Introduction
The term “economic constitution” (Wirtschaftsverfassung, constitution économique) brings into contact two systems key to the revolutionary and post-revolutionary era of the past 250 years, the modern constitution (and, with it, democracy) and the market economy (and, with it, capitalism).
Constitution and economy, democracy and capitalism are in tension. The constitution describes the process and values of self-government (whether more democratic or more elitist), implying a freedom of choice that extends to the conditions of economic life; and yet, interests that gain wealth from the existing economic system influence the polity, making the latter de facto dependent on the economic system. Economic life seems to be both at the disposition of the state and its basis. A similar tension exists from the point of view of the economic system. The economy likewise appears to be the foundation of the state, government appears to be “a committee for managing the affairs of the whole bourgeoisie”, in Marx’s words. But at the same time, the economic system relies on the state (i.e. the political constitution) for stability and order. Presuming a self-regulating market mechanism, for example, raises the question of how such an efficient system can operate without a coherent – i.e. sovereign – legal system, and without a legal system effective enough to ensure compliance.
The tension between constitution and economy goes deeper, because each also may appear to threaten the other, rather than simply to be a precondition for the other. Political sovereignty by its very nature enables the sovereign to make decisions about society’s operating rules, including the rules for the economy. From the point of view of the economy as a dynamic, self-organizing system, however, a constitution empowering that great black box of modernity, the people, threatens to interfere with the operation of the economy. A similar threat exists from the point of view of the constitution that claims to enable self-government. Limiting a democracy’s right to affect economic rules in the interest of the long-term efficacy of market economics, for example, can lead citizens to a sense of powerlessness in the face of an abstract and alien
The concept focuses indeed on the point where constitution and economy intersect. But one can do that in different ways. A standard handbook on the notion of the economic constitution asks what the constitutional rules are that affect the economy: “Wirtschaftsverfassung” is “the collective term for the constitutional norms that are essential and over the long run decisive for the order and the course of the economic process”. The West German Basic Law, for example, sets the goals for the state, such as the principle of the welfare state and the basic rights; in the most extreme case, for example of the Soviet Union, a constitution makes a “certain decision in principle for an economic order required by constitutional law”.2
This approach allows one to sort through the actual rules affecting the economy. Yet such an approach sets aside the deep debates about what a constitution should and shouldn’t do, and it depoliticizes the question of what an “economic constitution” is, insofar as it plays down the paradoxical power relationship between economic and political systems,3 around which so much political debate over the past few centuries has rotated. Both Philippe Steiner and Guillaume Grégoire have usefully resisted this depoliticizing approach in their contributions.4 Each of them raises, implicitly or explicitly, some of the thornier questions surrounding the point where constitution and economy connect.
In Steiner’s essay, for example, a “constitution of liberty”, to paraphrase Hayek, based on free trade and stable property, is paired with political despotism in the Physiocrats. There is no small amount of hubris in the notion that
The reverse problem appears in Grégoire’s work, namely how a democratic constitution can be used to enable the self-government of society on the one side (in the work of Hugo Sinzheimer), and can be assumed by conservative opponents to normatively limit democratic decisions about the organization of the economy (in the work of Carl Schmitt). The debate over the Wirtschaftsverfassung in the Weimar Republic is a debate over how much power the constitution grants to the constituted power to make substantive decisions about social and economic arrangements. Grégoire also opens up a different conception of change than the static one that the Physiocrats employed: the way a constitution can enable the creation of new social relationship from the bottom up, a long-term social revolution in Marx’s sense.
Both Steiner and Grégoire are also implicitly asking about the relationship between democracy and economic liberalism, especially the far-reaching conceptualization of a self-organizing market economy and society in the work of the Ordoliberals and Neoliberals.5 Others in this volume will be discussing contemporary debates about the European Union more directly,6 so I will only provide a few remarks at the end on how Steiner and Grégoire raise questions for the discussion, in particular about how constitutional norms dictating economic arrangements can be justified in the EU, a political organization based on treaties with only pseudo-constitutional qualities.
1 Physiocracy, or Legal Despotism
Physiocracy was only in part a school of economics. Their doctrines of free trade and fiscal reform also involved arguments about an ideal society based on free labour, internal markets, and a peaceful international order, as Steiner suggests. This image of an ideal economic (and moral) world certainly links up with some 19th century visions of European liberalism involving the abolition
Quesnay’s work, as Schumpeter noted, came down to two important policy recommendations, free trade in grain (and in general), and the single tax on landowners. He argued that both were the basis for expanded reproduction in a large, agriculturally based policy like France.10 Manufacturing and trade did not produce value, but they did produce new, useful things, according to the school. Quesnay’s recommendations were therefore about maximizing the
There are good arguments that creating an integrated free market and reducing administrative complexity aid economic development, and those arguments played an important role in German economic unification in the 19th century as well as European unification after 1949. There was more to Quesnay’s reform agenda than merely a technical strategy, however. He defended what he saw as a natural and enduring economic order, really a kind of physiological “constitution” of the economic world, which was bound up with the idea of a “tutelary monarch”. His “economic constitution” links nature, economic liberalism, and monarchical absolutism. The question is how Quesnay’s notion of economics fits with that advocacy of monarchism.
All men and all earthly powers ought to be subject to these sovereign laws instituted by the Supreme Being. They are immutable and the best laws possible; thus they are the foundation of the most perfect government, and the fundamental rule for all positive laws.12
These laws do not at all restrict man’s freedom, which forms part of his natural right; for the advantages of these supreme laws are manifestly the object of the best choice of freedom. Man cannot reasonably refuse the obedience which he owes to these laws; otherwise his freedom would be only a freedom harmful to himself and to others. It would be nothing but the freedom of a madman, who, under a good government, must be checked and cured through the authority of the positive laws of society.13
Freedom did not involve choosing representatives but affirming the monarch, who in return guaranteed social order and made the people “a participant in all the different kinds of goods and all the refinements of products”, or in other words consumers of products on the market.14
The agricultural kingdom that Quesnay embraced stood in contradiction to the republic, which he connected with a dynamic, commercial and manufacturing society (implicitly he meant no doubt England and Holland). Since commerce and manufacturing, according to Physiocracy, created no new wealth, these societies thrived by plunder, and they were connected to piracy, invasion, and imperialism. Because their citizens were merchants who hid their wealth behind complex financial arrangements, giving their property a “scattered and unknown character”, they had to be treated as masters and thereby induced to contribute to the state.15 Factionalism was an inherent part of commercial and manufacturing society, because such societies could not even accept such a thing as a general interest. Not so the agricultural kingdom, however. The “agricultural state” eventually came “to enjoy the benefits of society, of union, of population, of good and equitable laws, and of the appropriate arts and skills”. Such states needed a leader, of course, to produce positive laws: “From this originates the tutelary monarchy”, whose primary, indeed “primitive” task was the establishment of clear property lines and an absolute authority to ensure internal security and to guard against external threats.16 The absolute and
