Abstract
The paper asks whether Walter Eucken, the founder of German ordoliberalism, should be considered to be a proponent of authoritarian liberalism. That term originally refers to a proposal for economic liberalization advanced by Carl Schmitt in 1932. Authoritarian liberalism also could be taken to mean that Eucken favors the rule of law and economic freedoms, but rejects democratic decision making. Both possible meanings are considered. We show that Eucken is not a representative of authoritarian liberalism in either sense of the term. While Eucken and Schmitt offer similar descriptions of the entanglement of state and economy in Weimar Germany, their proposed solutions are rather different. With regard to the second meaning, we argue that Eucken’s critique of democracy refers to two universally recognized problems of democratic decision making, namely interest group influence and the tyranny of the majority.
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Notes
In this paper, the term liberal will be used in the sense of classical liberalism (Mack and Gaus 2004), not social or “modern” leftwing liberalism.
For an introduction to ordoliberalism, see Kolev (2017).
Rüstow was an ordoliberal economist, but not a member of the Freiburg School. For a description of his sociological approach to liberalism, see Reinhoudt and Audier (2018, pp. 28–33).
“By invoking the ‘authoritarian’ state one polemicises, in truth, against the democratic state. … One says ‘authoritarian state’ and means autocratic state authority versus democratic state authority” (Heller [1933] 2015, p. 299).
For example, Rüstow ([1929] 1959) proposed to establish a temporary dictatorship in order to overcome the political fragmentation of the Weimar Republic. As indicated by his 1928 correspondence with Rüstow, Eucken instead wanted to change the representational system along the lines of a proposal by former chancellor Hans Luther (Dathe 2009, pp. 69–70).
One remarkable recent finding is that while judicial independence is a robust predictor of personal freedom, electoral democracy is not (Berggren and Gutmann 2020).
On the properties of the private law society, see Böhm ([1966] 1989).
Ordoliberalism is the German variant of neoliberalism. The name refers to the ORDO journal established by Eucken and Böhm in 1948. On the history of neoliberalism, see Burgin (2012).
All translations by the authors, unless indicated otherwise.
In that sense, Michel Foucault ([2004] 2008, p. 106) speaks of the Nazi period as the “road to Damascus” moment for the Freiburg School.
A possible reference to Immanuel Kant, who describes a just constitution as one that “limits our freedom in such a way that it may be consistent with the freedom of others and with the common good of all” (Kant [1787] 2007, p. 602).
On the other hand, the ideal that people should be able to choose their constitutional environment—constitutional liberalism— is less explicit in Eucken’s writings (Vanberg 1988).
“The general will as Rousseau constructs it is in truth homogeneity. That is really consequential democracy. According to the Contrat social, the state therefore rests not on a contract but essentially on homogeneity, in spite of its title and in spite of the dominant contract theory” (Schmitt [1926] 1988, p. 14).
The Freiburg School distinguishes between genuine performance-competition (Leistungswettbewerb) and competitive strategies aimed at hindering competition, such as price collusion. The latter is referred to as prevention-competition (Behinderungswettbewerb). See Eucken ([1952] 2004, p. 247) or Böhm ([1933] 2010, pp. 207–248).
With regard to workers’ wage claims, Eucken seems particularly opposed to the practice of mandatory public arbitration (Eucken [1932] 2017, pp. 59–60).
Eucken maintains that, as a matter of methodology, political decisions should be taken as given by the economist. “Legal and social organisation” is an example of what he refers to as data: “Data, from the point of view of the economy as a whole, are those facts which determine the nature of the economic world without themselves being economic facts. On coming up against these data theoretical explanation has to break off” (Eucken [1940] 1950, p. 213).
The title translates as “The Guardian of the Constitution”.
On corporatism, see Mueller (1996, pp. 200–205).
See the discussion of the qualitative (not quantitative) total state in Sect. 5 below.
Quoted in Goldschmidt and Hesse (2013, p. 142).
A third difference concerns the status of politics in society. Eucken (1932a) identifies an attitude called Politismus. It is defined as the conviction that the state—like religion—gives meaning to people’s lives. Eucken expects that Politismus will “give way to disillusionment when … the limits of state influence become apparent in reality and when experience teaches us that the state cannot solve every material problem and even less the spiritual problems of our lives” (ibid, p. 87). As argued by Uwe Dathe (2014), that assessment contrasts sharply with Schmitt’s deeply politicized conception of society.
Eucken’s thinking on the issue almost certainly was influenced by Tocqueville. When discussing the effects of democratization in the Structural Transformations, Eucken adds a footnote saying “On the whole question: … see in particular A. de Tocqueville, De la démocratie en Amérique. Paris 1835. T[ome]. 2,3” (Eucken 1932b, p. 312). Volume 2 of the original French edition contains the chapter on the tyranny of the majority.
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Köhler, E.A., Nientiedt, D. Was Walter Eucken a proponent of authoritarian liberalism?. Public Choice 195, 363–376 (2023). https://doi.org/10.1007/s11127-021-00876-z
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DOI: https://doi.org/10.1007/s11127-021-00876-z