The intra-German resistance to the National Socialist dictatorship is a phenomenon not very familiar to anyone except specialists. Thanks to books and films about the failed Operation Valkyrie, many people know about the anti-Hitler conspiracy of high-ranking military men from among the German nobility. Some may be familiar with the student group “White Rose”, which included the Scholl brother and sister, executed by the Gestapo for distributing leaflets. However, in reality, there were many more pockets of resistance: protest youth, social democrats, Christian resistance, organized underground and desperate individuals who opposed the regime. And also a group of scientists and teachers united around several professors at the University of Freiburg, which is rightly called the academic resistance.
They formed three underground circles that were engaged in developing plans for the post-war structure of Germany. The anti-totalitarian concept they created was based on Christian ethics and paid attention to both economic and personal freedoms. The members of the Freiburg Circles worked closely with other German resistance groups and, despite the constant risk of exposure and threats to their lives, remained true to their professional and civic duty.
Fall
German universities have traditionally been independent and adhered to the principle of separation of science and politics, thanks to which they served as a model for higher education institutions in many countries. It is all the more paradoxical that after the National Socialists seized power, they effectively capitulated to the new regime and made no significant attempts to resist it. On the contrary, the universities obediently became involved in the process of Gleichschaltungsubmission to the systemand became an integral part of it: professors joined the party en masse, students enthusiastically converted to the new ideology. Only a few people openly expressed criticism: Jewish teachers, pacifists, socialists and democrats – and they did not enjoy the broad support of their colleagues in their protest.
In April 1933, the Law on the Restoration of the Professional Civil Service[1] was passed, designed to remove Jews and politically objectionable people from government service. Along with the First Regulation to the Law on the Citizenship of the Reich, it allowed for the dismissal of about 19.5% of the teaching staff from German universities. Some left universities with the wording “voluntary resignation for political reasons.” About 60% of those dismissed emigrated, and some of those who remained in Germany ended up in camps, were killed, or committed suicide[2].
On November 11, 1933, more than 900 scientists and teachers signed the “Statement of Professors of German Universities and Colleges of Support for Adolf Hitler and the National Socialist State”, dedicated to the celebration of the “National Socialist Revolution”, which was entitled: “With Adolf Hitler for the honor, freedom, and rights of the German people!”
However, despite the fact that some teachers really associated themselves with the new regime, for the majority, both participation in such collective statements and joining the NSDAP was a way to protect themselves and their university from threats and pressure. Young scientists and teachers of the “new generation” saw this as a good opportunity for career advancement and willingly took the vacant positions of their dissident colleagues.
The new regulations on universities, which came into force in April 1935, limited the autonomy of higher education institutions as much as possible. Academic self-government bodies lost their right to vote. The rector was proclaimed the “Führer” of the university and was directly subordinate to the Reich Ministry of Science, Education, and Public Instruction. Bernhard Rust, who headed it, appointed the leaders of the National Socialist Union of German Students and the National Socialist Union of German Associate Professors. Both organizationsThey were institutionally linked not to the higher education administration, but to the NSDAP, and were responsible for ideology in educational institutions. Thus, freedom of science and education was subordinated to the ideological guidelines of the party. The guidelines for the personnel policy of universities were not so much professional qualities as the racial affiliation and political loyalty of teachers. Soon, politically relevant departments began to appear in universities: racial studies, eugenics, ethnography, and prehistoric studies.
Finis universitatum
Albert University of Freiburg and Ludwig was founded in 1457. Its motto was the words from the Gospel of John “the truth will make you free.” At the beginning of the 20th century, about three thousand students studied there, including many bright intellectuals, writers and poets of that time: Walter Benjamin, Alfred Döblin and others. Even before the fall of the Weimar Republic, several of the university’s researchers and graduates were among the Nobel laureates. The university’s reputation was formed by its famous professors, including historians Friedrich Meinecke and Max Weber, and later a few liberal teachers who openly opposed National Socialism.
