Introduction
European integration historiography was inaugurated by Ernst B. Haas,Footnote 1 followed by the work of Walter Lipgens,Footnote 2 both of whom emphasised shared ideas across borders and the portrayal of integration as a peace project moving beyond the nation-state. Haas had focused on how international cooperation and regional integration take place when societal actors decide ‘to rely on the supranational institutions rather than their own governments’,Footnote 3 while Lipgens, through his admiration of wartime resistance movements and supranationalism, concluded that integration was ‘the most successful peace movement’.Footnote 4 However, as Kaiser notes, their belief in supranational institutionalisation stemmed from a ‘normative overdrive’ with limited empirical grounding.Footnote 5 When the ‘empty chair’ crisis unfolded in 1965,Footnote 6 their optimism was radically challenged, eventually compelling Haas to revise his stance.Footnote 7
In the immediate aftermath of the ‘empty chair’ crisis, critics directly challenged Haas’s and Lipgens’s ‘neo-functionalist’ perspective. Hoffmann declared that ‘the nation-state is still here’,Footnote 8 asserting that integration had stalled due to divergent national interests preventing supranational consensus.Footnote 9 Hoffmann’s account was focused primarily on differing European geopolitical positions relative to the United States, but Alan S. Milward adopted a similarly intergovernmental approach to argue that integration had, in fact, strengthened the nation-state. Portraying integration as a means for post-war governments to consolidate domestic economic recovery and the social-political compromises that accompanied it,Footnote 10 he rejected Lipgens’s emphasis on federalist resistance groups, asserting instead the pursuit of ‘national strategies’ as a means of using integration to restore the legitimacy of weakened nation-states.Footnote 11
This intergovernmental perspective was extended by Andrew Moravcsik, Hoffmann’s student, who explained European integration through ‘state preferences, interstate bargaining and institutional choice’. Highlighting ‘commercial advantage, relative bargaining power, and the credibility of commitments’,Footnote 12 Moravcsik placed powerful economic producers’ interests at the centre, with broader welfare concerns as secondary. Like Milward, he rejected neo-functionalism’s portrayal of integration as a technocratic, path-dependent process led by supranational experts,Footnote 13 depicting international cooperation as a process shaped by national self-interest and strategic negotiation. Crucially, Hoffmann, Milward and Moravcsik excluded supranational epistemic communities and cross-border advocacy networks from the integration narrative, emphasising instead national differences and intergovernmental compromises in the strategic pursuit of national interests within a changing global context.
Since the 2000s, scholars have challenged these ‘realist’ accounts by refocusing on transnational epistemic communities and advocacy coalitions, this time supported by more robust empirical sources.Footnote 14 Utilising multidisciplinary tools and extensive archives, these scholars emphasised transnational networks, cross-border elite socialisation, informal political coalitions and the interplay of ideational and material factors as co-determinants of the European project. Moving beyond neo-functionalists’ focus on resistance movements and political parties, this body of literature gave weight to the transnational links between Christian Democrats and societal actors like agricultural interest groups, law associations, policy networks and business groups.Footnote 15
A driving force of this critical approach related to the realists’ portrayal of nation-states as homogenous entities with fixed political economy models primarily expressed through their foreign ministries. Following Haas’s point that ‘there is no fixed and knowable national interest’,Footnote 16 Kaiser would quip that in realist accounts ‘actors like “France” sometimes appear capable of “thinking” and “feeling”’.Footnote 17 A consequence of such an approach is still visible in the contemporary tendency to portray nation-states as distinct macroeconomic paradigms – such as ‘French dirigisme’ and ‘German ordoliberalism’.Footnote 18 Quite paradoxically, while the realist approach was meant to place national strategies and domestic considerations at the forefront, it ended up obscuring the complexity and conflictual structure of the national/domestic terrain by homogenising nation-states. In the process, the way in which European integration was strategically utilised to overcome social and political gridlocks of the national terrain via supranational channels got lost.Footnote 19
If realist perspectives promoted a vision of integration structured around intergovernmental compromise between distinct national economies, research on epistemic communities and advocacy coalitions has nonetheless tended to overlook the transnationally shared economic liberalism that invigorated the process of integration. Building and expanding on the latter’s useful methodological perspective and critique of realist accounts, this paper aims at highlighting this shared liberalism (or, more precisely, the shared neoliberal framework) of the architects of European integration. In doing so, the paper not only contributes to the epistemic communities’ and advocacy coalitions’ literature by offering an analysis of shared ideational motivations between transnational actors but also corrects previous attempts to establish a link between ordoliberalism and European integration that, by reducing ordoliberalism to a specifically German tradition, have inevitably identified ordoliberal influence in the European project as an extension of German influence – whether in the specific policy area of competitionFootnote 20 or as an explanatory tool for Eurozone crisis management.Footnote 21
While German neoliberals played a significant role in the process of integration, this paper argues that it was their failure to fully advance their framework within West Germany that prompted them to seek transnational allies to institutionalise their framework at the supranational level. Yet, if this attempt had any success, it was not due to German hegemony but because the neoliberal framework already animated the views and beliefs of key integration architects across countries.
