On 19 September 1975, Bruno Kreisky, the Austrian chancellor and a towering figure of 1970s European social democracy, debated his challenger Josef Taus, a Christian Democrat, on live TV. National elections were scheduled for 5 October. Around twenty-five minutes into the debate, Kreisky attacked his rival by insinuating that the Christian Democratic People’s Party (ÖVP) wanted to abandon the goal of full employment in favour of the ideas of the renowned neoliberal economist and political philosopher, Friedrich August von Hayek.Footnote 1 Shaking his head, Taus replied, ‘Professor Hayek is not a member of the ÖVP! Nor is he close to us.’ Kreisky was quick to respond, retorting that some of the ‘gentlemen’ in the Austrian Economic Federation (Wirtschaftsbund), one of the ÖVP’s three traditional Bünde, do in fact endorse Hayek’s views.
Taus’s reaction to Kreisky is indicative of a broader tendency: in the mid-1970s, neoliberal ideas were generally unpopular among Christian Democrats in Western Europe. Indeed, most Christian Democrats remained committed to their post–Second World War vow to create a ‘social capitalism’ or ‘social market economy’. In essence, the idea was that market competition should coexist with reactive welfare states that correct market failures and, above all, support families through their tax and benefit systems.Footnote 2 This was far removed from neoliberalism, not least because Christian Democrats were committed to corporatism, assigning a key role to employee organisations in engineering class compromise – which neoliberals rejected in both thought and practice.Footnote 3 However, if the second part of Kreisky’s statement is correct, neoliberal thinking was already making inroads into the ÖVP in 1975.
How, then, did neoliberalism gradually gain traction among Christian Democrats in Austria and elsewhere in Europe from the late 1970s onwards? What caused Christian Democrats to embrace free markets, individualist thinking and even austerity, just as their Social Democratic adversaries did? While the story of social democracy’s neoliberalisation has often been told, the Christian Democratic experience is less well studied.Footnote 4 This is despite not only critics and political rivals observing that ‘residual traces of old [Christian Democratic] thinking – refusal of rugged individualism, desire for inclusion, nostalgia for social dialogue, and attachment to the welfare state – are [now] just residues, crowded out by acceptance of a neoliberalism designed to reassure conservative voters that there will be no radical or expensive reforms’.Footnote 5
One reason for the lack of research into the neoliberalisation of Christian Democracy is that even the recent resurgence of scholarly interest in Christian Democracy has not yet yielded much work on the 1970s and 1980s, which is arguably the key period for understanding the programmatic shift towards neoliberalism. Instead, the focus tends to be on the post-war era, when Christian Democracy emerged as a new and astonishingly successful political force across Western Europe.Footnote 6 Another possible reason for the lack of studies on the neoliberalisation of Christian Democracy is that some scholars have always considered neoliberalism to be an integral part of Christian Democracy. Following influential thinkers such as Michel Foucault and Quinn Slobodian, this perspective considers the Freiburg School’s ordoliberalism to be the initial manifestation of neoliberal ideology and the fundamental economic doctrine of Christian Democracy, as it was endorsed by prominent Christian Democrats like the West German minister and subsequent chancellor, Ludwig Erhard.Footnote 7 This view captures something real: ordoliberalism was genuinely influential in the early CDU, and Alfred Müller-Armack, an ordoliberal who coined the very term ‘social market economy’, was himself a Christian Democrat. Yet his conception of the social market economy already tempered Freiburg orthodoxy with a stronger social and interventionist emphasis, and what was implemented was a hybrid of ordoliberal and neo-corporatist elements rather than a consistently ordoliberal policy regime. The more thoroughgoing market liberalism of the 1970s and 1980s was a distinct and contested development.Footnote 8
The few existing studies that engage more closely with the gradual embrace of neoliberalism by European Christian Democracy usually highlight two things. Firstly, they suggest that the transnationalisation of Christian Democracy in the late 1970s – particularly the formation of broader transnational alliances with non–Christian Democratic conservative parties – played a significant role in transforming Christian Democrats’ economic positions.Footnote 9 One argument is that attempts to strengthen cross-partisan collaboration with non–Christian Democratic conservative parties, some of which fervently promoted neoliberal ideas, facilitated the diffusion of those ideas among Christian Democrats at a time when they were seeking programmatic inspiration. The European Democrat Union (EDU), formed in 1978, is often mentioned as a key vehicle for spreading neoliberal ideas among Christian Democrats. It included not only the two West German Christian Democratic parties (CDU and CSU) and the Austrian ÖVP but also Margaret Thatcher’s Conservative Party and the Swedish Moderaterna – two parties that represented the neoliberal avant-garde among the European centre-right in the late 1970s and early 1980s.
