LAW 2018/03
Department of Law
Dead man walking: Current European interest
in the ordoliberal tradition
Josef Hien & Christian Joerges
European University Institute
Department of Law
DEAD MAN WALKING: CURRENT EUROPEAN INTEREST
IN THE ORDOLIBERAL TRADITION
Josef Hien & Christian Joerges
EUI Working Paper LAW 2018/03
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ISSN 1725-6739
© Josef Hien & Christian Joerges, 2018
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Abstract
Ordoliberalism became during the years of the financial crisis the target of a European-wide critical
campaign. This school of thought is widely perceived as the ideational source of Germany’s crisis
politics which has even led to an “ordoliberalisation of Europe”. The essay questions the validity of such
assessments. It focuses on two aspects which are widely neglected in current debates. One is the
importance of law in the ordoliberal vision of the ordering of economy and society. The second is its
cultural and religious background in particular in German Protestantism. The influence of the ordoliberal
school on European law, so the essay argues, is overrated in all stages of the integration project. AngloAmerican neoliberalism rather than German Ordoliberalism was in the ideational driver seat since the
1980s. In the responses to the financial crisis the ordoliberal commitment to the rule of law gave way to
discretionary emergency measures. While the foundational synthesis of economic and legal concepts
became indefensible, the cultural underpinnings of the ordoliberal tradition survived and developed a
life of their own in particular in German political discourses.
Keywords
ordoliberalism, economic cultures, financial crisis, Ordnungspolitik, crisis law
Author contact details:
Josef Hien
Post doctoral fellow REScEU Team
University of Milan
and Berlin Social Science Center (WZB)
JosefHien@googlemail.com
Christian Joerges
Professor of Law and Society,
Hertie School of Governance, Berlin
Co-Director
Centre of European Law and Politics
University of Bremen
Joerges@hertie-school.org
Table of contents
INTRODUCTION ................................................................................................................ 1
THE FRAME OF REFERENCE IN LEGAL THEORY ................................................................ 2
RECEPTION HISTORY ....................................................................................................... 3
Weimar ................................................................................................................................... 3
Post-war Germany .................................................................................................................. 4
CULTURAL UNDERPINNINGS AND CONTEXTS OF THE POLITICAL AGENDA
OF ORDOLIBERALISM SINCE THE WEIMAR REPUBLIC ...................................................... 6
THE TURN TO EUROPE ..................................................................................................... 9
The Formative Phase of “Constitutionalisation” of the EEC Treaty ...................................... 9
Von Hayek’s and Mestmäcker’s “Neo-ordoliberalism”....................................................... 11
The Economic and Monetary Union (EMU) in the Maastricht Treaty as a Pyrrhic
Victory .................................................................................................................................. 12
CRISIS POLICY: AN “ORDOLIBERALISATION OF EUROPE” OR THE FAILURE
OF THE ORDOLIBERAL PROJECT? ................................................................................... 14
THE DISINTEGRATION OF ORDOLIBERALISM IN ECONOMIC SCIENCE ............................. 17
ORDOLIBERALISM AS POLITICAL CULTURE ................................................................... 18
CONCLUSION ................................................................................................................. 21
Introduction
Ordoliberalism is casting its shadow across Europe. Known to just a handful of dyed-in-the-wool
experts outside the German-speaking world prior to the euro crisis, this theoretical tradition of social
philosophy has made quite a name for itself over the past seven years. Weighty contributions in the
press1 and academic publications2 view ordoliberalism as an economic policy concept that is said to
have guided the German government during the debt crisis. The influence of this policy, they claim,
had brought about an “ordoliberalisation of Europe”. Contributions echoing this criticism are
relatively rare in Germany.3 This finding is the starting point of our deliberations: criticism of
ordoliberalism is above all a criticism of German crisis policy.
Recent interest in ordoliberalism has been focused closely on its ideas regarding economic policy. Yet
people forget the extent to which the founding fathers insisted on interdisciplinarity and perceived the
economic order as a legal order. Besides the fact that ordoliberalism was originally anchored in legal
concepts, we will go into a second foundational element which is also left largely unconsidered in the
current debate, namely the fact that the values underlying ordoliberal theory and constituting its
sociological core are heavily influenced by Protestantism.
We believe the direct impact ordoliberalism has in shaping German’s policy toward Europe is
overestimated. The influence of this school on forming the project of integration was minor, even in the
formative 1950s and 1960s. Its theoretical power and practical relevance have been declining since the
1960s. Its backing in the legal sciences became weaker and weaker given the impact of American
“economic analysis of law”.4 Gradually, economists close to the ordoliberal tradition have largely
1
The Guardian, “Let us Introduce you to ‘Ordoliberalism’”, 2 March 2012; The Financial Times, “The Wacky Economics of
Germany’s Parallel Universe”, 16 November 2014; The Economist, “German Ordoliberalism has had a Big Influence on
Policymaking during the Euro Crisis”, 9 May 2015.
2
S. Cesarotto and A. Stirati, “Germany and the European and Global Crises”, (2010) 39 Journal of Political Economy, 56-86;
V. Berghahn and B. Young, “Reflections on Werner Bonefeld’s ‘Freedom and the Strong State: On German
Ordoliberalism’ and the Continuing Importance of the Ideas of Ordoliberalism to Understand Germany’s (Contested) Role
in Resolving the Eurozone Crisis”, (2013) 18 New Political Economy, 768-78; M. Blyth, Austerity: The History of a
Dangerous Idea, (Oxford University Press, 2013), S. 141; S. Bulmer and W.E. Paterson, “Germany as the EU’sReluctant
Hegemon? Of Economic Strength and Political Constraints”, (2013) 20 Journal of European Public Policy, 1387-1405; P.
Dardot and C. Laval, The New Way of the World: On Neoliberal Society, (Verso Books, 2013); Gerhard Schnyder and
Mathias M. Siems, “The ‘Ordoliberal’ Variety of Neoliberalism”, in: Suzanne J. Konzelmann and Marc Fovargue-Davies
(eds), Banking Systems in the Crisis; The Faces of Liberal Capitalism, (Routledge, 2013), 250-268; S. Bulmer, “Germany
and the Eurozone Crisis: Between Hegemony and Domestic Politics”, (2014) 37 West European Politics, 1244-63; T.
Harjunienu and M. Ojala, “Mediating ‘the German Ideology’? Ordoliberalism and its Alternatives in the Press Coverage
of the Eurozone Crisis”, (2014) 24 Journal of Contemporary European Studies, 414-430; F. Denord, R. Knaebel and P.
Rimbert, “L’ordolibéralisme allemand, cage de fer pour le Vieux Continent”, Le Monde diplomatique, August 2015; R.
Hillebrand, “Germany and its Eurozone Crisis Policy: The Impact of the Country’s Ordoliberal Heritage”, (2015) 33
German Politics & Society, 6-24; A. Lechevalier, “Eucken under the Pillow: The Ordoliberal Imprint on Social Europe”,
in: A. Lechevallier and J. Wielgohs (eds), Social Europe: A Dead End: What the Eurozone Crisis is Doing to Europe’s
Social Dimension, (DJØF Publishing, 2015); P. Nedergaard and H. Snaith, “‘As I Drifted on a River I could not Control’:
The Unintended Ordoliberal Consequences of the Eurozone Crisis”, (2015) 53 Journal of Common Market Studies, 10941109; D. Schäfer, “A Banking Union of Ideas? The Impact of Ordoliberalism and the Vicious Circle on the EU Banking
Union”, (2016) 54 Journal of Common Market Studies, 961-980; J. Oksala, “Ordoliberalism as Governmentality”, in: T.
Biebricher and F.S. Vogelmann (eds), The Birth of Austerity: German Ordoliberalism and Contemporary Neoliberalism,
(Rowman & Littlefield, 2017).
3
S. Dullien and U. Guérot, “The Long Shadow of Ordoliberalism: Germany’s Approach to the Euro Crisis”, (2012) 22
European Council on Foreign Relations Policy Brief; T. Biebricher, “Europe and the Political Philosophy of
Neoliberalism”, (2013) 12 Contemporary Political Theory, 338-375; idem, “Neoliberalism and Law: The Case of the
Constitutional Balanced-Budget Amendment”, (2016) 17 German Law Journal, 835-856.
4
H.-D. Assmann, Ch. Kirchner and E. Schanze, Ökonomische Analyse des Rechts, (Athenäum, 1972) gave important signals.
1
Josef Hien & Christian Joerges
aligned their positions with those of Anglo-Saxon neoclassical economics - ordoliberalism has fallen
victim to overlying American influences on German economics. It is telling that during the euro crisis,
there were no genuinely ordoliberal contributions by economists or legal scholars that supported
Germany’s crisis policy. Opinion pieces by German economists institutionally linked to ordoliberalism
(through the Walter Eucken Institut, the Stiftung Marktwirtschaft, the Kronberger Kreis) take up publicchoice theories and the new institutional economics in which the original interdependencies between
law, economics, and the constitution have faded away.
Nonetheless, we find ordoliberal traditions having indirect influence. This influence is exerted based on
its sociological core: the underlying Protestant cultural values that originally constituted the foundation
for ordoliberalism formed and still forms German politicians’ discourse on the crisis. Ordoliberalism
thus continues to be influential in German politics thanks to its cultural foundations; politicians use
ordoliberal references symbolically to indicate certain political mindsets and orientations.
In the following sections, we first outline the framework of ordoliberalism in legal theory (2.), trace the
history of its early reception (3.), and provide evidence for its cultural anchoring in Protestantism (4.).
This is followed by an analysis of how ordoliberal theoreticians influenced the establishment of
European institutions in the early phases of integration (5.). We then turn to European crisis policy (6.)
and consider the academic decline of ordoliberalism (7). We have devoted a section to how German
politicians resorted to ordoliberal topoi in their discourse (8) and conclude with a summary (9).
The Frame of reference in legal theory
In contrast to the countless current contributions to ordoliberalism, law will assume a key role in our
reconstruction of the history of its reception. We have compelling reasons for this. Of the three who
signed the ordoliberal founding document of 1936,5 two were jurists (Franz Böhm and Hans GroßmannDoerth), and the third (Walter Eucken) was an economist who considered law and economics to be
interdependent orders. Michel Foucault, who in 1979 discussed ordoliberalism in five of his 12 lectures
on la naissance de la biopolitique, identified the constitutive significance of the law, which the current
criticism scarcely acknowledges, very precisely: “The juridical gives form to the economic, and the
economic would not be what it is without the juridical.”6 Legal rules and economic activity are mutually
dependent. “[T]he state can make legal interventions in the economic order only if these legal
interventions take the form solely of the introduction of formal principles.”
In the early Federal Republic, it was primarily jurists who communicated the practical-political
influence of ordoliberal thought. Their most important place of activity was not Freiburg, however, but
Frankfurt. That was where the later President of the Commission Walter Hallstein had been appointed
professor in 1941 and had become president of the university in 1946; Ernst-Joachim Mestmäcker, who
was to grow into the leadership role of the “second-generation” ordoliberals, completed his habilitation
in 1958 under Franz Böhm, who had joined the faculty in 1946, as did Kurt Biedenkopf, who defended
ordoliberal positions steadfastly as a scholar, policy consultant, and politician, in 1963.7 However,
Böhm’s chair of economic law was assumed in 1963 by a certain Rudolf Wiethölter, who wrote the
most succinct analysis of ordoliberal legal theory and classifies its core characteristics, or proprium, as
a social theory. As summarised concisely in Wiethölter’s typical fashion: The “dominant motto,” he
writes, is
5
F. Böhm, “Die außerstaatliche (‘natürliche’) Gesetzmäßigkeit des wettbewerblichen Wirtschaftsprozesses”, in: W. Stützel,
C. Watrin, H. Willgerodt and K. Hohmann (eds), Grundtexte zur Sozialen Marktwirtschaft: Zeugnisse aus zweihundert
Jahren ordnungspolitischer Diskussion, (Fischer Verlag, [1936] 1981), 135-142.
