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Walter Eucken

From 1891
 to 1950

An intellectual architect of West Germany’s post-war economic miracle, Walter Eucken was the primary founder of the Freiburg ordo-liberal school of economics. The son of Rudolf Eucken—winner of the 1908 Nobel Prize in Literature—Walter Eucken studied history before turning his attention to economics during his studies at the universities of Bonn, Kiel, and Jena. Eucken became a professor of economics at the University of Freiburg in 1927, remaining there until his death in 1950.

Though proficient in technical economics, Eucken was primarily interested in the broader issue of the legal rules that make both freedom and market economies possible.

The state’s economic role, Eucken argued, needed to be limited to protecting and upholding the key rules from which we derive the type of legal order that facilitates the free market’s dynamism. Eucken held that the state’s authority should be used—and used vigorously—to uphold the rule of law, private property rights, freedom of contract, and open markets. But once the state moved beyond these parameters, Eucken warned, both freedom and economic prosperity were endangered.

Following the National Socialists’ seizure of power in 1933, Eucken maintained contact with other anti-Nazi Germans who understood the need to think about how to transition a post-Nazi Germany towards a society marked by ordered liberty rather than socialism or communism.

Thus, at the end of World War II, Eucken was one of a small number of individuals able to present the intellectual case for the market economy in occupied Germany. While West Germany’s 1948 currency reform and abolition of price-controls was engineered by Ludwig Erhard, Erhard himself acknowledged Eucken as an intellectual godfather of the changes that took West Germany from rubble to riches in less than ten years.

Walter Eucken never made any secret of his Christian convictions. At the first Mont Pèlerin Society meeting convened by Friedrich von Hayek in 1947, participants were struck by Eucken’s forceful insistence Christianity’s essential compatibility with the market order. Eucken’s use of the word ordo partly reflected his effort to re-establish links between Christian social doctrine and free market thought. Given the right conditions, Eucken believed, markets gave economic expression to man’s innate dignity in ways that collectivist alternatives never could. Eucken’s early death at the age of fifty-nine was a grievous loss to the cause of freedom and Christian faith in a Europe that deeply needed both.