The philosopher Martin Heidegger. The Social Democrat Wilhelm von Möllendorff, elected at the end of 1932, did not last five days in office before resigning under pressure from the Nazi Party: the day after the first meeting of the university senate under his chairmanship, he was subjected to vicious attacks in the battle leaflet “Der Alemanne” – he was demanded “not to stand in the way of the reorganization of the university.” Möllendorff himself named Heidegger as his successor. At the plenary session, an almost unanimous decision was made: of the 93 professors, 13 were excluded from voting as Jews, 24 did not take part in the elections, two abstained and one voted against. On April 21, 1933, Martin Heidegger became rector of the University of Freiburg, and on May 1, he joined the NSDAP.
Martin Heidegger
His inaugural speech, “The Self-Assertion of the German University”[3], delivered on May 25, 1933, marked the transformation of the university into a model National Socialist institution, subordinated to the strict “Führer principle.” Heidegger declared that “the vaunted ‘academic freedom’ must be expelled from the German university.” At the same time, students’ Dasein (“existence”) was to be formed through “labor, military, and scientific service.” Labor and military service were combined into mandatory military-sports training.
As early as 1916, in a letter to his wife, Heidegger stated: “The Judaization of our culture and universities is horrifying; I believe that the German race must mobilize so many more inner forces in order to rise.” It is therefore not surprising that National Socialist ideology took hold at the university and racist purges began: Jewish and politically dissenting professors were fired, Jewish students were gradually expelled. “Non-Aryans” were stripped of their doctorates, and “non-German literature” was removed from the libraries.
Pro-rector Josef Sauer wrote: “Finis universitatum[4] (The end of the universities. — T-invariant)! And this fool Heidegger, whom weelected rector to bring us a new university spirituality. What irony!” Already on May 13, university lecturer and political economist Walter Eucken complained to Sauer (who wrote this down in his diary) that Heidegger “feels like the spiritual leader of a new movement, the only major and outstanding thinker since Heraclitus”[5].
Confrontation
Walter Eucken was born into an educated Protestant family, his father was a philosopher, Nobel laureate Rudolf Eucken, brother Arnold was a professor of chemistry, one of the leading German scientists of the interwar period. Walter was destined for an academic career, and he chose a relatively new science for himself – political economy, which he studied in parallel with history and law at the universities of Kiel, Bonn and Jena. In 1921, Eucken defended his doctoral dissertation: even then, his inclination to create new theories became apparent, and he became an opponent of the historical school, which denied the existence of objective economic laws. At this stage, his trusting relationships with colleagues and future friends were formed: Alexander Ryustovand Wilhelm Röpke: together they belonged to the circle of “German Ricardians”.
Walter Eucken
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Economist Alexander Rüstow emigrated to Turkey after the Gestapo searched his home in 1933. Kemal Ataturk’s Turkish Republic welcomed German professors in exile on the Bosphorus, and Rüstow found a position in the department of economic geography and economic history at Istanbul University. He also belonged to the Deutscher Freiheitsbund (German Freedom Union), an organization of opposition-minded Germans in exile, mainly academics, who were developing plans for the democratization of post-war Germany. This association failed to interest the Western allies in the idea of creating an international organization of German emigrants, but it attracted the attention of the US Office of Strategic Services (OSS). As a result, Alexander Rüstow became an agent (code name “Magnolia”), who provided communications between the OSS and the German resistance.
Professor of Economics Wilhelm Röpke never hid his views: as early as 1930, before the Reichstag elections, he distributed leaflets warning the peasantry of Lower Saxony against voting for the NSDAP. He who votes for the National Socialists, he wrote, chooses “chaos instead of order, destruction instead of reconstruction. He must know that he is voting for external and internal war, for senseless destruction.” When the National Socialists came to power, it was only thanks to the intervention of his colleagues and the preservation of relatively legal administrative practices in the first months of the regime’s establishment that he was not fired, but “sent on leave,” and in exile he managed to avoid being deprived of citizenship. Röpke was among the first German professors to be removed from office. The linguist Hermann Jakobson, who lost his position along with him, soon committed suicide. In 1933, Röpke left Germany and took a job at Istanbul University, and in 1937 he moved to Switzerland to take a professorship at the Geneva University Institute of International Studies.
In 1927, Eucken received a position at the University of Freiburg, where he found a kindred spirit in the teaching staff. Adolf Lampe, Hans Grossmann-Doerth, Franz Böhm and others formed the group of scholars who made Freiburg the most advanced universityin the field of economic sciences of that time. Cooperation with them quickly grew into friendship.