6
M. Foucault, Geschichte der Gouvernementalität II. Die Geburt der Biopolitik, (Suhrkamp Verlag, 2014), 163 & 171.
7
K.H. Biedenkopf, “Über das Verhältnis wirtschaftlicher Macht zum Privatrecht”, in: H. Coing et al. (eds), Festschrift zum
70. Geburtstag von Franz Böhm , (C.F. Müller, 1965); most recently, idem, Der Weg zum Euro. Stationen einer verpassten
Chance, (Hertie School of Governance, 2012) with telling reservations against the introduction of the euro.
2
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
“order (= ‘reasonable assembly of the diverse to form a whole’ - Eucken, taking on the scholastic
concept of ordo). This ‘order’ is a legal order: ‘Economic order is legal constitution’ (Böhm). As a
legal order, it is an order respecting and protecting “freedom” [...] core hypothesis on the normative
proprium and impact of ‘law’: The economic order as an order of private law constituted in terms of
competition policy develops material freedom and social equality of opportunity from private
autonomy and the system of legal transactions through the fundamental ideas of private law which are
functionalized in terms of competition law (freedom of contract, freedom to do business, freedom to
own property).”8
According to Wiethölter, this was neither an economic theory (“theoretical economics based on a law
of causality” or “economic policy designed to implement a particular programme”) nor a legal theory
as generally understood; rather, it was a “political theory of society” that “conceived of a ‘third way’
beyond liberalism and socialism as a permanent and liberal order of peace”.9 Wiethölter wrote this
critical précis of ordoliberal legal theory at the time when the ordoliberal tradition was dominant in
economic law in the Federal Republic and representatives of the school held leading positions in all the
important consulting institutions.
However, as already mentioned above,10 ordoliberalism has become less attractive since the 1970s. In
the arguments related to the financial crisis, opinions committed to the conceptual foundations and the
theoretical ambitions of ordoliberalism are hardly perceptible any more. We will return to this in more
detail.11 To formulate our initial hypothesis more precisely even at this point: The “law of the crisis”
with which Germany and Europe reacted to the financial crisis brought about a “delegalisation” of the
EU. The numerous critics who wish to see an ordoliberal agenda at work in the crisis policy fail to
recognise this circumstance. It is our opinion that the dramatic plight Europe found itself in was also
due to the fact that the law - ordoliberal law just as well as any other law - falls short of legitimately
formulating what comprises European governance.
Reception History
The long national and briefer European reception history of the ordoliberal theory was by no means only
straightforward and successful. Although ordoliberalism was influential during some phases, resistance
against it both in the Federal Republic and in Europe caused it to fail.
Weimar
In its beginnings in the early 1920s and 1930s, ordoliberalism constituted itself as an oppositional
science: forward thinkers such as Eucken, Böhm, Rüstow, and Röpke opposed both laissez-faire
liberalism and manifestations of power relationships typical of German organized capitalism. Alexander
Rüstow’s 1932 polemic against “paleoliberalism” speaks volumes. 12 Walter Eucken’s “Staatliche
Strukturwandlungen und die Krise des Kapitalismus” (“Structural Transformations of the State and the
8
R. Wiethölter, “Wirtschaftsrecht”, in: A. Görlitz (ed), Handlexikon zur Rechtswissenschaft, (Ehrenwirth, 1972), 531-538, at
534 f.
9
Ibid., 535.
10
Section 1 with fn. 8.
11
Section 6.
12
A. Rüstow, “Paläoliberalismus, Kollektivismus und Neoliberalismus in der Wirtschafts- und Sozialordnung”, in: K. Forster
(ed.), Christentum und Liberalismus – Studien und Berichte der Katholischen Akademie in Bayern, (1932); idem,
“Interessenpolitik oder Staatspolitik?”, (1932) 7 Der Deutsche Volkswirt, 169-172; idem, “Freie Wirtschaft – starker Staat”,
(1932) 187 Schriften des Vereins für Socialpolitik, 62-69.
European University Institute
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Josef Hien & Christian Joerges
13
Crisis of Capitalism”) had the same general thrust. Other advocates of the school, later renowned,
14
contributed their thoughts at the same time or soon after. Franz Böhm’s monograph on “Wettbewerb
und Monopolkampf” (“Competition and Struggle against Monopolies”), which was published in 1933,
15
was to become the foundation for a school of legal thought. The new liberalism distinguished itself
16
from the historical school of economics and was firmly opposed to socialist ambitions. But it was not
laissez-faire liberalism - above all, because the state was assigned the task of guaranteeing the
competitive order of the economy. Wilhelm Röpke used the vexing oxymoron “liberal interventionism”
17
to describe this function. The idea was in fact to replace the old “paleoliberal” night-watchman state
18
with a “strong state”.
The call for a strong state in particular provoked nefarious suspicions. We also view them as anticipating
disapproval being seen today. They do not impact ordoliberalism. The no longer only “quantitatively”,
but now “qualitatively” strong state that Carl Schmitt and some of his contemporaries called for19 was
to derive its political clout from discretionary opportunities for intervention that threw the shackles off
the rule of law. Ordoliberalism’s strong state was supposed to use its strength to shape a legal
constitution in which a free and fair order of competition would develop. Its power to shape policy was
intended to help contain economic power while binding itself to legal forms of action. This is how Carl
Schmitt’s strong state differs fundamentally from the ordoliberals’ rule-bound Ordnungspolitik.
Post-war Germany
Ordoliberalism is one of the few traditions that National Socialism had not damaged permanently. The
“strong state” just mentioned remained an ordoliberal desideratum in a sense well defined in economic
and societal policy. Franz Böhm led the way in formulating this program more precisely.20 He saw the
regulatory weakness of the Weimar Republic’s democratic pluralism regarding the concentration of
power in the economy as one cause for the National Socialists seizing power. After 1945, he emphasised
that “the refined competitive economy” was compatible with democracy under the rule of law, in
contrast to a “centrally planned economy”, but also more compatible than a “mixed economic system”.21
13
W. Eucken, “Staatliche Strukturwandlungen und die Krisis des Kapitalismus”, (1997) [1932] 48 ORDO: Jahrbuch für die
Ordnung von Wirtschaft und Gesellschaft, 5-25.
14
A. Müller-Armack, Entwicklungsgesetze des Kapitalismus. Ökonomische, geschichtstheoretische und soziologische Studien
zur modernen Wirtschaftsverfassung, (Junker und Dünnhaupt, 1932. On Müller-Armack’s life and work, cf. D. Haselbach,
Autoritärer Liberalismus und Soziale Marktwirtschaft. Gesellschaft und Politik im Ordoliberalismus, (Nomos Verlag,
1991, 117 ff..
15
F. Böhm, Wettbewerb und Monopolkampf; eine Untersuchung zur Frage des wirtschaftlichen Kampfrechts und zur Frage
der rechtlichen Struktur der geltenden Wirtschaftsordnung, (Carl Heymanns Verlag, [1933] 1964).
16
W. Abelshauser, Kulturkampf. Der deutsche Weg in die neue Wirtschaft und die amerikanische Herausforderung, (Kadmos,
2003), 158 ff.
17
W. Röpke, German Commercial Policy, (Longmans, Green and Company, 1934), 40 f; idem, Die Lehre von der Wirtschaft,
(Springer, 1937); on Röpke, cf., M. Glasman, Unnecessary Suffering: Managing Market Utopia, (Verso Books, 1996), 52
ff.
18
Rüstow, speaking to the Verein für Socialpolitik (German Economic Association): “A strong state, a state superior to the
economy, where it belongs”, in: Rüstow, “Interessenpolitik oder Staatspolitik?/Freie Wirtschaft – starker Staat”, note 12
above, 62-69.
19
C. Schmitt, “Starker Staat und gesunde Wirtschaft”, in: G. Maschke (ed.), Carl Schmitt, Staat, Großraum, Nomos. Arbeiten
aus den Jahren 1916-1969, (Duncker & Humblot, [1933] 1995).
20
Cf., above all, Böhm, note 15 above; Böhm, note 5 above (1936) and his again programmatic contribution to the first OrdoJahrbuch from 1948: “Das Reichsgericht und die Kartelle: eine wirtschaftsverfassungsrechtliche Kritik an dem Urteil des
RG vom 4. Febr. 1897, RGZ 38/155”, (1948) 1 Ordo: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 197-21.
21
Foundational, see F. Böhm, Wirtschaftsverfassung und Staatsverfassung, (Mohr/Siebeck, 1950). On Böhm, above all, see
R. Wiethölter, “Franz Böhm (1895-1977)”, in: B. Diestelkamp and M. Stolleis (eds), Juristen an der Universität Frankfurt
a.M., (Nomos Verlag, 1989), 207-252.
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Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
Because of these boundaries to three sides - toward the totalitarian planned state, toward laissez-faire
liberalism, towards the regulatory state - the idea of a “constitution for competition” guaranteed by the
state was considered an attractive guiding principle for the reconstruction of the economic and legal
order. Walter Hallstein is worthy of mention as one of the most influential advocates of this principle;
in his 1946 lecture as president of the University of Frankfurt,22 he advocated the “restoration” of private
law and of private-law freedoms, in line with the “Freiburg message”.23
In the early Federal Republic, ordoliberalism was strong, but had unsecured flanks. One resulted from
the tension between the (anti-interventionist) competition regime and the Basic Law’s principle of the
welfare state (which called for interventionist activism) - this line of conflict is personified in Alfred
Müller-Armack,24 who praised the compatibility of his project of a “social market economy” with the
“Freiburg message”, although his praise was unable to dispel the ordoliberals’ scepticism. More
important was the second flank, namely, the weakness of the “constitution for competition”. In his work
25
on the history of German private law in the Weimar and Bonn Republics, Knut Wolfgang Nörr
differentiates between two concepts that took effect in parallel and in opposition to each other in the
course of (German) economic legal history: the “organised economy” and the “social market economy”
(which he understands simply as an ordoliberal project). This coexistence of the “organised economy”
on the one hand and ordoliberalism on the other, he claimed, had institutionalised a contradiction. In
fact, ordoliberalism had dominated the thinking of only the scholars of private and economic law. In
state, constitutional, and administrative law, the influence of the ordoliberal school remained weak, and,
instead, the proponents of an organised and corporatist economic constitution were dominant. For this
reason, Nörr diagnosed a two-pronged approach to economic policy and constitutional law as a basic
phenomenon in the genesis of the Bonn Republic: “Concerning the economic order which was to shape
the new state, we must speak of nothing less than a double mise-en-scène, of two productions of the
26
same dramatic piece that were oblivious to each other.” Dramatic encounters certainly did take place.
They include two cases before the Federal Constitutional Court in which the ordoliberal postulate of an
“economic constitution” structured along competitive lines was rejected.27
22
W. Hallstein, “Wiederherstellung des Privatrechts”, (1946) Süddeutsche Juristenzeitung, 1-7; differently, idem, “Von der
Sozialisierung des Privatrechts”, (1942) 102 Zeitschrift für die gesamten Staatswissenschaften, 530-546.
