Article

History of the Human Sciences

26(2) 106125
Human economy and The Author(s) 2013
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DOI: 10.1177/0952695113478243

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Werner Bonefeld
University of York, UK

Abstract
The article expounds the ordo-liberal tradition that emerged as a distinct neo-liberal
conceptualization of free economy as a political practice. According to this tradition
there are things more important than GDP in as much as free economy depends on the
formation of the moral and the social preconditions of market freedom. The social facil-
itation and moral embedding of free economy are fundamental to the ordo-liberal con-
ception of a human economy, which entails a social policy of Vitalpolitik a politics of life.
Particularly at a time of manifest economic crisis and austerity, the social and moral vera-
city of economic liberty depends thus on the exercise of strong state authority.

Keywords
authoritarian liberalism, liberty, order, ordo-liberalism, Vitalpolitik

Introduction: Ordo-liberalism and the order of liberty

Ordo-liberalism is not frequently discussed in English as a great contribution to the
liberal economic thinking of the 20th century. This is unfortunate since it is the theory
behind the German social market economy (Nicholls, 1994), and for some see, for
example, Moss (2000) and Bonefeld (2005) its contribution to European construction
has been fundamental. It developed in the context of the manifest crisis of the Weimar
Republic in the 1920s and 1930s. Its founding thinkers were Walter Eucken, Franz
Bohm, Alexander Rustow, Wilhelm Ropke and Alfred Muller-Armack. For them, the

Corresponding author:
Werner Bonefeld, University of York, Department of Politics, York YO10 5DD, UK.
Email: werner.bonefeld@york.ac.uk
Bonefeld 107

economy has no independent existence. Rather, they say, its independence amounts to a
political practice. This conception of the state as the political authority of free economy
entails a distinctive understanding of social policy. Its purpose is the achievement of a
human economy. The main thinker of human economy is Ropke and to a lesser extent
Rustow. Rustow provided human economy with its decisive term, that is, Vitalpolitik.1
The term describes the distinct social policy objective of maintaining society as an enter-
prise society.
Ordo-liberalism developed a liberal-conservative critique of what Norman (2010)
calls the rigor mortis economics of numerical equations and government by central tar-
gets. It argues that free economy depends on vitally satisfied individuals, and it therefore
challenges economic arrangements that are driven solely by numbers, which pursuit
places excessive bureaucratic burdens on innovation, social interaction, social connec-
tion, and on entrepreneurial capacity. Such an economy suppresses personal responsibil-
ity and social innovation in favour of what the intellectual conservative Guglielmo
Ferrero (1963) called a quantitative civilization. That is, the qualities that make an
economy a human economy, an economy on a human scale and by means of human
action, become rationalized to the extent that the entrepreneur loses her or his vitality
and therewith entrepreneurial spirit. The ordo-liberal idea of human economy seeks,
as it were, a qualitative civilization one that is founded on the moral sentiments that
connect the freedom of competition with civic responsibility and encourage the entrepre-
neurial vitality of individuals. That is to say, for the ordo-liberals the viability of free
economy is a matter beyond demand and supply (Ropke, 1998). It is a matter of social
policy. They thus argued for a socially conscious and morally decisive social policy to
secure the social preconditions of free economy. In their view, free economy produces
what they called proletarianized workers, and they perceived the proletarian condition
as a problem of vitality, i.e. a non-economic, spiritual problem (Ropke, 2009: 53).
There was thus need for a social policy to secure the vitality of an entrepreneurial soci-
ety, that is, a Vitalpolitik. The term describes a political project of human economy,
which Muller-Armack (1978: 328) defines succinctly as an attempt at incorporating
competitiveness into a total life-style.
Apart from Foucaults (2008) lectures on neo-liberal reason in the late 1970s, one is
hard pressed to find critical presentations of the ordo-liberal idea of Vitalpolitik in
English.2 Foucault defines Vitalpolitik as a countervailing effort to the socially and
morally destructive effect of free economy on what the ordo-liberal conceives as the fun-
damental sociability of human community. The purpose of Vitalpolitik is thus subsumed
by that same economic rationality which it seeks to facilitate in the economic sphere.
Vitalpolitik is a means towards the end of an entrepreneurial society as the foundation
of economic liberty. Hajo Riese (1972) made this point about the innately economic
rationality of Vitalpolitik when he criticized the ordo-liberal social market economy as
a project of a formed society a formierte Gesellschaft which he rejected as totali-
tarian. Franz Bohms rejoinder to Riese focuses the ordo-liberal stance succinctly: eco-
nomic freedom is an eminently political decision (Bohm, 1973: 39), which needs to be
made time and time again to contain the illiberal use of freedom. There is need for the
constant political facilitation of free economy by means of a market police (Rustow,
1963[1932]), which includes the embedding of the psycho-moral forces (Ropke,
108 History of the Human Sciences 26(2)

1942: 68) of enterprise in society at large to maintain its entrepreneurial vitality

