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Conservative Liberalism, Ordoliberalism, and the State

Author(s):Dyson, Kenneth
Reviewer(s):Dekker, Erwin

Published by EH.Net (February 2022).

Kenneth Dyson. Conservative Liberalism, Ordoliberalism, and the State. New York: Oxford University Press, 2021. xx + 592pp. $145.00 (hardback), ISBN: 9780198854289.

Reviewed for EH.Net by Erwin Dekker, Mercatus Center at George Mason University.

 

Ordoliberalism is a branch of conservative moral philosophy. That is the provocative and controversial claim of Kenneth Dyson’s tome Conservative Liberalism, Ordoliberalism and the State. Dyson contextualizes the mid-20th century German liberals such as Walter Eucken, Wilhelm Röpke, and Alfred Müller-Armack in the tradition of conservative liberalism which emerged as response to the French Revolution in both Germany and France. He argues that the Ordos believed that a liberal order could only thrive in the right type of culture, and more importantly in the right moral climate.

It is an unusual reading of the German economic school which is associated with the constitutional, or rule-based, competitive order which “plans for competition.” Most, if not all, recent scholarship on the Ordoliberals has used the lens of neoliberalism to make sense, or mincemeat, of the ordoliberal project which coalesced in Freiburg in response to the economic instability which plagued the Weimar Republic and the subsequent rise of Nazism. But as Dyson convincingly demonstrates, they cited Goethe and Schiller more often than they cited their disciplinary colleagues, and so to properly understand them the intellectual historian should follow suit. He claims in the opening chapter that he wants to move beyond ideological readings of their work, but his real aim appears to be to read them through their own intellectual sources.

This works fantastically in the three chapters which discuss the three patron saints of the Ordoliberals: the aristocratic liberals embodied by Goethe and Tocqueville, the ethical philosophers embodied by Kant and Husserl, and Lutheranism and Calvinist reformed Protestantism embodied by theologians like Emil Brunner and Helmut Gollwitzer. These chapters are only partly attempts to trace direct intellectual influence through textual and contextual evidence, and more intuitive explorations of family resemblances between the Ordoliberals and their patron saints. It works wonders to bring out aspects of their work which have been mostly neglected (but see Commun and Kolev 2018). It illustrates the broad cultural influences on which many of the Ordoliberals drew, which extended beyond law and economics, to include politics, the arts, and religion. And it does much to illustrate the seriousness and moral commitment they brought to their work.

Dyson is less interested in laying out the conceptual history of the notion of Ordo (order), which has clear theological origins. But his approach does much to illuminate the values of the leading ordoliberal thinkers, as well as their moral imagination. A central theme in his explorations of these family resemblances is the personalized notion of responsibility, which the Ordoliberals sought to practice, and which informed their moral view of the economy and society. The theologians and intellectuals they most admired held a personalist view of Christianity, and they believed that the legal, social, and economic order should seek to draw on this notion of personal responsibility. This is perhaps most evident in Röpke’s Swiss-inspired vision of a decentralized economy of small shop owners, artisans, and farmers. If all individuals were property owners, everyone would be accountable for their own fate in life. And only citizens with this mature sense of responsibility would accept the rule-based political and economic order which a liberal system required.

This religious and cultural approach to their work, makes it is at least somewhat ironic that Dyson’s other major aim in the book is to internationalize the ordoliberal tradition. This succeeds relatively well for the French thinkers he discusses, most prominently Jacques Rueff and Louis Rougier, because his interpretative framework of aristocratic liberalism fits their work well. It also provides a good lens on the international nature of the 1938 “Colloque Walter Lippmann,” at which The Good Society by the American journalist was discussed. The meeting brought together continental liberals who shared a moral and cultural critique of interwar society, not just an economic perspective.

Dyson’s method of searching for family resemblances is still somewhat plausible for the Italian Luigi Einaudi and the American Henry Simons, but his attempts to weave the British economist Ralph George Hawtrey, the American maverick Frank Knight, and the progressivist trust-buster Louis Brandeis into the story are much less convincing. These thinkers build on such different intellectual foundations, and work in different cultural contexts that his connections feel stretched. The chapters which seek to justify their inclusion contain long digressions on American pragmatism and the obsession of the Cambridge Apostles with G.E. Moore’s Principia Ethica, which do little to make the case that these individuals are properly considered part of the ordoliberal tradition, or for that matter, conservative liberals. It also left me wondering why other thinkers like Michael Polanyi or Bertrand de Jouvenel are (nearly) completely ignored despite obvious family resemblances and more direct connections to the German Ordoliberals.

That does not take away from the fruitfulness of the conservative moral perspective which Dyson employs. In its German context and French context, it explains the ideal statesmen and bureaucracy which the Ordoliberals envisioned: an enlightened and morally responsible economically and legally trained cadre able to function as powerful arbiter working in the general interest. But since all men were ultimately fallible, clear rules and where possible automatic mechanisms should protect the legal and public framework necessary to secure the functioning of both the political and economic system. It also brings out the tensions between the aristocratic sentiments of the Ordoliberals in a bourgeois, or better democratic era: “The irony rested in the appropriation of the language of an aristocratic culture by bourgeois intellectuals” (130).  It was indeed the fear of an embattled upper bourgeois in an age of mass democracy which motivated the ordoliberal project.