23
On all this in more detail, see C. Joerges, “The Science of Private Law and the Nation-State”, in: Francis Snyder (ed), The
Europeanization of Law. The Legal Effects of European Integration, (Hart 2000, 47-82.; F. Kübler, “Wirtschaftsrecht in
der Bundesrepublik – Versuch einer wissenschaftshistorischen Bestandsaufnahme”, in: D. Simon (ed.), Rechtswissenschaft
in der Bonner Republik. Studien zur Wissenschaftsgeschichte der Jurisprudenz, (Suhrkamp Verlag, 1994), 364-385.
24
In the eyes of other orthodox ordoliberals such as Eucken or Röpke, the synthesis of the Catholic social doctrine and the
Protestant ordoliberalism that Müller-Armack strove to achieve with his conception of a social irenics and the term “social
market economy” made him a marginal figure in the ordoliberal paradigm, although he himself underlined his commitment
to ordoliberalism (see C. Joerges and F. Rödl, “The ‘Social Market Economy’ as Europe’s Social Model?”, in: L.
Magnusson and B. Stråth (eds), A European Social Citizenship? Preconditions for Future Policies in Historical Light,
(Lang, 2005). His boss, Ludwig Erhard, is considered the politically most prominent ordoliberal; as an economist and
professor in Nuremburg, he contributed little to the development of ordoliberal theory (but much too effectively marketing
it to the public). Eucken and Böhm are undisputedly viewed as the founding fathers of ordoliberalism; Röpke and Rüstow
are considered representatives of a sociological ordoliberalism; and Hayek, Hoppmann, and Mestmäcker represent the
second generation, which combined elements from the Anglo-Saxon and the Austrian schools.
25
K.W. Nörr, Die Republik der Wirtschaft. Teil I: Von der Besatzungszeit bis zur Großen Koalition, (Mohr/Siebeck, 1999), 5
ff.
26
Ibid., 84.
27
Investment aid judgment of 20 July 1954, BVerfGE 4, 7 and co-determination judgment of 1 March 1979, BVerfGE 50,
290.
European University Institute
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Josef Hien & Christian Joerges
Cultural Underpinnings and contexts of the political agenda of ordoliberalism since the
Weimar Republic
Just as is the case with its legal-theory aspects, the normative and ethical roots of ordoliberalism have
hardly been mentioned in the debate about an “ordoliberalisation” of Europe.
The founding fathers of ordoliberalism saw the reasons for Weimar’s decline not only in the
undermining of the liberal competitive economy through cartels and monopolies.
For this reason, the churches were to be strengthened again as “powers providing order” (Eucken).
Eucken had already commented in the 1930s that the loosening ties to the church had facilitated people
turning to secularisms in the Weimar period and that “religion had increasingly lost the power to provide
individuals’ lives, and thus also their economic activity, a context of meaning”.28 For this reason, the
ordoliberals took an interesting, duplicitous approach: on the one hand, they invoked the churches as
supporting authorities, while on the other, they sought to create a surrogate religion by incorporating
strong underlying values. A “sociological liberalism” was to replace a “sociologically blind liberalism”
and was to help “embed [the market] in a higher overall order”.29 In reference to Weber, Woodruff calls
this the attempt to develop a theodicy for the purpose of “adding an ethical dimension to the market”. 30
Böhm then emphasised that “competition” was the “morals of the free market economy”. 31 In so doing,
the ordoliberals did not invent a genuinely new canon of values, but went back to what was tried and
tested. Numerous “explicitly normative-anthropological deliberations” of the ordoliberals left their mark
on “the strong affinity of a liberal ethos largely influenced by Protestantism”.32
The “deep Protestant grammar”33 of ordoliberalism was no accident. All the key figures of the first
ordoliberal generation were Protestants. Eucken wrote in a 1942 letter to Rüstow: “I could neither live
nor work if I did not believe that God exists.”34 The ordoliberal project that developed in the late 1930s
and early 1940s in the Freiburg circles was therefore the genuinely Protestant attempt to design an
economic order. The project would later distance itself from the social-Catholic, the Keynesian-welfarestate, and the neoclassical Austrian-Anglo-Saxon competition. The key figure was the Protestant
theologian Dietrich Bonhöffer. Between 1938 and 1944, he brought Protestant theologians (Otto
Dibelius, Constantin von Dietze), Protestant economists (Walter Eucken, Leonard Miksch, Adolf
Lampe), Protestant jurists (Franz Böhm, Hans Großmann-Doerth), and Protestant historians (Gerhard
Ritter) together in the Bonhöffer Kreis and the Arbeitsgemeinschaft Erwin von Beckerath in Freiburg.35
The Freiburger Denkschrift, which originated from these circles and was to be the blueprint for postwar reconstruction, laid out the first coherent Protestant economic and social ethics.
28
Eucken, note 13 above, 5-25.
29
W. Röpke, Jenseits von Angebot und Nachfrage, 2nd ed.(Rentsch, 1958), 19.
30
D.M. Woodruff, “Ordoliberalism, Polanyi, and the Theodicy of Markets”, J. Hien and C. Joerges (eds), Ordoliberalism, Law
and the Rule of Economics, (Hart Publishing, 2017), 215-218.
31
Böhm, note 15 above, 136.
32
T. Jähnichen, “Die Protestantischen Wurzeln der Sozialen Marktwirtschaft”, (2010) 1 Ethik und Gesellschaft, 49-58, at 11,
13.
33
P. Manow, “Ordoliberalismus als ökonomische Ordnungstheologie”, (2001) 29 Leviathan, 179-98; H. Rieter and M.
Schmolz, “The Ideas of German Ordoliberalism 1938-45: Pointing the Way to a New Economic Order”, (1993) 1 Journal
of the History of Economic Thought, 87-114; H.-P. Reuter, “Vier Anmerkungen zu Philip Manow‚ “Die Soziale
Marktwirtschaft als interkonfessioneller Kompromiss? Ein Re-Statement”, (2010) 1 Ethik und Gesellschaft, 1-22;
Jähnichen, note 32 above.
34
H.O. Lenel, “Walter Eucken’s Briefe an Alexander Rüstow”, (1991) 42 ORDO: Jahrbuch für die Ordnung von Wirtschaft
und Gesellschaft, 11-14, at 12.
35
N. Goldschmidt, “Die Entstehung der Freiburger Kreise”, (1997) Historisch-Politische Mitteilungen:Archiv für ChristlichDemokratische Politik, 1-17.
6
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
Its underlying values clearly differentiate ordoliberalism from Anglo-Saxon liberalism. Although selfinterest, which drives people to compete with each other economically, does induce them to give their
best, it can also bring them to manipulate competition to their own benefit. Just as in Protestantism,
ordoliberalism considers people to be “neither angels nor devils”,36 but rather “justified and sinners at
the same time; that is why it is decisive to place them within an order that disciplines the peccator”.37
The ordoliberal idea to employ the state as protector of the economic constitution reflects the Protestant
continental-European views of human nature. Especially the US variants of ascetic Protestantism focus
on the freedoms and rights of the individual. This often culminates in hostility toward the state which is
alien to ordoliberals (sic!). Continental-European ascetic Protestantism attempted to strengthen the
morally proper behaviour of its communities by creating a res publica christiana, a Christian state
order.38 In his work, Eucken seeks a compromise between “a Calvinist theocracy with its near identity
of church and state and the Lutheran two-kingdoms doctrine with its separation of the spiritual and
secular spheres”.39 His concepts mirror Bonhöffer’s “authoritative-paternalistic [...] thinking” that
“trusts an order and authority based on law and responsibility more than individual freedom”.40
Ordoliberalism’s notion of society is not paternalistic, even though the state’s capability to provide order
is so important to it. The state is supposed to hold back and limit itself to setting underlying conditions
for the social order. Ordoliberals reject social transfer payments as false incentives. Unconditional
transfers for reasons of solidarity would in the end result in the “total catastrophe for state and society”
and make citizens “slaves of the state”.41 Instead, the state should limit itself to ensuring equal
opportunity and creating the conditions for helping people help themselves. The deep Protestant
grammar of ordoliberalism gave it a specific concept of solidarity. Help should always be limited to
what is absolutely necessary in order to set incentives for proper ethical behaviour (hard work, solidarity,
frugality).42 This is the only way for people to liberate themselves from misery through their own efforts.
That is the Protestant core of empowerment of the individual that results from the ordoliberal logic; this
attitude is visible time and again in German politicians’ discourse during the euro crisis.
Thus, ordoliberalism distinguished itself clearly from Catholic social ethics, the major religious and
political doctrine opposing it in the 1950s and 1960s.43 The Catholic conception of the human being
assumes that individuals are not equipped with the same intellectual, moral, and physical capabilities.
For this reason, ensuring fair and equal starting conditions and opportunities, as ordoliberals do, would
not suffice for Catholic social ethics; instead, society must also guarantee a certain amount of
redistribution.44 Nonetheless, both sides tried time and again to create a synthesis of the two Christian
ideas about the economic system.
36
C. von Dietze, Theologie und Nationalökonomie, (Tübingen/Stuttgart: Furche 1947), 26.
37
Reuter, note 33 above, 3.
38
P. Gorski, The Disciplinary Revolution: Calvinism and the Rise of the State in Early Modern Europe, (University of Chicago
Press, 2003), 21; T. Petersen, “Die Sozialethik Emil Brunners und ihre Neoliberale Rezeption”, HWWI Research Paper
No. 5-6, 2008, 1-27, at 23; with Benedictine critical distance, E.E. Nawroth, Die Sozial- und Wirtschaftsphilosophie des
Neoliberalismus, (Kerle, 1961).
39
Petersen, note 38 above, 23.
40
H. Falcke, “Welche Ansätze Für Eine Wirtschaftsethik finden wir bei Dietrich Bonhoeffer?”, (2011) 71 Evangelische
Theologie, 376-95, at 382.
41
W. Röpke, Civitas humana : Grundfragen der Gesellschafts- und Wirtschaftsreform, 3rd ed., (Erlenbach-Zürich, 1949), 257.
42
K. Dyson, “Ordoliberalism as Tradition and as Ideology”, in: J. Hien and C. Joerges (eds), Ordoliberalism, Law and the
Rule of Economics, (Hart Publishing, 2017).
43
J. Hien, “Competing Ideas: The Religious Foundations of the German and Italian Welfare States. PhD Thesis. Fiesole:
European University Institute, 2012, available at:
http://cadmus.eui.eu/bitstream/handle/1814/24614/2012_Hien_AuthVersion.pdf?sequence=1&isAllowed=y.
44
Pius XI, Quadragesimo Anno, 1931, available at: http://w2.vatican.va/content/pius-xi/en/encyclicals/documents/hf_pxi_enc_19310515_quadragesimo-anno.html, 75, last accessed 22 August 2017; H. Pesch, Lehrbuch Der
European University Institute
7
Josef Hien & Christian Joerges
Müller-Armack’s attempt to create a synthesis was the concept of the “social market economy”. 45
Müller-Armack’s “social irenics” did not meet with the approval of all representatives of ordoliberalism,
but the term “social market economy” became so popular that ordoliberal purists began to claim the
concept for themselves at the latest since Germany’s economic miracle and Erhard’s book “Prosperity
through Competition”. So a robust theoretical synthesis that did justice to the ideas of both the Protestant
and the Catholic factions was never elaborated.
There were political tensions too. Although both the social-Catholic and the ordoliberal-Protestant
factions had come together in the newly established Christian Democratic Union (CDU), the traditional
mistrust with which social Catholicism approached economic liberalism soon regained the upper hand.