In short, the “economic constitution” of the Physiocrats connected absolute principles of the economy with an absolute ruler unencumbered by the separation of powers, representation, and rights, but in possession of divine knowledge of the world to make decisions without these institutions.18 Claiming such an abstract and universal truth of human society could have, as Tocqueville famously argued, destructive ramifications.19 Even a position that seemed obviously good, like Dupont’s critique of slavery, defense of free labour, and call for African nations to develop their own sugar plantations and refineries based on free labour, for example, which Steiner presents positively, has come under scrutiny in the aftermath of developmental colonial experiments: what kind of labour would this free labour be, replacing what kind of existing social organization, and under what kind of control of the property owners?20
The real interest of the servants [i.e. the lower level administrators of the East India Company] is by no means the same with that of the country,
and the most perfect information would not put an end to their oppressions... It is a very singular government in which every member of the administration wishes to get out of the country, as soon as he can, and to whose interest, the day after he has left it and carried his whole fortune with him, it is perfectly indifferent though the whole country was swallowed up by an earthquake.27
2 From Despotism to Modern Constitutionalism
The “constitution” in the case of the Physiocrats enabled the monarch to reorder the economy according to reason and nature. It was a legal despotism insofar as it claimed to follow the laws of nature. Or, as Quesnay hopefully noted using an ahistorical natural image, “the constitution of the tree is the natural order itself, regulated by essential and irrefragable laws which must not be interfered with by extraneous laws”; “constitution” was a physiological term.28
The Weimar Constitution was established in a different context, when the term constitution itself had taken on a different meaning. The Weimar Constitution echoed the rhetoric and structures of the great democratic-republican constitutions from the late 18th century, even as its framers sought to adapt that tradition to the realities of the 20th century. That revolutionary conception of this tradition moved in a direction opposed to Physiocrats’ despotic political theory (even while reflecting some of their anti-monopolist and pro-market economic ideas). The US Constitution of 1789, the 1789 Declaration of the Rights of Man and Citizen, the US Bill of Rights of 1789-91, and the French Constitution of 1791 were rooted in different normative assumptions about the state, republican and commercial. They started with a radical notion of a society based on freedom from the state and of equality of individuals before the law. That universalistic, revolutionary language quickly confronted the particular exclusions to citizenship that were bound up with social and political reality. Women, slaves, aboriginal peoples, and others deemed too dependent, too uncivilized, or inherently irrational were excluded from this
The French and US constitutions presumed, in Dieter Grimm’s analysis, that freedom was a “condition of the general welfare”, in other words a precondition for society.29 As such, authority could not be unlimited and simultaneously “constitutional” in a normative sense. In this sense, the Physiocratic notion of the constitution was not constitutional. In the new conception the people, not nature or the monarch, were the source of the constitution, mediated by representatives.30 The constitution thereby created delegated power to lower authorities representing the people, but not in an absolute or unlimited way. The constitutions specified powers, divided powers among different organs of the state, and declared rights that limited those powers. In both France and the United States, the constitutions had a strong libertarian flavor (for those groups that were considered fully citizens) and implicitly affirmed the market economy. Neither, however, explicitly affirmed the universal validity of the market economy, raising it above the legislative power. The French Declaration of the Rights of Man and Citizen repeatedly and explicitly permitted limitations on rights, such as social distinctions “founded upon the general good”, the reserved right of the law to set limits to the “natural rights” of liberty, limitations to religion and to freedom of expression if they disturbed the public order, and so on. The French Declaration permitted expropriation of public property on the basis of “public necessity” determined by law, and an “equitable” (the text does not state “full”) indemnification. The US Constitution in its original form did not guarantee property rights at all, and in the Bill of Rights only the right to receive proper indemnification for the “taking” of property, despite the centrality of property rights to the founders’ conceptions. Rights in these systems were not absolute, and the legislator was delegated powers that could reach very deeply into the economic order. They left the way open, in other words, for some kind of “economic constitution” in Badura’s above cited neutral sense of the term, a constitutionally defined order that affected and organized the economy – through taxation to pay for universal education, for
Despite important differences, the Weimar Constitution was in the tradition of the late 18th century constitutions. The Weimar Constitution continued to stress the separation of powers, government by organs constituted and limited by the constitution, the ability of the people’s representatives (and the people directly, through plebiscites) to shape their legal world in the interest of the common good, a realm of freedom for individuals as well as the right of the legislature to shape and limit those liberties.31 Art. 153 of the Weimar Constitution, like Paragraph 17 of the French Declaration, asserted the right of property within the bounds of law, and required not a full but an “appropriate” indemnification for expropriated property. The German constitution left open the possibility that the legislature might not permit compensation or a legal appeal which seemed to differ from the French or American case; in practice, though, both French and Americans left open the way for non-compensation for loss of property in certain cases (e.g. the expropriations of the nobility in the French revolutionary context and the debates on compensation for “expropriation” of “property” in the debates on slave emancipation in the United States).32 The lack of an explicit creation of a supreme German constitutional court able to rule on the constitutionality of the legislature (here again not unlike France or the United States) left the relationship between politics and economy unclear. The Weimar Constitution both presupposed a free society and enabled that society to shape itself through law; as Grégoire shows well, its interpreters clashed over the extent of this freedom.33
Art. 151, for example, demanded that the normative ordering of “economic life” (a term that already insisted on a broad view of economics as part of society) correspond to the principles of justice and the goal of guaranteeing an existence worthy of humans for all; Art. 152 went on to state that legal transactions that transgress basic ethical principles are immoral, in a kind of imperative to the legislature to consider the moral effects of civil law and (explicitly) to outlaw usury. This imperative also applied to the courts.35 It is certainly important, as noted, that Art. 153 permitted expropriations without indemnification. But such expropriation took place only by statute, if the majority of the Reichstag, its delegates divided among five major parties and many minor ones, came to an agreement. The same point can be made about the two most important constitutional articles for the Social Democrats, Art. 159 and Art. 165. Art. 159 guaranteed the right of workers (and employers) to form coalitions for promoting labour and economic conditions, i.e. trade unions and employers’ organizations, and forbid retaliatory measures against union members. The complicated Art. 165 also affirmed trade unions and collective bargaining, while calling for cooperation between workers and owners on the factory level and the creation of a national system of factory councils all the way up to a National Economic Council (Reichswirtschaftsrat) that would advise the Reichstag. The different approaches to the economic constitution of Art. 165 corresponded to different conceptions of labour-capital relations, from the idealized image of national cooperation during the war, to renewed power for trade unions on a national level, to (enforced) harmony on the level of the factory, or to a national corporatist organization that could operate alongside
A limited, careful, and formal interpretation of the constitution, such as the one provided by Gerhard Anschütz, perhaps the leading “legal positivist” lawyer of the Weimar Republic, stressed that most of the article was in fact a “program for the legislature, i.e. future law” rather than immediately binding law.38 This interpretation stressed how the constitution enabled the legislature to make rights real and concrete through legislation. Herein lies the promise of democratic freedom – and freedom means risk.