Secondly, existing studies on the neoliberalisation of Christian Democracy tend to emphasise that adopting neoliberal positions was a drawn-out and conflict-ridden process. The question of whether neoliberal ideas should inform policy often sparked heated internal debates, as many Christian Democrats with corporatist commitments staunchly opposed privatisation and the rollback of the welfare state.Footnote 10 At the national level, those in favour of a more liberal approach to economic policy were often defeated in these conflicts.Footnote 11 At the transnational level, the main dividing lines concerned how open Christian Democrats should be to collaborating with non–Christian Democratic conservative parties. Some Christian Democrats ruled out broader associations, not least because they were sceptical about the liberal approach to economic policy championed by many conservative parties. It was only when these sceptical forces became electorally weaker that conservative parties with neoliberal leanings were included in transnational associations, most notably the European People’s Party (EPP).Footnote 12
Taking these two sets of observations as my starting point, this article aims to take a closer look at the intricacies of Christian Democracy”s neoliberalisation. Specifically, I will focus on two influential figures who led the neoliberal movement within the West German and Austrian Christian Democratic parties, respectively: Franz Josef Strauß, leader of the Bavarian CSU, and Wolfgang Schüssel, a young MP for the ÖVP whose political career took off in the early 1980s. My approach is inspired by the recent trend in political historiography of reconstructing broader histories of transformation by focusing on the trajectories of certain key figures. As Chappel argues, the distinctive advantage of such a ‘biographical approach’ is that it ‘allows us to see in detail how certain new concepts or strategies emerged as plausible responses in a particular context’.Footnote 13 And, indeed, as I wish to demonstrate, studying Strauß and Schüssel can help us better understand the initial appeal of neoliberalism to some Christian Democrats, prior to its popularisation.
Of course, I do not wish to claim that neoliberalism gained traction within the Austrian and West German Christian democratic parties exclusively because of Strauß’s and Schüssel’s attempts at ideological innovation. Nor did this entrepreneurship operate in a vacuum. As materialist accounts rightly emphasise, the structural crisis of the 1970s – the exhaustion of the post-war growth model and the strain it placed on corporatist and Keynesian arrangements – made market liberal ideas seem more plausible; Julian Germann goes so far as to suggest that West Germany’s defence of its export model was an inadvertent catalyst for the global neoliberal shift.Footnote 14 My contention is that such structural pressures created an opportunity for neoliberal ideas to spread but did not determine whether or not it would be seized. This task fell to ‘entrepreneurs of ideas’ such as Strauß and Schüssel, who promoted neoliberal thinking long before it became mainstream within their parties and was translated into policies. While they did not single-handedly rewrite economic and social policy agendas, they took important steps towards shifting the emphasis from ‘social capitalism’ towards greater private ownership, deregulation and the partial dismantling of the welfare state. Indeed, their activities mirror a general pattern in the spread of neoliberal ideas since the 1970s or so: born in opposition to the mainstream views of the time and promoted by individuals and groups who were convinced of its correctness, they eventually became widely accepted across the political spectrum.Footnote 15
Before embarking, two clarifications are necessary. Firstly, although I have already referred to some common intuitive understandings of neoliberalism, it is helpful to briefly explain how I will use the concept in what follows. As an analytical term, ‘neoliberalism’ refers to a broader social theory that ‘evolved out of a nineteenth-century economic philosophy of liberalism that advocated the unhampered activity of individuals to further their own preferences through a market mechanism constrained by law’.Footnote 16 Elaborated upon by influential thinkers such as F.A. Hayek and Milton Friedman, neoliberalism involves a complex set of propositions that largely amount to an endorsement of limited (but strong) government, reduced state interference in the economy, deregulation and greater private ownership, paired with fervent anti-socialism and anti-collectivism.Footnote 17 ‘Neoliberalisation’, in turn, refers to the spread of these ideas and corresponding policies. Recent historiography suggests that this process generally began to accelerate in the 1970s and 1980s, which is also the period on which the present article focuses.Footnote 18
