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Walter Eucken's Role in the Early History of the Mont Pèlerin Society

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Walter Eucken's Role in the Early History of the Mont Pèlerin Society A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Kolev, Stefan; Goldschmidt, Nils; Hesse, Jan-Otmar Working Paper Walter Eucken's role in the early history of the Mont Pèlerin Society Freiburger Diskussionspapiere zur Ordnungsökonomik, No. 14/02 Provided in Cooperation with: Institute for Economic Research, University of Freiburg Suggested Citation: Kolev, Stefan; Goldschmidt, Nils; Hesse, Jan-Otmar (2014) : Walter Eucken's role in the early history of the Mont Pèlerin Society, Freiburger Diskussionspapiere zur Ordnungsökonomik, No. 14/02, Albert-Ludwigs-Universität Freiburg, Institut für Allgemeine Wirtschaftsforschung, Abteilung für Wirtschaftspolitik, Freiburg i. Br. This Version is available at: http://hdl.handle.net/10419/90809 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Walter Eucken Institut ORDO Constitutio in Libertate Walter Eucken’s Role in the Early History of the Mont Pèlerin Society Stefan Kolev, Nils Goldschmidt Jan-Otmar Hesse 14/02 Freiburger Diskussionspapiere zur Ordnungsökonomik Freiburg Discussion Papers on Constitutional Economics Institut für Allgemeine Wirtschaftsforschung Abteilung für Wirtschaftspolitik Albert-Ludwigs Universität Freiburg i. Br. ISSN 1437-1510 Walter Eucken’s Role in the Early History of the Mont Pèlerin Society 1 2 3 Stefan Kolev , Nils Goldschmidt , Jan-Otmar Hesse Abstract In the history of economic thought Walter Eucken is mostly known for his impact in establishing the Social Market Economy in post-war Germany. Even though there is a growing interest in his ideas especially from an Austrian and a Constitutional Economics perspective, his influence on the discussions within neoliberalism and, more specifically, his impact in the course of the foundation of the Mont Pèlerin Society (MPS) are not yet widely considered. In this paper we attempt to show that Eucken was very influential in the formation of the MPS and that German ordoliberalism had a significant imprint on the early history of the society. It is primarily Eucken’s correspondence with F. A. Hayek and Wilhelm Röpke in this context which we present and analyze, complementing it with some hypotheses about early influences between Eucken and Hayek in terms of methodology and epistemology. Subsequently we show, by regarding the first MPS meetings between 1947 and 1949 (general and organizational), that there was – even at this early stage in the development of the MPS – a widening gap between a Continental European and an Anglo-Saxon understanding of neoliberalism, despite the personal friendships and high collegial respect especially between Eucken, Hayek and Röpke; Ludwig von Mises playing a special role in this setting. We illustrate this development also by discussing personal memories of Leonhard Miksch, a student of Eucken and a participant of the MPS meeting in 1949, recorded in his so far unpublished diary. Keywords Neoliberalism, Mont Pèlerin Society, Ordoliberalism, History of Economic Thought, Political and Economic Order, Role of Economists JEL Classification A11 · B25 · B31 · B41 · H11 1 S. Kolev, Department of Economics, University of Applied Sciences Zwickau, Dr.-Friedrichs-Ring 2A, D-08056 Zwickau, Germany | Wilhelm-Röpke-Institut, Erfurt, Germany 2 N. Goldschmidt, Department of Economics / ZöBiS, University of Siegen, Hölderlinstr. 3, D-57076 Siegen, Germany | Walter Eucken Institut, Freiburg, Germany 3 J.-O. Hesse, Department of History, Philosophy and Theology, University of Bielefeld, Universitätsstr. 25, D-33615 Bielefeld, Germany 1. Introduction Walter Eucken (1891-1950) was the only economist from Germany among the 39 scholars and journalists assembled in the first meeting of the Mont Pèlerin Society (MPS) in April 1947. Given that Wilhelm Röpke emigrated from Germany in early 1933 and worked in Geneva when the first meeting was arranged, and that Karl Brandt, although originating from the Institute of agricultural economics in Berlin, had already taught at Stanford University for a decade, it was Walter Eucken solely representing German liberal economics at that meeting. 