To structure this argument, this paper begins by tracing the historical development of neoliberalism from its inter-war origins with an emphasis on its transnational character. The misleading ‘Germanisation’ of neoliberalism as ‘ordoliberalism’ is shown to be the consequence of contingent post-war circumstances that do not justify its reduction to a German tradition. From this perspective, European integration is seen as having played a key role in reviving neoliberalism’s transnational character by bringing together cross-border proponents of specific views on markets, the state, the law and economic orders, allowing them to operationalise their perspectives with more success than at the national level. Underlying the argument of this paper is the conviction that while the post-war liberal embedded order could accommodate planning, fiscal-monetary coordination, industrial strategies, welfare expansion or demand-led expansionary policies at a national level, such features were either absent or very weak at the supranational level. Already in the period of early integration (from the ECSC to the EEC) and in contrast to what was taking place at the national terrain, the European project was structured around market-oriented framework-building and path dependency perspectives, not planning visions or direct interventions in the economy. There never was a European-wide planning agency, nor supranational welfare provisions. It is the aim of this paper to show that this was not merely because it was ‘easier to empower EEC institutions with a regulatory role, rather than with a redistributive one’ or because ‘creating a European-wide planning agency or an EEC industrial policy would create massive distributive problems’, as Warlouzet has argued,Footnote 22 but because the shared neoliberal perspective of integrations’ key architects was antithetical to such macroeconomic outlooks.
This is not to imply that the neoliberal framework was the sole driving force of integration or that it was fully successful. As we shall see, its operationalisation also encountered obstacles even at a supranational level – some of them driven by national actors who occasionally constructed their own transnational coalitions to obstruct specific neoliberal perspectives (as in the case of large steel industries that fought against the implementation of the ECSC’s anti-cartel provisions). For this reason, and despite the visions and efforts of various transnational networks, ‘understanding the domestic socio-economic and political dynamics that shape national European policies remains essential’.Footnote 23 This paper aims, however, at highlighting and contextualising the widely accepted (yet under-explored) market-liberal orientation of early European integration by analysing the type of liberal framework it embodied. Drawing from primary sources, archival evidence and secondary literature, the intention is to show that key elements of early integration – such as the unique institutional embedding of economic liberalism, the attempts to construct a legal/regulatory order that insulates policy from private economic power and democratic interference and the centrality of competition policy – are remarkably concomitant with the neoliberal framework as it was developed since the 1930s.
The structure of the paper is as follows: first, a reconceptualisation of ordoliberalism will challenge its widespread portrayal as a purely German tradition and situate it as embedded within the transnationally developed framework known as neoliberalism. Second, the analysis will connect the foundational visions of European integration with the neoliberal framework, an affinity further underlined through the examples of European competition policy and a contextualisation of debates around planning. The conclusion will reflect on the implications of this argument and outline avenues for future research.
Part One: Reconceptualising Ordoliberalism
What has become known as the ‘ordoliberal framework’ emerged as a liberal tendency developed by a transnational group of thinkers during the inter-war period in response to the liberal order’s international disintegration. Until at least the late 1950s, those who had developed and shared this perspective would self-describe as neoliberals. The term denoted their departure from what they pejoratively labelled ‘paleo-liberalism’ – identified as a call to return to pre-1914 laissez-faire liberalismFootnote 24 – and was adopted as a self-description by most participants of the 1938 Walter Lippmann Colloquium in Paris, where Lippmann’s recently translated The Good Society was praised. As organiser Louis Rougier noted, Lippmann’s book was pivotal in establishing that ‘the market economy was not, as certain classical economists believed, the spontaneous result of a natural order, but the result of a legal order in which the intervention of the state was a precondition’.Footnote 25
Neoliberals believed that a call to return to the pre-1914 predicament was misplaced. The ‘golden years’ of the previous order had not only been irreversibly torn apart by historical developments but some of its elements were also seen as partly responsible for the eventual disintegration.Footnote 26 The Great Depression had shattered the belief in capitalism’s natural equilibrium,Footnote 27 prompting the need for (limited) state intervention – acting not against, but rather ‘in the direction of the laws of the market’.Footnote 28 As Lippmann had argued, it was legal and institutional structures – not nature – that created markets and competition.Footnote 29
The proliferation of monopolies and cartels had also challenged the concept of perfect competition, revealing inherent tendencies towards market distortions.Footnote 30 Consequently, targeted state regulation of competition policy was required – not as a means of directly managing the economy, but in order to construct a legal framework that protects markets from their own destructive tendencies.Footnote 31 These distortions were reflected in the excessive concentration of private economic power, a neoliberal concept that referred to both monopolies and organised labour.Footnote 32 In contrast to ‘paleo-liberals’ like von Mises, who saw cartelisation as the consequence of an interventionist state,Footnote 33 neoliberals viewed them as intrinsic to markets, yet incompatible with the liberal competitive order.
