Alexander Rüstow


Alexander Rüstow was a German sociologist and economist. In 1938 he originated the term neoliberalism at the Colloque Walter Lippmann. He was one of the fathers of the "Social Market Economy" that shaped the economy of West Germany after World War II. He is the grandnephew of Wilhelm Rüstow, the grandson of Cäsar Rüstow and the father of Dankwart Rustow.

Life

Rüstow was born in Wiesbaden in the Prussian Province of Hesse-Nassau. From 1903 till 1908, he studied mathematics, physics, philosophy, philology, law and economics, at the universities of Göttingen, Munich and Berlin. In 1908, he obtained his doctorate under Paul Hensel, at the University of Erlangen, on a mathematical topic, Russell's paradox. He then worked at the Teubner publishing house in Berlin, until 1911, when he started working on his habilitation, on the knowledge theory of Parmenides. He had to interrupt his work though at the outbreak of the First World War, when he volunteered for the German Army.
After the war, Rüstow, then still a socialist, participated in the November Revolution, and obtained a post at the Ministry of Economic Affairs, working on the nationalization process of the coal industry in the Ruhr Area. Disillusioned with socialist planning, he started working for the VdMA, the German Engineering Federation in 1924. The engineering companies in Germany suffered much by the protected and subsidized coal and mine industry.
In the 1930s, the climate in Germany became too unfriendly for Rüstow; he was blacklisted in 1933 and fled to Switzerland, where he was offered a chair in economic geography and history at the University of Istanbul, Turkey. In Istanbul, he worked on his magnum opus, Ortsbestimmung der Gegenwart, a critique of civilization. In 1938 at the Colloque Walter Lippmann, it was Rüstow who created the term 'neoliberalism' to separate new liberalism from classical liberalism. Rüstow promoted the concept of the social market economy, and this concept promotes a strong role for the state with respect to the market, which is in many ways different from the ideas who are nowadays connected with the term neoliberalism.
In 1949, Rüstow returned to Germany and obtained a chair at the University of Heidelberg, where he remained until his retirement in 1956. He died in 1963 at age 78 in Heidelberg.

Ordoliberalism

Together with Walter Eucken and Franz Böhm, Rüstow provided the necessary foundational work of Ordoliberalism.

Work