The Making of the “Third Way”: Wilhelm Röpke, Luigi Einaudi, and the Identity of Neoliberalism

In the vast literature on neoliberalism, a helpful collection includes Denord (2007), Mirowski and Plehwe (2009), Audier (2012), Burgin (2012), Kolev (2013), Schulz-Forberg and Olsen (2014). For ordoliberalism, see Peacock and Willgerodt (1989) and Commun (2016). For the Social Market Economy, see Nichols (1994) and Muresan (2014).

The acceptance of this approach implies the recognition that “what was called ‘neoliberalism’ back in the 1930s does not correspond to the phenomenon that was labeled ‘neoliberalism’ in the 1970s, even though there may be some connections” (Audier 2012, p. 56). See also Kolev (2013, pp. 2–4).

For wide-ranging inquiries in Röpke’s economic and political liberalism, see Peukert (1992), Molina Cano (2001), Zmirak (2001), Hennecke (2005), Resico (2008), Gregg (2010), Solchany (2015). Following Foucault (2010 [1979]), Bonefeld (2012) and (2013) as well as Somma (2014) have assimilated Röpke to “mainstream” ordoliberals, convicting all of them for the naissance of authoritarian power-driven biopolitics. Among others, Goldschmidt and Rauchenschwandtner (2007) have attempted to rebut this narrative, while Mierzejewski (2006) has shed light on the nature of Röpke’s connections to Ludwig Erhard and the Social Market Economy.

W. Röpke to L. Einaudi, July 30, 1934, in Einaudi-Röpke Letters (1934–1961), AFLE (Archive of the Fondazione Luigi Einaudi), Section 2, File “Röpke, Wilhelm.” A brief account of Röpke’s Turkish years is given by Solchany (2015, pp. 65–78). See also the chapter by Antonio Masala and Özge Kama in this volume.

For Röpke’s approach, see Resico (2009), Gregg (2010, pp. 94–116), and Commun (2014).

If not otherwise stated, all translations of Einaudi’s papers and letters into English are mine.

“I have the great pleasure to acknowledge the receipt of a copy of your new book ‘Miti e paradossi della giustizia tributaria’, and to thank you wholeheartily for your great kindness. It promises most stimulating reading and most valuable instruction on several of the dark spots of Public Finance. […] I trust that my little book on Elementary Economics will have reached you in safety, and I ask you to look on it as on a pedagogical experiment,” W. Röpke to L. Einaudi, February 23, 1938, in Einaudi-Röpke Letters (1934–1961).

L. Einaudi to W. Röpke, April 29, 1942, in Einaudi-Röpke Letters (1934–1961). The Italian translation of the letter, the original (from which I quote) being in English, appeared in Giordano (2006, pp. 317–318).

L. Einaudi to W. Röpke, April 29, 1942, in Einaudi-Röpke Letters (1934–1961).

Solchany (2014, p. 98) notes that “all the publications of Röpke from the late twenties to his death, and to a lesser extent the writings of many other neoliberal intellectuals, may be interpreted as a thought on the crisis of modern world and the ways to remedy it.”

For the long and complex debate between Einaudi and Keynes, see Forte (2016).

As correctly stated in Bonefeld (2013), this view of Smith is rather misleading, more than ever in the light of recent studies on Smith, from Winch (1978) to Rothschild (2001). However, I consider unacceptable Bonefeld’s attempt to depict Smith as the forerunner of the (hypothetical) kind of “authoritarian liberalism” that ordoliberals and Röpke would eventually endorse.

For Lippmann’s economic liberalism, see Goodwin (2014, pp. 223–260).

Somewhat surprisingly, the rejection of collectivism and planning was grounded on ethical rather than economic reasons: “Let us glance back once more at the road of collectivism […] its details are sufficiently known: abolition of freedom and of the sphere of private personality, extreme mechanization, rigid hierarchies and proletarisation, the kneading of society into a dough-like lump, unrelieved dependency of each on the dominant group with its arbitrary and changing plans and programs where man in his uniqueness and dignity means nothing, power and the bureaucratic machine everything. Human dignity, freedom and justice have completely vanished there and, to round off the picture, even material productivity leaves much to be desired” (Röpke 1950 [1942], p. 176).