Secondly, I focus on the Christian Democrats in West Germany and Austria for three reasons. The first is simply that they are two of the most electorally stable Christian Democratic parties in the world, having occupied a central role in the politics of their respective countries since the end of the Second World War. This makes them a relevant object of study for anyone interested in the past and present of European Christian Democracy. The second reason is that both the Austrian and West German Christian Democrats exemplify the shift from confessional roots to broader, pragmatic ideologies that many parties of this kind underwent amid secularisation and economic change.Footnote 19 Consequently, they are well suited to a comparative historical analysis of adaptation processes. Finally, the Christian Democrats in West Germany and Austria played a crucial role in building and evolving the aforementioned transnational political associations through which neoliberal ideas would diffuse. The EDU in particular was led by the ÖVP and strongly supported by both CDU and CSU leaders, so there is a close link between these parties’ transnational activities and the spread of neoliberalism.
The ‘German Thatcher’: Franz Josef Strauß as Neoliberal Innovator in 1970s West GermanyFootnote 20
Franz Josef Strauß’s role as an ideological and programmatic innovator of German political conservatism has been documented in various places in the existing literature. In her work on the transformation of conservative ideologies in post-war West Germany and Britain, Martina Steber notes that 1968 – the year of major global student revolts – represented a critical juncture for Strauß and his CSU.Footnote 21 As early as the early 1960s, Strauß had attempted to reintroduce the term ‘conservatism’ as a distinctive label for the CSU, partly to provide a counterpoint to the left-leaning zeitgeist of the era. Christian Democrats rarely wanted to be associated with conservatism after 1945, however, as the term was politically discredited. Thus, Strauß encountered opposition. In 1968, after many years of internal debate, the CSU used the term ‘conservative’ in its party manifesto for the first time.Footnote 22
The 1968 CSU manifesto specifically stated that ‘being conservative should . . . mean having an open attitude towards technical progress without disregarding what has been handed down from the past’.Footnote 23 This was the conception of conservatism that Strauß favoured and gradually developed during the 1960s. His famous later assertion that being conservative entails ‘marching at the forefront of progress’Footnote 24 expresses the very gist of it. Strauß was also well aware of the fundamental compatibility between his views and those of certain liberals within his party. And at the 1968 party convention, Strauß even expressed his support for explicitly labelling the CSU a ‘liberal’ force, though he eventually argued against doing so on the grounds that the term liberal was ‘abused and partly overused’.Footnote 25 Nevertheless, he acknowledged that he was both a ‘conservative’ and a ‘liberal’.Footnote 26
In the early 1970s, internal programmatic debate intensified further and interest in neoliberal ideas grew. In 1969, the CDU/CSU lost power at the federal level for the first time since the first post-war election in 1949. While the Christian Democrats remained electorally strong in states such as Schleswig-Holstein, Rhineland Palatinate, Baden-Württemberg and Strauß’s Bavaria, there was a widespread sense that the Christian Democratic project was in crisis. Bösch argues that this ‘sense of crisis . . . had its origins in intra-party conflicts about how to react to the loss of power’.Footnote 27 Disputes arose within the party about the appropriate oppositional strategy in the Bundestag and the issues of programmatic alternatives and personnel renewal, leaving the West German Christian Democrats in a state of relative disorientation. Two months after the 1969 election, which produced the first of several social-liberal SPD–FDP coalition governments, the CDU appointed a ‘reform committee’ led by the young Helmut Kohl. In autumn 1971, party chairman Rainer Barzel proposed setting up a ‘committee on basic principles’ (Grundsatzkommission), which would be responsible for identifying key political issues and demands and developing response strategies. The disappointing result of the 1972 election further reinforced the general sense that ideological renewal was crucial.
