Metaphysical justification for an economic constitution? Franz Böhm and the concept of natural law

Abstract

The paper analyzes references to the concept of natural law in the work of legal scholar Franz Böhm (1895–1977), one of the founders of German ordoliberalism and a pioneer in working at the intersection of law and economics. Böhm was particularly interested in the economic constitution, the framework of legal rules that shape economic transactions. It is shown that Böhm’s work on this subject relates to natural law in two distinct ways. Firstly, from classical political economy, he adopts the argument that there are patterns in human behavior that allow for the establishment of a self-organizing mechanism that governs economic activity, a social order “bestowed by nature” or “ordo”. Secondly, given the distinction in jurisprudence between legal positivists and natural law theorists, the paper argues that Böhm should be viewed as the latter because he maintains that legal norms need to correspond to justice in order to be valid law. Despite his status as a natural law theorist, Böhm contends that legal systems must not be derived from metaphysical sources.

This is a preview of subscription content, log in to check access.

Notes

  1. 1.

    For biographical details on Böhm, see Dathe (2014) or Kolev (2017).

  2. 2.

    In this paper, the term liberal will be used in the sense of classical liberalism or libertarianism. The members of the Freiburg School were neoliberals who wanted to complement provisions for individual liberty with economic and social policies aimed at curbing the excesses of laissez-faire capitalism. The German variant of neoliberalism is called Ordoliberalism (Grossekettler 1989).

  3. 3.

    The competitive order consists of a number of principles such as the functioning of the price system, monetary stability, and open markets. See Sect. 2 below.

  4. 4.

    Nientiedt and Köhler (2016) discuss this problem in Eucken’s work.

  5. 5.

    On the importance of identifying the addressee of economic policy advice, see Sugden (2013).

  6. 6.

    All translations by the author, unless indicated otherwise.

  7. 7.

    For a non-metaphysical approach to natural law, see H. L. A. Hart’s notion of a “minimum content of natural law” (Hart 2012, pp. 193–200).

  8. 8.

    Modern constitutional economics in particular is based upon the principle of normative individualism, i.e. the assumption that social arrangements are regarded as good only if they correspond to the interests of the individuals involved, as judged by these individuals (Buchanan 1988).

  9. 9.

    Another possible source of this argument is David Hume. Hume maintained that legal rules, though artificial, reflect certain important characteristics of human nature (Haakonssen 1981, p. 22). His theory of justice led him to develop “the basic idea of social order arising spontaneously and without the intervention of deliberate constructions” (ibid., p. 37).

  10. 10.

    “The discovery that there exist in society orders… which have not been designed by men but have resulted from the action of individuals without their intending to create such an order, is the achievement of social theory—or, rather, it was this discovery which has shown that there was an object for social theory…. This kind of order which is characteristic not only of biological organisms… is an order which is not made by anybody but which forms itself. It is for this reason usually called a ‘spontaneous’… order. If we understand the forces which determine such an order, we can use them by creating the conditions under which such an order will form itself” (Hayek 1964, pp. 4–5).

  11. 11.

    The letters are part of Eucken’s personal papers held by the Thüringer Universitäts- und Landesbibliothek in Jena, Germany. The author would like to thank Uwe Dathe for allowing the access to the Eucken papers.

  12. 12.

    On the issue of conformity, see Grossekettler (1989).

  13. 13.

    The members of the Freiburg School include Eucken, Böhm, Hans Großmann-Doerth, K. Paul Hensel, Hans Otto Lenel, Friedrich A. Lutz, Karl Friedrich Maier, Fritz W. Meyer, Leonhard Miksch and Bernhard Pfister (Goldschmidt and Wohlgemuth 2008b, p. 9). The term ordoliberalism is often used to include the members of the Freiburg School as well as other German neoliberals such as Wilhelm Röpke and Alexander Rüstow.

  14. 14.