3 Sinzheimer’s Social Democratic Reading of the Economic Constitution
The term Wirtschaftsverfassung developed in the Weimar Republic as part of a normative strategy for both organizing industry and empowering workers. A more descriptive use of the term does arise under Ernst Rudolf Huber, but when we look at Hugo Sinzheimer, Franz L. Neumann, and Carl Schmitt, we need to keep this normative use of the term in mind. As Grégoire points out, the man who introduced the term, the labour lawyer and Social Democrat Sinzheimer, played a major role in the National Assembly’s discussion of labor-related basic rights. As Sinzheimer stated in 1919, “Social democracy is dependent on political democracy, for only within its framework can the life of social democracy unfold”.39 In this incisive analysis from 1919, written early in the Weimar Republic before the decisive break between Social Democrats and Communists and the electoral losses of 1920 weakened the left, Sinzheimer described an economic system in formation, organized below the level of the
Running throughout Sinzheimer’s work already from before the war was a notion of social reality brimming with workers’ activity, decisions, complexity, variety, creating law de facto where it had not existed before in the form of social norms regulating the interaction of labour and capital. Collective bargaining developed, on Sinzheimer’s narrative, outside of and in tension with the formal, individualistic law of contracts of the German Empire. And indeed any political constitution, according to Sinzheimer, required a “supplement” that would give the “freedom and community” implied in democracy a “living, social content”.41 Recognition of the right to organize and the councils was only one, formal part of the basic norms of economic democracy. Socialization of production was a further step, and for Sinzheimer not at all the same as bringing firms under direct, national control; instead, the point of socialization was to bring factory councils and trade unions into the process of administering firms, it included the right of “self-administration in the factory”, the organs of a future socialist economy.42 The Wirtschaftsverfassung in Sinzheimer’s conceptual structure was a matter of reality rather than a legal construction, of concrete, developing Sein rather than abstract Sollen; it was the ongoing production of a new reality through the real, physical process of working, learning, and deciding, which developed by way of constitutional, statutory, and
The constitution also empowered workers in the present, which, of course, Sinzheimer had firmly advocated in the National Assembly, especially by way of Art. 159 (establishing the right to join employees’ and employers’ organizations). Neumann, who clerked for Sinzheimer in the mid-1920s and was likewise a defender of the republic, pointed out that the right in Art. 159 to join a trade union was more firmly anchored in the constitution than was the right to own property, since Art. 159 was not expressly limited by statute. But the point was that the call for economic democracy was about much more than a static set of rights. Combined with the right to form councils (Art. 156), to define property by statute (Art. 153), and to nationalize, socialize, or communalize property (Art. 156), economic democracy provided concrete and explicit authorization to the Reichstag to transform society.44 Even more, these “constitutional” norms empowered workers to begin the process of “constituting” a new society, according to Sinzheimer’s reading.45 Sinzheimer described, in an almost Expressionist style, the way labour and society “dissolve the old concepts of the bourgeois legal order”, submerging them in the “enormous abundance of social material” that the legal order struggles to manage.46 The constitution of political democracy enabled the development of society in a socialist direction (which was not at all the same as centralized, bureaucratized planning and state control); it enabled councils and unions to form, parallel means for empowering workers, who, through their concrete experience, would build the new society. The slogan of economic democracy in the spd’s 1928 party platform and the concept of the economic constitution in Sinzheimer were
Despite the novel content of the constitution and novel ideas of Social Democracy, however, the logic of democratic constitutionalism remained. The procedures and principles embedded in the constitution enabled the self-fashioning of a polity and also a society, not in the static sense of the Physiocrats – implementing revealed natural rules for the best society, modelled on an allegedly unchanging China – but in a dynamic sense. Countries with democratic constitutions, like the United States, had in fact undergone dramatic transformations over the 19th century (with e.g. the end of slavery by and large without compensation, the rise of industrial capitalism, the formation of monopolies and cartels, the development of a trade union movement, and so on) precisely within the context of the constitution. Why should a social “economic formation” not be capable of further development within this open political structure? Sinzheimer therefore did not argue that constitutional law guaranteed a particular shape of civil law; a democratic constitutional structure could open the way for a social revolution that would destroy the “bourgeois legal order”.
Neumann on the left and, as discussed below, Carl Schmitt and Ernst Rudolf Huber on the right painted a picture of dramatic transformation between the late 19th century and the present, as social and economic developments destroyed liberal visions of the future based on natural, individual rights and the market. Neumann asserted that the revolutionary constitutionalist tradition of the late 18th century assumed natural rights, most important the individual’s right to property, that preexisted the constitution. Over the 19th century, monopoly capitalism gradually supplanted this world based on individual, contracts, and property. The “ideal type” of the “free entrepreneur”, he stated, no longer existed in the era of monopoly capitalism. Owners were actors only in name, entrepreneurs “more or less functionaries” of the monopolies and cartels, both replaced by managers, just as risk for the individual investor was eliminated.48 While the institutions of contract and market still existed in law, the freedom both implied was diminishing: “In the age of monopoly capitalism, the legal freedoms of capitalism lose their significance.
This moment of monopoly capitalism was the prerequisite, according to Neumann, for the economic constitution of the Weimar Republic. That term did not, for Neumann, mean the legal norms that regulated the economy, nor did it imply the primacy of the existing monopoly capitalist system over the political constitution or their equal political rights. The economic parts of the constitution instead permitted the formation of large interest groups in the economy. These groups, Neumann argued, had long since taken over the parties in parliament; now they intervened in markets politically to ensure the uninterrupted flow of the capitalist economy. Such groups included monopolies, cartels, and large concerns on the side of capital, and another kind of large, centralized organization on the side of labour, the “free, cooperative self-help organizations of the working class, the labor unions”. Freedom now consisted of the ability of these organized social groups to assert interests in an arena not directly controlled by the state. Their right to make meaningful decisions about the economy was guaranteed by Art. 159 of the constitution.50
Neumann’s compressed analysis implied that the individual freedoms of 1787 and 1789 included in the Weimar Constitution were merely window-dressing for a fundamentally different reality, beyond free markets; that with the end of this reality also went the end of the freedom of the parliament, which merely balanced social forces; and that “freedom” was preserved at the level of large organizations, guaranteed a space to bargain among themselves in order to unburden the state. Neumann himself defended basic liberal principles, like that of equality before the law, and rejected judicial attempts to limit the freedom of parliament. And yet, writing a decade after Sinzheimer’s exuberant work on the liberating potential of the economic constitution, Neumann’s work hardly painted a picture of a democracy and an economic democracy that enable the worker to come into his or her own as a human deserving
4 Schmitt, or an Authoritarian Response to the Economic Constitution
Whatever their visions of the transformation from individual to collective rights and politics, Sinzheimer and Neumann retained the late 18th century conception of a constitution that a) established processes for producing new laws that could shape markets and society, b) asserted rights that claimed, at least, to be inclusive of all citizens, and c) indicated values that should inform political initiatives. Like the liberal politicians like Hugo Preuss and Friedrich Naumann in the National Assembly and the legal positivists, they stressed the constitution’s openness to popular initiative and to a different future. Not everyone agreed. Otto Kirchheimer on the left and Carl Schmitt on the right both viewed the list of rights in the Weimar Constitution as jumbled and contradictory, and the constitution itself as failing to make a clear decision for a specific form of government.52 Over more than a decade, Schmitt argued that the constitution was torn between democracy (homogeneity without rights) and liberalism (individual rights without political unity), expressed in the later republic as the drive for unified self-expression of the nation through a populist president and the drive of interest groups and parties to divide up government, destroying unity.
Schmitt’s method for approaching the economic constitution mirrored his method for analyzing the Weimar Constitution: to describe different, contradictory, and clearly distinguishable systems of political and constitutional thought (such as liberalism and democracy); to assign parts of the constitution to these different intellectual systems; and on that basis either to show the contradictory nature of the constitution (at some moments) or to decide which parts of the constitution really mattered. An ideal conception of “constitution” rather than the constitution itself drove his analysis. The dominant
In making this argument Schmitt was not defending liberalism; from his early Weimar-era works on the threat to order posed by liberals in 1848 and 1918, to the crude juxtaposition of liberalism and democracy in his work of the mid-1920s, to his account of the bourgeois Rechtsstaat as an unpolitical, individualizing, and out-of-date set of principles, he consistently presented an image of liberalism that was out of touch with the political reality of divisive parties and factions, the legacy of the Versailles Treaty, and international capitalism and communism.54 By describing the Weimar Constitution as the combination of a bourgeois Rechtsstaat without political principle and a democracy based on political decision, he was able to argue against attempts by the legal positivists to take the written constitution seriously, both its rights for individual and groups and its openness to parliamentary initiatives. To be sure, at times he defended private property in a way that paralleled a liberal position, and at times he sought an authoritarian solution to the crisis of the Weimar Republic that would exclude National Socialism.55 Whatever his motives, his method was to measure the actual constitution against an ideal intellectual and historical model, and to find it lacking.