(Rustow, 1942) in the face of a socially and morally disintegrating market logic.
The issues raised by Riese and Foucault point towards a rather different orientation
from that usually attributed to the term social market economy (Tribe, 1995: 205).
Indeed, for Tribe (ibid.: 212) ordo-liberalism amounts to an authoritarian liberalism that
he associates with the political philosophy of Carl Schmitt.3 Bentin (1972: 145, note 16)
argues similarly: like Schmitt (1998[1932]), this conservative liberal school of thought
looked at the strong state as the means of guaranteeing the self-regulation of the market.
Given Schmitts role in the Nazi dictatorship, this association does not sit well with ordo-
liberalism as the theoretical foundation of the theory of social market.4 In this context,
advocates of ordo-liberal thought for example, Rieter and Schmolz (1993) have
argued that ordo-liberalism did not originate in the context of the manifest crisis of the
Weimar Republic. Rather, for them the roots of ordo-liberalism go back to the Nazi
period. In this perspective ordo-liberal ideas of free economy and a strong state are not
part of the authoritarian liberal-conservative reaction to the Weimar Republic. Rather
ordo-liberalism appears as a liberal-democratic alternative to Nazism, which became
manifest in the post-war period. Ordo-liberalism thus becomes part of the opposition
to Nazism, formulating a programme of political economy that, as Rieter and Schmolz
(ibid.) argued, was to be lasting, free and humane. This attempt at cleansing ordo-
liberalism from the liberal authoritarian critique of Weimar is confronted by the paradox
that its founding thinkers did not write in defence of Weimar liberal democracy. Rather
they perceived Nazism as the tyrannical consequence of the lamentable weakness of the
Weimar Republic to maintain a liberal economy.
In distinction to Rieter and Schmolz, Anthony Nicholls (1994: 48) and Sibylle Toennis
(2009: 169) acknowledge the origin of ordo-liberal thought in the Weimar Republic. They
see Rustows (1963[1932]) then enunciation of the strong state as a landmark in the theory
of the social market economy.5 Rustow has argued that the Weimar state was

. . . being pulled apart by greedy self-seekers. Each of them seeks out a piece of the states
power for himself and exploits it for its own purposes . . . This phenomenon can best be
described by a term used by Carl Schmitt pluralism. Indeed, it represents a pluralism
of the worst possible kind. The motto for this mentality seems to be the role of the state
as a suitable prey. What is needed is a state that governs, that is, a strong state, a state
standing where it belonged, above the economy and above the interest groups.
(1963[1932]: 255, 258)

Unlike Nicholls who does not comment on Rustows citation of Schmitt as the author-
itative critic of the Weimar Republic, Toennis investigates this and argues that Rustow
demanded the strong state as the means of liberty and freedom, whereas Schmitt advo-
cated the strong state as an end in itself. Neither discusses Rustows advocacy
(1959[1929]: 100 ff.) for a dictatorship within the bounds of democracy to maintain
the liberal market order. Ropke (1942: 246, 247) defined this dictatorship within the
bounds of democracy correctly as a commissarial dictatorship, which, as Schmitt
argues, temporarily suspends the rule of law to restore legitimate authority in the face
of an extreme emergency. Muller-Armack (1933: 41) argued that socio-economic
Bonefeld 109

difficulties can only be resolved by a strong state that suppresses the class struggle
and that thereby renders effective the free initiative of individuals within the framework
of decisive rules.
For Eucken (1932: 318) Weimar is characterized by a state of lamentable weakness
and demanded the strong state to maintain and sustain the socio-economic order. The
lamentable weakness of Weimar was a consequence of unrestrained forces of a system
of politicized pluralism and mass democratic demagogy, which transformed the econ-
omy into a state economy that suspends economic regulation by the free price mechan-
ism in favour of politicized social forces, from cartels and oligopolies to trade unions and
mass parties, leading to an economic policy of planned chaos that pushed society towards
tyranny (Eucken, 2004). For the sake of economic liberty, there is thus need for a strong
state that acts as the guardian of enterprise (Vanberg, 2001: 50). The strong state is the
limited state it rejects the interventionist welfare state as a step towards the inevitability
of totalitarian government. That is, the strong state is an economic planner for compe-
tition (Hayek, 1944: 31). Facilitating competition is not just a matter of the liberal rule
of law. It is also a matter of creating and maintaining a moral framework to secure the
human foundation of enterprise, which provision is the task of Vitalpolitik.
The remainder of the article explores the ordo-liberal argument that free economy
requires a decisive social policy to maintain market liberty. The next section presents the
ordo-liberal argument that a free economy produces devitalizing social outcomes, and
outlines ordo-liberals critique of the welfare state as an understandable manifestation
of a devitalized society. The second section expounds ordo-liberal social policy as a
political practice of human economy. The conclusion argues that ordo-liberal social pol-
icy presupposes an ever-vigilant state that governs with strong state authority to secure
the capacity of society to cope with economic shocks in the manner of the entrepreneur.

Free markets: Proletarianization, the welfare state and the true

interests of workers
For the ordo-liberals, the experience of the capitalist crisis of the late 1920s was proof
that the economy cannot be left to organize itself. They accepted that capitalism had
brought about miserable social conditions, and they recognized collectivist responses
to capitalism as understandable reactions to this misery but argued that such responses
compound that same misery. They therefore demanded that the state intervene in society
to resolve the impasse and secure the conditions of enterprise and argued that economic
freedom has no independent existence. Free economy requires the establishment of mar-
ket police (Rustow, 1942). For free economy to succeed, it needs to be ordered. It is an
ordered economic freedom, and the purpose of government is to provide that order, pre-
venting the illiberal misuse of freedom. Order is more than just a legal order. Fundamen-
tally it is a social and moral order an order that rests on the will of the participants
(Bohm, 1937: 52).
In conventional (neo-)liberal terms, the ordo-liberals argue that in a market economy
individuals are dependent on the impersonal laws of the market that, with the help of the
invisible hand, transform prices from private vices into public virtues, adjusting the pro-
duction of goods and provision of services to market preferences by means of the free
110 History of the Human Sciences 26(2)