It was Walter Eucken who immediately became Heidegger’s main opponent and a representative of the “hidden opposition in the Senate.” At the first meeting, he criticized the rector for attacks on members of the Jewish student corporation Neo-Friburgia, and at the second, he demanded that the volume of military and sports training classes, the disorderly conduct of which interfered with the educational process, be reduced.
In May 1934, Heidegger resigned as rector, and the ministry appointed lawyer Eduard Kern in his place, after which Eucken wrote to Rüstow that “much had improved” at the university. Nevertheless, he continued to consistently speak out against the fascistization of the university and the distortion of economic science, despite the high risks: Walter’s wife, the writer Edith Eucken-Erdzik, was “half-Jewish” in the racist terms of the National Socialists (she also later joined her husband’s activities). The Union of German Associate Professors demanded that Eucken’s license be revoked, but was unable to achieve their goal.
In the summer semester of 1936, Walter Eucken gave a course of public lectures “The Struggle of Science as Represented in the Works of Great Thinkers.” Using the examples of Socrates, Galileo and Spinoza, he spoke about how science should seek truth, and gave a speech against tyranny and abuse of power. Eucken’s lectures had a great resonance in Freiburg, and despite attacks in the student newspaper and several attempts to disrupt the events by the National Socialist Student Union, they attracted so many listeners that they had to be moved to the largest auditorium of the university. These lectures of Eucken turned into a meeting place for opponents of the Hitler regime.
Ordo
However, much more important was the consistent work on the formation of a united university opposition that could critically understand the current situation, and most importantly, develop principles for economic and social life “after”, to create a future without totalitarianism, in which everyone wanted to believe. Together with the lawyers Franz Böhm and Hans Grossmann-Doerth, in 1933 Eucken organized interdisciplinary seminars for students and lecturers, at which the problems of the concentration of economic power and the possibilities of institutional reorganization of the economy were discussed. These seminars laid the foundation for the “Freiburg School” of national economics, which created the theoretical foundations of ordoliberalism – the German direction of neoliberalism.
The proximity of freedom and order (ordo in Latin means “order”) is one of the key ideas of ordoliberalism. In relation to economics, this idea crystallized into the need to choose the so-called “third way”. Rejecting economic orders[6] that give rise to the concentration of power (Vermachtung) – whether in the hands of the state, as in a command economy, or in the hands of monopolies that arise under laissez faire conditions – the ordoliberals proposed an alternative socio-economic model. The key to the effectiveness of such a model was to be a strong state that creates optimal framework conditions for the functioning of the economy (i.e., implements a “policy of order”, Ordnungspolitik), but at the same time does not interfere in economic processes (i.e. does not directly influence the market, implementing a “policy of the process”, Prozesspolitik).
Eucken formulated a number of principles necessary for the formation of a competitive order. He attributed the following to the constitutive principles: a normally functioning price mechanism, the primacy of monetary policy (stability of the value of money), open markets, private property, freedom of contract, personal property liability of all participants in economic activity and the constancy of economic policy – it was with the help of these principles that Ludwig Erhard was able to create the framework of a new economy in the post-war years. The four regulatory principles that complement them indicate areas where government intervention is allowed in the event of distortion of market processes: control over monopolies, income policy (redistribution), economic calculation (intervention when external effects arise) and abnormal supply (in particular, in the labor market) [7]. At the same time, Eucken did not isolatesocial policy, believing that it should be part of the policy of order, while traditional social policy (compulsory insurance) infringes on the freedom of the individual, making him dependent on the state. The ordoliberal concept went far beyond the economy and had social, political and ethical dimensions: free competition was inextricably linked with individual freedom and responsibility, as well as with anti-totalitarian ideology.
In 1936, three scientists issued the ordo-manifesto “Our Task”, and in 1939 Eucken published his main work – “Fundamentals of National Economy”, in which he criticized any form of planned economy and linked their emergence with the presence of dictatorship. The book was smuggled out of Germany to Great Britain, where the Austrian libertarian economist Friedrich von Hayek was living in exile at the time. After reading it, he was amazed that such scientific freethinking was still possible under National Socialism.