The old alliances between Catholicism, economic corporatism, and the Bismarckian welfare state
formed anew.46 The Protestant ordoliberals responded to this alliance with suspicion. The relationships
being renewed were too similar to those they had opposed in the 1920s. The leading ordoliberals could
not identify with and reconcile themselves to the de facto constitution of the Federal Republic’s
economy - its decidedly corporatist elements, the tendencies of political Catholicism toward economic
democracy, and the restoration of the Bismarckian welfare state under the Catholic chancellor
Adenauer.47 They saw Germany on the road to serfdom that Hayek had prophesied for welfare-state
agendas.48
The negative attitude toward social policy also became important in the first federal cabinets, in the
arguments between Adenauer, a Catholic, and Erhard, a Protestant. The controversy around the reform
of the pension system between 1955 and 1957, which was to become the new foundation for the Federal
Republic’s welfare state, was the strongest. Erhard railed against the “poison of dynamization” and
wanted to reduce pensions to a minimum.49 To Röpke, the planned reform was “the prosthesis of a
society crippled by proletarism and crumbled to bits through massification”.50
In the end, the ordoliberals had to concede defeat, and the presumably most popular reform of the postwar period was introduced. In return, Erhard was permitted to initiate the antitrust law, complete the
Bundesbank Act, and construct the German Council of Economic Experts as an independent body in
which ordoliberal expertise was to be bundled and be politically untouchable and which was to advise
the Federal government. But in fact, the institutional agenda of the ordoliberals was constantly
circumvented in the German “negotiation democracy”.51 The German post-war order was therefore not
only a compromise between capital and labour, as suggested by the term “social market economy”, but
Nationalökonomie. 1. Grundlegung, (Freiburg im Breisgau: Herder, 1914), 83; F. Mazurek, “Die Konzeption Des
Gesellschaftlichen Solidarismus Nach Heinrich Pesch“, (1980) 21 Jahrbuch Für Christliche Sozialwissenschaften, 73-98,
at 83, 93; Nawroth, note 38 above.
45
A. Müller-Armack, “Wirtschaftslenkung und Marktwirtschaft”, in: idem (ed), Wirtschaftsordnung und Wirtschaftspolitik.
Studien und Konzepte zur sozialen Marktwirtschaft und zur europäischen Integration, (Rombach, [1946] 1966), 19-170;
idem, “Die Wirtschaftsordnungen sozial gesehen”, in: idem, (ed), Wirtschaftsordnung und Wirtschaftspolitik. Studien und
Konzepte zur sozialen Marktwirtschaft und zur europäischen Integration, (Rombach, [1948] 1966), 171-199.
46
P. Manow, Social Protection, Capitalist Production. The Bismarckian Welfare State in the German Political Economy,
1880-2010, (Berlin-Bremen-Cologne, 2016), unpublished ms. (on file with authors), 84 ff.; Abelshauser, note 16 above, 93
ff.
47
J. Hien, “The Ordoliberalism that Never Was”, (2013) 12 Contemporary Political Theory, 349-358.
48
F.A. v. Hayek, The Road to Serfdom, (Routledge, 1944).
49
V. Hentschel, Geschichte der Deutschen Sozialpolitik: 1880-1980, (Suhrkamp Verlag, 1983), 165.
50
W. Röpke, “Gefahren des Wohlfahrtsstaats”, in: D. v. Schönwitz, K. Hohmann, H.-J Weber and H. Wünsche (eds),
Grundtexte zur Sozialen Marktwirtschaft, (Gustav Fischer, 1958), 253-270, at 255.
51
The entire process is reconstructed in G. Brüggemeier, Entwicklung des Rechts im organisierten Kapitalismus, Band 2,
(Syndikat, 1979), 383 ff.
8
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
a compromise between the social ethics and ideas about the economic system held by the two major
religions in Germany, as Philip Manow emphasises.52
The turn to Europe
The relationship between ordoliberalism and the project of European integration was not one of mutual
affection.53 The disappointments about Germany’s economic and societal policies may have favoured
the turn to Europe, but whether and to what extent such hopes were fulfilled is a different matter. On
the side of the ordoliberal school, we see the willingness to cooperate, but also ex post facto
rationalisations, adaptations, and finally failures. Three development phases can be differentiated.
The formative phase of “constitutionalisation” of the EEC Treaty
Ordoliberalism and its Ordnungstheorie were practically unknown beyond Germany’s borders. Even
within Germany, European law specialists, whose background was mainly in public law (Staatsrecht),
hardly took note of ordoliberalism.54 Yet legal scholars and the courts certainly did set the tone in
shaping the project of integration. But it was not ordoliberalism, but rather the project of “integration
through law” which represented the legal field’s claim to leadership, whereby law presented itself as a
stringently constructed system - a doctrine in the style of German “jurisprudence of concepts.”
Summarised briefly:
Norms of the EEC Treaty which are sufficiently concrete apply directly in the Member States. Since
these norms apply directly, they must take precedence over national law. This applies in particular to
the fundamental economic freedoms which can be asserted by Europe’s market citizens before the
European Court of Justice, countering relevant national legislation. This Court safeguards the
uniformity of European law. That is why its interpretation must be binding.
These are the core concepts whose interaction comprises the so-called constitutionalisation of the
European Treaties. They have taken on paradigmatic significance, and have convinced and guided
generations of lawyers.55 Political, social, and economic determinants of this development of the law
were disregarded. The legal doctrine of European law cannot explain the success of this doctrine. Its
practical impact only becomes intelligible based on how it functions for a project of integration
conceived of as being market-rational. And it is within precisely this explanatory framework that it
becomes understandable why the orthodoxy of European law is attractive to ordoliberalism:56 the
freedoms guaranteed in the EEC Treaty, the opening up of national economies, the bans on
discrimination, and the commitment to a system of undistorted competition were interpreted as a
52
P. Manow, “Modell Deutschland as an Interdenominational Compromise”, CES Working Paper 003, 2000.
53
Leading representatives of the ordoliberal school initially rejected the project of integration; cf., M. Wegmann, Früher
Neoliberalismus und Europäische Integration, (Nomos Verlag, 2002), 313 ff.
54
The doyen of the new discipline, Hans Peter Ipsen, was one of the exceptions, yet kept a critical distance from ordoliberalism
in his seminal book Europäisches Gemeinschaftsrecht, (Mohr/Siebeck, 1972), 976 ff.).
55
D. Augenstein and M. Dawson, “What Law for what Polity? ‘Integration through Law’ in the European Union Revisited”,
in: D. Augenstein (ed.), “Integration through Law” Revisited: The Making of the European Polity, (Ashgate Publishing,
2013) with extensive references. One of the very rare critical voices is, prominently, D. Grimm, Europa ja - aber welches?
Zur Verfassung der europäischen Demokratie, (C.H. Beck, 2016). - The impact has been documented not, as the author
claims, in ”the first historical analysis” but with particular care by R. Byberg, “The History of the Integration Through Law
Project: Creating the Academic Expression of a Constitutional Legal Vision for Europe”, (2017) 18 German Law Journal,
1532-1556; this euphemism in this work does justice do the enthusiasm and prudence of the founding fathers of the project
but cannot camouflage the theoretical poverty of its conceptual frame.
56
Cf., already, C. Joerges, “The Market without a State? States without Markets? Two Essays on the Law of the European
Economy”, EUI Working Paper Law 1/96, San Domenico di Fiesole 1996 (http://eiop.or.at/eiop/texte/1997-019 and 020.htm); idem, “Economic Law, the Nation-State and the Maastricht Treaty”, in: R. Dehousse (ed.), Europe after
Maastricht: an Ever Closer Union? (C.H. Beck, 1994), 29-62.
European University Institute
9
Josef Hien & Christian Joerges
“decision” in favour of an economic constitution conforming to the underlying conditions of a marketbased order. The EEC could be understood as a legal order committed to maintaining economic
freedoms and protecting competition by means of supranational institutions that precisely because of
this gained a constitutional legitimacy independent of that of the democratic nation-state - and that
simultaneously placed limits on the Community’s scope of political action.57 In this way, ordoliberalism
was able to answer the question about the legitimacy of the project of integration more conclusively
than the prevailing orthodoxy. The fact that the EEC had constituted itself as a “market without a state”58
did not raise eyebrows. Independent institutions that cannot be guided politically certainly do satisfy an
ordoliberal constitution of the economy, once the “basic decision” in favour of such an order has been
taken.
So, even during the formative phase of the process of integration, do we already have to contend with it
“ordoliberalising” Europe? Such an assumption would amount to the mere possibility of a reconstruction
of the project of integration along ordoliberal lines being taken at face value. The ordoliberal vision of
an autonomous transnational economic constitution was a normative project that was hardly noticed, let
alone recognized, outside of Europe. As Abelshauser showed,59 it was impossible to reach consensus
about it even between the Ministry for Economic Affairs and the Federal Foreign Office. Giandomenico
Majone observes soberly and soberingly:60 in the 1950s, planification and interventionist practices were
commonplace in the founding states in all sectors of the economy - how could defeated Germany, of all
countries, have been able to prevail in Europe with a liberal Ordnungspolitik that could not even be
implemented domestically? Is it legitimate to present the acceptance found by the chapter on competition
policy as an ordoliberal moment even though it appears simply imperative that the continued existence
of barriers to trade is incompatible with the agenda of market integration; that, on the one hand,
governments must be kept from creating a competitive advantage for their own economies through
subsidies, and, on the other, companies must not be permitted to organise market compartmentalisation?
After all this, even limiting the Community to the economy and by doing so foregoing a European labour
and social constitution, which indeed initiated the “decoupling” of the social dimension from the
institutionalisation of Europeanised “undistorted competition”,61 cannot be exposed so easily as
(backhanded) cunning on the part of ordoliberal reason. Did it not stand to reason instead to set aside
such efforts to expand and deepen the project of integration because opening up the national economies
and removing barriers to trade were considered a win-win matter even by socially oriented economists62
and it could be assumed that the social security systems organised along nation-state lines would remain
57
Instructive, A. Müller-Armack, “Die Wirtschaftsordnung des Gemeinsamen Marktes”, in: idem (ed.), Wirtschaftsordnung
und Wirtschaftspolitik. Studien und Konzepte zur sozialen Marktwirtschaft und zur europäischen Integration, (Rombach:
1966), 401-415, at 401 ff.
58
C. Joerges, “Markt ohne Staat? Die Wirtschaftsverfassung der Gemeinschaft und die regulative Politik”, in: R. Wildenmann
(ed), Staatswerdung Europas? Optionen einer Europäischen Union, (Baden-Baden.1991), 225-268.
59
W. Abelshauser, “Deutsche Wirtschaftspolitik zwischen europäischer Integration und Weltmarktorientierung”, in: idem (ed),
Das Bundeswirtschaftsministerium in der Ära der Sozialen Marktwirtschaft. Der deutsche Weg der Wirtschaftspolitik,
(Walter de Gruyter, 2016), 482-581, at 537 ff.
60
G. Majone, Rethinking the Union of Europe Post-Crisis. Has Integration Gone Too Far?,(Cambridge University Press,
2010), 90 ff; in depth, A. Milward, The European Rescue of the Nation State, (Routledge, 1992).
61
F.W. Scharpf, “The European Social Model: Coping with the Challenges of Diversity”, (2002) 40 Journal of Common
Market Studies, 645-670, at 645 f.
62
Cf. especially the “Ohlin Report” of the International Labour Organization 1956, 99-123.