price mechanism. This means of economic regulation is they say the only basis for a
rational economy yet it is most fragile: not only does competition, as Rustow (1942:
272) put it, [appeal] solely to selfishness, it also [continuously increases] the
property-less masses (Ropke, 2002: 149) who struggle to make ends meet, and who
therefore demand welfare support to secure subsistence needs. They rebuke laissez-
faire liberalism for having committed the fatal error of assuming that the market
mechanism supplies morally and socially justifiable solutions if left to its own devices
(Muller-Armack, 1978: 329). Although competition is a human necessity, without which
man [is] not a human being (Eucken, 1989[1948]: 34), it does neither improve the
morals of individuals nor assist social integration (Rustow, 1942: 272). If unfettered, the
society of greedy self-seekers destroys the ethical and social forces of coherence upon
which competition rests (Rustow, 1963[1932]: 255). If left to itself, competition leads to
a progressive disintegration and atomisation of the body politic, and this sets in as
soon as the fund of the inherited integration has been spent (Rustow, 1942: 173; also
Muller-Armack, 1976: 235). Competition, thus, rather than increas[ing] the moral stock
. . . reduces the moral stamina (Ropke, 2009: 52), particularly of workers. They cannot
bear, without excessive harm to themselves and society, the constant mental, nervous
and moral tension which is forced upon them by an economic system dominated by sup-
ply and demand (ibid.: 119). Social cohesion is the fundamental presupposition of enter-
prise competition, and cohesion is a matter also of moral integration. There is thus need
for a social policy that secures the fundamental sociability of the unsocial interests, and
achieves the integration of property-less workers into the system of free economy.
Rustow defines the property-less workers in orthodox Marxist terms. He argues that
the most severe sociological pathologies of capitalism belong to what Marx described
most concisely as the transformation of labour power into a commodity, which results
from the separation of the worker from the means of production (2005: 365). The pro-
letarianized worker is thus, as Marx had argued, doubly free free of the means of sub-
sistence and free to sell his or her commodity, that is, labour power, to acquire means of
subsistence (see Marx, 1983: ch. 26).6 The ordo-liberals accept that workers are funda-
mentally dispossessed and morally estranged from the sentiments of private property.
Ropke thus argues that the proletarian condition

. . . means nothing less than that human beings have got into a highly dangerous sociolo-
gical and anthropological state which is characterized by lack of property, lack of reserves
of every kind . . . by economic servitude, uprooting, massed living quarters, militarization
of work, by estrangement from nature and by the mechanization of productive activity; in
short, by a general devitalization and loss of personality. (Ropke, 2002: 140)

The proletarian is prised out of the fabric of true community (Ropke, 1998: 57; also
Muller-Armack, 1981a: 58, 260), devoid of entrepreneurial stamina, and does not pos-
sess the requisite ethical values for that spontaneous action which makes us human (see
Muller-Armack, ibid.: 260). That is, workers are condemned to a life of economic and
social dependence, a rootless, tenemented life, where men are strangers to nature and
overwhelmed by the dreariness of work (Ropke, 2009: 14). Then there is the concentra-
tion of wealth and the emergence of giant enterprises which, they argue in the
Bonefeld 111

characteristic manner of organic conservatism, make a large part of the population

dependent, urbanized cogs in the industrial-commercial hierarchy (ibid.: 15). The dis-
possessed live in a mass society that is shallow, uniform, derivative, herdlike, and tritely
mediocre (ibid.: 54). Indeed, and in the words of Barry (1989: 119), proletarianized
workers are too stupid . . . to internalize those moral rules which it is essential to follow
if the market society is to be maintained. They do not have the moral capacity to accept
responsibility (Ropke, 2002: 192).
For the ordo-liberals, the prospects of economic freedom require a resolution to the
workers question. Fundamentally, proletarianization is not caused by material hardship.
As Ropke (2009: 223) explains, working class problems are . . . problems of personal-
ity. The workers are too depressed by their proletarian status to help themselves
(Ropke, 1957: 23). That is to say, proletarianization is fundamentally a psychological
condition (Muller-Armack, 1981a: 261), which neither higher wages nor cinemas can
cure (Ropke, 1942: 3; Rustow, 1942). Workers, says Ropke (1998: 57), plunge them-
selves into the mass because they are made deeply unhappy by the social enmassment
which prises people out of the fabric of a true community. The proletarianization of
society amounts thus to a decomposition of the humans of society and its transformation
into a social dust bowl (Ropke, 2009: 54). For the sake of the free economy, liberalism
has therefore to look outside the market for that integration which is lacking within it
(Rustow, 1942: 272). Ordo-liberals thus demand a social policy that secures the socio-
economic cohesion of free economy.
They reject the welfare state as the false answer to the workers question because it
consolidates proletarianization (Ropke, 2009: 224).7 They see the welfare state as a
product of unfettered mass passion (Ropke, 1998: 152). It allows mass-produced
men to shirk their own responsibility (Ropke, 1957: 24), establishes government-
organized mass relief for a society crippled by proletarianism and enmassment
(Ropke, 1998: 155) and compounds proletarianized social structures by disempowering
individuals to take their lives into their own hands. Progress, they declare, should not be
measured by the provision of welfare, that is, the satisfaction of human needs. Rather, it
should be measured by what the masses can do for themselves out of their own resources
and on their own responsibility (Ropke, 1957: 22). Nevertheless, the proletarian demand
for human security is a real one. It is created by the market (Ropke, 1998: 10). If unfet-
tered, competition this necessity of human freedom entails the survival of the fittest
(Ropke, 2009: 164), and in this struggle workers cannot succeed. They cannot withstand
the insecurity and instability of the living conditions which [this entails] (ibid.: 119) and
they will thus engage in a struggle for welfare provision. That is, for the sake of free
economy, liberalism has to address the workers question and achieve incorporation
of the dispossessed class into civil society, transforming proletarianized workers into
personalities of private property (Rustow, 2005: 111).
According to the ordo-liberals, the real causes of working-class discontent lie in the
workers devitalized, unpropertied existence. The problem of vitality can only be solved
by a social policy that, on the one hand, does not intervene with the free price mechan-
ism (Muller-Armack, 1976: 132) and that, on the other, achieves incorporation of the
dispossessed into the social fabric of the market society as willing participants of eco-
nomic value. The workers are devitalized because they are not possessed by the ethic
112 History of the Human Sciences 26(2)

and spirit of the bourgeois (Campbell, 2009: xvi). True welfare policy is therefore
about the empowerment of the worker as a citizen, that is, as an entrepreneur of the free
price mechanism. Behind working-class demands for employment and material security
there exists, they say, the much deeper human desire to enter the civitas (Ropke, 2002:
95) of a human economy an economy that empowers the individuals as self-
provisioning, self-responsible and self-reliant entrepreneurs of their own life-
circumstances. Ordo-liberal social policy is about achieving vitally satisfied workers.

Social policy: Vitality and enterprise

The ordo-liberal social policy objective is perhaps best summarized in Ropke:

We need to eliminate the proletariat as a class defined by short-term wage-income. In its

stead we have to create a new class of workers who are endowed with property and assets,
and who are rooted in nature and community, self-responsible and able to sustain them-
selves by their own labour, and who thus become mature citizens of a society of free human-
ity. (Ropke, 1950a: 182)

The following three subsections examine these points in reverse order. The fourth and
final subsection concludes on the political form of human economy, the state.

Citizens of free humanity

Material security is an elementary human desire. However, the very attempt at trying to
organize it for the sake of the propertyless is the surest way . . . of coming to grief.
Security is only to be had at a price of constant watchfulness and adaptability and the
preparedness of each individual to live courageously and put up with lifes insecurities
(Ropke, 2002: 198). They thus argue that the free market is in itself social (Muller-
Armack, 1976: 253). It is social because free economy stimulates production and
increases output, leading to greater demand for labour (ibid.). The general increase
in productivity (Bohm, 1937: 11) triggers the (in)famous trickle-down effect, spreading
wealth to workers (Muller-Armack, 1976: 179, 198, 253, 301). In addition, the increases
in labour productivity tend to reduce prices, which makes commodities affordable to
workers, who benefit as consumers. According to Eucken (1951: 67), such market-
facilitating social policy makes a policy of full-employment unnecessary, since the
expansion of the market absorbs available labour into employment.8 The social question
is thus solved by a well-ordered economy: it provides for employment and thus gives
workers a far greater choice of jobs and therefore greater freedom (Nicholls, 1994:
324). It also makes the poor wealthier in the long run as wealth trickles down, rendering
other forms of social welfare superfluous (ibid.: 325). The most important objective,
then, of ordo-liberal social policy is to unfetter the productive forces of society (Bohm,
1937: 11). Social policies which encourage economic growth (Muller-Armack, 1989:
85), and which make money to invest in production rather than incestuously in finance,9
are of the essence. Social policy has therefore to support the initiatives of employers to
increase the productivity of their employees who have to regain interest in their work
Bonefeld 113

(Muller-Armack, 1981b: 72). Social policy in support of more productive workers is

beneficial to workers because it generates jobs, provides secure wage income and
improves conditions. However, the satisfaction of material needs is by itself insufficient
to secure vitally satisfied workers. In their view, working dissatisfaction with conditions
is fundamentally a psychological problem.
Ordo-liberal social policy focuses thus on empowering workers as responsible market
agents by means of a Vitalpolitik, a politics of life, as Rustow (1963[1932], 2005, 2009)
called it. The worker is devitalized because of the effects of urbanization and massifica-
tion, and because of the barracks discipline of industrial work. These, says Rustow
(2009: 71), are the causes for the deeply felt discontent of workers, which material
reward and economic security cannot cure. Vitally satisfied workers, he argues, can cope
with wage pressures and can adjust to adverse market conditions and perilous working
conditions in a robust and entirely responsible manner because they have the courage
to get on with things (ibid.: 734). The decisive social policy issue, then, is not the mate-
rial welfare of the workers but their vitality, that is, their entrepreneurial capacity to face
adverse conditions with courage, with determination and in a self-responsible manner
(see Rustow, 2005: 365). Workers have to learn to accept risk akin to an entrepreneur
who sees opportunities when misfortune strikes. Vitalpolitik has thus to penetrate the
mental make-up of workers (Muller-Armack, 1976: 198) to undercut a proletarian con-
sciousness in favour of the notions of quality, sincerity, eternity, nobles, human scale,
and simple beauty (Ropke, 1950a: 194) that characterize the caritas of responsible
brotherhood (Ropke, 1964: 87).10
In sum, social policy is tasked with the formation of market-conforming personalities.
In its essence, says Campbell (2009: xvi), this is an attempt to socially nurture the ethic
and spirit of the bourgeois. It is a plea for embourgeoisement (Quinn, 1998: xvii). That
is to say, social policy is engaged in a constant battle for the freedoms of price and pri-
vate property. Property, says Quinn (ibid.: xix), is social propriety. Without it the
particular moral universe of bourgeois values simply ceases to exist. And it is the
entrenchment of these values of human economy into a total life-style, transforming
a proletarian personality into a personality of private property, that defines the purpose
of ordo-liberal social policy.

Deproletarianization: Community and nature

Since the status of the worker is characterized by dependency on the vagaries of the
labour market, the capacity to absorb shocks is thin. The ordo-liberals recognize this, and
argue for alternative ways of securing means of subsistence and moral obligations with-
out entering into collective welfare commitments. They say that a politics of life, a Vital-
politik, has to re-root workers in natural forms of community, by which they understand
the nuclear family situated in a small parochial community that extends to workers a
particular human warmth, which is indispensable for securing the human anthropolo-
gical condition of the worker (Ropke, 1957: 41). Since the proletarian condition is one of
dispossession, workers have to have access to independent means of subsistence outside
the market to maintain themselves as vitally satisfied citizens. The misery of capital-
ism is not that some have capital but that others have not, and for that reason are
114 History of the Human Sciences 26(2)

proletarianized (Ropke, 1942: 263). As proletarians, workers are not able to accumu-
late individual property and wage income alone is a source of discontent that explains
their class struggle.
Deproletarianization amounts thus to a policy against the dispossessed status of the
worker, it is a policy of restoring small property ownership (Campbell, 2009: xvi) to
the worker who must in all circumstances be divested of his chief material characteris-
tic, viz., his unpropertied state of being (Ropke, 2009: 221). Workers have to be enabled
to rent garden plots, or, better still, own a house and arable ground (ibid.) as a pre-
condition for attaining a degree of relative independence and security, that awareness
of kinship and tradition which only property can give (ibid.). That is, for the ordo-
liberals, workers have to have access to market-independent means of subsistence to
increase their capacity to secure provision by their own effort and initiative. Ropke does
not endorse proletarian self-help by means of a cash in hand black market economy. He
advocates the transformation of proletarians into vitally satisfied individuals who resist,
say, the populist tide of commercialism and the materialism of welfare state security for
a holistic approach to living sensibly and responsibly in small-scale communities.11
These independent means of subsistence are a matter of community values, family obli-
gations and individual responsibility. They reject collective forms of decommodifying a
part of the workers subsistence in favour of decommodified forms of market-
independent means of meeting subsistence needs by self-provisioning.
The demand to re-root workers in decongested and ruralized communities envi-
sages decentralized communities of artisans, small traders and craft workers, and family
farmers, as an ideal condition for deproletarianization. These forms of life and work are
the most important sectors of non-proletarian existence (Ropke, 2009: 218). The work-
ers have to be extracted out of the masses and into these forms of non-proletarian exis-
tence, which provide the appropriate anthropological framework (Ropke, 2002: 32) for
a human economy that is characterized by closer relation to the soil and . . . the place of
work (Ropke, 2009: 221), and its human scale is indispensable for the salvation of a
free economic and social system (Ropke, 2002: 34). Human economy is characterized
by an anthropological framework that is built on the recognition of human effort; it pro-
ceeds by the demassification of society to allow for a socio-economic reality based on
smaller units of production and settlements and for sociologically healthy forms of life
and work (Ropke, 2009: 162). This effort at human economy is to make working-class
families more independent of the market and more resilient in the face of economic
downturns. Re-rooting workers in decongested communities will, they say, empower
workers to help themselves and others. It will thus provide conditions of self-
provisionment and property . . . which will enable it [the nation] to withstand even the
severest shocks without panic or distress (Ropke, 2002: 221).
Re-rooted workers are anchored in community and family, and this enables them to
cope in the cold society (Rustow, 2009: 65; 2005: 365) of economic price and factor
competitiveness. It also prevents them from falling prey to the proletarian craze that asks
for the rotten fruit of the welfare state (Ropke, 1957: 14). They thus conceive of depro-
letarianization in quasi-feudal terms. Workers are to work for an employer during the
waged part of the working day, and for themselves during the remainder of the day, once
they have exited the factory gate, be it the gate of the manufacturing or the service sector.
Bonefeld 115

Vitally satisfied workers obtain a part of their sustenance from their own non-
commodified labour, including vegetable production in allotment gardens (Ropke,
2009: 224).
Independent forms of subsistence are to give workers a firm anchorage, namely,
property, the warmth of community, natural surroundings and the family (Ropke,
2002: 140; Rustow, 2009: 65; 2005: 365). The intended outcome is a real and funda-
mental alteration of the economic cellular structure (Ropke, 2002: 211) that enables
workers to succeed in competitive labour markets (see Muller-Armack, 1976: 235). They
thus propose the resurrection of 18th-century values of an organic society in combination
with the virtues of the entrepreneur. Since for the ordo-liberals, the proletarian existence
is a problem of personality, the point about this combination is to instil, ground and
harness those ethical values upon which the sociability of competitive social relations
and enterprise rests. That is, self-discipline, a sense of justice, honesty, fairness,
chivalry, moderation, public spirit, respect for human dignity, firm ethical norms all
of these are things which people must possess before they go to market and compete with
each other (Ropke, 1998: 125). In the same manner, they propose adjustment interven-
tions to accelerate processes of economic restructuring by means of, for example, pro-
vision of financial incentives in support, say, of greater labour mobility and acquisition
of employable skills. Unemployed workers are fundamentally workers in transit, from
one form of employment to another. In this respect, too, non-market forms of self-
provisioning, especially ruralized subsistence-labour, are to secure the personality of the
worker, containing the threat of proletarianization. Rustows notion of vitality and
Ropkes idea of true community do not contain notions of human solidarity and purpose,
which are absent from the ordo-liberal idea of the good society. For the ordo-liberals,
empowering the vitality of the worker is a means towards securing the liberal-utility
of enterprise competition. Vitalpolitik is about the establishment of a socio-economic
order founded on economic liberty, which requires also the establishment of an ideolo-
gical bond that, in the terms of a Vitalpolitik, bespeaks the proletarian as a free individual
who relishes empowerment as a self-responsible entrepreneur of her or his own labour
power (see Ptak, 2007: 24, 27).12

Private property as social right

Let us, says Ropke (1950b: 153), put economic freedom on the firm foundation of mass
property ownership, of ones house, and ones workshop and garden. Rooting workers
in ruralized subsistence work does not empower the working individual as a full stake-
holder of the free economy, transforming a proletarian personality into a personality of
private property. For this to happen, the worker must be able to acquire freely disposable
funds and become a small capitalist, possibly by being given the opportunity of
acquiring stocks or have a share in the profits (ibid.). Then there are the beneficial
activities of savings banks, mutual building societies, co-operatives, which social policy
has to promote in order to do away with that leading characteristic of the proletariat,
namely lack of property (Ropke, 2002: 156). For the ordo-liberals, ownership of capi-
talized property transforms proletarianized workers into personalities of private prop-
erty, to whom the notions of privacy, independence, self-reliance, freedom, and
116 History of the Human Sciences 26(2)

dignity are second nature. With the ownership of private property comes responsibility,
and with responsibility comes a particular social and moral universe, for which the
word bourgeois imposes itself (Ropke, 1998: 98). Money, says Ropke (1950b:
252), is coined freedom. The proposed civitas of coined freedom is to harness the
whole network of social relationships on the basis of common moral values:

. . . individual effort and responsibility, absolute norms and values, independence based on
ownership, prudence and daring, calculation and savings, responsibility for planning ones
own life, proper coherence with the community, family feeling, a sense of tradition and the
succession of generations combined with an open-minded view of the present and the
future, proper tension between individual and community, firm moral discipline, respect for
the value of money, the courage to grapple on ones own with life and its uncertainties, a
sense of the natural order of things, and a firm scale of values. (1950b: 252)

However, for the working-class proprietors of mortgage debt, private property does not
glow as golden as it is made out to be. By analogy with the idea that poverty is not
unfreedom (see Joseph and Sumption, 1979), exposure to crippling private debt, foreclo-
sure and homelessness is not unfreedom either; it is a market outcome that requires a
courageous entrepreneurial response. Human economy recognizes only one form of
poverty, and that is poverty of aspiration.
For the ordo-liberals, debt has no place in a human economy; what they demand is
sound money. Workers are not meant to meet subsistence needs by access to private
credit, but by working for themselves and others after the conclusion of the waged part
of the working day. At the same time, however, they also speak about the diffusion of
share ownership and the partaking of workers as investors in stock markets to make the
laws of coined freedom manifest in society at large. Indeed, if money is coined freedom,
then private debt is an investment into future earnings, into future freedom. It is a pro-
missory note of freedom to come. However, private indebtedness does not reveal entre-
preneurial networks of social relationships; on the contrary, it cripples its owners and
destroys communities. Private debt is probably a far greater force of deproletarianization
than the savers morality, which is expectant of a golden goose, delivered on judgement
day. Private debt privatizes the debtor, impoverishes the future in the present and acts as
a powerful restraint on working-class solidarity (see Bonefeld, 1995). That is, the diffu-
sion of private property entangles society in the laws of private property, including its
laws of bankruptcy, personal risk and private insurance. Ordo-liberal social policy is
therefore not really about the spreading of coined freedom. It is about the acceptance
of coined freedom as a character trait. For neo-liberal political economy, the free price
mechanism is the calculating machine of economic freedom, and when the chips are
down society has to accept lifes misadventures with inner strength, courage and
conviction.
The enterprise society of vitally satisfied workers is confronted by the paradox that
the law of coined freedom depends on income generation, that is, on the exertion of pro-
ductive labour in an ever-expanding economy. The bottom line of human economy is
therefore price competitiveness based on increased labour productivity. Foucaults com-
ment on social market economy is succinct: there can be only one true and fundamental
Bonefeld 117

social policy: economic growth (2008: 144). It is indeed its social content (Muller-
Armack, 1976: 253). Only the total mobilisation of the economic forces allows us to
hope for social improvements, which achieve real social content by means of increased
productivity (Muller-Armack, 1981b: 79). In short, for the plea for embourgeoisement
to be heard, the free economy has to grow and grow without limits, so that the infamous
trickle-down effect, this liberal reward of labour, appears in reach. Economic crisis thus
indicates that things are at a standstill, requiring, as Adam Smith put it, state action to
facilitate the cheapness of goods of all sorts (Smith, 1976: 333), that is, to increase
labour productivity and price competitiveness in order that the accumulation of wealth
rewards labour with the prospects for employment and wage income.
For Muller-Armack, the trickle-down effect of wealth is the raison detre of the free
society (Muller-Armack, 1976: 179, 198) time and time again, it requires a real break-
through in the productive effort of labour to redeem the promissory note of an affluent
future. Ordo-liberalism is about this future for which it strives in an ever-renewed pres-
ent. This future present requires vitally satisfied workers with access to private property
and means of self-provisioning to absorb risks. Social policy is an attempt at establishing
this connection between the human beings and private property (Muller-Armack, 1976:
133). It aims to make competition socially effective (ibid.: 246). For what, as Foucault
(2008: 148) put it succinctly, is private property if not an enterprise? What, he asks, is
home ownership if not an enterprise, an investment, a commodity, something for profit,
for exchange? Enterprise competition is the formative idea of the ordo-liberal social
policy of deproletarianization. The achievement of a human economy is the foundation
of enterprise.

Human economy and political authority

Muller-Armack (1981b: 92) defines the purpose of ordo-liberal social policy suc-
cinctly. It is to relieve individuals from fear of freedom and to make individuals accept
responsibility for that freedom. Vitalpolitik is about committing the social individuals
in the (self-)responsible use of economic freedom. Social policy aims thus at making
society to approximate as closely as possible to the ideal of perfect competition
(Rath, 1998: 68). This task is never completed. The free economy contains the natural
tendency towards proletarianization (Ropke, 2009: 218) and it is therefore necessary
to conquer the free economy anew each day (Ropke, 1998: 27). Raths point is worth
considering: social policy is intended to make reality in the image of its idea, that is, the
reality of a market mechanism of supply and demand is decided beyond supply and
demand. Laissez-faire does not extend to social policy. Instead, society requires con-
stant observation and formation, and the task of removing impediments to its operation
is incessant. The free economy ceases to flourish if the spiritual attitude on which it is
based that is the readiness to assume the responsibility for ones fate and to partic-
ipate in honest and free competition is undermined by seemingly social measures
in neighbouring fields, that is, those employment and welfare policies that constitute
the welfare state (Erhard, 1958: 184). Ordo-liberal social policy is therefore more than
just a policy towards society. Fundamentally, it is a means of securing free economy
in the will of its participants (cf. Bohm, 1937: 11) to secure the liberal purpose of
118 History of the Human Sciences 26(2)

economic freedom in the mentality of society. As a policy of will formation it is in

fact devoted to the formation of character. It is therefore not only a policy of society
(Foucault, 2008: 146) but, also and fundamentally so, a policy in and through society,
shaping its inner physiology.
Free economy is thus a political practice. As Foucault put it (1997: 97), the free econ-
omy must be supported, managed, and ordered by a vigilant internal policy of social
interventionism to sustain and facilitate the freedom of spontaneous action without
which, they say, man is not a human being. The internal policy of social intervention
that Foucault talks about is a policy of human economy. It provides for the free economy
those requisite psycho-moral forces (Ropke, 1942: 68) upon which the conduct of
economic liberty depends. Without them, the relations of liberty will degenerate into
a vulgar brawl (Ropke, 1982: 188).13 Embedding the rationality of enterprise into the
mentality of society requires a perpetually vigilant and active security state that acts
as market police to secure a human economy of vitally satisfied entrepreneurs (see
Ropke, 1963; Eucken, 2004: 327 ff.; Rustow, 1942: 289).