    Eucken indicates that the term ordo describes a “natural order” that is not (fully) identical to the competitive order outlined above. The competitive order is ordo because it “corresponds to the nature of man and the task at hand”. At the same time, it is not ordo because it does not come about naturally, but requires a complex institutional framework to function (Eucken 1952/2004, p. 373).

  15. 15.

    Constantin von Dietze was not a member of the Freiburg School. Together with Eucken and Böhm, he took part in the German resistance movement against Hitler (Rieter and Schmolz 1993).

  16. 16.

    Translations of titles of Böhm’s works are taken from the bibliography published in the 1996 special issue of the European Journal of Law and Economics.

  17. 17.

    A chapter of this work has been translated into English as “The Non-State (‘Natural’) Laws Inherent in a Competitive Economy” (Böhm 1933/1989).

  18. 18.

    This translation taken from Grossekettler (1996).

  19. 19.

    In Böhm’s later work (e.g. Böhm 1966/1989), a societal structure based on voluntary contracts between individuals with equal rights is referred to as a private law society (Privatrechtsgesellschaft).

  20. 20.

    Böhm remarks on this quality: “The phenomenon that the good rewards itself automatically in the form of earthly benefits and the bad punishes itself automatically in the form of earthly detriments is by no means the rule in the fields of ethical, social and political life. However, in the field of economic cooperation, such an automatism actually occurs under certain external preconditions” (Böhm 1942, p. 79).

  21. 21.

    The preface to the series, written by the Freiburg School’s founders, has been translated into English as “The Ordo Manifesto of 1936” (Böhm et al. 1936/1989).

  22. 22.

    The artificial character of the choice of economic system can also be seen in Böhm’s evaluation of the German economy. While he alleges that the Nazis are generally in favor of a “dynamic” (i.e. competitive) economic system, he says that the actual economic constitution of the year 1937 combines elements of competition with authoritarian command (Böhm 1937, p. 75).

  23. 23.

    Sittlichkeit derives from the German word for custom (Sitte). In its well known Hegelian usage, the term describes the customary—i.e. traditional—roles of individuals in social institutions such as family, civil society and state (Herzog 2013, p. 48).

  24. 24.

    Böhm uses the ambivalent expression “daß … das Geltende kein Recht ist”, where “Recht sein” means both to be just and to be law.

  25. 25.

    To be sure, Kelsen’s Pure Theory of Law also assumes the existence of a basic norm (Grundnorm). It serves the purpose of avoiding the problem of infinite regress; its content, however, is irrelevant.

  26. 26.

    “The existence of a law is one thing: its merits or demerits are another thing. Whether a law be, is one inquiry; whether it ought to be, or whether it agree with a given or assumed test, is another and a distinct inquiry” (Austin 1832, p. 278).

  27. 27.

    The author would like to thank Hartmut Kliemt for pointing him to Bentham’s argument.

  28. 28.

    On the interpretation of this phrase from the perspective of natural law theory see Finnis (2011, pp. 351–366).

  29. 29.

    It is not entirely clear what this term means to the members of the Freiburg School. In a 1943 text co-authored by Böhm, the following definition is given: “ethicality (understood as the willingness to take on personal responsibility before God)” (Böhm and Wolf 1943/1984, p. 729).

  30. 30.

    The memorandum was commissioned by Dietrich Bonhoeffer, a leading figure in the Protestant resistance movement against the Nazis. On the oppositional Freiburg circle, which drafted the memorandum, see Rieter and Schmolz (1993). On Böhm’s relationship with Protestantism see Roser (1998) or Holthaus (2015).

  31. 31.

    Vanberg illustrates this point by a quote from John Stuart Mill: “But though governments or nations have the power of deciding what institutions shall exist, they cannot arbitrarily determine how those institutions shall work. The conditions on which the power they possess… is dependent… are as much a subject of scientific enquiry as any of the physical laws of nature” (Mill, quoted in Vanberg 2007, p. 5).