10
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
intact in the golden age of “embedded liberalism”?6364 It is telling that ordoliberal protagonists were
undeterred by such declarations in their own interpretation of integration.65
Von Hayek’s and Mestmäcker’s “Neo-ordoliberalism”
Europe’s integration through law experienced and withstood many a crisis, therefore progressing only
slowly - until in 1985 Delors, the charismatic President of the Commission, triggered an unprecedented
dynamic with his “White Paper on completion of the internal market”.66 Its agenda was met with strong
approval by the ordoliberal camp, but just as in the previous section on the “constitutionalisation of the
treaties” and the “integration through law,” it would be too simplistic to conclude again that an
“ordoliberalisation” of Europe were taking place on the basis of the affinities between the practice of
integration policy and its theoretical reconstruction.
The affinities and discrepancies between Delors’s internal market initiative and the ambitions of the
ordoliberal school become apparent when placed in the context of the revision of ordoliberal legal
theory, which was carried out in the national context as early as the 1960s.67 It was a revision of
paradigmatic dimensions. It took place when Friedrich A. von Hayek returned from Chicago to succeed
ur-Freiburger Walter Eucken. Von Hayek’s theorem of “competition as a discovery procedure”68
became the new guiding star for the second generation of German post-war ordoliberalism. Erich
Hoppmann, who was appointed von Hayek’s successor in Freiburg in 1968 and then became director of
the Walter Eucken Institut in 1970, again as von Hayek’s successor, was decisive in keeping the
connection between economics and jurisprudence alive. His congenial companion as a legal scholar was
Ernst-Joachim Mestmäcker, a student of Böhm’s, who was the leading theorist and also the most
influential representative of the new generation. The opinions on the internal market initiative by the
protagonists of the ordoliberal tradition, specifically those of the Board of Academic Advisors to the
Federal Ministry for Economic Affairs69 and the Monopolies Commission,70 are to be seen against this
background.
The principle of “mutual recognition” of product standards and regulations, which was introduced by
the ECJ’s legendary Cassis ruling and systematically developed in the Commission’s White Paper, was
understood as institutionalising a regulatory competition which was to expose national laws to an
international competition for the “best” regulation. Tendencies in the ECJ’s rulings to have European
antitrust law strengthen the supervision of national legislation were understood in the same vein. This
reorientation of antitrust law centred on a core element of the ordoliberal tradition, namely controlling
63
On the concept, see J.G. Ruggie, “International Regimes, Transactions and Change: Embedded Liberalism in the Postwar
Economic Order”, (1982) 36 International Organization, 375-415; J. Steffek, Embedded Liberalism and its Critics:
Justifying Global Governance in the American Century, (Springer, 2006).
64
Cf. S. Giubboni, Social Rights and Market Freedoms in the European Constitution. A Labour Law Perspective , (Cambridge
University Press, 2006), who argues: “[T]he apparent flimsiness of the social provisions of the Treaty of Rome (and of the
slightly less meagre ones of the Treaty of Paris) was in reality consistent with the intention, imbued with the embedded
liberalism compromise, not only to preserve but hopefully to expand and strengthen the Member States’ powers of
economic intervention and social governance: i.e., their ability to keep the promise of protection underlying the new social
contract signed by their own citizens at the end of the war” (loc. cit., 16); similarly F. Rödl, “Arbeitsverfassung”, in: A. v.
Bogdandy and J. Bast (eds), Europäisches Verfassungsrecht, 2nd ed. (Springer, 2009), 855-904, at 867.
65
Cf. the references in W. Sauter and H. Schepel, State and Market in European Union Law: The Public and Private Spheres
of the Internal Market before the EU Courts, (Cambridge University Press, 2009), 13-15.
66
Commission of the EC 1985.
67
Pierre Dardot and Christian Laval call this turnaround “neo-ordoliberalism” (Dardot & Laval, note 2 above, 205 ff).
68
F.A. v. Hayek, “Wettbewerb als Entdeckungsverfahren”, reprinted in idem, Freiburger Studien. Gesammelte Aufsätze,
(Mohr, 1969), 249-265.
69
Board of Academic Advisors to the Federal Ministry for Economic Affairs 1986.
70
Monopolies Commission 1990, 401.
European University Institute
11
Josef Hien & Christian Joerges
private power by controlling competition. The Chicago School declared this objective misguided
because it did not promote efficiency at all. In effect, this corresponded to the notions of Hayek’s theory
of “competition as a discovery procedure”, which the legal scholars of the “second generation” of the
ordoliberal school had adopted.71 Protecting the freedom of entrepreneurial activities, they maintained,
required above all striking down anticompetitive regulations and limiting government subsidies.
Deregulation and privatisation policies now determined Europe’s agenda. As was already the case in the
formative phase of the project of integration, it would again be premature to conclude, on the basis of
these affinities between the reorientations of the “second generation” and Anglo-Saxon neoliberalism,
which had been adopted in Europe, that German “neo-ordoliberalism” was successful.72
Besides these affinities, however, there were also considerable discrepancies. They became manifest
when the internal market initiative entangled the Community in a growing number of social regulatory
issues concerning environmental, labour, and consumer protection and established an increasingly
extensive regulatory machinery. It was now about re-regulation, not de-regulation, a finding that had to
irritate Anglo-Saxon neoliberals and German neo-ordoliberals.73 The weight and the dynamics of the
new regulatory policies were ignored or underestimated by Ordnungstheorie and Ordnungspolitik.74 The
new chapter on industrial policy was taken note of - and rejected.75 Once the European policy
competencies had been broadened and the relevant regulatory bodies had been established, it was no
longer comprehensible how one could continue to assign a constitutional core function to the “system
of undistorted competition”. It had become clear that Europe placed little trust in “competition as a
discovery procedure”.76 Ordoliberalism adopted a critical distance.77
The Economic and Monetary Union (EMU) in the Maastricht Treaty as a pyrrhic victory
The Maastricht Treaty was the hitherto most ambitious integration project. The competencies of the
project, which was from then on called “Union”, were expanded to include environmental and industrial
policy. A European polity emerged. The approaches of a “social Europe” were strengthened. An “ever
71
C. Joerges, “What is Left of the European Economic Constitution? A Melancholic Eulogy”, (2005) 30 European Law
Review, 461-489, at 472 ff.
72
D. Bartalevich, “Do Economic Theories Inform Policy? Analysis of the Influence of the Chicago School on European Union
Competition
Policy”,
Ph.D
thesis,
Copenhagen
Business
School,
2017,
available
at:
http://openarchive.cbs.dk/handle/10398/9530, last accessed 22 August 2017; A. Wigger, “Debunking the Myth of the
Ordoliberal Influence on Post-war European Integration”, in: J. Hien and C. Joerges (eds), Ordoliberalism, Law and the
Rule of Economics, (Hart Publishing, 2017), 161-178.
73
First recognised very clearly and elaborated programmatically by Giandomenico Majone (G. Majone, “Regulating Europe:
Problems and Prospects”, (1989) 3 Jahrbuch zur Staats- und Verwaltungswissenschaft, 159-177; idem, Deregulation or
Re-Regulation? Regulatory Reform in Europe and the United States, (St. Martin’s, 1990).
74
The fact that Ordnungstheorie did not address the problems of the “risk society” corresponds to its fixation on competition.
In risk society, decision problems arise that cannot be handled by market participants' decisions; cf. M. Everson and C.
Joerges, “Consumer Citizenship in Postnational Constellations?”, in: K. Soper and F. Trentmann (eds), Citizenship and
Consumption, (Palgrave Macmillan, 2008), 154-171.
75
See W. Mussler, Die Wirtschaftsverfassung der Europäischen Gemeinschaft im Wandel. Von Rom nach Maastricht, (Nomos
Verlag, 1998), 166 ff; M.E. Streit and W. Mussler, “The Economic Constitution of the European Community. From ‘Rome’
to ‘Maastricht’”, 1995 1 European Law Journal, 5-30; P. Behrens, “Die Wirtschaftsverfassung der Europäischen
Gemeinschaft”, in: G. Brüggemeier (ed.), Verfassungen für ein ziviles Europa, (Nomos Verlag, 1994; E.J. Mestmäcker,
“On the Legitimacy of European Law”, in: idem (ed.), Wirtschaft und Verfassung in der Europäischen Union. Beiträge zu
Recht, Theorie und Politik der europäischen Integration, (Nomos Verlag, [1993] 2003), 133 ff.
76
W. Sauter, Competition Law and Industrial Policy in the EU, (Oxford University Press, 1997), 26 ff.
77
See Streit and Mussler, note 75 above, and Behrens, note 75 above, 73-90. The fact that the plurality of constitutional
requirements relativizes the relevance of the system of undistorted competition was certainly registered by E.-J.
Mestmäcker and H. Schweitzer, Europäisches Wettbewerbsrecht, 2nd ed., (C.H. Beck, 2004), 112 ff., but they add that “in
the German-language literature [...] the primacy of an overall order characterized by the internal market and undistorted
competition had prevailed”.
12
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
closer Union” was to develop. There was nothing genuinely ordoliberal about any of this. But there was
also the Economic and Monetary Union: an independent central bank, the commitment to price stability,
support for the currency through a Stability Pact. Was all this not ordoliberal?
Concerning the argument accompanying the treaty coming into existence, we must refer to the relevant
analyses.78 Here, we limit our observations to a legal dispute: the Maastricht Treaty was brought before
the German Federal Constitutional Court, whose decision of 12 October 1993 caused quite a sensation
and shock among scholars of European law:79 the Community, the court claimed, was merely an
association of states; the Federal Constitutional Court had the right to review whether the system of
power was being heeded; allegiance to “ultra vires legal acts” was to be refused. The Constitutional
Court also found that it was a dictate of democracy for the populace to have the opportunity “to give
legal expression [...] to that which - relatively homogeneously - joins it together intellectually, socially,
and politically”.80
The criticism triggered by all this81 drew attention away from arguments put forward by the
complainants that are much more important in our context: in particular, they claimed that the European
Union had such far-reaching competencies that the nation-states were no longer in a position to
discharge important tasks. This erosion of national statehood, they asserted, called the continued
existence of democratic statehood into question altogether. This line of argument prompted the Federal
Constitutional Court to position the constitutional democracy of the Federal Republic of Germany in
opposition to the continuing erosion of its statehood. Although the ruling ultimately approved European
integration, it arrived at this result by taking up ordoliberal theorems. In the process, it itself subverted
its demand for preserving democratic decision-making power and relinquished the Member States’
political control over their economies.
How was that possible, and why did nobody notice? One fundamental contradiction in the reasons given
for the ruling actually appears obvious. It is true that the Federal Constitutional Court declares that
“fundamental” powers are to be left to the Bundestag as an essential constitutional requirement. But
then the reasons given for the ruling make a strictly ordoliberal about-face: economic integration, the
court said, was a non-political process that was taking shape autonomously and beyond the Member
States. The Monetary Union needed functional legitimacy which was to be appropriately
institutionalised by means of a constitutional duty to guarantee price stability and regulations to counter
excessive budget deficits. By putting such institutional provisos into practice, the court concluded, the
objections against the democratic legitimacy of economic integration had resolved themselves. In other
words, the European Union is permitted to constitutionalise itself as a “market without a state”, and its
Member States may transform themselves into “states without markets”.82
78
Especially K. Dyson, The Road to Maastricht: Negotiating Economic and Monetary Union, (Oxford University Press, 1999).
79
BVerfG 89, 155.
80
Loc. cit., 186.