For a concept that is useful in scholarly terms, one must affirm that the basic rights in the bourgeois Rechtsstaat are only such rights that can be valued as rights prior to and superior to the state and that the state confers not according to the standard of its laws.56
The last phrase is important. Freedom of conscience, home, mail, and property, for example, preceded the state according to the logic of the bourgeois Rechtsstaat (i.e. liberalism). As such, they were private rather than political rights, which, however, according to Schmitt, took on political forms, since “free expression of opinion, freedom of speech and press, freedom of worship, free assembly, and freedom of association and coalition” implied, in Schmitt’s formulation, “the unhindered exploitation of social power through social organizations”.57 These rights would be private and yet paradoxically have an effect on politics, without being “political” in Schmitt’s strong sense of a (unified and homogeneous) democracy. At the same time, though, Schmitt dwelled on the way the constitution permitted the legislature to define and thereby limit rights. Basic liberal rights, conceptualized in Schmitt’s ideal conception as preceding the state and guarding against the state, were in fact defined and limited in application by state law. They now appeared subject to the discretion of the state instead of preceding the state.58
In principle [...] one and the same state can only have one kind of basic rights. In the current constitution those are, for lack of any other, clear decision, the individual rights of liberty of the bourgeois Rechtsstaat based on the freedom and equality of the individual.59
This method is problematic from both a factual and a theoretical standpoint. Ideal constitutions always run aground on factual realities. Just to make some obvious factual points: the original US Constitution did not contain a Bill of Rights not because the founders were satisfied that rights were adequately defended at the state level, but rather because they thought the legislature would define and defend rights. It is therefore hard to argue that the US Constitution was based solely on natural, pre-existing rights; in any case, republicanism stressed the primacy of the needs of the community in a time of crisis. Madison had little faith in “parchment barriers” protecting rights against the government. The framers instead focused on empowering the people in such a way as to limit bad and ill-considered decisions that violated rights (such as President Adams’s Sedition Acts).61 And as noted above, the French Declaration of Rights of Man and Citizen was clear that rights were to be defined, which means delimited, by statute – indeed, how could that be otherwise, since property, marriage, religion, etc. had to be defined first in order to be protected? Again, the freedoms were defined by the Civic Code eventually written. And as the Jim Crow laws in the United States showed, the essence of rights could indeed be violated by the legislature. These are obvious facts about constitutions that included liberal basic rights at the time. The ideal
Schmitt’s conceptualization of democracy as unity and homogeneity made use of a language that one does indeed see in the early moments of the French and US republics, a language of unity and a language against parties and factions in the general interest. The great value of his work lies precisely in prying the tensions and contradictions out of the democratic experiments of the past. But why does democracy have to assume such an unreal unity as the general interest? Even Madison shifted away from believing in a general good separate from passions and interests, when faced with the reality of national parties in 1800; clearly parties were going to form, to argue over which interests should be represented, for example those of agriculture or those of commerce, those of debtors or those of creditors.62 But for Schmitt, this pluralism was the big problem, the plural interests of parties and of interest groups seem on his reading outright anti-democratic. His discussion of the “total state” was actually about how the state, representing political order itself as a higher principle, could neutralize factions in the name of guarding the constitution. To be sure, Schmitt’s ideas provided arguments in 1932 for resolving a real crisis of democracy related to the paralysis of parliament and the rise of radical, anti-constitutional parties on both right and left; his arguments, however, seemed to view the very pluralism in modern democracy itself as the crisis.
This digression into legal theory, rights, and pluralism relates directly to Schmitt’s discussion of independent social powers in the economy, which he viewed as a threat to unity. The trade unions, if empowered politically, took away from the primacy of the state and its strong male representative to “decide” who was friend and who was enemy. If organized interests in the economic realm were granted direct political rights in any kind of Wirtschaftsverfassung, they would threaten the “unity of the state will”.63 Or as he wrote in 1933, “I believe that political power and rule is the primary thing and unavoidable presupposition for an effective comprehensive economic plan, and not that the plan is the foundation of political rule”.64 In his 1958 remarks on his 1930 essay on “The Problem of the Domestic Neutrality of the State”, Schmitt was clear about the lineage of political thinking into which he was tapping: the
Schmitt was not opposed to change, so long as it strengthened state power. That’s why he described in his Guardian of the Constitution the way that parliamentary paralysis required the president to make use of emergency decrees based on Art. 48; defended the way those decrees took on the status of legislation, i.e. that they displaced the legislature; and defended interventions into the economy. The president became the new guardian of the constitution, defending, however, its ideal core of homogeneity and unity. He became, in a sense, an ersatz monarch, but equipped with far more power than the old German Kaiser had to repress the pluralism that Schmitt declared unconstitutional rather than a normal part of any real, functioning democracy.67
One of his closest students, Ernst Rudolf Huber, pulled Schmitt’s ideas together in a long essay from early 1933 that essentially argued for the constitutionality of a transition to a quasi-permanent authoritarian regime, based on a selective reading of the constitution itself. In an essay written as the Weimar Constitution was ending but when the precise nature of the new authoritarian system remained unclear, Huber left unstated but obvious to observers that the president was now the legislator, Art. 48 had become the normal way of doing legislative business. It was the unspoken assumption of the entire essay. Second, he argued that all basic rights, including basic liberties, were subject to the reservation that the state had to protect its existence through statutes and measures taken on that basis; judges and administrative officials, i.e. the state, could suspend rights on the basis of general statutes; no longer were these
With this shift towards authoritarian constitutionalism, the economy took on a particularly important role. All of the general phrases of the constitution about economic life of became ways of maintaining the national community: “no new economic order is created, but a new order of values in economic life”, as Huber put it. Free markets were at an end, now organized by state-recognized groups; individual property rights were replaced by property rights bound up with social responsibility (i.e. state control). Art. 159, granting the explicit right to join a trade union, became a call for the state to obligate a worker to serve the entire community. The term “trade union” drops out of the entire discussion, replaced by the notion of a collective labour contract protecting workers as an estate (Stand), as a “basic form of our economic organization”. Mirroring this post-individual guarantee was a reformulation of all social life on corporatist lines: the state guaranteed the free operation of social organizations, from churches to businesses, unless the common good
The concept of the economy changed dramatically in this conception; even more dramatic, however, is what happened to the idea of the constitution, which was no longer a set of rules enabling self-government on the basis of individual freedom, but a declaration about an organized society existing under authoritarian tutelage : Sein not Sollen.
