Classical liberalism in Germany can look back on a proud but also at times tragic history. With strong roots in the legal traditions of the old empire, prior to 1806, which offered strong safeguards against centralized power, liberalism began to flourish during the Enlightenment period of the late 18th century. Inspired by the American and, more important, the French Revolution, German thinkers like Immanuel Kant and Johann Gottlieb Fichte were strong supporters of the rights of man and unhindered freedom of opinion and press. Fichte especially, although he was later to change his views in favor of a nationalistic socialism, interpreted the idea of a “social contract” in so radical a manner that it appeared consistent with each citizen’s ability to secede from the state. His book Contribution to the Rectification of the Public’s Judgment of the French Revolution (1792) presaged much of what today would be viewed as an anarcho‐​capitalist version of libertarianism.

One of the greatest works bearing the imprint of classical liberalism of this period—if not of German liberalism as a whole—was written by Wilhelm von Humboldt (1767–1835). In his book The Limits of State Action, written in 1792, he defined self‐​education as the true end of man to which a minimal state was a necessary precondition.

The poor military performance of the German states during the Napoleonic Wars made thoroughgoing reforms necessary, and intellectuals and enlightened bureaucrats often combined in their efforts to introduce the principles of local autonomy and the rule of law. This collaboration was especially evident in Prussia under the leadership of Baron vom Stein. However, by far the most important of the liberal reforms was the foundation of the Zollverein (customs union) in 1834, which established free trade among the German states and contributed much to the rise of Germany’s industrial revolution.

As bureaucratic reformism began to wane, liberalism became increasingly an oppositional creed, if not a revolutionary one. Liberal thinkers, the most important of whom were Karl von Rotteck and Karl Theodor Welcker, paved the way for the Revolution of 1848. Rotteck and Welcker were both historians and politicians from the southwest who together edited the 15‐​volume Staatslexikon, which immediately became the manual of constitutionalism throughout Germany. Even more radical was the philosophy put forward by Max Stirner in his The Ego and Its Own (1844), who advocated nothing short of an individualist anarchist philosophy.

By the time of the Revolution of 1848, and its subsequent failure to overthrow the old regime, a combination of constitutionalism and nationalism was predominated through the German states. Liberals joined the movement for national unity because it appeared a promising strategy to overthrow the autocratic regimes that governed the various smaller states into which Germany was then divided. It eventually became evident that linking liberal reforms with the movement for a united Germany was counterproductive because liberal politicians began to sacrifice liberal political goals on the altar of national unity. Many liberals abandoned their liberalism as they became convinced that Prussian hegemony, under the leadership of conservatives like Bismarck, was the best way to achieve unity. In the 1860s, the liberals split on this issue, bifurcating into a National Liberal Party, whose primary interest was a strong united German state, and a Progressive Party, which continued to retain its liberal links.

Following the 1848 revolution, the various German governments reinstituted strict limits on political freedoms. However, surprisingly, economic liberalism flourished, and a policy of internal and external free trade was vigorously pursued. The intellectual force behind this tendency was the Congress of German Economists, founded in 1858. Intellectuals, businessmen, and politicians joined in emulating the British free trade movement of Richard Cobden and John Bright. The German “Manchester‐​Men,” as they were pejoratively dubbed by both socialists and nationalists, have often been depicted as heartless advocates of greed without any trace of concern for the poor. However, the “Manchesterites” strongly believed in the social advancement of workers; what they questioned was whether this goal could be accomplished through state coercion. This group, including Hermann Schulze‐​Delitzsch, embraced voluntarism and free trade. In fact, Schultze‐​Delitzsch was the founding father of the German self‐​help and cooperative movement.

Immediately following German unification in 1871, Bismarck turned on the liberals because they opposed his attempts to centralize power. In 1878, he adopted protectionist economic policies while introducing elements of the modern welfare state. The effect of these policies was to cause enormous disunity within liberal ranks.

Among the leading liberals who opposed Bismarck was Ludwig Bamberger, a radical from the 1848 revolution, who earlier had been Bismarck’s economic advisor and the creator of German monetary union of 1876. In 1880, Bamberger broke with Bismarck and with the National Liberal Party, for which he sat in the Reichstag, over the issue of protectionism and social reform. Bismarck’s primary opponent in the Reichstag was Eugen Richter, leader of the Progressive Liberals, who was to prove the last classical liberal of influence in Germany and whose warnings against socialism on the left and militarism on the right were, alas, confirmed by subsequent events.

World War I marked the effective end of classical liberalism as a major political movement in Germany until the late 1940s. It was not able to recover during the Weimar Republic and dismally failed to stop Hitler’s advance to power. The period after World War II, however, saw a remarkable revival of liberalism. The German Constitution of 1949 was in part designed by liberals, and even during the war economists such as Walter Eucken and Wilhelm Röpke had made plans for a liberal postwar economy. With the creation of West Germany in 1949, Ludwig Erhard, who became minister of economic affairs in the first ministry of Konrad Adenauer, established the “social market economy,” thus creating the “economic miracle” in the 1950s.

Since then, liberalism seems to have eroded. In the 1970s, Keynesianism and welfare statism became more and more prevalent in economic policy. The ever‐​increasing and costly welfare state today is the biggest challenge to German liberals.

Further Readings

Humboldt, Wilhelm von. The Limits of State Action. John Wyon Burrow, trans. London: Cambridge University Press, 1969.

Raico, Ralph. The Party of Liberty: Studies in the History of German Liberalism. Jorg Guido Hulsmann, trans. Stuttgart, Germany: Lucius & Lucius, 1999.

Richter, Eugen. Pictures of the Socialistic Future (Freely Adapted from Bebel). Henry Wright, trans. London: Swann Sonnenschein, 1907.

Sheehan, James J. German Liberalism in the Nineteenth Century. London: Methuen, 1982.

Sweet, Paul R. Wilhelm von Humboldt. A Biography. Cleveland: Ohio State University Press, 1978.

Originally published