81
J.H.H. Weiler, “Does Europe Need a Constitution? Reflections on Demos, Telos and the German Maastricht Decision”,
(1995) 1 European Law Journal, 219-258, at 219 ff. B.-O. Bryde, “Die bundesrepublikanische Volksdemokratie als Irrweg
der Demokratietheorie”, (1994) 5 Staatswissenschaften und Staatspraxis, 305-330. This assertion that none exists may be
incorrect, for nobody can gain an overview of the immense literature on the Maastricht judgment; however, it is true that
even an analysis as comprehensive as that by Franz C. Mayer (F.C. Mayer, Kompetenzüberschreitung und
Letztentscheidung. Das Maastricht-Urteil des Bundesverfassungsgerichts und die Letztentscheidung über Ultra-vires-Akte
in Mehrebenensystemen; eine rechtsvergleichende Betrachtung von Konflikten zwischen Gerichten am Beispiel der EU
und der USA, (C.H. Beck, 2000) does not deal with the decision’s problématique relating to the law of the economic
constitution.
82
Cf. already, C. Joerges, “States without a Market? Comments on the German Constitutional Court’s Maastricht-Judgment
and a Plea for Interdisciplinary Discourses”, 1996, available at: http://eiop.or.at/eiop/texte/1997-020.htm, last accessed 22
August 2017.
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This entailed a fair bit of hubris. The Monetary Union certainly depended on Germany. But was this to
mean that it could be subjected to German conditions? The German Federal Constitutional Court
emphasised this point with a threat: “The concept of the Monetary Union as a ‘Stabilitätsgemeinschaft’
(community of stability) is the basis and the object of the German law approving [entry into the union].
If the Monetary Union should be unable to continue to develop the stability existing at the beginning of
the third phase in accordance with the agreed commitment to ensure stability, then it would abandon the
contractual conception.” And if it should turn out “that the desired Monetary Union cannot be realized
without an (as yet undesired) political union”, then a new political decision about how to proceed further
would be required.83 Paul Kirchhof, the reporting Justice of the 2nd Senate, was an expert in public law
and a Catholic, and not a “recognised” ordoliberal in either identity. It is all the more remarkable that
he attempted to clarify the indeterminacies of the treaty text by means of a concept that reads as if it
were ordoliberal and that was to make this interpretation binding across Europe. However, it very rapidly
turned out that this was wishful thinking when that which was never to happen, according to the decision,
actually did happen: the “community of stability” proved unstable. When in 1998, before entry into the
third stage of the Monetary Union, the German Federal Constitutional Court was confronted with the
demand to review whether the criteria it had formulated itself were being respected, the court had no
other option but to refer to the prerogatives of the responsible state bodies to assess the matter.84 This
was where the law entered into the crisis mode of European governance: political constraints prevailed
over the legally formulated provisions.85 Hardly less astonishing than the statements by the Federal
Constitutional Court on the legally binding nature of the “community of stability” was Mestmäcker’s
assessment of the situation in 2007: “Trust in independent institutions, represented by German
experiences with the Federal Constitutional Court and the Bundesbank, was probably the most important
German contribution to the constitutional structure of the EC.”86 To be sure, this statement predates the
crisis. But even in 2007, this was the same type of wishful thinking that we observed in the earlier phases
of the project of integration.87
Crisis policy: An “Ordoliberalisation of Europe” or the failure of the ordoliberal project?
What is the state of the frequently invoked “ordoliberalisation of Europe”?88 Did ordoliberalisation
prevail thanks to the crisis, whereas in the decades before it had made little impact and had remained
wishful thinking? How could we tell? (1) By the Maastricht Treaty and the economic and monetary
policy agreed in it? (2) By the crisis policy measures? (3) By the rulings on crisis policy? – Time and
again in our discussion of these broad questions, we encounter the patterns that we faced throughout our
reconstruction of the reception history of ordoliberalism.
(1) The agreement on the Economic and Monetary Union (EMU) is largely considered the high point of
the project of the internal market. The same is true of the assumption that the Monetary Union was a
construct permeated with ordoliberalism. This is indeed corroborated by important factual, substantial,
and institutional evidence. The most important evidence in factual terms is the commitment of monetary
policy to price stability (Art. 127 TFEU; ex Article 105 EC Treaty), compliance with which the Federal
83
BVerfG 89, 155, margin numbers 90, 93.
84
Decision of 31 March 1998, BVerfGE [Decisions of the Federal Constitutional Court] 97, 350.
85
This was repeated in the most dramatic terms in the argument between the Federal Constitutional Court and the ECJ about
the ECB’s OMT programme, which we discuss in Section 6. (3); “pereat iustitia, fiat mundus” (C. Joerges, (2016) 23
Maastricht Journal of European & Comparative Law, 99-118) is a description that seeks to point out the renunciation of
the law, but is not intended to insinuate, for example, that the EMU or its interpretation by the Federal Constitutional Court
were “just”.
86
E.-J. Mestmäcker, “Europäische Prüfsteine der Herrschaft und des Rechts”, (2007) 57 ORDO: Jahrbuch für die Ordnung
von Wirtschaft und Gesellschaft, 3-16, at 12.
87
Cf. Section 5, a), b), c).
88
Blyth, note 2 above, 142.
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Dead man walking: Current European interest in the ordoliberal tradition
Constitutional Court declared to be a precondition for Germany’s joining the Monetary Union, only to
declare the stability of the “community of stability” to be a sine qua non of its binding nature for
Germany.89 The most important institutional indicator is the establishment of the ECB and its being
endowed with a degree of independence that is significantly greater than that of the German
Bundesbank. Nonetheless, giving up the D-Mark remained very highly controversial among German
economists. “The excessively hasty introduction of a European Monetary Union will expose Western
Europe to strong economic tensions that could bring about a crucial political test in the foreseeable
future, thereby endangering the goal of integration”, read one of the 11 points of a critical
memorandum.90 Ultimately, what was likely decisive was not the discourse among experts, but
politics.91
We are not trying to reconstruct the processes of how it came into existence in order to determine which
reasons were ultimately decisive; clearly, we are instead focusing on the body of rules established by
the Maastricht Treaty. This regime lacks essential characteristics of a constitutional order. Instead, the
EMU institutionalised a constellation of conflict that cannot be resolved. This came about by assigning
monetary policy to the Union level, but retaining the nation-states’ responsibility for fiscal and economic
policy, thus installing actors with markedly different preferences and interests for interdependent policy
fields without creating a framework which would have allowed the political and economic conflicts
arising from this situation to be resolved. The Stability Pact, which complements the EMU, was a lex
imperfecta, and the Union’s competency to coordinate (Art. 121 TFEU) was feeble. However, the
policy’s incoherences and laxness were by no means an accident or the result of poor craftsmanship in
designing the treaty. National parliaments’ power of the purse is the core competency of parliaments in
democracies. Nobody could expect of the Member States that they would relinquish fiscal policy in
addition to monetary policy. Yet the protagonists of the EMU were certainly aware of the differences
between economic cultures, including those within the euro area. They would also have had to
acknowledge that the Union did not meet the conditions of an optimal currency area. A stipulation that
strict rules would apply was therefore simply out of the question. It could only be about having as much
leeway as possible for fine-tuning and political compromises - borne by that culture of unlimited
optimism that European politics has relied on time and again.92
(2) Was the crisis of the ordoliberal or neoliberal agenda at least followed by pertinent reactions, as was
93
reported everywhere? The flood of norms alone that are to bring the financial, sovereign debt, and
economic crises under control should give pause. The collection of relevant legal texts compiled by
94
Fernando Losada and Agustín José Menéndez, which does not even document the regulations
95
subsequently introduced in the Member States, runs to 800 pages. The extent and the density of this
body of rules show that the crisis policy seeks to leave nothing to Hayek’s “competition as a discovery
96
procedure” and blithely disregards the cautioning words from his Nobel Prize acceptance speech about
89
BVerfG 89, 155.
90
Memorandum führender deutscher Wirtschaftswissenschaftler zur Währungsunion vom 11. Juni 1992, available at:
http://www.dasgelbeforum.net/forum_entry.php?id=211943&page=22&category=0&order=time.
91
Abelshauser, note 59 above, 555 ff.
92
Majone, note 60 above, 58 ff.
93
Most recently, again with philosophical aspirations, Oksala, note 2 above, 181-196.
94
F. Losada and A.J. Menéndez, “The Key Legal Texts of the European Crises. Treaties, Regulations, Directives, Case Law”,
Oslo: ARENA Centre for European Studies, 2014; available at: http://www.sv.uio.no/arena/english/research/
publications/publications-2014/menendez-losada-legal-texts-v01-120614.pdf., last accessed 22 August 2017.
95
This is documented meticulously by a project of the European University Institute: Constitutional Change through Euro
Crisis Law. A Multi-level Legal Analysis of Economic and Monetary Union. http://eurocrisislaw.eui.eu, last accessed 22
July 2017.
96
v. Hayek, note 68 above.
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97
presumption of knowledge . Instead, the agenda of the crisis policy is to force structural convergence
98
in the euro area. Not only von Hayek, but also Walter Eucken would be horrified: von Hayek because
the massive interventionism disregards his economic-policy warnings and normative positions; Eucken
because although the procedures of the crisis policy are supposed to increase “competitiveness”
everywhere, the stony path to this faraway goal is pursued with economic-policy tools that have nothing
99
in common with Eucken’s Ordnungspolitik.
But do the TSCG, the debt brake, the increasing competitiveness not correspond to the ordoliberal canon
of values? Will, for this reason, an economic system be institutionalized in the end that respects and
insists on market processes? For the time being, it is unforeseeable how and when the new forms of
economic governance could be transformed into an Ordnungspolitik in the sense of the ordoliberal
tradition. The specific feature of this policy was its legal force, the interdependency of legal order and
economic order: Foucault understood this interdependency as follows: “What does applying the
principle of the rule of law in the economic order mean? Roughly, I think it means that the state can
make legal interventions in the economic order only if these legal interventions take the form solely of
the introduction of formal principles. There can only be formal economic legislation. This is the
100
principle of the Rule of law in the economic order.” It was precisely this postulate of an economic
policy bound to justiciable criteria that Ernst-Joachim Mestmäcker declared to be indispensable.101
(3) The likely most important ECJ decision since the famous reasons for the direct effect of sufficiently
concrete provisions of the EEC Treaty in 1963102 is the Gauweiler decision of 16 June 2015.103 The ECJ
had to examine the question presented to it by the German Federal Constitutional Court whether the
ECB was respecting the limits on its monetary-policy mandate or was rather arrogating the economicpolicy competencies reserved for the Member States when it bought bonds from Member States that had
gotten into financial difficulties, insisting that “[t]he granting of any financial assistance” remain bound
to the “strict conditionality” that was demanded in return for the financial assistance (Art. 136 III TFEU).
These conditionalities concern the financial- and economic-policy conduct of the Member State in
question. Here, the ECJ considered itself authorized to clarify the constellation of conflict that was
institutionalised with the establishment of the EMU: the Bank had been assigned a technically highly
complex task, namely monetary policy, the fulfilment of which required relevant expertise. Performing
this task independently, the court said, included the freedom of the ECB to determine autonomously
what was required in terms of monetary policy. The assessment by the ECB of the economic situation
and the ECB’s measures were legal, provided that “no obvious mistake in assessment could be
determined”.104 The Gauweiler decision legalized the transformation of the economic order into a
technocratic regime that owes nobody political responsibility and that draws its legitimacy from its
expertise. Of course, this is a type of expertise that cannot rely on proven knowledge, but demands that
its discretionary decisions in dealing with situations of uncertainty are respected as a matter of
97
F.A. v. Hayek, Die Anmaßung von Wissen: Die Irrtümer des Sozialismus, (Siebeck, 1996).
98
F.W. Scharpf, “Forced Structural Convergence in the Eurozone”, MPIfG Discussion Paper 16/15, 2016.
99
M. Hadeed, “The Ordoliberal Ghost”, (2017), available at: https://www.socialeurope.eu/the-ordoliberal-ghost, last accessed
22 August 2017; incidentally, Eucken 1952, 245 ff. emphasises the context dependence of the form of competitive-based
orders.