5 Ordoliberal Fantasies
At the beginning of his 1933 essay on basic rights, Ernst Rudolf Huber invoked the left-liberals Friedrich Naumann and Hugo Preuss, claiming that both recognized that liberal basic rights contradicted the “spirit of real democracy”.72 Preuss was the main author of the constitution, and played a key role in holding together the pro-democratic alliance of democrats, Social Democrats and Catholic Center Party delegates during the National Assembly’s deliberations. Naumann called for basic rights during the National Assembly’s deliberations that would transcend the liberal individualism of the 19th century and articulate the values of the German nation – including individual rights. Both viewed the constitution as a means for integrating a nation divided by politics, religion, and class, and enabling social legislation in the future. Huber invoked precisely this call for a national and social future, two ideals at the heart of German left-liberalism since at least the 1890s, and arguably already in 1848, but in a way
It is not correct to call Huber’s and Schmitt’s (not completely identical) political positions authoritarian liberalism. Nor does the adoption by future ordoliberals of Schmitt’s language of the strong state indicate that the neoliberals necessarily were and remained fascist.74 I think that Grégoire treads this fine line very well,75 refusing to identify neoliberalism with fascism while still noting its dalliance with authoritarian tendencies. There is no doubt that the liberal tradition was willing to countenance authoritarianism; this was part of the modernizing and civilizing drive that marked their best thinkers, such as Benjamin Constant and John Stuart Mill, who argued that if people are unable to honor contracts, unwilling to respect others as fellow humans, all too willing to follow established authorities, and willing to use violence in ordinary life, then they are not able to exercise civilized, modern freedom. The German National Liberals were not out of line with this liberal tradition.76 It was something quite different to call essentially for a Gleichschaltung of all social groups, to put them under the vigilant control of an authoritarian state apparatus. Neither Huber nor Schmitt affirmed and defended entrepreneurs or capitalism in the strict sense of a system that left basic economic decisions to the logic of the dead hand of capital (profit and interest rates); they affirmed
At the same time, some who later became part of the Ordoliberal group clearly flirted with Hitler’s new state in 1933, as seen in Müller-Armack’s almost mystical affirmation of the myth of national unity and with it a state-dominated, corporatist economy; but others, like Röpke, simply rejected Nazism on the grounds of basic human decency.77 For anyone seriously concerned with the liberal social project (and it’s not clear that Müller-Armack was in 1933), the problem of authority remained essential. As Thomas Biebricher has argued, later neoliberals were fundamentally ambivalent about state power. On the one hand, people like Friedman and Hayek entertained the fantasy of an authoritarian leader who would establish and enforce the economic ground-rules of liberal society like a neutral umpire; Röpke’s endorsement of Atatürk was a broader endorsement of a civilizing dictatorship, creating the character needed for modern liberalism (in this sense closer to Mill’s defense of despotism in colonies). But on the other hand, economic liberals distrusted state power, not surprisingly since it was hardly likely in reality that a strong ruler would remain satisfied with playing the neutral umpire.78 This ambivalence about power (with which this essay began) confronts any intellectual movement aiming at social transformation: it would be great to have a strongman help in the process, but how can you trust a strongman to listen to the experts? Here we do get to an interesting parallel to Physiocracy. One encounters a kind of hubris all too often among economists claiming to know the right answer to an economic problem, and dismissing factions and interests as distorting the right answer. From the point of view of the economist in possession of truth,
Here, I think, one sees the limits to comparing the Ordoliberals and the Physiocrats (insofar as either group can be reduced to a clear and unambiguous set of principles). Yes, certainly, Franz Böhm invoked the Physiocratic notion of applying natural law (or rather the laws of human nature) to the economy in his 1933 work on monopolies.80 It is far less clear, however, that his 1930s account of a basic decision on the economic order – free trade or centralized planning – translates into absolutist or despotic politics, especially after 1945. Böhm and the others recognized the gap between assumptions of the natural functioning of economics and economic reality, whether it came to policies regulating utilities or defining competition, social insurance or state investment. His 1933 work makes a reasoned and differentiated argument against both Sinzheimer and Schmitt, first that for legal as well as practical reasons, the Weimar Constitution made market competition the default, “normal” system; second that there were serious legal and economic reasons to support the market economy, not just ideology; and third that Schmitt himself misread the whole point of economic liberalism, which was not about making the individual absolute but about competition ensuring pluralism and social coordination, which could require government intervention.81 And throughout
The ordoliberal yearning for a neutral umpire and simultaneous fear of political capriciousness mirrors the basic enabling/restraining dialectic of the democratic constitutionalist tradition itself.83 In fact, most German ordoliberals embraced the West German Basic Law, which in many ways paralleled the Weimar Constitution. And the Basic Law, despite occasional arguments to the contrary, did not cement in place the ordoliberal world view.84 Its framework did not bar the opening to economic democracy: both co-determination and a strong, unified, national trade union were possible. Further reaching worker control did not take place, not because of the constitution, but because of popular support for conservative parties. Neither did the judiciary halt a process of economic democratization: the Federal Constitutional Court deliberately set wide parameters for economic initiatives by the legislature, so long as it guaranteed the principles of liberty (basic rights), the rule of law, and social responsibility (the Sozialstaat).85 The more recent decision to amend the Basic Law to require a (somewhat) balanced budget was not imposed by a dictator
Conclusion: European Union Dilemmas
This essay starts with two tensions that the concept of an economic constitution highlights. First, a constitution’s claim to enable a polity to rule society is problematic, because the constitution and polity depend for their own survival on economy and society. Physiocratic attempts to order economy and society ran into challenges of the whims of nature and the lack of infrastructure, and contributed to food shortages and popular violence in the years before the French Revolution. Second, a constitution’s claim to set down the rules for self-government, as implied in the French and American Revolutions and as stated explicitly in the Weimar Constitution, also involves limiting self-government, which necessarily brings up hard questions of where those limits are to be found. Whether we focus on the leftist call for an economic constitution that involved economic democracy or the right-wing call for an authoritarian constitutionalism, both claimed the existing constitution as their foundation. While the first suggested a parliamentary path to socialist transformation, the second suggested a parliamentary and constitutional process of centralizing power and defanging rights. Both raise the question of whether certain changes really are constitutional, and even what the term “constitutional” means. Yet drastically limiting society’s ability to rule itself (through imposing inalterable laws) might undermine legitimacy even more than allowing a democracy to make mistakes, insofar as it creates the image of a tutelary minder of the democratic child. This problem of a “constitution” that sets down strict economic rules limiting how the polity can respond to economic conditions is one of the dilemmas currently facing the European Union. In other words, there is a tension in the EU as well between a “constitution” that enables polity and society to organize itself and the way the same “constitution” limits self-government.
Second, the EU’s structure makes dealing with crises on a Union level more difficult, especially when interests of “sovereign” states are at issue. This was the main message of the Greek crisis. Where was the leadership that would be capable of expressing a position above that of the individual states? The representatives of the individual “sovereign” states, however committed they were to the European project, had above all to respond to citizens at home. It was easy for national political actors to blame the “center” for problems and avoid confronting hard issues. The result was a populist reaction replete with images of the “enemy”. That crisis fomented far-right and far-left populism in Greece and Germany, for example.91 EU rules are not the rules of a “legal despot”, but they are relatively inflexible precisely because of the lack of a clearly identifiable set of European leaders. The inflexible nature of the “constitution” of the EU contributes to its political weakness. Indeed, the 2008–2015 Eurozone crisis more than anything else seems to have point up the lack of a coherent relationship between economic rules and political constitutions, as the rules intended to promote stability become sources of instability, both economic and political.92
It is not clear that the Weimar Republic discussion about an economic constitution that enables more democratic labour relations and socialization of property is directly important for the EU. EU rules do not dictate property laws of member states. They do not close off the possibility of experimentation with labour relations, though they do limit subsidies, tariffs, and other attempts to shield firms from competition.93 Indeed, a wide variety of approaches to labour law exist across individual member states, unionization levels vary widely from state to state, and laws establishing co-determination and levels of public or public/private ownership likewise vary widely.94 But these remain limited member state-level initiatives. What is crucial for the EU is not Sinzheimer’s notion of the economic constitution per se, but rather the further development of a European-wide (political) constitution.
Ed.: see also supra in this volume, G. Grégoire & X. Miny, « Introduction – La Constitution économique : Approche contextuelle et perspectives interdisciplinaires ».
P. Badura, Wirtschaftsverfassung und Wirtschaftsverwaltung, 4th ed., Tübingen, Mohr-Siebeck, 2011, p. 10. This is the somewhat depoliticizing approach that Ernst Rudolf Huber began to develop in the early 1930s, and which he sought to free from its late Weimar political implications in his important intervention in 1956, in an important series of essays: E. R. Huber, « Der Streit um das Wirtschaftsverfassungsrecht », Die öffentliche Verwaltung, 1958, vol. 9, pp. 97–102, 135–143, 172–175, 200–207.
Ed.: regarding this paradoxical power relationship between economic and political systems, see also infra in this volume, C. Joerges, « Economic Constitutionalism and “The Political” of “The Economic” ».
See supra in this volume, P. Steiner, « Les Physiocrates, l’économie politique, l’Europe » and G. Grégoire, « The Economic Constitution under Weimar: Doctrinal Controversies and Ideological Struggles ».
Ed.: see also infra in this volume, the contributions and discussions of T. Biebricher, W. Bonefeld, S. Audier and V. Valentin in Section 2 – The (Neo)liberal Recapture of the Concept.
See esp. infra in this volume, the contributions in Part 2. The European Economic Constitution. From Micro to Macro.
See also B. Herencia, « L’optimum gouvernemental des physiocrates : despotisme légal ou despotisme légitime ? », Revue de philosophie économique, 2013, vol. 14, n° 2, pp. 119–149.