Neoliberals strongly distinguished their approach from central planning.Footnote 34 As Röpke would explain in 1942, ‘[we] refuse to be presented with the choice between laissez-faire and planned economy as the only alternatives. There are not two, but three possibilities, namely: laissez-faire, compatible state intervention and incompatible state intervention (planned economy).’Footnote 35 Against the pre-1914 ‘minimal state,’ neoliberals advocated a strong state as ‘the political form of the free economy’.Footnote 36 In tandem with Carl Schmitt’s rejection of the ‘total state’, which tries to appease all and gets torn apart, the neoliberal state has the strength to resist the particularism of private economic power, inherent market-distorting forces and the influence of mass democracy and class struggle.Footnote 37
For neoliberals, pluralist parliamentary democracy was symptomatic of a destructive mass society.Footnote 38 It brought ‘the peoples and their passions, the interest groups and [the] chaotic forces of the masses’Footnote 39 into governance and threatened market stability, public finance and the sanctity of the value of money by subjecting the rule of law to mass democratic demands.Footnote 40 A strong state, on the other hand, can create a new economic order by allowing ‘depoliticised’ economic and legal experts to construct an ‘economic constitution’Footnote 41 – the ‘comprehensive decision about the order of the economic life of a community’Footnote 42 – that can safeguard the capitalist order from both private economic power and the ‘excesses’ of the democratic process.
The ‘Germanisation’ of the Ordoliberal Framework
The term ‘ordoliberalism’ was coined in 1950 by Hero Moeller, a colleague of Walter Eucken.Footnote 43 Though later adopted by Lutz, Böhm and Meyer in the editorial of Ordo’s twelfth issue (1962), it was not intended to mark a distinctly German variant of neoliberalism.Footnote 44 Instead, it distinguished their framework from what they saw as a hijacking of the concept of neoliberalism by ‘paleo-liberals’,Footnote 45 a conflict that signified a conceptual (rather than a national) divide. Ordoliberalism (i.e., neoliberalism) continued to be characterised by the promotion of an expert-led ‘economic order’ structured around a legal/regulatory strong state and institutionally insulated from majoritarian processes and private economic power.
Linguistic transformations aside, the rebranding of the transnationally developed framework of neoliberalism as a distinctly German ordoliberalism emerged as a consequence of historically contingent circumstances. In contrast to other European countries where neoliberals had either tarnished their reputations by collaborating with authoritarian/fascist regimesFootnote 46 or were restrained by post-war left/right coalitions, West Germany was the only country where a large number of neoliberals found themselves in positions of power and direct influence in the immediate aftermath of the Second World War.Footnote 47
West Germany was at the time under the direct occupation of the Office of the Military Government of the United States (OMGUS), which, under the control of the State Department, remained a bastion of economic orthodoxy.Footnote 48 Overseeing post-war economic reconstruction after the abandonment of the Morgenthau Plan to transform West Germany into a ‘pastoral land’, OMGUS chief Lucius Clay and his personal appointee Joseph Dodge promoted a market-oriented reconstruction project against central planning.Footnote 49 Due to the influence of the United States’ long history of anti-cartel/anti-monopoly legislationFootnote 50 and the identification of industrial concentration as one of the causes of Nazism, de-cartelisation was added as one of OMGUS’s expressed aims. Finding natural allies for such a project in the German neoliberals, the latter occupied key positions as economic advisers and, eventually, within the first West German government itself.
This influence manifested itself in key policies like the 1948 currency reform and price liberalisations that entrenched a clear market orientationFootnote 51 and were celebrated at the time by their neoliberal colleagues across Europe.Footnote 52 The immediate necessity of a monetary reform (‘[as] there can be no division of labour without a functioning currency system’)Footnote 53 and of price liberalisation had been discussed at the inaugurating meeting of the Mont Pèlerin Society (MPS) in 1947, demonstrating, as Dyson notes, that the neoliberal framework always had a ‘wider European and international resonance’.Footnote 54 There was, in other words, nothing specifically German about this perspective, apart from the contingent ability of German neoliberals to attempt its operationalisation in real conditions. The views of Eucken and Röpke or the policy-making attempts of Böhm and other German neoliberals in the direction of the competitive order were not tailored to fit the needs of particular German economic interests.
