UNIVERSITY OF CALIFORNIA Los Angeles The Politics of Order: Ordo-liberalism from the Inter-war Period through the Long 1970s A dissertation submitted in partial satisfaction of the requirements for degree Doctor of Philosophy in History by Joshua Charles Rahtz 2017 © Copyright by Joshua Charles Rahtz 2017 ABSTRACT OF THE DISSERTATION The Politics of Order: Ordo-liberalism from the Inter-war Period through the Long 1970s by Joshua Charles Rahtz Doctor of Philosophy in History University of California, Los Angeles, 2017 Professor Robert P. Brenner, Chair This dissertation examines the thought of the five principal thinkers of the distinctive German neo-liberal tradition of ordo-liberalism, a consistent and often prominent current in the intellectual life of the Bundesrepublik since the end of the Second World War. By way of intellectual profiles of these main figures, the dissertation shows that ordo-liberalism developed as a political rather than purely economic theory. Shaped by the double crisis of capitalism of the inter-war period – of inflation and global economic depression – it attempted a response to the failure of the liberalism of the time. From the 1920s, these thinkers sought institutional and social arrangements that would preserve the separation of economic and political spheres, which ii they believed to be the basic requirement of a functioning price mechanism. They achieved this by appeal to the state in its capacity to enforce this separation and regulate social life. The dissertation proceeds by close reading of the main texts of Walter Eucken (1891-1950) and Franz Böhm (1895-1977), representatives of the Freiburg School who developed a method of political economy and constitutional legal theory that sought to isolate the economic responsibilities of the state from democratic pressure. The dissertation then turns to the sociological thinkers Wilhelm Röpke (1899-1966) and Alexander Rüstow (1885-1963), and profiles their development of a theory of mass culture and the measures the state might take to reintroduce and preserve a politics of vitality to combat it. The concluding chapter, on Alfred Müller-Armack (1901-1978), theorist of capitalist crisis in the 1930s, economist of European integration within the Christian Democratic Union, and sociologist of religion, reconstructs his development of the social market economy and concludes with his response to the onset of the downturn of the 1970s. The dissertation shows that by various means, ordo-liberals of the first generation sought resolution to economic crisis directly through politics, and therefore were compelled to undertake comprehensive revision of liberal economics and political theory. iii The dissertation of Joshua Charles Rahtz is approved. Francis R. Anderson Russell Jacoby Dylan Riley Robert P. Brenner, Committee Chair University of California, Los Angeles 2017 iv Table of Contents ABSTRACT OF THE DISSERTATION ....................................................................................... ii Acknowledgments ......................................................................................................................... vii List of Acronyms ......................................................................................................................... viii Vita .................................................................................................................................................. x Introduction ..................................................................................................................................... 1 Chapter 1: Walter Eucken: Theorist of Ordnungspolitik .............................................................. 29 Formation ............................................................................................................................................... 30 A Theory of Capitalist Crisis .................................................................................................................. 47 Taxonomy of Market Forms .................................................................................................................... 73 Ordnungspolitik: Walter Eucken’s Regulation Theory ........................................................................... 89 Chapter 2: Franz Böhm, Jurist of Economic Regulation .............................................................. 98 From Private Power to the Private Law Society .................................................................................. 103 At Freiburg and Jena, Under the Third Reich ...................................................................................... 110 Into the Post-War Period ...................................................................................................................... 125 Chapter 3: Röpke, Economist of Occidental Liberalism and Decentralization .......................... 133 Economic Lessons ................................................................................................................................. 138 The Humane Order: Against Economies of Scale ................................................................................ 147 v The Wartime Trilogy: The Double Character of Capitalism ................................................................ 163 The Persistence of Occidental Moralism .............................................................................................. 176 Chapter 4: Alexander Rüstow, Sociologist of Market Ethics ..................................................... 180 Formation and Biographical Overview ................................................................................................ 180 Weimar Social Theory and Machine Tools ........................................................................................... 188 Coordinates of the West ........................................................................................................................ 193 Federal Republic Years ......................................................................................................................... 213 Chapter 5: Alfred Müller-Armack: From National Socialism to Christian Democracy ............. 225 Crisis Theory and the Volksstaat .......................................................................................................... 228 Theorizing Religion ............................................................................................................................... 240 The Road to Europe .............................................................................................................................. 252 Conclusion .................................................................................................................................. 277 Bibliography ............................................................................................................................... 285 Archival Sources ................................................................................................................................... 285 Literature .............................................................................................................................................. 285 vi Acknowledgments I owe Perry Anderson a tremendous debt of gratitude for his teaching, for his advice and support, and for giving shape to this dissertation and guiding it over the course of several years. Robert Brenner has supported this project and offered critical commentary at every stage. I am extremely thankful for his mentorship. Russell Jacoby and Dylan Riley commented on the research design of this dissertation, and for that I am very grateful. I also owe a great debt to Dieter Plehwe for his expert advice on the research for this dissertation, on related work, and his personal generosity over years. I would like to thank Jürgen Kocka for his guidance, and Alexander Nützenadel and his colleagues at Humboldt University for hosting me at their department in Berlin from 2013 through 2015. There, Martin Lutz, Kim Priemel and Laura Rischbieter offered feedback on the work in its early stages. Martin Lengwiler of the University of Basel kindly arranged for a stay at Basel’s history department for October of 2014, and commented on early versions of part of this dissertation presented at the department’s colloquia. Roberto Sala’s comments there and at Humboldt’s Wartin colloquium in 2013 merit special thanks, as do Mischa Suter’s, and Milena Guthörl’s. Irene and Walter Oswalt of the Walter-Eucken-Archiv in Frankfurt, and Uwe Dathe of Friedrich Schiller University, Jena, made available to me letters and other material from the Estate of Walter Eucken; the staff of the Wilhelm-Röpke-Archiv at the Institut für Wirtschaftspolitik, and the archivists at the Bundesarchiv Koblenz and those at the Konrad- Adenauer-Stiftung in Sankt Augustin and at the Hoover Institution Archives, Stanford University, were all of great help in my research. The librarians at the Young Research Library at UCLA, and especially Christopher Brennan, have been outstandingly efficient and generous. Lastly, I must acknowledge the Estate of F.A. Hayek for granting permission to use quotations from Hayek’s unpublished letters. vii List of Acronyms ACDP Archiv für Christlich-Demokratisch Politik (Archive for Christian-Democratic Policy) ASM Aktionsgemeinschaft Soziale Marktwirtschaft (Action Group for the Social Market Economy) BA Bundesarchiv (Federal