For Simons’ economic liberalism, see De Long (1990) and Köhler and Kolev (2011).

For the impact of Swiss politics on his thought, see Zmirak (2001, pp. 25–66), as well as the chapter by Andrea Franc in this volume.

W. Röpke to L. Einaudi, August 3, 1942, in Einaudi-Röpke Letters (1934–1961).

G. Solari to L. Einaudi, June 27, 1943, in Einaudi-Solari Letters (1899–1952), AFLE, section 2, File “Solari, Gioele”.

L. Einaudi to E. Rossi, November 8, 1943, in Einaudi and Rossi (1988, p. 133).

L. Einaudi to W. Röpke, October 9, 1943, in Einaudi-Röpke Letters (1934–1961).

W. Röpke to L. Einaudi, October 12, 1943, in Einaudi-Röpke Letters (1934–1961).

Röpke’s connection to the Austrian School certainly deserves further research, see Ancil (1994), Wohlgemuth (2006), and Audier (2012, pp. 399–508).

Einaudi (2006 [1931], pp. 78–79): “Freedom of the spirit, freedom of thought, cannot exist where there is and must be but a single will, a single creed, a single ideology. [...] Freedom of thought is therefore necessarily associated with a certain dose of economic liberalism [...] The spirit, if it is free, creates a varied economy in which there is coexistence of private property and the property of groups, bodies, state administration; coexistence of classes of industrialists, tradesmen, farmers, professionals, artists, different from each other, all of them drawing the material means of life from their own sources, capable of living in poverty, if necessary, but without having to beg for alms from a single power, be it the state, a tyrant, a dominant class, or a priesthood intolerant of any but the orthodox faith. In the free or liberal society, the individual, the family, the class, the group, the business concern, the charitable foundation, the school, the artisans’ or workers’ league must receive the consecration of legality from a supreme organ, called the state; but they must feel and believe they are living, and effectively live, their own lives coordinated with the lives of others but not submerged in the life of the collectivity and not dependent on the tolerance of the organ representing the collectivity.”

Röpke requested his friend’s assistance quite often: see, for example, W. Röpke to L. Einaudi, March 11, 1946, in Einaudi-Röpke Letters (1934–1961): “Could you please help me dealing with your son Giulio?”

See the invitation card in Einaudi-Rinascita Liberale Letters (1946–1947), AFLE, section 2, File “Rinascita Liberale.”

For the active partnership of Antoni and Röpke inside and outside the Mont Pèlerin Society, see Audier (2012, pp. 258–262, 336–337).

For the economic heritage of left-wing liberals and their Röpkean character, see Bonetti (2014, pp. 114–121). For Leoni’s libertarian philosophy, see Masala (2003).

In a letter dated September 18, 1961, Röpke confessed to Einaudi his disgust at the “intrigues inside our Mont Pèlerin Society,” adding that he decided to quit even though “the Assembly has rejected my resignation,” so he had to “reflect on the opportunity of coming back” (W. Röpke to L. Einaudi, September 18, 1961, in Einaudi-Röpke Letters [1934–1961]). More broadly on the history of the MPS, see Hartwell (1995) and Plickert (2008).

For a detailed analysis of Röpke’s anti-collectivist stand, see Solchany (2015, pp. 297–369).

See, for example, Röpke (1959b, pp. 234–235): “If man is to be restored to the possibility of simple, natural happiness, it can only be done by putting him once more in a humanly tolerable existence, where, placed in the true community that begins with the family and living in harmony with nature, he can support himself with labor made purposeful by the institution of private property. The almost desperate character of this effort does not testify against its necessity if we wish to save our civilization.”

For a brilliant exposition of the intellectual roots of the theory of mixed government, see Vile (1998, pp. 58–82).

See Burgin (2012, pp. 87–122) and Jackson (2012). Burgin pertinently observes that “like Walter Lippmann’s Inquiry into the Principles of the Good Society before the war, The Road to Serfdom was premised on a belief that one could engage in a vigorous critique of planning without rejecting government intervention altogether” (Burgin 2012, p. 90).