100
Foucault, note 6 above, 171.
101
E.-J. Mestmäcker, ‘Power, Law and Economic Constitution’, German Economic Review, (1973) 2, 177-198.; instructive
also the criticism of Posner’s economic legal theory in E.-J. Mestmäcker, A Legal Theory without Law. Posner v. Hayek
on Economic Analysis of Law, (Mohr/Siebeck, 2007).
102
Case 26-62, van Gend & Loos v Netherlands Inland Revenue Administration, Judgment of the Court of 5 February 1963.
EUR-Lex - 61962CJ0026_SUM - EN
103
ECJ, Case C-62/14, Judgment of the Court (Grand Chamber), 16 June 2015, Peter Gauweiler and others v Deutscher
Bundestag, ECLI:EU:C:2015:400.
104
Ibid., para. 74.
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Dead man walking: Current European interest in the ordoliberal tradition
principle.105 This case was observed and applauded in all the subdisciplines of European Studies, that is,
by scholars of the law, politics, and economics.106 Following this development, it is no longer clear how
ordoliberalism, a theory of economic law, could defend its theoretical core characteristics, namely
commitment to the rule of law and guidance of economic policy by justiciable criteria.
The disintegration of ordoliberalism in economic science
So far, we have documented only the progressing “delegalisation” of “economic governance” that has
culminated in the crisis policy. But the economic foundations of ordoliberalism have lost some of their
previous attractiveness as well. This is a process extending far back into the last century. 107 After the
turn of the millennium, nothing less than a jolt of formalisation and modelling permeated the field of
economic science in Germany. Ordnungsökonomik, which was sceptical about the mathematisation of
the discipline and had a strong philosophical and normative orientation, slipped into the margins.108
Apparently, it could no longer survive internationally in light of the dominance of universalistic AngloSaxon microeconomics. Young German economists were faced with the choice of either turning away
from the classical Ordnungsökonomik or being unable to keep up internationally. The Cologne methods
dispute, which was sparked when six professorships previously tailored to Ordnungspolitik were to be
filled, attracted considerable attention. Following two appeals published in the Frankfurter Allgemeine
Zeitung and the Handelsblatt, a harsh exchange ensued in which 83 ordoliberals and 188 modernisers
spoke out.109 The strongest critics of the reorientation included Hans Willgerodt (a nephew of Wilhelm
Röpke, member of the Kronberger Kreis, and publisher of the Ordo Jahrbuch) and Christian Watrin (a
student of Müller-Armack), both professors emeritus at Cologne University and representatives of
Ordnungsökonomik. Both had directed the Institute for Economic Policy at the University of Cologne,
which had been founded by Müller-Armack. The ordoliberal economists criticized modern economics
for the wide discrepancy “between formal models defined for artificial worlds - [...] and the economic
policy problems arising in our experiential world with its real institutions and real people”.110 German
economists working abroad stated: “German economics is fossilized”;111 “many of the purely verbal
105
On this difference: J. White, “Policy Between Rule and Discretion”, in: J. Hien and C. Joerges (eds), Ordoliberalism, Law
and the Rule of Economics, (Hart Publishing, 2017), 289-300.
106
For the second time, the Federal Constitutional Court referred the matter to another court on 18 July 2017. The court’s
ruling here questions the ECB’s policy of “quantitative easing”, stating that it might be a form of public sector finance that
is incompatible with the Gauweiler decision: BVerfG, Decision of the Second Senate of 18 July 2017- 2 BvR 859/15 –
paras. (1-137). The ECJ’s response can be expected to take some months. Its conclusion is foreseeable; cf. M. Goldmann,
“Summer of Love: Karlsruhe Refers the QE Case to Luxembourg”, 2017, available at: http://verfassungsblog.de/summerof-love-karlsruhe-refers-the-qe-case-to-luxembourg, last accessed 22 August 2017.
107
A. Nützenadel, Der Ökonomen. Wissenschaft, Politik und Expertenkultur in der Bundesrepublik 1949-1974, (Vandenhoeck
& Ruprecht, 2005), esp. 33 ff.
108
R. Sala, “Methodologische Positionen und soziale Praktiken in der Volkswirtschaftslehre: Der Ökonom Walter Eucken in
der Weimarer Republik”, 2011, WZB Discussion Paper, No. SP IV 2011-401; U. Dathe, “Walter Euckens Weg zum
Liberalismus (1918–1934)”, (2009) 65 ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 53-86; J.
Zweynert, “Die Entstehung Ordnungsökonomischer Paradigmen: Theoriegeschichtliche Betrachtungen”, 2007, Freiburger
Diskussionspapiere zur Ordnungsökonomik 07/8.
109
V. Caspari and B. Schefold, Wohin steuert die ökonomische Wissenschaft? Ein Methodenstreit in der Volkswirtschaftslehre,
(Campus Verlag, 2011).
110
V. Vanberg, “Die Ökonomie ist keine zweite Physik”, Frankfurter Allgemeine Zeitung 13 April 2009, available at:
http://www.faz.net/aktuell/wirtschaft/wirtschaftswissen/wissenschaft-die-oekonomik-ist-keine-zweite-physik1792335.html, last accessed 22 August 2017.
111
C. Dustmann, “Deutsche VWL ist verknöchert”, Handelsblatt, 4 May 2009, available at:
http://www.handelsblatt.com/politik/konjunktur/oekonomie/nachrichten/oekonomenstreit-christian-dustmann-deutschevwl-ist-verknoechert/3169706.html, last accessed 22 August 2017.
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analyses to be found, for instance, in German-language journals [are] deeply permeated by ideology.”112
They criticised the “separate path taken in Germany” which, they alleged, meant withdrawing into its
“national shell”.113 German economists working in the US faulted a “doctrinaire provincialism” of
“philosopher-economic policymakers in the German tradition” and called the Cologne methods dispute
a “sideshow”.114
In the end, the Anglo-Saxon camp prevailed once and for all. Tim Krieger, holder of the Endowed Chair
for Constitutional Political Economy and Competition Policy in Freiburg, commented: “[A]fter
Cologne, it was clear to us younger economists that we would not be appointed professors if we worked
on classical Ordnungsökonomik; that is why we oriented our work toward the international
developments in the discipline from the beginning.”115
The fact that ordoliberalism still has considerable weight in some political and administration circles in
Germany, however, could be recognized in two contributions to the dispute among economists. Then
State Secretary in the Ministry for Economic Affairs Walther Otremba, who had prepared a doctorate
on Barriers to Entry as a Problem of Competition Policy in Cologne in the 1970s, warned of overly
strong mathematisation resulting from the planned reorientation of economics in Cologne, but admitted
that “saying ‘Freiburg School’ in the morning and ‘Ludwig Erhard’ in the evening” would not suffice
to keep up internationally.116 Weidmann, President of the Bundesbank, commented: “Personally, I
couldn’t and still can’t glean much from this debate. Both are important; both complement each other:
we need an economic policy framework founded on norms, that is, a guiding principle resting on proven
principles.”117
Ordoliberalism as political culture
Jens Weidmann has mentioned Eucken in 33 of the 106 speeches he has given since becoming president
of the Bundesbank in 2011. In a speech in Freiburg in 2013, he agreed with Lars Feld by repeating what
112
Ibid.
113
G. Kirchgässner, “Der Rückzug ins nationale Schneckenhaus”, Frankfurter Allgemeine Zeitung, 15 June 2009, available at:
http://www.faz.net/aktuell/wirtschaft/wirtschaftswissen/oekonomenstreit-der-rueturfckzug-ins-nationale-schneckenhaus1811767.html, last accessed 22 August 2017.
114
Harald Uhlig quoted in O. Storbeck, “Deutsche Ökonomen zerfleischen sich”, Handelsblatt 4 May 2009, available at:
http://www.handelsblatt.com/politik/konjunktur/oekonomie/nachrichten/volkswirtschaftslehre-deutscheoekonomen-zerfleischen-sich/3169902.html, last accessed 22 August 2017; R. Bachmann, “Peinliche Unkenntnis”,
Handelsblatt 4 May 2009, available at:
http://www.handelsblatt.com/politik/konjunktur/oekonomie/nachrichten/oekonomenstreit-ruediger-bachmann-peinlicheunkenntnis/3169652.html, last accessed 22 August 2017.
115
Interview with Tim Krieger on 30 May 2015. Despite the intractable positions, the dispute resulted in a partial renewal of
the ordoliberal school. Feld proposed orienting classical ordoliberalism even more strongly toward the public choice school
(L.P. Feld and E. Köhler, “Ist die Ordnungsökonomik zukunftsfähig?”, (2011) 12 Zeitschrift für Wirtschafts- und
Unternehmensethik, 173-195. Goldschmidt, Wegner, Wohlgemuth, and Zweynert sought to revive ordoliberalism’s
programme for society by developing it further in collaboration with North and Sen (Goldschmidt et al., “Was ist und was
kann Ordnungsökonomik?”, Frankfurter Allgemeine Zeitung , 19 June 2009). For the turn toward a “third generation” of
ordoliberal thinkers recognized by the Walter-Eucken-Institut cf. V. Vanberg, Liberaler Evolutionismus oder
vertragstheoretischer Konstitutionalismus? Zum Problem institutioneller Reformen bei F.A. von Hayek und J.M.
Buchanan, (Mohr/Siebeck, 1982). For an authoritative elaboration, cf. L.P. Feld, “Eine Europäische Verfassung aus politökonomischer Sicht”, (2003) 54 ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 289-317.
116
O. Storbeck, “Kölner Volkswirte bleiben hart”, Handelsblatt , 7 July 2009, available at:
http://www.handelsblatt.com/politik/konjunktur/oekonomie/nachrichten/oekonomenstreit-koelner-volkswirte-bleibenhart-seite-2/3214752-2.html, last accessed 22 August 2017.
117
J. Weidmann, “Krisenmanagement und Ordnungspolitik”, 2013, Walter Eucken Vorlesung on 11 February 2013 in Freiburg
i.Br., available at: https://www.bundesbank.de/Redaktion/DE/Reden/2013/2013_02_11_weidmann.htm, last accessed 22
August 2017.
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Dead man walking: Current European interest in the ordoliberal tradition
Feld had stated in the Wirtschaftswochein 2011: he recommended that during the crisis, all politicians
should put Eucken’s “Grundsätze der Wirtschaftspolitik” (“Principles of Economic Policy”) under their
pillows.118 Nor can Chancellor Merkel escape the spell of Freiburg. She made a point of travelling to
Freiburg on the occasion of Eucken’s 125th birthday to declare her commitment to the principles of
Ordnungspolitik.119
The most conspicuous is Finance Minister Schäuble, who emphasises his Freiburg origins time and
again (in 18 of his speeches between 1 January 2010 and 1 December 2015), thereby referring not only
to his place of birth and alma mater, but also to the fundamentally ordoliberal orientation of his policies
as finance minister. Between 1 January 2010 and 1 December 2015, he discussed the ordoliberal
concepts “Ordnungsrahmen” and “Ordnungspolitik” 36 times in the 80 speeches and interviews
referring to German solidarity during the euro crisis. The deep Protestant grammar can also be found in
Schäuble’s argumentation. To Schäuble, the cause of the euro crisis is that some countries “lived far
beyond their means until the crisis broke out”,120 and that the countries of the South cannot demand
unconditional solidarity since “the standard of living, the population’s per capita income [...] was
significantly lower in other euro area countries”.121 The countries’ behaviour had to change as a
precondition for solidarity. Solidarity was not a “one-way street”;122 more “reliability”123 and more
“solidity”124 was to be demanded of the crisis countries in return for solidarity. With these arguments,
he takes up the Protestant core of empowerment which is embedded in ordoliberalism. Nonetheless,
Schäuble appears unsure whether such appeals on moral grounds will be heard, “[f]or the terrible thing
is: the fundamentals of human nature don’t change”.125 For that reason, the appeals to the debtor states’
118
Ibid. He became moralistic in a curious passage of a speech in Bremen. There, he described his admiration of the Prussian
reformers, all of them reformed Protestants, and also the danger of exceedingly high sovereign debt by emphasising, “What
the crisis has shown clearly, however, is that exceedingly high debt entails serious risks. Incidentally, Frederick III of
Brandenburg was already aware of this. When he had himself crowned King Frederick I in Prussia in 1701, a general
amnesty was announced from which only blasphemers, murderers, high traitors, and – debtors were excluded.” J.
