The Religious Foundations of the European Crisis Josef Hien WORKING PAPERS Abstract1 There has been much talk about ordoliberalism recently. Scholars and the press identify it as the dominant economic instruction sheet for Germany’s European crisis politics. However, by analyzing ordoliberalism only as an economic theory, the debate downplays that ordoliberalism is also an ethical theory, with strong roots in Protestant social thought. It is this rooting in Protestant social thought that makes Ordoliberalism incompatible with the socioeconomic ethics of most of the European crisis countries, whose ethics originate in Catholic and Orthodox social thought. This divergence is the source of a crisis of understanding between European nations and hinders a collective response to the crisis. 1 This article has been written in the context of the REScEU project (Reconciling Economic and Social Europe, www.resceu.eu), funded by the European Research Council (grant no 340534). 1 2 The ordoliberalization of Europe Blyth assessed that ‘Germany’s response to the crisis, and the crisis itself both spring from the same ordoliberal instruction sheet’ (Blyth 2013, 141). Many side with him. Hillebrand comments that ‘Germany’s crisis policy [...] appears rational from an ordoliberal perspective’ (Hillebrand 2015, 6). Nedergard and Snaith argue that ‘one crucial consequence has been a strengthening of the ordoliberal governance in the European Union’ (Nedergaard and Snaith 2015) and Bulmer concludes that ‘ordo-liberalism has trumped pro-europeanism’ in Germany (Bulmer 2014, 1244). The list could be continued with similar citations from many others (Dullien and Guérot 2012; Berghahn and Young 2013; Bulmer and Paterson 2013; Dardot and Laval 2014; Cesaratto and Stirati 2010; Jones 2013). Some even speak of an ‘Ordoliberalization’ (Biebricher 2014) of Europe. Prominent international media outlets like the Guardian (Kundnani 2012; Guérot and Dullien 2012), The Financial Times (Münchau 2014) and the Economist (The Economist 2015) have picked up the ball. However, contributions that link ordoliberalism and German Euro-politics share one important downside: they perceive ordoliberalism solely as an economic theory neglecting that is also a theory of society with strong ethical provisions. The paper asks about the origins of these provisions and argues that they are rooted in Protestant social thought. These ethics surfaced in the heated debates about solidarity during the European debt crisis. They create frictions with the social ethics of the European South rooted in Catholicism and Orthodoxy. 3 The paper uses a morphological approach to first, show how religious values have been infused into ordoliberal ideology between the 1930s and 1950s. Second, trace how these values have, throughout time, lost their direct Protestant labelling but not their stealthy Protestant content. Third, highlight how these ordo-ethics surfaced during the European sovereign debt crisis between 2010 and 2015. The argument is not meant to replace economic interest based (export vs import: Armingeon and Baccaro 2015; creditor vs debtor countries: Dyson 2014) or functional-economic (Höpner and Lutter 2014) explanations of the Euro crisis but should complement them. A major problem of the Eurozone are the diverging political economies within it (Höpner and Schäfer 2012). Neo- Rokkanian literature has pointed out that this divergence was caused partly by the different socio-economic doctrines of European Christianity (Kahl 2005; Manow and Van Kersbergen 2009; Manow 2004; Van Kersbergen 1995). Like the institutions of the political economies of Europe the religious underpinning of the diversity of European socio-economic thought have proven to be resilient even in a secularizing Europe. In the crisis both have become a stumbling block for transnational understanding. Ordoliberalism as an Ideology, Methods and Empirics Anglo-Saxon Economists describe ordoliberalism as ‘ideology’ (Kirchgässner 2009) and some even call it a ‘religion’ (The Economist 2015). Ordoliberals themselves concur that ordoliberalism shares few of the main features of present day economic theory (Lucke 2006). Ordoliberal contributions rarely use formal modeling, do not rely exessively on mathematics, or quantitative empirics (Fuest 2006). The multidisciplinary origins of ordoliberal thinkers (Böhm 4 was a lawyer, Eucken an economist, Rüstow a sociologist) is at odds with the highly specialized field of present day economics. However, ordoliberalism is an ideology, not in the ascriptions that Anglo-Saxon economists throw at it but in the way political theorists classify ideologies. Ideologies ‘are clusters of ideas, beliefs, opinions, values, and attitudes usually held by identifiable groups, that