Conclusion
I have argued that ordo-social policy focuses on two principal ideas. First, free markets
produce deficient social outcomes in the form of proletarianized workers and decaying
structures of social and moral integration; and, second, the economy has no independent
existence. The cohesion of an enterprise society is a matter beyond demand and supply as
Ropke argued in his book A Human Economy.14 Fundamentally, human economy is a
political practice of a Vitalpolitik, which is conscious of the devitalizing effects of free
economy, which does not yield to the clamour of the poor, and which instead provides
for the market that requisite social integration and those psycho-moral forces upon
which it depends but which it is unable to produce by its own effort. Vitalpolitik is to
transform a proletarian mentality into the moral sentiments of private property, harnes-
sing workers as self-responsible entrepreneurs of their own labour power.
For the ordo-liberals, therefore, there really are things that are more important than
GDP, inasmuch as GDP does neither breed the moral sentiments nor provide for liberty
that social and moral order, upon which its progress depends.15 The laws of justice do not
apply to disorder, and enterprise is a function of the moral sentiments of human econ-
omy. For the ordo-liberals, the well-being of capitalism is synonymous with the well-
being of the entrepreneurial spirit innovative, energetic, enterprising, competitive,
risk-taking, self-reliant, self-responsible, eternally mobile, always ready to adjust to
price signals, etc. (see Eucken, 1932: 297). Vitalpolitik is the ordo-liberal means of gov-
erning the mentality of the social individuals as self-responsible and willing entrepre-
neurs of free enterprise, who have the moral stamina and courage for competition and
the inner strength to absorb shocks, and who help themselves and others when the going
gets tough, and who adjust to market pressures willingly and on their own initiative. GDP
derives from the productive assertion of vitally satisfied individuals, and not the other
way round. They therefore criticize the welfare state as a pumping system of the
Leviathan (Ropke, 1957: 20). In its stead, they demand a strong state as the political
authority of human economy. Instead of yielding to mass demands for welfare support,
Bonefeld 119

the state of human economy declares for a society that helps itself and seeks the incor-
poration of the mentality of the entrepreneur into the moral fabric of society. Ordo-
liberal social policy entails thus a political practice of governmentality the mentality
of enterprise (see Foucault, 1991).
Foucaults (2008: 242) treatment of ordo-liberal social policy in terms of a modern
manifestation of biopolitics is apposite. Market police intervenes in the human dispo-
sition to generate the requisite psycho-moral forces of human economy, securing the
conduct of the entrepreneur in the mentality of social individuals. In distinction to Fou-
cault, social policy is thus not only a policy towards and of society. It is fundamentally a
policy in and through society, governing its mentality from within. According to Tribe
(2009), Foucault argues on the basis of two distinct, though interdependent, logics, the
logic of the market and the logic against the market. It is because of this duality that Fou-
caults account of ordo-liberalism does not draw it out fully. Foucault identifies the logic
for the market as a competitive market economy that is ruled by the laws of perfect lib-
erty free competition, pursuit of economic value, and regulation of entrepreneurial pre-
ferences and innovation by the free price mechanism. He conceives of the logic against
the market as comprising the principle of ordo-liberal social policy, that is, Vitalpolitik,
which for Foucault somewhat compensates for the heartless logic of economic value
(2008: 242). However, for the ordo-liberals, Vitalpolitik is not a politics against the mar-
ket. It is a market-facilitating and -embedding policy, which has to be pursued relent-
lessly to sustain and maintain the moral sentiments of economic liberty in the face of
the destructive sociological and moral effects of free economy. For the ordo-liberals,
if unchecked, free economy destroys the moral and social fabric of society, leading to
its proletarianization and politicization, which manifests itself in collective demands for
a Keynesian economic policy, welfare support and commitment to full employment,
which for them pushes society towards planned chaos and tyranny. Vitalpolitik is the
pre-emptive means at containing the proletarianization of society. It is therefore not a
politics against the logic of free economy. Rather, it is meant to render free economy
effective. It seeks the formation of enterprise competition in the mentality of the social
individuals (Riese, 1972; Ptak, 2007). There really is only one freedom, and that is the
freedom of the self-responsible entrepreneur. Instead, then, of allowing society to govern
through the state, they demand that the state governs not only over society but, also, in
and through society to ensure the will for enterprise as the foundation of the freedom of
enterprise competition.
Peacock and Willgerodt (1989: 9) capture the essence of ordo-liberal social policy
well when they argue that it amounts to medication that is administered in order to help
the market organism to self-regulate. Nevertheless, in distinction to Peacock and Will-
gerodt, the ordo-liberals do not see the market as a self-regulating organism. For them, it
is neither self-regulating, nor is it an organism. The free economy is a political practice
and its operation depends thus upon a constant political effort of market police. In a
word, in the face of the self-destructive logic of the free economy, ordo-liberal social
policy entails a constantly reasserted political decision for free economy, facilitating the
social preconditions of competition and embedding the moral sentiments of enterprise.
Vitalpolitik therefore does not manifest a logic against the market. Rather it is a means
of social and moral planning for competition.16
120 History of the Human Sciences 26(2)