Weidmann, “Stabiles Geld für Europa. Rede als Ehrengast bei der 470”, Bremer Schaffermahlzeit in Bremen am 14.
Februar 2014, available at: www.bundesbank.de/Redaktion/DE/Reden/2 014/2014_02_14_weidmann.html, last accessed
on 22 August 2017.
119
A. Merkel, “Rede von Bundeskanzlerin Merkel beim Festakt zum 125. Geburtstag von Walter Eucken”, Freiburg, 13
January 2016, available at: https://www.bundesregierung.de/Content/DE/Rede/2016/01/2016-01-14-rede-waltereucken.html, last accessed 22 August 2017.
120
W. Schäuble, “Farbe bekennen”, interview with Finance Minister Wolfgang Schäuble on German TV (ARD), 5 February
2015, available at: http://www.bundesfinanzministerium.de/Content/DE/Interviews/2015/2015-02-05-ard-textfassung
.html, last accessed 22 August 2017.
121
Idem, “Griechenland war auf dem richtigen Weg”, interview with ZDF Heute Journal, 17 February 2015, available at:
http://www.bundesfinanzministerium.de/Content/DE/Interviews/2015/2015-02-17-heute-journal-textfassung.html,
last
accessed 22 August 2017.
122
Idem, “Rede des Ministers Dr. Wolfgang Schäuble anlässlich des Neujahrsempfangs bei der Deutschen Börse AG”, 24
January 2011, Frankfurt am Main, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2011/2011-01-24-deutsche-boerse.html, last accessed 22
August 2017; idem, “Reform Der Europäischen Finanzregeln – Für eine bessere Verfassung Europas”, Berlin, 26 January
2011, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2011/2011-01-26-humbold.html,
last accessed 22 August 2017.
123
Idem, “Rede von Dr. Wolfgang Schäuble anlässlich der Beratungen zum Europäischen Stabilisierungsmechanismus im
Deutschen Bundestag”, Rede in Berlin, 9 August 2015, available at: http://www.bundesfinanzministerium.de
/Content/DE/Reden/2011/2011-09-08-rede-m-bundestag-zum-europaeischer-stabilisierungsmechanismus.html,
last
accessed 22 August 2017.
124
Idem, “Griechenlands Reformen tragen erste Früchte”, interview with Zeitung Ta Nea, 26 March 2013, available at:
http://www.bundesfinanzministerium.de/Content/DE/Interviews/2013/2013-03-26-tanea-tageszeitung-griechenland-teil2.html, last accessed 22 August 2017.
125
Idem, “Berlin, Sicherheitspolitik im Spannungsfeld der Finanzen”, Rede vom 24 June 2013, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2013/2013-06-24-bundesakademie-fuersicherheitspolitik.html”, last accessed 22 August 2017.
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moral obligation had to be accompanied by strong institutions strengthening ethically correct behaviour.
This, again, is a Protestant-ordoliberal platitude. Since humans are simultaneously sinful and justified,
institutions had to safeguard that their behaviour is just. Schäuble makes the functioning of the assistance
dependent upon the correct “incentive systems”.126 New institutions were to promote “helping the
countries help themselves” (he refers to this in 11 of 80 speeches).127 To Schäuble, solidarity is
necessarily linked to “conditionality” (he refers to this in 11 of 80 speeches),128 “consolidation” (he
refers to this in 5 of his speeches),129 “discipline”,130 “sanctions”,131 and “monitoring”.132
Schäuble’s calls for self-reliance, discipline, austerity, and modesty, which he seeks to stimulate by
making moral appeals and institutional systems of incentives, are to be found not only in first-generation
ordoliberalism, but also in the individual lay ethos of ascetic and pietistic Protestantism. 133 In an
interview with Der Spiegel, he emphasised, “My grandmother, who was from the Swabian Jura
[translator’s note: an area known for its traditional frugality], used to say: good-naturedness precedes
licentiousness. There is a kind of generosity that can quickly produce the opposite of what is
intended.”134 In 2015, he gave a speech at the German Protestant Kirchentag (Church Congress). He was
asked to discuss a passage from the Gospel of Luke against the background of the crisis in Greece. The
parable suggests, figuratively, that one can agree to debt relief in certain circumstances. Schäuble
comments: “Hard to believe what we read here”, and in his speech, he raises doubts about the accuracy
of the Bible translation. He affirmed: “to forgive the debts someone has to another, and break the rules
on your own authority: as a Christian, I cannot believe that Jesus recommends that we act in a way that
would make it more difficult for people to live together, that would make life less safe, and that would
make survival more laborious.”135 Then, he mentioned key values that are mentioned time and again in
the first-generation ordoliberals’ books: helping people help themselves, the danger of the wrong
126
Idem, “Lebensversicherer müssen verstärkt Vorsorge betreiben”, Rede in Berlin, 21 November 2013, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2013/2013-11-22-gdv.html, last accessed 22 August 2017.
127
Idem, “Bankenunion macht Europa stabiler und handlungsfähiger”, Rede in Berlin, 25 September 2014, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2014/2014-09-25-Bundestag-Bankenunion-textfassung.html,
last accessed 22 August 2017.
128
Idem, note 123 above.
129
Idem, “Der Unbeugsame”, interview in Focus, 7 May 2012, available at: http://www.wolfgang-schaeuble.de/derunbeugsame, last accessed 22 August 2017.
130
Idem, “3. Lesung des Haushaltsgesetzes 2015 im Deutschen Bundestag”, Rede in Berlin, 25 November 2014, available at:
http://www.bundesfinanzministerium.de/Content/DE/Reden/2014/2014-11-28-Bundestag-Abschluss-Bundeshaushalttextfassung.html, last accessed 22 August 2017.
131
Idem, “Rede des Bundesfinanzministers zum Europäischen Stabilitätsmechanismus (ESM) und Ratifizierung des
Fiskalvertrags”, Rede in Berlin, 19 March 2012, available at: http://www.bundesfinanzministerium.de
/Content/DE/Reden/2012/2012-03-29-rede-fiskalpakt-bundestag.html, last accessed 22 August 2017.
132
Idem, “Dr. Wolfgang Schäuble anlässlich der Verleihung des Grand Prix de l’ Economie in Paris”, Rede in Paris, 12 January
2010, available at: http://www. bundesfinanzministerium.de/Content/DE/Reden/2010/2010-12-01-rede-grandprix.html,
last accessed 22 August 2017; for the complete analysis, see J. Hien, “The Religious Foundations JCMSof the European
Crisis”, (2017) 55 Journal of Common Market Studies: first view: DOI: 10.1111/jcms.12635.
133
S. Kahl, “The Religious Roots of Modern Poverty Policy: Catholic, Lutheran, and Reformed Protestant Traditions
Compared”, (2005) 46 Archives Européennes de Sociologie, 91-126, at 107.
134
W. Schäuble, “Der Bundesfinanzminister im Interview dem SPIEGEL vom 18. Juli 2015. Das Interview führten: Klaus
Brinkbäumer, Michael Sauga und Christian Reiermann”, 18 July 2015, available at: http://www.bundesfinanz
ministerium.de/Content/DE/Interviews/2015/2015-07-20-spiegel.html, last accessed 22 August 2017.
135
Idem, “Bibelarbeit zum Evangelischen Kirchentag 2015 − Klug handeln – mit Q6 dem Mammon?, Rede in Stuttgart am 4.
Juni 2015”, available at: http://www.bundesfinanzministerium.de/Content/DE/Reden/2015/2015-06-04-kirchentag.html,
last accessed 22 August 2017; see, also, D. Kirsten, “Schäuble legt die Bibel aus”, 4 June 2015, Deutschlandfunk, available:
http://www.deutschlandfunkkultur.de/bundesminister-beim-kirchentag-schaeuble-legt-die-bibelaus.2165.de.html?dram:article_id=321733, last accessed 22 August 2017, and J. Rahtz, “The Soul of the Eurozone”, (2017)
104 New Left Review, 107-131.
20
Department of Law Working Papers
Dead man walking: Current European interest in the ordoliberal tradition
incentives, the advantages of frugality and of sustainable finances. He closed his speech with a reference
to the original connection between ordoliberalism and Protestantism, referring to Dietrich Bonhöffer.
The rationales used by leading German politicians are steeped in references to the Freiburg School and
commitments to ordoliberalism. The discourse, however, is oriented more toward the general ordoliberal
patterns and platitudes rather than referring to deeper levels of ordoliberal theory. It was especially the
fusing of elements of ordoliberal economic theory and normative Protestant platitudes that makes the
political discourse by politicians such as Schäuble so appealing to German voters. So it is not only a
discourse about virtues, but a reference to the original underlying values that were built into the theory
by ordoliberals in the 1930s and 1940s. Alongside the beguiling concepts of the social market economy
and the economic miracle of the 1950s, the ordoliberalism of the Freiburg School has become a
landmark in German collective memory. This is, however, a highly superficial adaptation of
ordoliberalism lacking greater theoretical potency, but with considerable acceptance in the German
electorate.
Conclusion
Legal scholars, the protagonists of ordoliberalism, have had to realize that its notions of a law of an
economic constitution and a legally stipulated economic policy have failed.136 Ordoliberal positions have
also been pushed to the sidelines in German economic science. What has been retained is common
beliefs that even extend into the communication of German policy-makers. But neither in law nor in
economics are authors to be found who represent a genuinely ordoliberal approach to overcoming the
crisis. What remains is a popular ordoliberalism, an ordoliberalism of the people, which the German
political community uses to give reasons for the crisis and rationalize tough measures while drawing on
ordoliberal platitudes of the 1950s and arguments appealing to underlying Protestant values. American
commentators have described all this as a “moral lesson”137 that divides the members of the European
Union into “northern saints and southern sinners”138 during the crisis. It is the deep ordoliberal-Protestant
grammar which Anglo-Saxon and southern European observers perceive in admonitions made by
German politicians’ admonitions.
136
The most recent pertinent work on ordoliberalism we have been made aware of by Brigitte Young is an online publication
“Ordliberalism: A German Oddity?”, edited by Th. Beck and H. Kotz (CEPR Press, 2017), available at: www.cepr.org.
Among the 20 contributors there is just one with some previous legal affinities (Philipp Steinberg). We conclude thatt we
were well advised entitle our own work to which we have referred repetedly in the is essay Ordoliberalism, Law and the
Rulke of Economics (Hart Publishing, 2017).
137
M. Fourcade, “The Economy as Morality Play, and Implications for the Eurozone Crisis”, (2013) 11 Socio-Economic
Review, 620-27.
138
M. Matthijs, “Powerful Rules Governing the Euro: The Perverse Logic of German Ideas”, (2016) 23 Journal of European
Public Policy, 375-391, at 376.
European University Institute
21