Most of the new programmatic ideas suggested at the federal level were hardly conservative or neoliberal. In fact, ‘in keeping with the spirit of the 1970s, the CDU became more social and visionary’.Footnote 28 This proved popular among the members of the Christian Democratic Employees’ Association (CDA), who enthusiastically supported suggestions such as promoting democracy in the workplace.Footnote 29 However, among conservatives such as Hans Filbinger, Alfred Dregger and, indeed, Franz Josef Strauß, these kinds of ideas were not well received. They preferred a renewed emphasis on and reinterpretation of the notion of ‘conservatism’, as Strauß suggested already at the 1968 CSU party convention. However, this was only one part of the story. With the aforementioned ‘progressive’ reform proposals on the table and Social Democrats in office, conservatives within the CDU/CSU began gravitating towards a distinctly liberal brand of anti-socialism.Footnote 30 This became central to their ideological counter-project.Footnote 31
As early as at the 1971 CSU party convention, Strauß attempted to articulate the principles of a conservative, anti-socialist liberalism that, in his view, should lie at the core of West German Christian Democracy. He argued that the CSU’s defining feature is that it
is liberal in the sense of liberal thought . . . However, the CSU has nothing in common with late liberalism, a degenerate phenomenon in which unrestrained individual freedom goes hand in hand with the promotion of collectivist tendencies. This kind of pseudo-liberalism paves the way for socialism and legitimises those whose anti-liberal and intolerant attitude means they can no longer be considered representatives of the democratic idea.Footnote 32
Ideologically, this indicated the direction in which Strauß wanted to take his party: towards a confident liberal conservatism that was distinct from the ‘social liberalism’ of the SPD–FDP coalition and the broader liberalising tendencies that emerged in the context of 1968.
In the following years, Strauß sharpened his rhetoric even further, drawing increasingly on a more distinguishable neoliberal register. At the CSU party convention of 1973, he harshly criticised those within the CDU/CSU who argued for a greater democratisation of the workplace and society more broadly.Footnote 33 Democratisation, he asserted, ‘is one of those dangerous words that can be used to achieve positive outcomes in certain areas, but the same formula can be used to devastating effect in other areas, restricting freedom, introducing terror and subjecting a majority to the whims of a minority’.Footnote 34 Later in his speech, Strauß also insinuated that the rapprochement between West German, Soviet and GDR trade unions was a step towards a totalitarian socialist state in which ‘we will have neither free trade unions nor free parties’.Footnote 35
These statements clearly affirm views typically associated with neoliberalism. A fervent anti-socialism coupled with a warning against the over-democratisation of society are indeed hallmarks of the neoliberal thinking that was gaining popularity among West German conservatives in the early to mid-1970s.Footnote 36 Notably, the major neoliberal thinker Friedrich August von Hayek was appointed to a professorship at the University of Freiburg in 1962. After his retirement in the early 1970s, West German conservatives became increasingly interested in his work. As Karabelas argues, ‘For the first time since his return to Europe, Hayek received enquiries from the JU, the Union’s youth party and the RCDS, the Christian-conservative counterpart to the Socialist German Student Association (SDS)’.Footnote 37 In the mid-1970s, Hayek also became a regular contributor to conservative newspapers such as the Frankfurter Allgemeine Zeitung and Welt.Footnote 38 For many conservatives, Hayek’s thinking increasingly came to represent a powerful alternative to the social-liberal zeitgeist that emerged after 1968 and that, in their view, even tempted many Christian Democrats to become more ‘socialist’.