Dyson helps us in seeing how they envisioned an ascetic, precautionary and even stoic mindset for the bourgeois elite which was envisioned to be both moral exemplar and ideal state functionary. Such values could be cultivated in other orders in society, but as “bourgeois aristocrats,” they ultimately believed that the masses could not be expected to fully master these moral virtues, and hence there was a need for disciplinary institutions. The market which draws on personal initiative and made every individual responsible for their own choices, also had the power to discipline and punish. It is both a “civilizing and a disciplining” process (see also Dekker 2016). As Dyson describes wonderfully, Röpke thought of his role in theatrical terms, like a Greek chorus: “he was there as the warning and guiding voice” (88).

It should come as no surprise that this aristocratic attitude led to significant complexity during the turbulent 1930s. Dyson tells us much about the exceptional intellectual courage of Walter Eucken who stood up against Martin Heidegger, when the philosopher was elected rector of the University of Freiburg after the Nazis came to power. But he also deals extensively with the hopes that many conservatives placed in a strong leader during the early 1930s. Various German Ordoliberals did not oppose or even supported Hitler’s leadership, as someone who was able to guide the country to new glories. In his treatment of the French Ordoliberals he similarly treats their involvement with the Vichy regime sincerely, although he is excessively soft on Louis Rougier, who kept defending the Vichy Regime and its leader Philippe Pétain after 1945.

Aristocratic liberalism of the ordoliberal kind embodied a liberalism from above, and it was not immune from the temptations that a strong leader could salvage some of the bourgeois cultural and values of a civilization under siege. There were two crucial questions for European conservative intellectuals during the 1930s. First, what could be done to stop the collectivist spirit and the form of mass politics and mass society which had developed across Europe? Second, what level and form of state power was acceptable to reign in the state capture by powerful economic actors and to restore some of the more conservative liberal values? Dyson notes but does not make much of the fact that the Ordoliberals referred often to Goethe’s masterpiece Faust. Nor does he observe that Thomas Mann, who fits right into the cultural context he sketches, updated the Faustian story in his Doctor Faustus. His lens, nonetheless, makes apparent that the conservatives generally, and the conservative liberals in particular, felt faced with a Faustian dilemma.

German and French conservatives frequently opted, temporarily or much longer, for support for the strong leader. The crucial question, one sparked, but left unarticulated and unanswered, in Dyson’s book, is what made ordoliberal thought, if not ordoliberal individuals, largely immune from such temptations. I believe that the reason Dyson never asks this question is because he systematically ignores the liberal aspects of their thought. This does not mean that his book does not provide vital clues for an answer to that question. Ordoliberals remained fiercely antinationalist, and as recent scholarship has shown their work provided crucial inspiration for the postwar European and international order (Dold and Krieger 2019). Hayek, whom Dyson includes among the Ordoliberals, used his antinationalism as a key argument in his essay “Why I Am Not a Conservative.”

More importantly the Ordoliberals developed and expounded a liberal distrust of concentrated power. The form this took differed based on the various orders in society. It led to their ideal of the decentralized economy based on small and medium-sized businesses to avoid any form of monopoly power. It led them to appreciate the family as a foundational institution and a more measured appreciation of civil society, because here too, there were dangers of too much concentration of power. It led them to put most of their trust in rule-based governance, because it formed the best safeguard against corruption and capture of the state. In liberal fashion they thought in pluralist terms about institutions which could keep organized power of any kind in check.

Finally, most of them were attracted to a personal form of Protestantism. In Freiburg the ordoliberal economists Walter Eucken, Adolf Lampe, the legal scholar Franz Böhm, and the historian Gerhard Ritter became members of the Bekennende Kirche, an oppositional church which was established after the Lutheran Church had become subordinated to the Nazi regime in 1934. It was here that they formed strong bonds with theologians like Dietrich von Bonhoeffer who drew up a memorandum in 1943 with their help which later acted as something of a blueprint for postwar Germany. The memorandum called for a state able to deal with a world in which man had fallen from grace and was ruled by self-serving impulses. Böhm wrote: “Luther’s life and beliefs offered the one basis for some optimism that answers might be found to the isolation and loss of identity of the individual in modern mass society” (222). This helps explain the fraught relationship of the German ordoliberal movement with Catholicism after the war. It emerged out of a dislike for the more corporatist direction of the economic thinking developed by the Roman Catholic Church and deepened through the deeply problematic role of the Church during WWII. But it ultimately rested on the fact that the personalist, if not individualist, religiosity of the leading Ordoliberals was less congruent with Roman Catholicism.