  32. 32.

    On the contrary, Nawroth (1961) presents Böhm as a legal positivist. Böhm’s natural law stance is briefly acknowledged by Tumlir (1989).

  33. 33.

    Hayek describes his evolutionary approach to law as follows: “Though there can be no justification for representing the rules of just conduct as natural in the sense that they are part of an external and eternal order of things … it does not follow from this that the rules of conduct which in fact guide [man] must be the product of a deliberate choice on his part … The views and opinions which shape the order of a society, as well as the resulting order of that society itself, are not dependent on any one person’s decision … and in this sense they must be regarded as an objectively existing fact” (Hayek 1982/2013, pp. 223–224).

  34. 34.

    In this sense, Böhm’s position may be comparable to that of Hugo Grotius, who argued that natural law follows from human nature rather than from God’s command (Finnis 2011, pp. 42–48).

References

  1. Austin, J. (1832). The province of jurisprudence determined. London: John Murray.

    Google Scholar 

  2. Bentham, J. (1843). Anarchical fallacies. Being an examination of the declarations of rights issued during the French Revolution. In J. Bowring (Ed.), The works of Jeremy Bentham (Vol. II, pp. 491–534). Edinburgh: William Tait.

    Google Scholar 

  3. Blümle, G., & Goldschmidt, N. (2000). Zur Normativität ordoliberalen Denkens. In B. Külp & V. Vanberg (Eds.), Freiheit und wettgewerbliche Ordnung. Gedenkband zur Erinnerung an Walter Eucken (pp. 15–57). Freiburg: Haufe.

    Google Scholar 

  4. Böhm, F. (1933/1989). The non-state (“natural”) laws inherent in a competitive economy. In Ludwig-Erhard-Stiftung (Ed.), Standard texts on the social market economy: Two centuries of discussion (pp. 107–113). Stuttgart: Gustav Fischer.

  5. Böhm, F. (1933/2010). Wettbewerb und Monopolkampf: Eine Untersuchung zur Frage des wirtschaftlichen Kampfrechts und zur Frage der rechtlichen Struktur der geltenden Wirtschaftsordnung. Baden-Baden: Nomos.

  6. Böhm, F. (1934). Recht und Macht. Die Tatwelt, 10(3–4), 115–132.

    Google Scholar 

  7. Böhm, F. (1936). Die Wirtschaftsordnung als Zentralbegriff des Wirtschaftsrechts. Mitteilungen des Jenaer Instituts für Wirtschaftsrecht no. 31.

  8. Böhm, F. (1937). Die Ordnung der Wirtschaft als geschichtliche Aufgabe und rechtschöpferische Leistung. Stuttgart: W. Kohlhammer.

    Google Scholar 

  9. Böhm, F. (1942). Der Wettbewerb als Instrument staatlicher Wirtschaftslenkung. In G. Schmölders (Ed.), Der Wettbewerb als Mittel volkswirtschaftlicher Leistungssteigerung und Leistungsauslese (pp. 51–98). Berlin: Duncker & Humblot.

    Google Scholar 

  10. Böhm, F. (1950). Die Idee des ORDO im Denken Walter Euckens. Dem Freund und Mitherausgeber zum Gedächtnis. ORDO, 3, XV–LXIV.

    Google Scholar 

  11. Böhm, F. (1953/1960). Der Rechtsstaat und der soziale Wohlfahrtsstaat. In E.-J. Mestmäcker (Ed.), Reden und Schriften über die Ordnung einer freien Gesellschaft, einer freien Wirtschaft und über die Wiedergutmachung (pp. 82–150). Karlsruhe: C. F. Müller.

