Walter Eucken facts for kids
Quick facts for kids
Walter Eucken
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| Born | 17 January 1891 |
| Died | 20 March 1950 (aged 59) |
| Nationality | German |
| Institution | University of Freiburg, University of Tübingen |
| Field | Macroeconomics |
| School or tradition |
Freiburg school |
| Alma mater | University of Kiel, University of Bonn, University of Jena |
| Influences | Edmund Husserl |
| Contributions | Ordoliberalism |
Walter Eucken (German: [ˈɔʏkŋ̍]; 17 January 1891 – 20 March 1950) was an important German economist. He was a key thinker in the Freiburg school of economics and is known as the "father" of a system called ordoliberalism. He also helped develop the idea of a "social market economy" in Germany.
Contents
Early Life and Education
Walter Eucken was born on January 17, 1891, in Jena, which is now part of Thuringia, Germany. His father, Rudolf Eucken, was a famous philosopher who won the Nobel Prize in Literature in 1908. His mother, Irene, was a painter. Walter grew up in a very smart and creative home. His father even read ancient Greek texts with his sons. Many famous artists and thinkers visited their family home.
Walter studied economics at the universities of Kiel, Bonn, and Jena. He earned his doctorate degree from Bonn in 1914. During World War I, he served as an officer in the German army on both the western and eastern fronts.
Life During the Weimar Republic
After World War I, Eucken moved to Berlin University and became a full professor in 1921. In 1920, he married Edith Erdsiek, a writer and philosopher. They had three children.
Like many in his family, Eucken was a conservative and didn't fully trust the new German government, known as the Weimar Republic. He briefly joined a conservative political party but left because he disagreed with their economic ideas. He didn't like their support for protectionism (making it harder for foreign goods to enter the country) or their positive view of cartels (groups of businesses that work together to control prices).
In 1925, he moved to the University of Tübingen and then in 1927 to the University of Freiburg. He stayed at Freiburg for the rest of his life.
Opposing the Nazis
During the time of Nazi Germany, when Adolf Hitler was in power, Walter Eucken openly disagreed with the Nazi government's policies at the University of Freiburg. Some of his lectures even caused protests from Nazi student groups.
After a terrible event in 1938 called Kristallnacht (when Jewish businesses and synagogues were attacked), Eucken joined with other academics and priests in Freiburg. They formed a secret group called the Konzil (Council). They discussed how Christians should fight against the unfair and cruel Nazi rule. This group, also known as the Freiburg Circles, had connections to important figures in the resistance against Hitler, like Dietrich Bonhoeffer.
Bonhoeffer asked Eucken and two friends to help write a secret plan for how Germany's economy and society should be organized after the war. They wanted to replace the Nazi system, which controlled everything, with a system based on free competition. If a plan to overthrow Hitler on July 20, 1944, had worked, their ideas would have been used to rebuild Germany. After the plan failed, Eucken's friends were arrested, but Eucken himself was released after being questioned twice.
After World War II
After World War II, Eucken's ideas were very important in rebuilding the economy of West Germany. His theories helped set the stage for what became known as the Wirtschaftswunder, or "economic miracle." He was an advisor to Ludwig Erhard, who was in charge of the economy in the American-British zone of occupation. Eucken helped create the new economic system.
One of Eucken's students, Leonhard Miksch, wrote the law in June 1948 that suddenly ended price controls. This was a big step towards a free market.
Death and Lasting Impact
Walter Eucken died from a heart attack on March 20, 1950, while giving a lecture at the London School of Economics in the United Kingdom.
Four years after his death, the Walter Eucken Institut was founded to continue his work and ideas. His ideas also influenced the German law against unfair competition in 1957, which became the basis for West Germany's competition policy.
Eucken's Economic Ideas: Ordoliberalism
Eucken's main economic idea was called ordoliberalism. This is a special German type of neoliberalism (a belief in free markets). Ordoliberalism argues that the government has a very important job: to create the right rules and framework for economic freedom to grow.
Unlike "laissez-faire" (which means letting the economy run completely free), ordoliberalism recognized that too much freedom could lead to powerful companies forming cartels and controlling markets. So, ordoliberalism aims to limit the economic power of individuals, companies, and groups.
This is done through a strong legal system that includes:
- Protecting private property.
- Making sure private contracts are followed.
- Holding people and companies responsible for their actions (legal liability).
- Allowing anyone to enter markets freely (free entry).
- Keeping money stable (monetary stabilization).
In this system, the government should not try to control or interfere with daily economic activities, like in a centrally planned economy. Instead, it should provide a well-functioning, competitive "Ordnung" (order or framework). Within this framework, private businesses and people can act freely without the government constantly stepping in.
The idea of ordoliberalism was first introduced in 1937 in a magazine called Ordnung der Wirtschaft, which Walter Eucken helped publish. From 1948 onwards, these ideas were further developed in the journal ORDO.
Works by Walter Eucken
- Kritische Betrachtungen zum deutschen Geldproblem (Critical Thoughts on the German Money Problem), 1923
- Die Grundlagen der Nationalökonomie (The Foundations of Economics), 1939/1950
- "Wettbewerb als Grundprinzip der Wirtschaftsverfassung" (Competition as the Basic Principle of the Economic Constitution), 1942
- "Die Wettbewerbsordnung und ihre Verwirklichung" (The Competition Order and its Realization), 1949
- Unser Zeitalter der Mißerfolge (Our Age of Failures), 1951
See also
In Spanish: Walter Eucken para niños