Most famously in J. S. Mill, On Liberty, in J. M. Robson and A. Brady (eds.), Collected Works of John Stuart Mill, Vol. XVIII: Essays on Politics and Society, Ontario, University of Toronto Press, 1977, pp. 213–310, esp. pp. 236–237. This discussion has been subject to dramatically different interpretations over time; see esp. D. Bell’s careful « John Stuart Mill on Colonialism and Colonies », in Reordering the World: Essays on Liberalism and Empire, Princeton, Princeton University Press, 2019, ch. 9.
See also B. Harcourt, The Illusion of Free Markets: Punishment and the Myth of Natural Order, Cambridge, Harvard University Press, 2011.
On free trade and the single tax/fiscal reform as the real core: J. Schumpeter, History of Economic Analysis, New York, Oxford University Press, 1954, pp. 230–231; M. Sonenscher, Before the Deluge: Debt, Inequality, and the Intellectual Origins of the French Revolution, Princeton, Princeton University Press, 2007, pp. 205–208.
Esp. the introduction of R. Meek, The Economics of Physiocracy, London, George Allen and Unwin, 1962, pp. 22–27.
Ibid., p. 19.
F. Quesnay, « Natural Right », in R. Meek (ed.), The Economics of Physiocracy. op. cit., pp. 53–56.
F. Quesnay, « Extract from ‘Rural Philosophy’ », in R. Meek (ed.), Economics of Physiocracy, op. cit., p. 58.
Ibid., pp. 58, 60–61, 63.
Ibid., p. 62; M. Sonenscher, Before the Deluge, op. cit., ch. 3, for the broader context and the connection to the problem of theodicy. See also the summary of Quesnay’s positions in: « The General Maxims for the Economic Government of an Agricultural Kingdom », in R. Meek (ed.), The Economics of Physiocracy. op. cit., pp. 231–268, esp. pp. 231–233.
Ibid., p. 237; F. Quesnay, « Extract from ‘Corn’ » in R. Meek (ed.), The Economics of Physiocracy, op. cit., pp. 79–80.
S. Kaplan, Bread, Politics, and Political Economy in the Reign of Louis XV, 2nd ed., London, Anthem, 2015, pp. 113–117. Quesnay as well as his colleague Pierre-Paul Le Mercier de la Rivière both rejected representative institutions, since the knowledge of nature obliterated the need for intermediaries: see L. Vardi, The Physiocrats and the World of the Enlightenment, New York, Cambridge University Press, 2012, pp. 137–139, 169–171; but see M. Sonenscher, Before the Deluge, op. cit., pp. 212–213, on intermediaries in the sense of officials rather than gentry or representatives. Quesnay’s praise for Chinese despotism (F. Quesnay, « Despotism in China », translated in L. Maverick, China a Model For Europe, San Antonio (TX), Paul Anderson, 1946, pp. 139–304) was not least a way to clear the deck for expert advisors, as critics like Mably already noted: see S. G. Jacobsen, « Against the Chinese Model: The Debate on Cultural Facts and Physiocratic Epistemology », in S. Kaplan and S. Reinert (eds.), The Economic Turn: Recasting Political Economy in Enlightenment Europe, London, Anthem, 2019, pp. 89–116, and T. Pénigaud, « The Political Opposition of Rousseau to Physiocracy: Government, Interest, Citizenship », History of Political Thought, 2015, vol. 22, pp. 473–499.
Tocqueville’s not entirely reliable narrative in The Old Regime and the Revolution, New York, Harper, 1856, ch. 15. See the harsh judgment of the world expert on bread and politics in ancien regime France, S. Kaplan and S. Reinert, « The Economic Turn in Enlightenment Europe », in S. Kaplan and S. Reinert (eds.), The Economic Turn, op. cit., p. 11.
F. Cooper, « From Free Labor to Family Allowances: Labor and African Society in Colonial Discourses », American Ethnologist, 1989, vol. 16, pp. 745–767; on the colonial intertwinings of Physiocracy and legal despotism, P. Røge, « ‘Legal Despotism’ and Enlightened Reform in the Îles du Vent: The Colonial Governments of Chevalier de Mirabeau and Mercier de la Rivière, 1754–1764 », in G. Paquette (ed.), Enlightened Reform in Southern Europe and Its Atlantic Colonies, Burlington (VT), Ashgate, 2009, pp. 167–182.
Detailing the story: S. Kaplan, Bread, Politics, and Political Economy in the Reign of Louis XV, op. cit.
On the role of models in economics, J. Kornai, By Force of Thought: Irregular Memoirs of an Intellectual Journey, Cambridge, mit, 2006, p. 183.
Of the many works on the Settlement, see esp. R. Guha, A Rule of Property for Bengal: An Essay on the Idea of Permanent Settlement, Charlotte (NC), Duke University Press, 1996; J. Mclane, Land and Local Kinship in Eighteenth-Century Bengal, New York, Cambridge University Press, 1993, on the prehistory and the transformation of punishments from physical pain and humiliation to expropriation.
A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. I, (1776), New York, Oxford University Press, 1976, p. 67.
See H. Farrell’s astute comments on Mill’s liberal political economy and the Irish Famine at:
A. Smith, Theory of Moral Sentiments, (1759) New York, Oxford University Press, 1976, p. 234.
A. Smith, Wealth of Nations, vol II, op. cit., p. 641. Smith, of course, held similar views on free trade as the Physiocrats; the difference was a sense of irony recognizing the limitations of human knowledge and the complexity of human interactions: see esp. E. Rothschild, Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment, Cambridge, Harvard University Press, 2001, ch. 1.
F. Quesnay, « Despotism in China », op. cit., pp. 274–275; see also pp. 141–142, 212–213, 225, 264–267, 271–278.
See esp. D. Grimm, « Constitutionalism », in Constitutionalism, New York, Oxford University Press, 2015, pp. 3–37, esp. pp. 6–19.
L. Rubinelli, Constituent Power: A History, New York, Cambridge University Press, 2020.
General overview in C. Gusy, Die Weimarer Reichsverfassung, Tübingen, Mohr Siebeck, 1997; in English, P. Caldwell, « The Weimar Constitution », in N. Rossol and B. Ziemann (eds.), The Oxford Handbook of the Weimar Republic, New York, Oxford University Press, 2021.
On the US case, J. Ely, Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights, New York, Oxford University Press, 1992, pp. 82–83, with further references.
See supra in this volume, G. Grégoire, « The Economic Constitution under Weimar: Doctrinal Controversies and Ideological Struggles ».
R. Thoma, « Die juristische Bedeutung der grundrechtliche Sätze der deutschen Reichsverfassung im allgemeinen », in H.-K. Nipperdey (ed.), Die Grundrechte und Grundpflichten der Deutschen, vol. I, Berlin, R. Hobbing, 1929, pp. 5–11.
Although in fact the courts were already ruling on this basis before 1919: G. Anschütz, Die Verfassung des Deutschen Reichs vom 11. August 1919 (1933), 14th ed., Aalen, Scientia, 1987, pp. 702–703.
G. A. Ritter, « Die Entstehung des Räteartikels 165 der Weimarer Reichsverfassung », Historische Zeitschrift, 1994, vol. 258, pp. 73–112.
Overview in C. Gusy, Die Weimarer Reichsverfassung, op. cit., pp. 364–369.
G. Anschütz, Die Verfassung des Deutschen Reichs, op. cit., p. 744.
H. Sinzheimer, « Die Zukunft der Arbeiterräte » (1919), repr. in H. Sinzheimer, Arbeitsrecht und Rechtssoziologie: Gesammelte Aufsätze und Reden, vol. I (edited by O. Kahn-Freund and T. Ramm), Frankfurt am Main, Europäische Verlagsanstalt, 1976, pp. 351‑355, esp. p. 351.
Ibid., pp. 353–354.