  12. Böhm, F. (1957/1960). Die Forschungs- und Lehrgemeinschaft zwischen Juristen und Volkswirten an der Universität Freiburg in den dreißiger und vierziger Jahren des 20. Jahrhunderts (Das Recht der Ordnung der Wirtschaft). In E.-J. Mestmäcker (Ed.), Reden und Schriften über die Ordnung einer freien Gesellschaft, einer freien Wirtschaft und über die Wiedergutmachung (pp. 158–175). Karlsruhe: C. F. Müller.

  13. Böhm, F. (1966/1989). Rule of law in a market economy. In A. Peacock & H. Willgerodt (Eds.), Germany’s social market economy: Origins and evolution (pp. 46–67). London: Macmillan.

  14. Böhm, F. (1973). Eine Kampfansage an Ordnungstheorie und Ordnungspolitik: Zu einem Aufsatz im Kyklos. ORDO, 24, 11–48.

    Google Scholar 

  15. Böhm, F., Eucken, W., & Grossmann-Doerth, H. (1936/1989). The Ordo Manifesto of 1936. In A. Peacock & H. Willgerodt (Eds.), Germany’s social market economy: Origins and evolution (pp. 15–26). London: Macmillan.

  16. Böhm, F., & Wolf, E. (1943/1984). Anhang 1: Rechtsordnung (zur Denkschrift “Politische Gemeinschaftsordnung. Ein Versuch zur Selbstbesinnung des christlichen Gewissens in den politischen Nöten unserer Zeit”). In K. Schwabe & R. Reichardt (Eds.), Gerhard Ritter. Ein politischer Historiker in seinen Briefen (pp. 729–734). Boppard: Harald Boldt.

  17. Buchanan, J. M. (1988). Contractarian political economy and constitutional interpretation. American Economic Review: Papers and Proceedings, 78(2), 135–139.

    Google Scholar 

  18. Caldwell, B. (2009). Erik Angner, Hayek and natural law. Journal of the History of Economic Thought, 31(4), 551–555.

    Article  Google Scholar 

  19. Dathe, U. (2014). Franz Böhm—Ein Liberaler im “Dritten Reich”. In H. Maier (Ed.), Die Freiburger Kreise. Akademischer Widerstand und Soziale Marktwirtschaft (pp. 141–162). Paderborn: Ferdinand Schöningh.

    Google Scholar 

  20. Eucken, W. (1940/1950). The foundations of economics: History and theory in the analysis of economic reality. London: William Hodge.

  21. Eucken, W. (1952/2004). Grundsätze der Wirtschaftspolitik. Tübingen: Mohr Siebeck.

  22. Feld, L. P., & Kirchgässner, G. (2004). The role of direct democracy in the European Union. In C. B. Blankart & D. Mueller (Eds.), A constitution for the European Union (pp. 203–235). Cambridge, MA: MIT Press.

    Google Scholar 

  23. Feld, L. P., Köhler, E. A., & Nientiedt, D. (2015). Ordoliberalism, pragmatism and the Eurozone crisis: How the German tradition shaped economic policy in Europe. CESifo Working Paper no. 5368.

  24. Finnis, J. (2011). Natural law and natural rights (2nd ed.). Oxford: Oxford University Press.

    Google Scholar 

  25. Gerber, D. J. (1994). Constitutionalizing the economy: German neo-liberalism, competition law and the “New” Europe. American Journal of Comparative Law, 42(1), 25–84.

    Article  Google Scholar 

  26. Goldschmidt, N., & Wohlgemuth, M. (2008a). Social market economy: Origins, meanings and interpretations. Constitutional Political Economy, 19(3), 261–276.

    Article  Google Scholar 

  27. Goldschmidt, N., & Wohlgemuth, M. (2008b). Entstehung und Vermächtnis der Freiburger Tradition der Ordnungsökonomik. In N. Goldschmidt & M. Wohlgemuth (Eds.), Grundtexte zur Freiburger Tradition der Ordnungsökonomik (pp. 1–16). Tübingen: Mohr Siebeck.