It is even less credible to conceptualise this framework as representative of a German political economy consensus. Despite their better positioning in key posts and their extensive public relations campaigns,Footnote 55 German neoliberals’ policy suggestions were met with significant resistance within West Germany – from the SPD and its social-democratic promotion of central planning and economic democracy;Footnote 56 from social Catholic elements in the CDU;Footnote 57 from strong economic interest groups, as in the case of the conflict with the Federation of German Industries (BDI) during the drafting of the Anti-Cartel Law;Footnote 58 from trade unions, as was the case with the Co-Determination Law of 1951 and the Pension Reform Act of 1957.Footnote 59 The subsequent compromises that resulted from such conflicts would become anathema to German neoliberals, reinforcing their convictions about the destructive influence of particular interest groups and democratic processes,Footnote 60 prompting them to seek ways to escape the constraints of domestic politics.Footnote 61
Part Two: Early European Integration as Institutionalised Competition
European integration was initiated in the 1950s, and it reflected an attempt to operationalise the vision of promoting trade through the creation of a common market, structured around a rules-based vision (visible in the centrality of competition policy) and a concomitant legal/regulatory mechanism to oversee the enforcement of these rules (visible in institutional forms meant to be strong enough to insulate themselves from private economic power, organised labour and national parliaments). From the draft programmes that led to the inauguration of the European Coal and Steel Community (ECSC) in 1952 up until the creation of the European Economic Community (EEC) after the signing of the Rome Treaty in 1957, European integration was explicitly framed as a liberal market order – in contrast to competing contemporary visions that included, inter alia, social-democracy, ‘Keynesian’ demand-led economic management, central planning and industrial policy. While such policy outlooks remained pivotal within national contexts, their absence from the European, supranational level has not been properly contextualised.
The ECSC was inaugurated by the Paris Treaty of 1951, widely regarded as the first practical move towards the formation of a supranational European entity,Footnote 62 through the creation of the institutions of the High Authority (HA), the Council of Ministers, the European Court of Justice and the Common Assembly and introducing ‘some of the basic features that have marked European integration ever since’.Footnote 63 The Paris Treaty was the result of deliberations around the Schuman Declaration, an initiative by French Foreign Minister Robert Schuman, with an official aim to pacify relations between France and Germany. But while integration was ‘sold as a way of allowing France and the rest of the Western Continent to use German resources without becoming dependent or dominated by her’,Footnote 64 the framework within which such an aim would be contextualised indicated that wider considerations were at play.
While Milward has argued that the Schuman Declaration was ‘invented to safeguard’ Monnet’s plan for the post-war reconstruction and modernisation of the French economy,Footnote 65 others have pointed out that the link between the two was essentially circumstantial and only acted as an ‘additional incentive’Footnote 66 on top of a pre-existing goal of formalising the inter-dependence of the two sectors and eliminating obstacles to free trade.Footnote 67 Even if modernisation remained a goal behind French (especially after the failure of Monnet’s plan to meet its targets in 1949–50) and Belgian officials like Paul-Henri Spaak,Footnote 68 other signatories of the Treaty (like Dirk Stikker for the Netherlands or Joseph Bech for Luxembourg) were more concerned with facilitating access to raw materials for their already modernised industries.Footnote 69 What gradually emerges as a more significant common point in the discussions leading to the ECSC, however, was a mutually shared perspective that the realisation of such divergent aims could only take place through the creation of supranational institutions, the elimination of trade barriers and – crucially – the creation of a market order that included provisions against cartels and monopolies.
Within this context, the absence of supranational planning structures is also notable. Despite the nonchalant mention of the concept of a ‘plan’ in the Schuman Declaration, the reality was that the Treaty left no space for accommodating national planning schemes. Not only did the artificial separation of the crucial coal and steel industries from the rest of the sectors of the economy de facto mean that wider national planning and industrial policy were somewhat hindered, but the Treaty also ensured that executive and decision-making powers (at the level of both investment and the regulation of competition) were taken away from the national level and handed over to supranational institutions.Footnote 70 On top of that, the ECSC Treaty included clear provisions that forbid ‘state subsidies or assistance’ (Art. 4, ECSC) and imposed price transparency and the supranational management of investment – linked to the ability of the ECSC to procure loans under its own terms. If there was going to be any ‘planning’, it would be one structured around free markets and led by a supranational authority enforcing a rules-based competition policy.
Notwithstanding this approach, and while the eventual Schuman Plan (hereafter: the Plan) included a clear rejection of cartels and other restrictive practices,Footnote 71 it did not spell out detailed competition rules – something that prompted US officials to express fears that ‘the [ECSC] will prove to be a reincarnation of the prewar international steel cartel’.Footnote 72 ‘Without the inclusion of competition rules’, US authorities would note, they could not support ‘in good faith that the general idea is a single market characterized by competition’.Footnote 73 Monnet was quick to present this as a misunderstanding. As he noted in his Memoirs, US officials like Acheson had
failed to realize the significance of the Schuman Plan when it was first described to him through an interpreter. He suspected it of being a sort of huge coal and steel cartel, the nostalgic dream of European industrialists and a capital sin for Americans, who respected the laws of competition and free trade. The lawyer and the politician in Acheson instinctively recoiled, and I had to come and calm his fears.Footnote 74
In fact, archival evidence demonstrates that specific concerns around the equalisation of competitive conditions and the necessary institutional machinery to enforce them were already present during the drafting of the Plan by Monnet, Schuman and Pierre Uri – whose help ‘made the draft more orderly and the institutional system stronger’.Footnote 75 In a confidential note sent to the chief delegates discussing the Plan in October 1950, Monnet noted that ‘it is evidently necessary . . . to exclude all restrictive practices of cartels’,Footnote 76 gladly reporting one month later in a personal memorandum sent to Schuman that ‘the provisions on cartels and industrial concentrations affect the very substance of the Schuman Plan’.Footnote 77 The key question, he added, was whether ‘the planned organization will be the opposite of an international cartel, or whether the High Authority will have authority in name only, with the powers transferred by the governments to the European Coal and Steel Community actually being diverted and handed over to coalitions of private interests’.Footnote 78 As Küsters notes, Uri, Monnet and Schuman drafted their proposals with the aim of ‘eliminating inefficient producers’, condemning cartels and promoting ‘genuine competition’.Footnote 79 Embedded in a vision to create a ‘market structure with legal governance’, the political objective was, echoing Eucken, the prevention of ‘excessive concentrations of economic power’.Footnote 80 The underlying ‘critique of economic power [and] a commitment to a strong anti-trust law which [. . .] protect markets against self-destruction’Footnote 81 was entirely concomitant with the neoliberal framework.
Contrary to a depiction of these early stages of integration as a process of compromise between national interests, the eventual conflicts that emerged around the issue of competition and its regulation did not reflect national divergences. Across Europe, the plan was wholeheartedly promoted by fellow liberal figures in the signatory countries, such as Luigi Einaudi in Italy (governor of the central bank and first post-war President of the Republic), who exalted the prioritisation of the (neoliberal) conviction that state protection and subsidies distorted market coordinates.Footnote 82 In Belgium, support for the plan was most strongly articulated by Henri Spaak,Footnote 83 who, alongside his overall support for supranational integration and his Atlanticist outlook, focused on the above-mentioned ability of the ECSC to ‘modernise’ the Belgian coal industry by making it more competitive – a euphemism for the closing down of 30 per cent of Belgian mines and a pathway for reducing what were seen as excessively high salaries of coal workers.Footnote 84 More broadly, the plan had the support of Christian Democrats across Europe,Footnote 85 while opposition was led by Communists, some social democrats, Gaullists in France and neofascists. As both SchumanFootnote 86 and MonnetFootnote 87 would point out, the ECSC’s success did not depend on reaching ‘compromises’ by navigating or even appeasing particular national interests but through constructing ‘common interests’ across countries.
If particular national interests played a role, they consisted of fierce (and eventually most effective) opposition to the regulatory competition policy of the ECSC by ‘leading industrial capitalists and related partisan interests in Germany, France, Italy and Belgium’.Footnote 88 As a consequence, the actual implementation of the ECSC’s competition policyFootnote 89 would prove difficult. But this was not a reflection of conflict between member states but between the supranational authorities and particular national interests who saw in the ECSC’s market orientation a dangerous exposure of their industries to international markets (as in the case of France and Belgium), an end to state subsidies (as in the case of Italy) or the threat of decartelisation (as in the case of German industries).Footnote 90
This conflict began less than a year after its inauguration, when the HA first attempted to use its powers to monitor, regulate and intervene in competition-related topics (such as price setting and cartels). At the time, not only were prices fixed at a maximum level, but all member states had large cartel organisations in both steel and coal industries.Footnote 91 The HA tried to initiate the process of liberalisation and free price formation by debating whether to continue with the fixing of prices, a decision that would render the task of tackling cartels crucial. But a certain lack of cohesion on behalf of the HA, linked with domestic political considerations and/or further integration proposals like the European Defence Community (EDC), cast a shadow over the HA’s ability to implement the Treaty’s Articles effectively.
In September 1953 Monnet regrettably informed the HA that the aim of free competition had not become a reality.Footnote 92 As a consequence, the first steps to rein in cartels began more forcefully in April 1954 with the German GEORG coal cartel, targeted as the ‘most serious threat to the effectiveness of any Community policy’.Footnote 93 German coal producers responded by sabotaging and stalling all talks with the HA, leading to the fact that ‘for the rest of the whole of 1954, all the High Authority achieved was an exchange of views with the Ruhr’.Footnote 94 While the German cartel was protected by both members of the West German Federal Government and trade unions (who feared that increased competition would cause profits to decline and raise unemployment), Monnet sent the HA’s vice-president Franz EtzelFootnote 95 to lead negotiations in the hope that his close contact with Adenauer and industrial interests in the Ruhr would help. Yet, even though Etzel insisted that the ECSC’s competition policy was driven by pro-market considerations, representatives from Ruhr responded by claiming that the restrictions were instead causing market disturbances. As Von der Groeben noted in a report, Etzel’s portrayal of the ECSC as not ‘dogmatically liberal’ (i.e., laissez-faire) was met with indifference. For the Ruhr producers, ‘the absence of competition was not a problem’.Footnote 96 In public meetings organised by German steel producers to gather support against the HA, representatives of the French cartel ATIC were also invited,Footnote 97 inaugurating an informal transnational coalition between different cartels that would later also affect attempts by the HA to regulate French cartels.Footnote 98
While a rather weak solution was eventually reached for the GEORG cartel,Footnote 99 similar obstacles and the indecisiveness of the HA to effectively use its executive power meant that the overall account of ECSC’s implementation of its competition policy has generally been seen as a failure.Footnote 100 In June 1956, the US State Department would make a similar assessment in a confidential letter to the ECSC, noting that ‘even though the High Authority has taken some significant actions against cartels (e.g., break up of GEORG), there are major areas about which we continue to be concerned’.Footnote 101 But it is crucial to keep in mind that the eventual failure of the strict implementation of anti-cartel policy does not contradict its neoliberal outlook – in the same way that the compromises that German neoliberals had to accept within West Germany did not render their suggestions less neoliberal. In their design, and at a framework-building level, the executive branches of the ECSC reflected a vision of a strong state geared towards the prerequisites of the competitive order, while competition policy was shaped into a fixed legal structure rather than a mechanism allowing discretionary decision-making. Faced with domestic political and industrial opposition, officials of the ECSC ‘sought to externalize their differences and to de-politicize their working relationships as much as possible’,Footnote 102 but this did not guarantee their predominance. While ‘competing normative principles for ordering economic, political, military and social relations were approximately identical’,Footnote 103 the continued existence of powerful particular interests, the fluctuations caused by domestic political considerations and the under-developed supranational structures all collided to weaken practical implementation. Overcoming this gridlock became the task of further integration.
In any case, the artificial separation of the coal and steel industries from the rest of the economic sectors of ECSC members already hinted towards a wider wish to expand the common market into all areas. Moreover, the particular difficulties of implementing the anti-cartel provisions of the Treaty further reinforced the common goal of strengthening the institutional regulation of the behaviour of economic actors. Instead of enlarging the competences of the High Authority, however, the authors of the drafts that would lead to the Rome Treaty sought to increase supranational regulation by strengthening the legal structures of integration. While the HA was replaced by the European Commission, whose powers of enforcement now included the ability to impose fines on anti-cartel violations and to block anti-competitive mergers, competition policy after the Rome Treaty was also assigned judicial oversight by the European Court of Justice.
The broad outlines of the Rome Treaty had been discussed at the Messina Conference of June 1955. There, Dutch official BeyenFootnote 104 had made a series of proposals structured around the so-called Benelux line, an initiative by Beyen, Spaak and Joseph Bech (from Luxembourg).Footnote 105 This envisaged further integration via a ‘narrower bond than that of so-called intergovernmental cooperation [for] a community of states to promote interests recognised as common through a common policy’.Footnote 106 Such a vision was supported by the Italian delegate, Gaetano Martino, who would explain that ‘the Common Market will be neither dirigiste nor laissez-faire’.Footnote 107 Rather, Martino would continue, it would be a market structured around ‘common rules on competition’ that could prevent ‘Member States or individual operators [. . .] from resorting to practices that might prevent their competitors from freely pursuing their economic activities: In other words, the problem of monopolies, cartels and state aid’.Footnote 108 The German delegation, headed by future Commissioner Walter Hallstein (‘an avowed ordoliberal’),Footnote 109 the architect of the social market economy Alfred Müller-Armack and a large group of advisors,Footnote 110 ‘handed over a memorandum envisioning a “free common market” and the establishment of rules to “ensure that competition within the Community is not distorted”’.Footnote 111 The delegates of the conference broadly supported this, a consequence of the fact that early negotiations (such as the Beyen Plan of 1953) had included ‘free competition’ as a necessary precondition for the common market through the adoption of a proper regulatory framework. Sorting out the final details was assigned to a committee led by Spaak.
At his request, the Spaak Report would be drafted in April–May 1956 by Hans Von der Groeben (who was called the ‘Jean Monnet of Germany’) and Pierre Uri.Footnote 112 The report had a clear neoliberal orientation: French Minister of Economy Ramadier would condemn its framework as one that undermined ‘in the strongest possible terms the protectionist practices that have made the industrial reconstitution of France possible’,Footnote 113 while von der Groeben would later recall that he was positively surprised by the fact that Pierre Uri was in ‘complete agreement’ with the ‘free market conception’ of the proposed competition rules.Footnote 114
The eventual Rome Treaty, Ernst-Joachim MestmäckerFootnote 115 would later remark, ‘embodies an economic constitution. Its substantive foundation is constituted by the freedoms of traffic in goods and services and of personal movement, the prohibition of national discriminations and the system of undistorted competition.’Footnote 116 While other German neoliberals would praise the Treaty for establishing a ‘stability community’ (Stabilitätsgemeinschaft) founded ‘on law over and above its constitutive political entities’,Footnote 117 non-German officials would equally celebrate a similar perspective, seeing their task as one of convincing other delegates and their national governments to ratify the Treaty. In this context, French delegate Marjolin ‘worked hard to influence the French negotiation positions in the summer of 1956, rendering them more compromising and thus acceptable to France’s negotiation partners’,Footnote 118 going as far as suggesting further integration through a ‘fully-fledged economic union where Member States would relinquish key prerogatives, such as decisions on budgetary spending, budget deficits and surpluses, credit policy, public investment, and exchange rates’.Footnote 119 In an earlier note on the need to proceed with the EEC, Uri had already pointed out that ‘the experience of the European Coal and Steel Community illustrates the effectiveness and stability of functional integration linked to institutional integration’.Footnote 120 This transfer of power to supranational institutions, he would add, was ‘the only way to overcome national particularisms’.Footnote 121
Other neoliberals outside the negotiations would display similar enthusiasm. In a pamphlet published in support of European integration, Lippmann would praise Spaak as an equal to Hallstein and Erhard,Footnote 122 while Jacques Rueff, who would be appointed as one of the first judges of the European Court of Justice, would highlight the mutually shared perspective of the delegates by arguing that any ‘divergence between differing perspectives was taking place within the same structure: The one that established the institutional market’.Footnote 123 In his view, the Rome Treaty represented the ‘realization and crowning achievement of the effort to renovate liberal thought’.Footnote 124
In the same way as in the ECSC, the Rome Treaty’s competition policy would be a key policy field of supranational integration and ‘one of the central means to promote European integration’.Footnote 125 Fully embedded as an indispensable barrier to central planning, EEC competition policy specified that ‘rules were necessary to prevent competition in the future common market from being distorted’.Footnote 126 As Slobodian notes, for figures like Mestmäcker, competition law brought ‘the economic constitution of the EEC Treaty to life’.Footnote 127 Despite these proclamations, research has shown that the implementation of the EEC’s competition policy continued to encounter obstacles and problems. While the rationale was to create a legal order with strengthened institutional backing, the process of transposing the ECSC’s competition articles into the new Treaty ‘left many questions largely unanswered’, as
article 85 EEC (article 101 TFEU) contained the prohibition principle in the first paragraph, but also the exceptions in the third paragraph. Cartels could be banned according to article 85-1, but also authorized if they fulfilled the criteria of article 85-3 (contribution to technical progress, etc.). This association of a prohibition provision with an important exception looked like the French abuse law. Article 86 EEC (article 102 TFEU) on dominant position was vague and article 87 EEC left the implementation of the first two articles to a further regulation.Footnote 128
Nonetheless, as already mentioned, the difficulties of fully implementing the neoliberal framework should not distract from the fact that it remained the predominant shared goal of the key architects of integration. A final examination of the absence of alternatives strengthens this perspective.
Part Three: European Integration as a Planning vs Competition Compromise: Conclusions and Further Research Areas
Prominent accounts of European integration describe it as a conflict between French dirigisme and German ordoliberalismFootnote 129 or ‘competition vs planning’.Footnote 130 In this paper, the predominance of the neoliberal framework and the absence of dirigiste or planning structures at the supranational level has been argued. At the level of the ECSC, no specific evidence has been found to suggest that planning ideas had any supranational backing. Pointing at ECSC officials’ background in planning committees (such as Monnet or his associates) or claiming that draft plans for the ECSC ‘were ambitious with regard to planning’ indicates tendencies but does not suffice. Instead, as noted, the specific structure of the ECSC and its regulations functioned as obstacles against macroeconomic planning by artificially separating key industrial sectors from the rest of the economy and forbidding state aid and subsidies. A similar case can be made for the EEC. Its overall outlook, animated by the mutually shared beliefs of its key architects, was one of market-oriented neoliberalism, which left no space, or supranational design, for planning or other competing macroeconomic alternatives. That this did not directly affect national planning, as Warlouzet rightly notes, does not mean that the EU’s supranational architecture reflected a compromise.
As this paper has noted, early European integration took place in a period of history when planning committees, fiscal/monetary coordination and credit allocation in the service of industrial policies were crucial elements of national economies. It remains, however, inaccurate to interpret the existence of such macroeconomic structures at a national level (while noting their absence at the supranational level) as an indication of compromise.
This paper has suggested that such debates can be clarified by a more nuanced and analytical exploration of the concepts used. Beginning with a reconceptualisation of the ordoliberal framework in the direction of highlighting its transnational character as neoliberalism (as opposed to its depiction as a German tradition), this paper has shown that ‘ordoliberalism’ refers to a neoliberal framework developed across borders, placing the necessity of a legal/regulatory mechanism at the epicentre of a market economy. Understanding markets as riddled with inherent contradictions when left on their own, while also calling attention to the distorting effects of mass democratic processes, the neoliberal framework sought to promote an economic constitution, a competitive order capable of tackling both particular interests and market distortions. Contrary to common depictions, the neoliberal framework does not reject state intervention – so long as it remain market-conforming; nor it is not by definition hostile to welfare provisions – as long as they were, as Böhm would argue, ‘restricted by this constitutional framework’Footnote 131 or framed within a project that ensured the continuation of the market economy.
In a similar way, it is also pertinent to offer an equally nuanced definition of ‘planning’ and its relation to the neoliberal framework outlined above. To start with, Denord has shown that French neoliberal tendencies were concomitant with elements of planning. Conceptualised as seeking to ‘reorient public intervention by putting the state at the service of the market and of competition’,Footnote 132 neoliberal visions are detectable in French politicians like Antoine PinayFootnote 133 who sought to recreate the conditions for competition through the state.Footnote 134 Even more prominent in such attempts was someone like Maurice Allais, who came up with the concept of ‘competitive planning’ as a ‘third way’ against both collectivism and laissez-faire.Footnote 135
In the same way that Rougier had pointed out that neoliberalism is about imposing rules ‘fully recognising that “that they might not necessarily be the same in the age of high-speed transportation as in the days of the stagecoach”’,Footnote 136 one can argue that French neoliberals held different views about how one arrives at a competitive market order – not about whether one is desirable. At times, it even appears that the debate merely reflects linguistic differences: while French participants at the Mont Pèlerin Society’s first meetings would continue to explore the meaning of ‘liberal interventionism’ through concepts like ‘dirigisme libéral’,Footnote 137 Rueff would dismiss the économie dirigée as a dictatorial system but fully support the concept of ‘institutional markets’.Footnote 138
As Amable has suggested, French notions of planning often emerged from officials directly involved in policy-making rather than intellectuals supporting a specific theoretical framework. Yet, in conceptualising planning as ‘indicative’ rather than ‘prescriptive’, ‘the price mechanism and competition became the dominant regulating mechanisms in order to achieve economic efficiency, and the efforts of planners became directed towards improving, rather than replacing, the price mechanism’.Footnote 139 Rather than a synonym of dirigisme, Lovering has also noted that indicative planning has always been understood as governing with markets, rather than against them as the notion of dirigisme implies.Footnote 140
With ‘modernisation’ as the leitmotif of economic policy (in contrast to ‘stability’, as in the case of Germany), notions of planning in France and Belgium also reflected attempts to re-conceptualise the appropriate role of the state and the scope of its activity within a market economy; in other words, a perspective triggered by a similar consideration as the one that had led German neoliberals to formulate their ‘third way’ between laissez-faire and central planning or collectivism.
In this context, even the planning credentials of someone like Robert Marjolin, an associate of Monnet at the Commissariat Général au Plan, who is often described as a Keynesian (or even a socialist), have been challenged. As Schulz-Forberg has noted about Marjolin, his vision of the plan ‘described a state acting on the level of general economic rules and modifying the market without direct intervention in the economic life of businesses [. . .] This setting of the market frame [. . .] is simply an instrument of state power that the governments of all “great modern countries employed”, and he argued that the plan was in tune with recent developments in economic liberalism.’Footnote 141 Despite the pejorative depiction of planning as inherently oppositional to the market competitive order by some German neoliberals, it is crucial to maintain a nuanced distance from such ideological positioning. As Lovering points outs, ‘economic planning was never a singular phenomenon and was always contested’. In fact,
battles played out over the modalities of intervention and over who should lead them. The rhetoric of the market played an important role within these battles. But it was never a straightforward fight of markets versus planning. Instead, the market was mobilized to make claims both for and against planning, reflecting its malleability in liberal capitalist orders.Footnote 142
Similar perspectives emerge from recent research on the concept of planning in Belgium. While post-war Belgian economic policy is often described as structured around planning, Mommen has argued that it actually reflected a vision of ‘reconstruction on a pre-war basis’.Footnote 143 This reflected, as Evrard writes, ‘a commitment to fiscal conservatism, price stability and the mixed economy, rather than the interventionist planning strategies experimented in neighbouring countries’.Footnote 144 This could also explain why in the early 1950s, Walter Lippmann Colloquium participant and MPS member Louis Baudin described Belgium as a ‘neoliberal model’.Footnote 145
If one defines planning as part of a neo-mercantilist project with industrial and social policy at its epicentre; the coordination of economic actors by state authorities and the centralisation of information as its operational structure; and, finally, with credit policy, state aid and tax breaks as its key policy fields, as Warlouzet does,Footnote 146 it is hard to see any traces of these elements in either the ECSC or the EEC. This does not, however, mean that the neoliberal framework that represents, according to this paper, the mutually shared vision behind early integration was fully operationalised. As shown, it was obstructed by the lack of clarity that characterises all theoretical formulations that confront the real world, by oppositional national and particular economic interests, by demands and pressure for democratic transparency. It was, in other words, challenged by the very same forces that neoliberals have identified as obstacles to the market order since the inter-war period. But efforts to materialise this vision did not stop. The project of European integration continued and has, to this day, conquered many of its goals – most significantly, in the realisation of monetary unification under the control of non-majoritarian independent institutions with price stability as its sole purpose. Such a construct is firmly embedded in the neoliberal framework as it has been reconceptualised in this paper, a contribution that will hopefully open up new research opportunities and topics for evaluating how this framework continued to influence European integration after the inauguration of the EEC.
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