Sinzheimer traced the origin of the more radical councils movement in early 1919, in fact, to the sense that mere political democracy had failed to provide a “social content of life”; “life” is a recurring term in this period: « Das Rätesystem » (1919), in Arbeitsrecht und Rechtsoziologie, vol. I, op. cit., pp. 325‑350, esp. p. 325. On his notion of “constitutionalizing” labour law, see esp. R. Dukes, The Labour Constitution: The Enduring Idea of Labour Law, New York, Oxford University Press, 2014.
H. Sinzheimer, « Das Rätesystem », op. cit., p. 334.
H. Sinzheimer, « Die Zukunft der Arbeiterräte », op. cit., p. 351.
F. Neumann, « Die soziale Bedeutung der Grundrechte in der Weimarer Reichsverfassung » (1930), repr. in Wirtschaft, Staat, Demokratie (edited by A. Söllner), Frankfurt am Main, Suhrkamp, 1978, pp. 68–73; F. Neumann, Koalitionsfreiheit und Reichsverfassung: Die Stellung der Gewerkschaften im Verfassungssystem, Berlin, Carl Heymann, 1932, p. 77.
There is more than a little similarity between Sinzheimer’s notion of social revolution, combined with the gradual development of a new kind of responsible and disciplined proletariat, and Gramsci’s, developed around the same time but from a Marxist-Leninist perspective: the real revolution is happening over the long term in society, not in politics.
H. Sinzheimer, « Die Neuordnung des Arbeitsrechts » (1919), in Arbeitsrecht und Rechtssoziologie, vol. I, op. cit., p. 69.
On the prevalence of this notion of organization, K.-W. Nörr, Die Republik der Wirtschaft, vol. I, Tübingen, Mohr Siebeck, 1999, pp. 5–18.
F. Neumann, « Über die Voraussetzungen und den Rechtsbegriff einer Wirtschaftsverfassung » (1931), in Wirtschaft, Recht, Demokratie. Aufsätze 1930 – 1954 (edited by A. Söllner), Frankfurt am Main, Suhrkamp, 1978, pp. 76–78; see also F. Neumann, Koalitionsfreiheit und Reichsverfassung, op. cit., pp. 48–49.
F. Neumann, « Über die Voraussetzungen und den Rechtsbegriff einer Wirtschaftsverfassung », op. cit., pp. 86 and 89.
Ibid., pp. 82, 85, 87–88, 94–96 and 99; F. Neumann, Koalitionsfreiheit und Reichsverfassung, op. cit., p. 63. This argument very much in line with Sinzheimer (« Das Rätesystem », op. cit., p. 327).
The theme runs through Sinzheimer’s work; see esp. his 1933 speech, written after having fled Germany for the Netherlands, « Das Problem des Menschen im Recht », in Arbeitsrecht und Soziologie, 1933, vol. 2, pp. 53–69.
O. Kirchheimer, « Weimar und was dann? Entstehung und Gegenwart der Weimarer Verfassung », in Politik und Verfassung, Frankfurt am Main, Suhrkamp, 1964, pp. 9–56; C. Schmitt, Constitutional Theory, Durham, Duke University Press, 2008, p. 201.
C. Schmitt, Constitutional Theory, op. cit., pp. 201–212.
Compressed argument with relevant literature in P. Caldwell, Popular Sovereignty and the Crisis of German Constitutional Law, Durham (NC), Duke University Press, 1997, pp. 96–107.
On property see esp. I. Maus’s still valuable work: Bürgerliche Rechtstheorie und Faschismus, 2nd ed., Munich, Wilhelm Fink, 1980; on Schmitt’s search for an anti-Nazi authoritarian solution, J. Bendersky, « Ausnahmezustand, Staatsnotstandsplan, and Ermächtigungsgesetz: Reappraising Carl Schmitt’s Political Constitutionalism and the Demise of Weimar », in H. Beck and L. Jones (eds.), From Weimar to Hitler: Studies in the Dissolution of the Weimar Republic and the Establishment of the Third Reich, 1932–1934, New York, Berghahn, 2019, pp. 52–78, with further sources.
C. Schmitt, Constitutional Theory, op. cit., p. 202.
C. Schmitt, Constitutional Theory, op. cit., pp. 202–204.
C. Schmitt, Constitutional Theory, op. cit., pp. 214–215, argues that the bourgeois Rechtsstaat therefore guarantees, not liberties in every case, but the “principles” of a basic right: legislation and even constitutional legislation that eliminates a liberty entirely is not constitutional. Where, however, the line is to be drawn is unclear.
C. Schmitt, « Grundrechte und Grundpflichten » (1932), repr. in Verfassungsrechtliche Aufsätze aus den Jahren 1924–1954, 4th ed., Berlin, Duncker & Humblot, 2003, p. 206.
C. Schmitt, Der Hüter der Verfassung, Tübingen, Mohr Siebeck, 1931, p. 97.
S. Levinson, An Argument Open To All: Reading The Federalist in the 21st Century, New Haven (CT), Yale University Press, 2015, 178–179; on that logic in operation in turning back Adams’s sedition laws, S. Dunn, Jefferson’s Second Revolution: The Election Crisis of 1800 and the Triumph of Republicanism, New York, Houghton Mifflin, 2004.
See esp. R. Dahl, « Madison: Republican or Democrat? » Perspectives on Politics, 2005, vol. 3, n°3, pp. 439–448.
C. Schmitt, Der Hüter der Verfassung, op. cit., p. 99.
C. Schmitt, « Machtpositionen des modernen Staats » (1933), in Verfassungsrechtliche Aufsätze, op. cit., p. 371, an essay written in the midst of the transformation to some kind of authoritarian regime under the leadership of Hitler and Hindenburg.
C. Schmitt, « Grundrechte und Grundpflichten », op. cit., p. 197; « Das Problem der innenpolitischen Neutralität des Staates » (1930), in Verfassungsrechtliche Aufsätze, op. cit., pp. 42–43. Grégoire points to an important section where Schmitt discusses fascist Italy and the Soviet Union, however, suggesting another way to overcome the problem of pluralism: through a one party system that uses its mass basis to stand above factions (Der Hüter der Verfassung, op. cit., p. 100). There is no doubt that Schmitt flirted with such “ways forward”, and that his name-dropping of right-radicals like Ernst Jünger and Hans Freyer was part of this flirtation, but that lies beyond the scope of this essay.
See infra in this volume, V. Valentin, « L’idée de constitution économique et l’hypothèse du libéralisme autoritaire » – Carl Schmitt was indeed not a liberal !
Esp. C. Schmitt, Der Hüter der Verfassung op. cit., pp. 118–131, with a summary at 158–159.
E. R. Huber, « Bedeutungswandel der Grundrechte », Archiv des öffentlichen Rechts, 1933, vol. 62 (N.F. 23), pp. 1–98, esp. pp. 16, 21, 25–28 and 33. Huber’s 1931 Das Deutsche Reich als Wirtschaftsstaat by contrast still describes the core economic reality underlying the constitution as one based on free markets and free enterprises: in Bewahrung und Wandlung: Studien zur deutschen Staatstheorie und Verfassungsgeschichte, Berlin, Duncker & Humblot, 1975, pp. 37–61. Huber’s reference to national, Christian values coincides with Schmitt’s discovery of the authentic decision of the constitution for marriage, family, and property in Legality and Legitimacy (edited by J. Seitzer), Durham (NC), Duke University Press, 2004, pp. 41–58 and puts both firmly in the authoritarian conservative traditions of Latin America: see R. Gargarella, The Legal Foundations of Inequality: Constitutionalism in the Americas, New York, Cambridge University Press, 2010, ch. 2.
See the essays in H. A. García and G. Frankenberg (eds.), Authoritarian Constitutionalism: Comparative Analysis and Critique, Northampton (MA), Edward Elgar, 2019.