    Google Scholar 

  28. Grossekettler, H. G. (1989). On designing an economic order: The contributions of the Freiburg School. In D. A. Walker (Ed.), Perspectives on the history of economic thought: Selected papers from the history of economics society conference, 1987. Volume II: Twentieth-century economic thought (pp. 38–84). Aldershot: Edward Elgar.

  29. Grossekettler, H. G. (1996). Franz Böhm as a pioneering champion of an economic theory of legislative science. European Journal of Law and Economics, 3(4), 309–329.

    Article  Google Scholar 

  30. Haakonssen, K. (1981). The science of a legislator. The natural jurisprudence of David Hume and Adam Smith. Cambridge: Cambridge University Press.

    Google Scholar 

  31. Hart, H. L. A. (2012). The concept of law (3rd ed.). Oxford: Oxford University Press.

    Google Scholar 

  32. Haselbach, D. (1991). Autoritärer Liberalismus und Soziale Marktwirtschaft. Gesellschaft und Politik im Ordoliberalismus. Baden-Baden: Nomos.

    Google Scholar 

  33. Hayek, F. A. (1964). Kinds of order in society. New Individualist Review, 3(2), 457–466.

    Google Scholar 

  34. Hayek, F. A. (1982/2013). Law, legislation and liberty: A new statement of the liberal principles of justice and political economy. London: Routledge.

  35. Herzog, L. (2013). Inventing the market: Smith, Hegel, and political theory. Oxford: Oxford University Press.

    Google Scholar 

  36. Holthaus, S. (2015). Zwischen Gewissen und Gewinn. Die Wirtschafts- und Sozialordnung der “Freiburger Denkschrift” und die Anfänge der Sozialen Marktwirtschaft. Münster: LIT.

    Google Scholar 

  37. Kelsen, H. (1928/1968). Die philosophischen Grundlagen der Naturrechtslehre und des Rechtspositivismus. In H. R. Klecatsky, R. Marcic & H. Schambeck (Eds.), Die Wiener rechtstheoretische Schule: Schriften von Hans Kelsen, Adolf Merkl, Alfred Verdross (Vol. 1, pp. 281–350). Vienna: Europa-Verlag.

  38. Kelsen, H. (1934/1992). Introduction to the problems of legal theory: A translation of the first edition of the Reine Rechtslehre or pure theory of law. Oxford: Clarendon Press.

  39. Kirchgässner, G. (1988). Wirtschaftspolitik und Politiksystem: Zur Kritik der traditionellen Ordnungstheorie aus der Sicht der Neuen Politischen Ökonomie. In D. Cassel, B. Ramb, & H. Thieme (Eds.), Ordnungspolitik (pp. 53–75). Munich: Franz Vahlen.

    Google Scholar 

  40. Knight, F. H. (1944/1982). The rights of man and natural law. In Freedom and reform: Essays in economics and social philosophy (pp. 312–357). Indianapolis: Liberty Fund.

  41. Kolev, S. (2017). Franz Böhm. In A. Marciano & G. B. Ramello (Eds.), Encyclopedia of law and economics. New York: Springer. https://doi.org/10.1007/978-1-4614-7883-6_201-2.

    Google Scholar 

  42. Manow, P. (2001). Ordoliberalismus als ökonomische Ordnungstheologie. Leviathan, 29(2), 179–198.

    Article  Google Scholar 

  43. Miksch, L. (1950). Die sittliche Bedeutung der inneren Koordination. ORDO, 3, 29–73.

    Google Scholar 

  44. Müller, C. (2015). Das Naturrecht in der Wirtschafts- und Sozialethik. Bemerkungen zu einem von Herbert Pribyl und Christian Machek herausgegebenen Tagungsband. ORDO, 66, 411–415.

    Google Scholar 

  45. Nawroth, E. E. (1961). Die Sozial- und Wirtschaftsphilosophie des Neoliberalismus. Heidelberg: F. H. Kerle.

    Google Scholar 

  46. Nientiedt, D., & Köhler, E. A. (2016). Liberalism and democracy—A comparative reading of Eucken and Hayek. Cambridge Journal of Economics, 40(6), 1743–1760.