In 1936, due to political pressure, interdisciplinary discussions were stopped, but in fact they continued to be held within the framework of the seminar “Man and Society”, which the retired Freiburg professor of political economy Karl Diehl organized in 1934. The seminar was held in the professor’s apartment on Wednesdays until Diehl’s death in 1943. In this way, dissident scientists managed to disguise discussion circles and avoid the need to obtain permission (the Law on Assemblies, adopted in 1934, required permission from the relevant authorities to hold almost any public event). Diehl’s seminars brought together trusted colleagues to work together, and after the seminar they would openly communicate and discuss political events. This group, which included a lawyer, an economist, and a theologian, Konstantin von Dietze, a historian Gerhard Ritter, Walter Eucken and his wife, later became the core of the “Freiburg Circles“.
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Von Dietze taught at the Friedrich Wilhelm University (today the Humboldt University of Berlin) and was an active member Confessional Church (Bekennende Kirche) – an opposition movement of Protestants who opposed the absorption of the church by the National Socialist state (Gleichschaltung). In 1937, due to the ideologisation of university life in Berlin, von Dietze transferred to work at the University of Freiburg and in the same year was arrested for two weeks for the first time by the Gestapo. In 1935-1936, von Dietze was the chairman of the Union for Social Policy, which united German-speaking economists from different countries; in the end, he chose to disband the organization in order to avoid Gleichschaltung. He also contacted the politician and one of the leaders of the civil resistance Carl Goerdeler and the lawyer Count Yorck von Wartenburg, through whom he was able to significantly influence the agricultural policy of the “Kreisau Circle” (Kreisauer Kreis). The circle united opposition-minded intellectuals of different political views and confessions, who sought to formulate the foundations of the social and political structure of Germany after the fall of the National Socialist regime. Separate working groups (dealing with law, foreign policy, education, and other topics) met at the Kreisau estate, which belonged to the leader of the circle, lawyer Helmuth James Count von Moltke. The main results of the circle’s activities were reflected in the document “Fundamentals of the New Order”, which was a prototype of the constitution. Moltke worked in the Abwehr, the military intelligence and counterintelligence service of the Reich, where, under the leadership of Admiral Wilhelm Canaris, an anti-Hitler resistance group was also created, helping Jews leave the country and preparing assassination attempts on Hitler. It was Moltke who met with neoliberal scholar and American agent Alexander Rüstow in Turkey in July 1943 to report to the Western Allies on the state of affairs and the state of resistance movements in Germany.
Action
EventsNovember 9, 1938 year, when a wave of Jewish pogroms swept across Germany, shocked the Freiburg professorship.
Gerhard Ritter wrote to his mother: “What we have experienced in the last two weeks is the most shameful and terrible thing that has happened in many years. What have we come to!!! … This terrible week will never be forgotten. Oh, if only one could hope that this would be the beginning of internal changes and understanding for those responsible for all this! But can one seriously hope for this?”
The Freiburg synagogue was also set on fire on the night of November 9-10. Firefighters were forbidden to put it out, and the next morning SS and SA soldiers blew up the burning ruins. Impressed by the terrible events, Lampe, von Dietze and Eucken founded the Freiburg Council (Freiburger Konzil), the first of the Freiburg Circles and the only resistance group to emerge in response to the Kristallnacht pogroms. It also included Gerhard Ritter, physicist Gustav Mie, the wives of scientists, and a number of Protestant and Catholic priests. The first meeting of the council took place in December 1938 in the home of the Lampe family. The meetings, which continued until 1944, discussed issues of the Christian right to resistance and the tasks of Christians and the church under totalitarianism. The results of the discussions were reflected in the memorandum “Church and World”.