4 But Eucken’s presence was much more than just participation. As we will show in the following, his reasoning was part of the conception in the minds of Hayek as well as Röpke in preparation of the first meeting of the MPS. Furthermore, in the years until his sudden death in 1950 Eucken gained influence on the organisation’s existence as well as its intellectual development. We therefore are of the opinion that via Eucken’s influence, German ordoliberalism coined the early history of the MPS, a neglected perspective so far in the literature. To unfold this argument we will proceed as follows: in a first step (chapter 2) we want to describe the personal relationship between Eucken and some core figures of the MPS before the first meeting. The next section (chapter 3) describes Eucken’s special influence on the recruitment of German economists for the MPS until 1950 and thus on the early personal evolution of the society. Chapter 4 is dedicated to Eucken’s intellectual influences that are more difficult to detect; we attempt to identify them by first analysing the correspondence between Eucken and Hayek in 1945 and 1946 discussing “The Road to Serfdom” and by subsequently reconstructing some influences in the fields of methodology and epistemology (chapter 4.1). As a second path to identifying Eucken’s intellectual influences, we compare the papers Eucken and Hayek presented at the first MPS meeting in 1947, setting them in the context of relevant preceding developments (especially linked to Henry C. Simons) and of notable institutional linkages between Eucken and Hayek in the aftermath of the MPS meeting in 1947 (chapter 4.2). Complementing this, we then discuss recently discovered diary notes by Leonhard Miksch, one of Eucken’s most important students, who was invited to the MPS meeting in 1949 (chapter 5). In the concluding chapter 6, we outline the continuities and discontinuities that ensued in the relationships among the discussed economists in the decades following Eucken’s death in 1950. 2. The relationship between Hayek, Eucken and Röpke until 1947 Eucken must have met the eight years younger Hayek at one of the meetings of the Verein für Socialpolitik in the 1920s, these conventions back then being attended on a regular basis by German and Austrian economists alike. For sure they met, at the latest, at the meeting of the Verein in Zurich in 1928, since both of them presented papers in the session on business cycle theory. (Blümle/Goldschmidt 2006) After moving to the London School of Economics and after acquiring a car in the late 1930s, on his “frequent trips between London and Vienna” Hayek “generally avoided visiting Germany and crossed only the southwest corner” (Hayek 1983/1992, 188), but “regularly made a stopover in Freiburg just to visit Eucken and to keep in touch with him.” (Hayek 1983/1992, 190) However, correspondence with Eucken to be found in the Hayek Papers starts not before 1939. 5 As to the early period of their association, 4 However, also Alexander Rüstow, who had to emigrate to Turkey in the early 1930s, as well as the Munich historian Franz Schnabel were invited but could not attend due to visa problems. (Plickert 2008, 139) 5 Eucken to Hayek, 27.6.1939, Hoover Institution Archives, Stanford University (hereafter abbreviated as “HIA”), Friedrich A. v. Hayek Papers (hereafter: “FAH Papers”), Box 18, Fo. 40. 1 the following recollection of Hayek from the 1980s seems worth quoting in length, even though his undated memory on their acquainting with each other via Röpke is difficult to verify: “It was through Röpke that I came in contact with Walter Eucken in Freiburg. At that time he was not at all well known, but already had great influence among his closer associates. He was probably the most serious thinker in the realm of social philosophy produced by Germany in the last hundred years.” (Hayek 1983/1992, 189) After the war Eucken was keen to very soon get in contact with Hayek, with whom – after sharing some thoughts on “our fates in Freiburg” having been “very odd” 6 under the “diabolical power system” 7 – he felt united “as non-socialist economists” who “must cooperate across borders”, as he plead in November 1945 8 while inviting Hayek for a lecture at the University of Freiburg. 9 Already in October 1945 Hayek is sharing with Eucken his recent experiences in Switzerland, his intention
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