provide directives, even plans, of action for public policy-making it an endeavour to uphold, justify, change or criticise the social and political arrangements of a state or other political community’ (Freeden 2004, 6). The involvement of ordoliberals in the economic policies of the 1950s in West-Germany, the fighting against economic governance in Europe in the 1960s and the attempts to influence Euro politics during the recent European crisis are examples (Abelshauser 1996a; Young 2014; Nützenadel 2005). Ordoliberalism is not complex and coherent enough to be a philosophy but it is more encompassing and has more real world aspirations than economic theory (Foucault 2010). Like philosophers, ordoliberals developed positions about the good life but their provisions do not exclusively target epistemic communities but were made to be used in politics. One could say that ordoliberal’s ‘theoretical weakness ensures its political survival’ (Joerges and Rödl 2005: 14). During the European debt crisis, ordoliberals engaged in ‘de- contestation’, presenting value judgements as if they were not potentially controversial but truth statements, another trademark of ideologists (Freeden 2013). Political theorists study ideology through the tool of morphology. The researcher’s task is to unveil ‘an ideology’s internal architecture’ (Freeden 2013, 5) by focusing on the core, adjacent and the peripheral concepts of an ideology and document how these change through time. The 5 core of ordoliberalism has three components: an institutional economic component, a law component and an ethical component. The study focuses on the first generation of ordoliberal thinkers, Eucken, Böhm, Röpke, Rüstow and Müller-Armack between 1930s and 1950s. I use the religious sociology of Weber and Troeltsch and rely on (auto)-biographical works to highlight the ordoliberal’s Protestant connections. The analysis of contemporary ordoliberalism starts with the Neue Methodenstreit in 2009 and ends with the European sovereign debt crisis in 2015. I focus on three contemporary ordoliberal key figures: central bank president Weidmann, finance minister Schäuble and Fuest, the head of the most important economic research institute in Germany. I analyse 41 speeches and interviews of Schäuble, 20 speeches of Weidmann and all scientific contributions of Fuest between 2010 and 2015. Economy, law and ethics: three core components of ordoliberalism Ordoliberalism is a German invention. It emerged during the 1930s as a conservative response to the Great Depression and the political and economic turmoil in the Weimar republic. Ordoliberals were shocked by the economic, political and social havoc of Weimar. The influence of politics and organized interests, the rise of cartels, the clientelism of Weimar’s welfare state, ‘the ruthless exploitation of the state by the interest mob’ as Röpke put it, lies at the heart of their analysis (Röpke 1948b, 310). Ordoliberals deducted that the functioning of liberal market economies could only be guaranteed if they were protected from social and political influence. ‘The economic system has to be like a un-destroyable toy’ Röpke wrote and added that it had to be “’fool-proof’ in the drastic English expression” (Röpke 1948b, 309). 6 Eucken postulated two principle tasks for the ordoliberal state: “First principle: the policy of the state should be focused on dissolving economic power groups or at limiting their functioning. Second principle: the politico-economic activity of the state should focus on the regulation of the economy, not on the guidance of the economic process” (Eucken 1952, 334,336). Instead of the classic liberal night watch state ordoliberals wanted a strong state that guarantees free market competition (Biebricher 2011). For liberals in the Anglo-Saxon tradition the state is the spoiler for ordoliberals it is the safeguard. The ordoliberal state should be a ‘robust’, ‘impartial’ and ‘incorruptible’ arbitrator (Röpke 1948b, 310). Governed not by parties or interest groups but by, ‘highly educated civil servants’, with strong ‘vocational ethos’ (Röpke 1948b, 310). Central institutions of economic statecraft, have to be made impermeable for political influence. This made law the second core feature of ordoliberal thinking. Economic policy had to be ‘justiciable economic policy’ (Röpke 1948b, 312) arbitrated in courts, ‘the last fortress of state authority and of trust in the state’ (Röpke 1948b, 312). Economy and law fuse in the economic constitution. A strong state should make this economic constitution, this machinery of law based, technocratic, de-politicized competitive economy, work flawlessly. This conception of the ordoliberal economic constitution is where commentators see the overlap between ordoliberal principles