Constantine von Dietze
The members of the circle were close to the Confessing Church and through the priests on the council they contacted its chief theologian and leader of the Christian resistance – Dietrich Bonhoeffer. In 1940, thanks to his son-in-law Hans von Dohnányi, who worked for Admiral Canaris, Bonhoeffer became an Abwehr agent, which allowed him to freely travel to Switzerland, Norway, Sweden and other European countries, where he communicated with supporters of the anti-Hitler resistance. In 1942, Bonhoeffer met with Bishop George Bell of Chichester in Sweden to convince the British that the new German government that would be created after the planned elimination of Hitler would be able to resolve all domestic problems on its own, if only given time. Bonhoeffer asked Constantin von Dietze to prepare a programmatic document for the World Church Conference that the Anglican Church intended to hold after the war. This document was to contain principles for organizing all spheres of public life, a healthy foreign and domestic policy based on Christian ethics. A group that initially included only economists Eucken, Lampe, and von Dietze, as well as the historian Ritter, immediately began working on the memorandum in complete secrecy. This stage of the Freiburg opposition’s activity is commonly called the “Bonhoeffer Circle” (Bonhoeffer-Kreis).
Dietrich Bonhoeffer
The main text was written by Gerhard Ritter. The authors of Appendix 4 (economic and social order), devoted to the development of the ordoliberal economy, were three political economists, and Appendix 1 (legal order) was prepared by lawyers Franz Böhm and Eric Wolf. On November 17-19, 1942, a secret meeting of the circle was held in von Dietze’s house, at which the text of the memorandum was seriously revised and edited. With the active participation of Berlin colleagues, the document was completed by January 1943: the 130-page memorandum was entitled “Political Public Order. An Attempt to Recognize Christian Conscience in the Conditions of Political Disasters of Our Time”and”. For security reasons, only three copies were printed. Ritter hid one of them on a farm in the Southern Black Forest, which is why it has survived to this day.
Finally, the third circle was “The Working Group of Erwin von Beckerath” (Die Arbeitsgemeinschaft Erwin von Beckerath). Professor of National Economy von Beckerath from the University of Bonn headed the “Politekonomika” group, which was created within Class IV[8] (research unit) of the Academy of German Law on the initiative of Professor Jens Jessen (an active member of the resistance since 1939). The group included the Freiburgers Eucken, Lampe, von Dietze and Böhm, as well as the Cologne professor of finance Günther Schmölders, economic adviser to the “Kreisau Circle”. The scientists’ publications were distinguished by their professional radicalism: in 1941, a collection of articles from Class IV was published, in which Eucken openly stated that he considered the centralized economy of National Socialism to be a mistaken path and called for a “complete restructuring” of the economic order after the war. It is surprising that such an article passed the Reich’s military censorship at that time. Eucken’s friend and colleague Wilhelm Röpke reviewed the anthology in the Neue Züricher Zeitung, noting that the publication openly exposed the “fiasco of National Socialist economic policy.”
Apparently, the tone of the Class IV publications did not go unnoticed by the authorities, and in 1943 the group was disbanded as “strategically unimportant” (nicht kriegswichtig), after which the “Erwin von Beckerath Working Group” was formed, which continued to conduct economic discussions in private – in the homes of the participants in Freiburg, Jena and Bad Godesberg. The scientists managed to hold about ten meetings, which resulted in the writing of more than 60 reports and memoranda. Forty of them declared the need for currency reform. The authors expressed concern about the stability of the value of money (the key principle of the ordoliberal model): uncontrolled emission of money for military needs, combined with freezing prices and strict state control over industrial production, created a threat of inflation comparable to the financial catastrophe of 1923. In order to avoid it at the time of price liberation, Lampe and Eucken called for the liquidation of excess money supply by means of currency reform. It, in turn, was inseparable from the economic reform: while the former would ensure a balance between the volumes of goods and the money supply, the latter, by liberalizing prices, would return natural market benchmarks for self-regulation of economic activity.
Karl joined the working group meetings more than once. Goerdeler, but not all of its participants knew that their colleague was involved in preparing a coup d’état and that Adolf Lampe sent a copy of each of the group’s reports to Goerdeler and von Wartenburg in the Kreisau Circle. Despite the fact that the true goals of their work were skillfully veiled, the scientists exposed themselves to great danger. Preparing any plans for post-war life was regarded as defeatism or “doubts about the final victory” and after 1942 was equated with “actions aimed at the disintegration of the armed forces” (Wehrkraftzersetzung), a crime punishable by death.
Victim
The failed assassination attempt on Hitler on July 20, 1944 and the failure of the coup d’etat, prepared by high-ranking officers of the Wehrmacht and Abwehr, had the most tragic consequences for all participants in the German resistance.
Persecution of the military conspirators and anyone who might be connected with them lasted for many months. During this time, the Gestapo arrested between five and seven thousandpeople. Over 700 people were put on trial, about 200 were killed or executed shortly after the assassination attempt, and another five thousand were arrested in August 1944 during the “Action Gitter”. Its targets were former Weimar politicians, liberals, communists, social democrats, trade unionists – basically anyone whose reliability was in doubt.
Heinz Linge, Martin Bormann, Julius Schaub, Hermann Goering and Bruno Loerzer inspect the ruins of the block where the explosion occurred. 20 July 1944
Carl Goerdeler was arrested in August 1944 and hanged in February 1945 in Berlin-Plötzensee Prison, where political prisoners were held and executed. But not before he had given up the names of von Dietze and Lampe under torture. They were arrested in September and imprisoned in Berlin-Moabit Prison, where they were interrogated and brutally tortured in the hope of obtaining the names of other members of the Freiburg resistance. They were brought before an extraordinary court, the Volksgerichtshof (, in April 1945 and charged with complicity in the “preparation of the putsch by the traitor Goerdeler and his protectors.” Their complicity consisted of developing plans for the economic, social and cultural transformation of Germany. The defendants were found guilty of treason and sentenced to death.
Gerhard Ritter was captured in November and placed first in the Ravensbrück concentration camp, and later transferred to the Berlin-Moabit prison. Like his colleagues, he was sentenced to death.
Gerhard Ritter
Von Dietze, Lampe and Ritter escaped death only because Soviet troops occupied Berlin and they managed to escape in the ensuing chaos. Adolf Lampe died shortly after the end of the war from the effects of torture and terrible conditions.
Walter Eucken was interrogated twice by the Gestapo in late 1944 and was also threatened with torture. Eucken narrowly escaped prosecution by coordinating his testimony with colleagues in a Berlin prison; in this he was helped by the student Heinrich Kuhlmann, who secretly passed notes to the prison.
Professor Jens Jessen was arrested in October 1944, brought before the extraordinary court in early November, sentenced to death for “complicity and failure to report high treason” and hanged in Plötzensee prison.
Franz Böhm, who was a member of all three circles, escaped arrest by chance. During interrogation under torture, intentionally or accidentally, one of his colleagues called him “Pastor Böhm”. As a result, two namesakes were probably arrested instead of him: Pastor Franz Böhm, who died in the Dachau camp, and Pastor Hans Böhm, who belonged to the Confessing Church but was released shortly before the end of the war.
Dietrich Bonhoeffer and Hans von Dohnanyi were arrested back in April 1943 on charges of “disintegration of the armed forces”, and their involvement in the assassination attempt on July 20 was later revealed. Like Admiral Canaris, they were hanged on April 9, 1945.
Bonhoeffer’s friend, the lawyer Friedrich Justus Perels, who also belonged to the “Freiburg Circles”, was arrested in October 1944 on charges of “failure to report known plans for a coup and illegal activities in favor of the Confessing Church.” Perels was sentenced to death and executed on April 23, 1945.
Helmuth James Count von Moltke, the founder of the Kreisau Circle, was arrested in January 1944, and in January 1945, he was sentenced to death and hanged in Plötzensee Prison.
Peter Count Yorck von Wartenburg, who was a member of the Kreisau Circle and closely collaborated with the conspirators, was arrested on July 20, 1944, sentenced to death on August 8, and hanged the same day in Plötzensee Prison on Hitler’s personal orders.
A New Beginning
After three years of political oblivion and devastation, Germany – at least its western part, the so-called Trizone – received a chance to regain statehood and build a fundamentally different political and socio-economic system. The plans for transforming the country, which the Freiburg ordoliberals developed during the period of Hitler’s dictatorship, without hoping for their quick implementation, were embodied in reforms of Ludwig Erhard — the “father of the German economic miracle” and the first federal minister of economics of Germany.
Even before the constitution of the FRG, in June 1948, a monetary reform was carried out, during which the devalued Reichsmarks were exchanged for new German marks. It was followed by decisions on price liberalization and reform of the system taxation. The Basic Law of the Federal Republic of Germany, adopted in May 1949, established the conditions for the creation of a social market economy, including the right to free personal development, freedom to choose a profession and place of work, and guarantees of private property rights. Finally, in 1957, the Law Against Restrictions on Competition was adopted, completing the framework for ordoliberal ideas.