    Article  Google Scholar 

  47. Ptak, R. (2009). Neoliberalism in Germany: Revisiting the ordoliberal foundations of the social market economy. In P. Mirowski & D. Plehwe (Eds.), The road from Mont Pèlerin: The making of the neoliberal thought collective (pp. 98–138). Cambridge, MA: Harvard University Press.

    Google Scholar 

  48. Riese, H. (1972). Ordnungsidee und Ordnungspolitik. Kritik einer wirtschaftspolitischen Konzeption. Kyklos, 25(1), 24–48.

    Article  Google Scholar 

  49. Rieter, H., & Schmolz, M. (1993). The ideas of German Ordoliberalism 1938–1945: Pointing the way to a new economic order. European Journal of the History of Economic Thought, 1(1), 87–114.

    Article  Google Scholar 

  50. Roser, T. (1998). Protestantismus und Soziale Marktwirtschaft: Eine Studie am Beispiel Franz Böhms. Münster: LIT.

    Google Scholar 

  51. Runge, U. (1971). Antinomien des Freiheitsbegriffs im Rechtsbild des Ordoliberalismus. Tübingen: J. C. B. Mohr (Paul Siebeck).

    Google Scholar 

  52. Sally, R. (1996). Ordoliberalism and the social market: Classical political economy from Germany. New Political Economy, 1(2), 233–257.

    Article  Google Scholar 

  53. Smith, A. (1776/1904). An inquiry into the nature and causes of the wealth of nations (Vol. I). London: Methuen.

  54. Streit, M. E., & Wohlgemuth, M. (2000). The market economy and the state. Hayekian and ordoliberal conceptions. In P. Koslowski (Ed.), The theory of capitalism in the German economic tradition: Historism, ordo-liberalism, critical theory, solidarism (pp. 224–269). Berlin: Springer.

    Google Scholar 

  55. Sugden, R. (2013). The behavioural economist and the social planner: To whom should behavioural welfare economics be addressed? Inquiry, 56(5), 519–538.

    Article  Google Scholar 

  56. Topitsch, E. (1958). Vom Ursprung und Ende der Metaphysik. Eine Studie zur Weltanschauungskritik. Vienna: Springer.

    Google Scholar 

  57. Tumlir, J. (1989). Franz Böhm and the development of economic-constitutional analysis. In A. Peacock & H. Willgerodt (Eds.), German neo-liberals and the social market economy (pp. 125–141). London: Macmillan.

    Google Scholar 

  58. Van der Walt, J. (2016). When one religious extremism unmasks another: Reflections on Europe’s states of emergency as a legacy of ordo-liberal de-hermeneuticisation. New Perspectives, 24(1), 79–101.

    Google Scholar 

  59. Vanberg, V. (2007). Privatrechtsgesellschaft und ökonomische Theorie. Freiburg Discussion Papers on Constitutional Economics 07/5.

  60. Voigt, S. (1996). Die konstitutionelle Ökonomik als Herausforderung für die Theorie der Wirtschaftspolitik—zugleich eine Skizze zur Weiterentwicklung einer ökonomischen Theorie der Verfassung. In I. Pies & M. Leschke (Eds.), James Buchanans konstitutionelle Ökonomik (pp. 157–183). Tübingen: J. C. B. Mohr (Paul Siebeck).

    Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Daniel Nientiedt.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Nientiedt, D. Metaphysical justification for an economic constitution? Franz Böhm and the concept of natural law. Const Polit Econ 30, 114–129 (2019). https://doi.org/10.1007/s10602-019-09275-5

Download citation

Keywords

  • Natural law
  • Legal positivism
  • Ordoliberalism
  • Social market economy

JEL Classification

  • B20
  • B31
  • H10
  • K10