E. R. Huber, « Bedeutungswandel der Grundrechte », op. cit., pp. 38–39, 43, 46–49, 62 ff., 76–78 (criticizing Neumann) and 86. See his earlier Das Deutsche Reich als Wirtschaftsstaat, op. cit., pp. 44–46, rejecting the constitutional possibility of a corporatist order on the fascist model.
E. R. Huber, « Bedeutungswandel der Grundrechte », op. cit., pp. 92 and 97–98.
Ibid., pp. 9–10.
On Huber see esp. the short but accurate summary connecting Huber to neo-Hegelian authoritarianism, the assertion of harmony, and the primacy of the state in the national order, in M. Stolleis, Geschichte des öffentlichen Rechts in Deutschland, 3. Band, 1914–1945, Munich, C.H. Beck, 1999, pp. 228–230 and 347–350. Huber himself claimed an inner distance from National Socialism, and claimed that his Nazi-era work aimed to bring that system into a constitutional framework; his work seems more accurately to have provided window-dressing for a brutal and capricious regime: see the contributions in E. Grothe (ed.), Ernst Rudolf Huber: Staat-Verfassung-Geschichte, Baden-Baden, Nomos, 2015, esp. the contributions from Reinhard Mehring and Frieder Günther.
Ed.: on these controversies, see infra in this volume, the contributions of W. Bonefeld, « Economic Constitution and Authoritarian Liberalism – Carl Schmitt and the idea of a “Sound Economy” », S. Audier, « Le néolibéralisme : Un “libéralisme autoritaire” néo-schmittien? » and V. Valentin, « L’idée de constitution économique et l’hypothèse du libéralisme autoritaire ».
See supra in this volume, G. Grégoire, « The Economic Constitution under Weimar: Doctrinal Controversies and Ideological Struggles ».
Strong critique of this strand of liberalism in U. Mehta, Liberalism and Europe: A Study in Nineteenth Century British Liberal Thought, Chicago, University of Chicago, 1999. Notably, Mehta views Burke as a critic of and antidote to liberalism; for Carl Schmitt, Burke was a liberal.
A. Müller-Armack, Staatsidee und Wirtschaftsordnung im neuen Reich, Berlin, Juncker und Dünnhaupt, 1933.
T. Biebricher, The Political Theory of Neoliberalism, Stanford, Stanford University Press, 2018, ch. 2. See also infra in this volume, T. Biebricher, « An Economic Constitution – Neoliberal Lineages ». On Röpke and authoritarianism, Q. Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism, Cambridge (MA), Harvard University Press, 2018, 113–117.
Ed.: see also infra in this volume, C. Joerges, « Economic Constitutionalism and “The Political” of “The Economic” ».
F. Böhm, Wettbewerb und Monopolkampf: Eine Untersuchung zur Frage des wirtschaftlichen Kampfrechts und zur Frage der rechtlichen Struktur der geltenden Wirtschaftsordnung (edited by E.-J. Mestmäcker), Baden-Baden, Nomos, 2010, implicitly at pp. 114, 309 and 314, but with much more of a focus on Smith than on Quesnay; excellent systematic investigation in D. Nientiedt « Metaphysical Justification for an Economic Constitution? Franz Böhm and the Concept of Natural Law », Constitutional Political Economy, 2019, vol. 30, pp. 114–123, esp. 124.
F. Böhm, Wettbewerb und Monopolkampf, op. cit., pp. 315–327; see also J. Hien and C. Joerges, « Das aktuelle europäische Interesse an die ordoliberale Tradition », Leviathan, 2017, vol. 45, pp. 462–463, noting the gap between Schmitt’s advocacy of exceptional legislation by a powerful state and the Ordoliberal call for a state to approve and defend a set of abstract laws to ensure competition. But see Q. Slobodian, Globalists, op. cit., pp. 211–212, citing Böhm’s 1937 statement describing a fundamental decision on economic form in F. Böhm, Ordnung der Wirtschaft als geschichtliche Aufgabe und rechtsschöpferische Leistung, Stuttgart, Kohlhammer, 1937. In my estimation, the 1937 text by Böhm deserves a careful contextual examination: it strikes me, for example, as a bit strange for Böhm, so opposed to anti-Semitism, to be citing Schmitt just after Schmitt had taken the deep plunge into overt anti-Semitism and the destruction of legal traditions in 1936, and just as Schmitt himself was under attack for the alleged liberalism of his Hobbesian decisionism. Böhm could hardly have missed these events as a professor of law. Nor could he have missed the shift to a more intense state-driven monopolization and cartelization of key sectors of German industry under the Four Year Plan starting in 1936, even as he described in 1937 an “elastic” approach to economic management that reserved the option of “returning” to competition in the future. Should one consider the text an example of massive self-deception or a veiled strategic intervention? I raise this as a real question, to which I do not have an answer. See infra T. Biebricher, « An Economic Constitution – Neoliberal Lineages » for some other considerations on the text.
G. Teubner, « Transnational Economic Constitutionalism in the Varieties of Capitalism », Global Perspectives, 2020, vol. 1, p. 4.
As Böhm clearly realized in « Democracy and Economic Power » in Universität Frankfurt am Main. Institut für Ausländisches und Internationales Wirtschaftsrecht (ed.), Cartel and Monopoly in Modern Law, Karlsruhe, C. F. Müller, 1961; see also his « Left Wing and Right Wing Approaches to the Market Economy », Zeitschrift für die gesamte Staatswissenschaft, 1979, vol. 135, pp. 442–448, for his openness to multiple political perspectives.
Ed.: see infra in this volume, P.-C. Müller-Graff, « The Idea of an Economic constitution (Wirtschaftsverfassung) in German law».
For further references, see P. Caldwell, Democracy, Capitalism, and the Welfare State: Debating Social Order in Postwar West Germany, New York, Oxford University Press, 2019, pp. 68–69, and P. Badura, Wirtschaftsverfassung und Wirtschaftsverwaltung, op. cit., pp. 10–11.
D. Grimm, « Constitutionalism without Constitution: A Democracy Problem », in N.W. Barber, M. Cahill and R. Ekins (eds.), The Rise and Fall of the European Constitution, New York, Hart Publishing, 2019, pp. 23–40, which pulls together many of his other works on the fate of constitutionalism since 1990, esp. The Constitution of European Democracy, New York, Oxford University Press, 2017.
Ed.: see also infra in this volume, P. Lindseth & C. Fasone, « The Eurozone Crisis, the Coronavirus Response, and the Limits of European Economic Governance ».
D. Grimm, « Origins and Transformation of the Concept of the Constitution », op. cit., pp. 32–37; D. Grimm, « Constitutionalism », op. cit., pp. 23–27; D. Grimm, « Europe Yes – But Which Europe? » in The Constitution of European Democracy, op. cit., pp. 5–6.
Ed.: see infra in this volume, H. Lokdam & M. A. Wilkinson, « The European Economic Constitution in Crisis: A Conservative Transformation? ».
During the Great Recession, critics complained that the terms of Union had removed the power of member states to respond to crises through fiscal measures to default on debt, but the center did not at the same time provide relief. See esp. the compelling arguments by W. Streeck in Buying Time: The Deficit Crisis of Democratic Capitalism, New York, Verso, 2014, but also M. Sandbu’s description of options not pursued by member states when offered the possibility of blaming Brussels: Europe’s Orphan: The Future of the Euro and the Politics of Debt, Princeton, Princeton University Press, 2014.
Ibid., p. 181.
This, I think, where J. Hien and C. Joerges are going in « Das aktuelle europäische Interesse an die ordoliberale Tradition », op. cit., pp. 233–237.
Ed.: see infra in this volume, P. Van Cleynenbreugel & M. Miny, « The Fundamental Economic Freedoms: Constitutionalizing the Internal Market ».
G. Teubner, « Transnational Economic Constitutionalism », op. cit., pp. 4–6; P. Badura, Wirtschaftsverfassung und Wirtschaftsverwaltung, op. cit., pp. 77–78, on property rights.
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