“By implementing a turn in economic policy from an administrative-command economy to a market economy, we did not simply initiate an economic reform, we did something more: in doing so, we created a new foundation for our socio-economic and social life, gave it a new beginning,” Erhard said, speaking at the CDU congress in August 1948[9]
Based on a hard currency and a new regulatory framework, the German national economy entered era known as the “economic miracle” and lasting until the mid-1960s. The average annual growth of GDP in the 1950s and 1960s was 8.2%, and in 1955, economic growth reached 12.1%.[10] The unemployment rate had fallen to 0.8% by 1961, making it possible to speak of full employment. At the same time, the average annual growth in labor productivity during this period was 7.3%, which was largely due to structural shifts toward knowledge-intensive industries. Breakthrough economic growth made it possible to realize the main goal of German reformers – to improve the quality of life of the population.
The social market economy became the quintessence of the theoretical concepts of the Freiburg School, the Austrian School of Economics, neoliberals of the humanistic tradition and the author of the term itself – Alfred Müller-Armak, a representative of social liberalism.
The scientists who survived the war and repressions took an active part in the creation of a new economic order in post-war Germany. Members of von Beckerath’s working group became authoritative advisers to the government. Six members of the Freiburg Circles: Eucken, Lampe, von Beckerath, Böhm, Erich Preiser and Theodor Wessels, joined the scientific council of the Ministry of Economics in 1948, and von Beckerath headed it from 1950 to 1964.
Walter Eucken advised the French and American military administrations, and later served as an advisor to Ludwig Erhard, exerting a significant influence on the economic development of the newly formed German state. He advocated monetary reform and price liberalization, as well as the abolition of state regulation. At the same time, Eucken criticized some of the economic steps of the first cabinet of Konrad Adenauer, seeing anti-competitive tendencies in them. In 1947, he became one of the co-founders of «Mont Pelerin Society», created by F.A. von Hayek and uniting 39 liberal-oriented scientists who advocated for peace, freedom and human dignity. In 1948, together with Franz Böhm, Eucken began publishing the scientific yearbook Ordo, which remains a forum for discussion of ordoliberalism to this day. “If West Germany has managed to overcome even the first steps on the path to a healthy market economy, then Walter Eucken’s contribution to this achievement cannot be overestimated,” wrote his friend Röpke in March 1950, when Eucken died suddenly in London during a lecture tour.
After the end of the war, Franz Böhm moved to Frankfurt and joined the CDU. Thus, in parallel with his scientific career, his political career began: from 1953 to 1965, he was a member of the Bundestag. Böhm was an influential assistant to Erhard, especially in matters of anti-cartel legislation (it was his compromise version of the law that was adopted in 1957) and the implementation of the ordoliberalprinciples in the Basic Law. Erhard wrote: “It cannot be denied that without Franz Böhm and his teachings and ideas, the path to the introduction of a social market economy would have had to be overcome much more resistance.” Moreover, in 1952, Böhm (who had lost his position as head of the department and been deprived of the right to teach under the National Socialists for speaking out against discrimination against German Jews) headed the German delegation in negotiations on compensation payments to the State of Israel and the “Conference on Jewish Material Claims against Germany.” He played a decisive role in securing compensation payments, and as a member of parliament, he became one of the creators of German reparations legislation.
Two scholars who were never members of the Freiburg School, but were always connected to it by common liberal ideas and personal contacts: Wilhelm Röpke and Alexander Rüstow – found themselves in exile because of their views.
Working in exile, Röpke was free from both the censorship of Hitlerism and the post-war pressure from the Allies. During the war, Ludwig Erhard obtained contraband books by Röpke, banned by the Gestapo, and devoured his works on the market economy. After the war, Röpke actively communicated with Chancellor Adenauer and Minister of Economics Erhard – communication with the latter grew into friendship. Being an opponent of any collectivism and the political totalitarianism associated with it, Röpke in every way supported the policy of turning to a market economy, carried out by Erhard, despite the fact that socialist and Christian-socialist sentiments dominated among the political elites of that time. Thus, the CDU’s Ahlen Program, adopted in the British zone in 1947, gravitated toward “Christian socialism” and demanded the partial socialization of large-scale industry. The Social Democrats adhered to a socialist course and advocated a planned economy, the occupation authorities were inclined toward dirigiste methods of managing the economy, and representatives of industry sought to preserve traditional German cartels. Röpke, who belonged to the “Erhard Brigade,” warned against the creation of a bureaucratic welfare state and emphasized the importance of freedom and personal responsibility for economic efficiency.