Böhm’s letter also sheds light on another possible response to the crises of the 1930s which Dyson for some reason never ponders: despair and retreat from the world. The ordoliberal manifesto “Our Tasks” is aimed directly at the fatalism of many of their contemporaries. It is a document of hope in dark times. This hope is hard to make sense of through the conservative lens that Dyson employs. He illustrates wonderfully how the Ordoliberals sought historical analogies in modern, pre-modern, and even ancient times to understand the decline of nineteenth-century liberalism, but he does not observe sufficiently how they did not draw the obvious decline from all these historical analogies: all civilizations are ultimately doomed. Dyson demonstrates convincingly that the Ordoliberals shared a lot of conservative sentiments. But their anthropology was ultimately hopeful, it believed in the ability of the individual to know what was good and to act upon it, that was the Lutheran optimism to which Böhm referred. This optimism was not primarily cultural and communal, as it might have been for the Catholic, but moral and individual, shaped by German Protestantism.

This theological difference explains much of the second half of the book, which analyzes the fate of Ordoliberalism in postwar Europe. Dyson is looking for a revival of the conservative sentiments and values which he found appealing in the ordoliberal thinkers, especially the more sociologically oriented such as Wilhelm Röpke, Alfred Müller-Armack and Alexander Rüstow and fails to detect much that might inspire hope. To the contrary, he provides interesting reflections on the internal development of the Ordoliberals in Germany, who came to focus more narrowly on law and economics. Under the influence of the public choice approach developed by James Buchanan and Gordon Tullock, and imported by Viktor Vanberg, the Ordos became more explicitly individualist and less visibly moral. This to the disappointment of Dyson, who favors the more catholic social agenda aimed at the promotion of social irenics, as embodied by Müller-Armack and his Social Market Economy.

In his narrative the American libertarian tradition as well as the individualist economics of Chicago corrupt, or rather empty, Ordoliberalism of its vital energy, its ethical origins. Dyson’s story reinforces the split between the European social synthetic thinkers and the more narrowly American economic thinkers which Angus Burgin (2012) described in his book about the Mont-Pèlerin Society. This sentiment is wonderfully captured in the quote from the French essayist Charles Peguy which opens the introduction and to which Dyson returns several times: “Everything begins as a mystique [founding ideal] and ends as a politique,” but “the mystique should not be devoured by the politique to which it gave birth.”

For Dyson the mystique of Ordoliberalism is constituted by the aristocratic liberalism of the early 19th century, quite literally by the poetry of Goethe and Schiller. It was embodied during the interwar period by one of very few women who feature in the book – Dyson addresses the objection that Ordoliberalism is patriarchal – Ricarda Huch, a German poet who won the Goethe Prize in 1931. She was the mother-in-law of Franz Böhm and published a long series of geographical essays on cities of the past, which emphasized their architecture and organic structure, as well as the personal and communal forms of governance of these cities. Her nostalgic poetry criticized the vanity of man and the vulgarity of modern culture. She espoused the spirit of classicism.

That mystique might have disappeared after WWII, but it was not devoured by the politique of Ordoliberalism. It always existed in tension with the more individualistic and moralistic elements in ordoliberal thought. The conservative, classical mystique competed in the 1930s and 1940s with the liberal mystique of the sovereign consumer and the ambitious entrepreneur. The tension between classicism and romantic individualism was thematized in Goethe’s The Sorrows of Young Werther. And it was Schiller who did much to inspire the Romantic cult of the individual. If one thing might be learned from the wide-ranging literature on neoliberalism, it is that modern liberalism indeed contained a mystique all its own.

In the conclusion of his book Dyson sides with a long list of conservative thinkers who have identified an emptiness at the core of liberalism, most recently Patrick Deneen (2019). For Dyson the Ordoliberals stand out because they are some of the few liberals who recognized this void and attempted to fill it with a combination of religious and cultural values. His book sheds much new light on the inspirations and the values which undergirded Ordoliberalism across the European continent. But whereas much of the neoliberal literature has tended to overestimate the influence and power of the ordoliberal ideas, Dyson underestimates them through his failure to recognize their liberal, hopeful, and ultimately forward-looking nature.

References

Burgin, Angus. 2012. The Great Persuasion: Reinventing Free Markets since the Depression. Cambridge: Harvard University Press.

Commun, Patricia, and Stefan Kolev, eds. 2018. Wilhelm Röpke (1899–1966): A Liberal Political Economist and Conservative Social Philosopher. Cham, Switzerland: Springer.

Dekker, Erwin. 2016. The Viennese Students of Civilization: The Meaning and Context of Austrian Economics Reconsidered. Cambridge, UK: Cambridge University Press.

Deneen, Patrick J. 2019. Why Liberalism Failed. New Haven: Yale University Press.

Dold, Malte, and Tim Krieger. 2019. Ordoliberalism and European Economic Policy: Between Realpolitik and Economic Utopia. London: Routledge.

 

Erwin Dekker (www.erwindekker.com) is Senior Research Fellow at the Mercatus Center at George Mason University. He is the author of Jan Tinbergen (1903-1994) and the Rise of Economic Expertise (Cambridge University Press, 2021) and The Viennese Students of Civilization (Cambridge University Press, 2016).

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Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII