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Weimar Germany: The first open access order that failed?

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Abstract

The Weimar Republic is analysed within the concept of limited and open access orders. Before World War I, Imperial Germany had developed into a mature limited access order with rule of law and open economic access but lack of competition in politics. After World War I and inflation, Weimar Germany developed toward an open access order; open access was not, however, sustainable and collapsed in 1930–31. This case of a failed open access order suggests refining the framework of limited and open access orders in further work. It shows that the political process of “creative destruction” might result in dissolution of open access and that the political system needs the capacity of efficiently creating legitimacy in order to sustain openness. The failure of Weimar Germany also indicates that the international political system might work as a destabilizing factor of open access and that the nation-state perspective of the limited and open access order framework needs to be supplemented by an international perspective.

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Notes

  1. The founders of the “Basic Law” of the Federal Republic of Germany (Grundgesetz) heavily debated “Weimar” and their conclusions were incorporated into the “Basic Law” (Stolleis 2013, 115–154).

  2. In France, one of the first OAOs in history, the ‘Front National’ received 25 % in the European elections of 2014.

  3. Unpublished keynote lecture to the EHES, ‘Leviathan Denied: Coordination, Coercion, Rules, and the Nature of Government’ London, 6.9.2013; see also Wallis and North (2011).

  4. Some US states still had similar incorporation requirements in the twentieth century (Fischer 1955).

  5. Fränkel (1915) reports that the trade of these shares was managed via bank deposits. The GmbH is still the most common form of incorporation in Germany.

  6. A larger number of JSC was set up for iron and steel works and coal mines in the 1850s to attract foreign capital to new industries (Reckendrees 2013b).

  7. German JSCs still have a two-tier board with the board (Vorstand) running the company’s daily business and the supervisory board (Aufsichtsrat) controlling the board and making lasting decisions.

  8. So did the import tariffs of all major economies (except the British) at the end of the 19th century, with the highest extraction rate in the USA (O'Rourke 2000, 461).

  9. In terms of modern competition law the open access system of the UK was a real latecomer that met the EU or American standards only at the end of the twentieth century (Scott 2009).

  10. For the Bavarian army, the Kaiser was supreme commander only during war (Nipperdey 1992, 202).

  11. Abrams’ (1995, 10) argues ‘the German Empire was, in theory a constitutional monarchy, yet in practice it was governed by a Prussian oligarchy’; statements like this are misleading; parliament could block government and its debates have been influential. See e.g. Henning and Tennstedt (1990–2006).

  12. A £500 security was returned under the condition that the candidate received 5 % of the votes (Cook 2005, 68).

  13. Access was more open in the USA, yet some states by several means discriminated based on race or income (Keyssar 2000).

  14. Yet, war-like fights between organizations with violence capacity and police were not a German phenomenon; homicides slightly increased (to 1.2 per 100,000). The average US-rate of casualties was ten times higher; during prohibition, 170 policemen on average were killed each year (Statistical Yearbook, passim; Roth 2011, 226–253).

  15. Cooperation between the government and the radical right even spurred leftist rebellions on the Ruhr, in Bremen, Hamburg, Bavaria, and Saxony that resulted in thousands of casualties.

  16. Still, political support to these organizations as expressed in national elections declined from 1920 (20 %) to 1928 (11 %); with the Great Depression it increased again to 17 % (1932).

  17. For an English version of the constitution, see: http://www.zum.de/psm/weimar/weimar_vve.php.

  18. After serious losses in the national elections of 1928 the party turned to anti-republican politics (Mergel 2003) and cooperated with the Nazi-movement that aimed at a national dictatorship.

  19. I am grateful to Gerhard Wegner for providing me the distinction between rent-creating LAOs and rent-seeking in OAO.

  20. Welfare was a social consequence of the war; one can hardly send millions of soldiers to the front and let alone the victims (families, children etc.). This obligation of the state for the victims of war was undisputed by all parties in the Weimar Republic.

  21. This is also because of the consistency of criteria used if one compares Weimar Germany with the Third or the Fourth Republic (France), Victorian United Kingdom or the USA (with limited access to politics and lack of control of violence organizations in the South until the 1960s).

  22. With thanks to Deirdre McCloskey who suggested thinking of these parallels.

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Acknowledgments

This is a revised version of a paper presented at the workshop ‘‘Germany’s Catch-Up Development, from Limited to Open Access to Political and Economic Organizations and Competition’’ held at the Walter Eucken Institute in Freiburg, 28.2.-1.3.2014. I thank the participants for valuable feedback. Gerhard Wegener and Erik Grimmer-Solem provided detailed, knowledgeable comments on a draft version of this article, which improved the article substantially. An anonymous reviewer and the editors of CPE gave valuable suggestions for improving the manuscript for which I am very grateful. All remaining errors are mine. I also want to thank the Thyssen Foundation for funding this workshop and to the Walter Eucken Institute for hosting it.

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  1. Department of Management, Politics, and Philosophy, Center for Business History, Copenhagen Business School, Porcelænshavn 18A, 2000, Frederiksberg, Denmark

    Alfred Reckendrees

  2. Max Planck Institute for the Study of Societies, Paulstraße 3, 50676, Köln, Germany

    Alfred Reckendrees

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Reckendrees, A. Weimar Germany: The first open access order that failed?. Const Polit Econ 26, 38–60 (2015). https://doi.org/10.1007/s10602-014-9184-9

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