Alexander Rustow
Alexander Rustow, the author of the term “neoliberalism,” introduced the neoliberal program “Free Economy, Strong State”, in which he spoke out against protectionism, subsidies and the creation of cartels and for a state that sets framework conditions and does not follow the lead of interest groups. In 1949, Rüstow returned from emigration and also joined the ranks of advisers to Ludwig Erhard, who was introducing neoliberal ideas as the basis for a social market economy. Erhard in every way opposed the administrative-command economy, which “kills any sense of responsibility and duty, as well as any desire to create” [11]. “Any system that does not provide the individual with freedom of choice of profession or consumer choice,” Erhard argued, “violates basic human rights… Neither anarchy nor a “termite state” are suitable for human existence. Only where the balance of freedom and obligations is strictly defined by law does the state acquire the right to speak and act on behalf of the people”[12].
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Text: Natalia Supyan, PhD in Economics, Germanist
[1] Gesetz zur Wiederherstellung des Berufsbeamtentums, 7. April 1933, https://www.bundesarchiv.de/DE/Content/Virtuelle-Ausstellungen/NSDigitalisierung/Berufsbeam tentum_virtuelle_ausstellung.html. [2] Michael Grüttner und Sven Kinas, Die Vertreibung von Wissenschaftlern aus den deutschen Universitäten 1933–1945, VfZ 1/200 7 Oldenbourg 2007. [3] Martin Heidegger Die Rektoratsrede: Selbstbehauptung der deutschen Universität https://archive.org/details/MartinHeideggerDieSelbstbehauptungDerDeutschenUniversitaet/page/n2/mode/1up?q=Nazi [4] The end of universities, lat. [5] Führer der Führer, Der Spiegel 34/1986 https://www. spiegel.de/wissenschaft/fuehrer-der-fuehrer-a-baef837b-0002-0001-0000-000013519843.
[6] Wirtschaftsordnung — an economic order, or economic model, is a set of legal norms and institutions that regulate the economic behavior of people. Walter Eucken first outlined his theory of economic orders in his work “Fundamentals of National economy” in 1940.
[7] For more details, see: Eucken W. General principles of economic policy, XVI. Chapter: The politics of economic policy – the constitutional principles, S. 254–304.
[8] The structure of the Academy of German Law included three research units, called classes, in 1940. Class IV – National Economic Research (Erforschung der völkischen Wirtschaft) was established [9] Rede Ludwig Erhards vor dem zweiten Parteikongreß der CDU der britischen Zone am 28. August 1948 in Recklinghausen https://www.ludwig-erhard.de/erhard-aktuell/standpunkt/soziale-marktwirtschaft-statt-planwirtschaft/. [10] Relatives Wachstum in der BRD 1951 – 2002. Das Wachstum der deutschen Volkswirtschaft IWS-Papier Nr. 1 https://www. wachstumsstudien.de/Inhalt/Papiere/IWS-Papier1.pdf. [11] Rede Ludwig Erhards während der 14. Vollversammlung des Wirtschaftsrates des Vereinigten Wirtschaftsgebietes am 21.4.1948 in Frankfurt am Main, Wörtliche Berichte und Drucksachen des Wirtschaftsrates des Vereinigten Wirtschaftsgebietes 1947-1949, hg. v. Institut für Zeitgeschichte und dem Deutschen Bundestag, Wissenschaftliche Dienste, bearb. v. Christoph Weisz/Hans Woller, 6 Bände, München-Wien 1977, hier Bd. 2, S. 436-445 https://www.1000dokumente.de/index.html?c=dokument_de&dokument=0010_erh&object=translation&st=&l=de. [12] Ibid.
Natalia Supyan 5.09.2024