Notes
I researched the ordo-liberal tradition with the support of an ESRC grant entitled Ordoliberalism
and the Crisis of Neoliberal Political Economy, RES-000-22-4006. The support of the ESRC is
gratefully acknowledged. I wish to thank the anonymous referees for their helpful and instructive
comments. Special thanks are due to Greig Charnock, Hugo Radice and Phil Cerny for their help
ful comments on earlier drafts. The usual disclaimers apply.
1. At the 1938 colloque Walter Lippmann Rustow also created the term neo-liberalism to
separate the new liberal thinking about free economy and strong state from the tradition
of laissez-faire liberalism. On this, see Ptak (2009). See also Meier-Rusts (1993) study about
Rustows conception of history as a sequence of socio-cultural orders. Rustows work is clo-
sest to Ropke. For Peukert (1992) Ropke is a quarrelsome defender of liberal economic values
and leading conservative critique of unrestrained materialism, which, says Peukert (2009),
established his reputation as a founding thinker of the modern conservative conception of
economic ecology; akin, one might add, to Prince Charles. Gregg (2010) sees Ropke as a
profoundly anti-Keynesian thinker of economic liberty and morality, and he characterizes him
as a 20th-century Smithean philosopher, combining morality with liberty, and freedom with
responsibility.
2. Tribe (2009) provides a thoughtful assessment of Foucaults interpretation, arguing that
Foucault does not fully explore the implications of ordo-liberal social policy as a means of
embedding economic liberty in the mentality of the entrepreneur. Foucault maintains that the
political sphere retains its independence from the economic sphere. On the ordo-liberal idea of
the strong state as the political foundation of free economy, see Jackson (2010) and Bonefeld
(2012b).
3. See also Ptak (2004, 2007) and Candeias (2009). The term authoritarian liberalism was first
used by Hermann Heller (1933) as a characterization of the new liberalism that looked at the
strong state as the concentrated force of economic liberty. On Schmitt and ordo-liberalism, see
also Haselbach (1991: 40 ff.), Bentin (1972) and Cristi (1998).
4. After the Second World War, there was great ambiguity towards Schmitt, and efforts of cut-
ting the connection between Schmitt and the neo-liberals are legion. Hayek, for example,
rejected Schmitt in toto, denouncing him rightly as the leading Nazi theoretician of totalitar-
ianism only to acknowledge that Schmitt probably understood the character of the develop-
ing form of government better than most people (Hayek, 1944: 187; 1979: 194). He accepted
Schmitts distinction between democracy and liberalism and argued that Schmitts analysis
was most learned and perceptive (Hayek, 1960: 485). On this, see Cristi (1998) and Bonefeld
(2006a).
5. Nicholls (1994) sees ordo-liberalism as the enemy of both social-democracy and national
socialism, and in relations to Nazism it thus represents the other Germany: it developed the
conception of the strong state as the concentrated force of economic liberty in distinction to
Weimar disorder and Nazi tyranny.
6. For critical assessment, see Bonefeld (2002, 2011).
7. This section references mainly the work of Ropke. He expresses the ordo-liberal critique of the
welfare state and the idea of human economy with great clarity and precision.
8. Eucken (1951) is based on lectures that he gave at the LSE in 1950, having been invited by
Robbins who was an important opponent to all things Keynesian, including the commitment
Bonefeld 121

to a politics of full employment. Robbins conceived of economics as a science of human

action in conditions of economic scarcity, rather than as one of social wealth and the manner
of its production and reproduction. See Robbins (2007[1932]).
9. On this in relation to anti-globalization as a critique of financial capitalism, see Bonefeld
(2006b).
10. Human economy thus inverts Brechts imperative bread first, moral later to morals first, so
that bread may trickle down later. See his Dreigroschen Oper [Threepenny Opera]. Oscar
Wilde captured the sentiments of the caritas of responsible brotherhood well when he wrote
in The Importance of Being Earnest: If the lower orders dont set us a good example, what
on earth is the use of them? They seem, as a class, to have absolutely no sense of moral respon-
sibility. While Wilde talked about this in irony, Ropke conceives of human economy as a
well-ordered society on a human scale.
11. This is the basis for Peukerts (2009) claim that Ropke is a founding thinker of modern
conservative ecological thought.
12. Maurice Glasman (1996) thinks that ordo-liberalism is a theory of social solidarity and, in
support of his view, quotes at length from the writings of Pope Leo XIII and Pope Pius XII.
His sincere advocacy of Roman Catholic social theory is not shared by the ordo-liberals,
including Muller-Armack whose post-war endorsement of Christian values was merely instru-
mental. It provided the metaphysical glue (Fried, 1950: 352) that is required for the moral
cohesion of society. Ptak (2007: 42) refers to this effort at metaphysical resource management
as ideologization. See also Haselbach (1991). On the Popes contributions to economic
thinking, see Hunt (2003).
13. Adam Smith makes the same point arguing that if left to its own devices, the system of
economic liberty descends to bloodshed and disorder (Smith, 1976: 340). On the connection
between the classical political economy of Adam Smith and ordo-liberalism, see Bonefeld
(2012a).
14. The German title of his book is Jenseits von Angebot und Nachfrage, that is, Beyond Demand
and Supply. The German title focuses the locus of market integration on its political form, the
form of the state, whereas the English title, A Human Economy, focuses the liberal objective of
state intervention.
15. This remark about GDP is David Camerons; see Miles (2011).
16. I use the phrase planning as a reference to Hayeks argument that for free economy the
liberal state is indispensable as a planner for competition (Hayek, 1944: 31).

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Bonefeld 125

Author biography
Werner Bonefeld teaches Politics at the University of York. His most recent publications include
Negative Dialectics in Miserable Times, Journal of Classical Sociology 12(1): 12234; Kapital
& Kritik [Capital & Critique], which he co-edited with Michael Heinrich (Hamburg: VSA, 2011),
and, in Spanish, Razon Subversiva: Crtica del estado, del capital y de la subjetividad negada
[Subversive Reason: On the Critique of Political Economy] (Buenos Aires: Herramienta, 2013).