As in other parts of Western Europe, West Germany also saw the end of post-war growth rates, rising inflation and fiscal strain in the early and mid-1970s.Footnote 39 Many Christian Democrats regarded inflation in particular as the main threat to the successful model of the social market economy, though, unlike in Britain, West Germany did not experience a complete breakdown of the post-war economic order.Footnote 40 It was in this context that Strauß’s approach became increasingly confrontational, drawing on the same kind of alarmist rhetoric that we would later find in Thatcher’s speeches.Footnote 41 As his contemporary and later German president Richard von Weizsäcker put it, ‘Strauß was on the warpath in all directions’ in the mid-1970s.Footnote 42 The perhaps most notable example of this is his ‘Sonthofen speech’ from November 1974. Delivered to a select group of CSU MPs, this was eventually leaked to the West German weekly magazine Der Spiegel, which published it in early 1975. In the speech, Strauß proposed a new, hard-line strategy for the CDU/CSU: radical and deliberately obstructive opposition to the SPD–FDP government, alongside more polarising rather than cooperative rhetoric. The two Christian Democratic parties should be presented as the sole defenders of freedom (‘We are fighting for freedom, against socialism, for the individual, against the collective, for a united Western Europe, against Soviet hegemony over Europe’) while scolding the social democrats as quasi-totalitarian ‘socialists’.Footnote 43
This proposal was far from well received within the CDU and CSU, not least because many Christian Democratic leaders believed that Germany was still in a favourable position internationally, despite inflation and fiscal pressures.Footnote 44 Nevertheless, the parties’ electoral strategy for the 1976 Bundestag elections partly followed the confrontational approach favoured by Strauß. To start with, they adopted the controversial slogan ‘Freedom instead of socialism’, even though their chancellor candidate, Helmut Kohl, was hardly an enthusiastic free-marketeer.Footnote 45 In an interview with Der Spiegel, Strauß named ‘a well-known, internationally respected economist, Nobel Prize winner, Professor Friedrich August Hayek’, as the ‘inventor’ of the CDU/CSU”s slogan and affirmatively mentioned Hayek’s 1944 classic The Road to Serfdom, in which Hayek demonstrated ‘that fascism, national socialism, Marxism and communism are brothers or descendants of the same parents . . . but that they stem from the same unspiritual breeding ground, namely collectivism’.Footnote 46 Similarly drawing on what could be interpreted as Hayekian themes, the 1976 CSU manifesto contained a section entitled ‘Less state – more freedom’, arguing for considerable limitations on the state’s reach and influence. It also stressed that there were ‘many opportunities to privatise public services’ that would make service provision more efficient.Footnote 47 The manifesto’s preface already sets the tone, celebrating the ‘free, self-responsible citizen’.Footnote 48
As recent historiography on the neoliberalisation of Christian Democracy would suggest, Strauß’s struggle also had transnational and international dimensions.Footnote 49 Indeed, Strauß sought to leverage emerging transnational party networks, most notably the EDU, founded in 1978, which included non–Christian Democratic conservative parties such as the UK Conservative Party, the Danish Konservative Folkeparti and the Swedish Moderaterna. The EDU founders mostly regarded the new partisan alliance as a necessary response to increasing ideological polarisation between left and right in the 1970s.Footnote 50 By facilitating cross-national exchanges and coordination, the EDU should help the European centre-right sharpen its profile and present voters with a clear political alternative. Strauß’s distinctive vision for the EDU was to unite conservative and neoliberal forces from all over Europe against both Social Democrats and those Christian Democrats who still held on to the welfarist post-war doctrine of ‘social capitalism’, notably the Italian, Dutch and Belgian Christian Democratic parties.Footnote 51 Strauß’s chief allies in this coalition-building effort were Thatcher’s Conservative party and the Swedish Moderaterna.Footnote 52
Contrary to the wishes of many in the CDU, who envisaged the EDU as a more pluralistic internal association,Footnote 53 neoliberal forces gained the upper hand at an early stage. This is evident not only in the EDU’s self-description as an alliance of ‘non-collectivist’ parties.Footnote 54 Early EDU working group reports also set out shared demands for ‘tax relief . . . a reduction of protectionism, . . . encouraging occupational mobility . . . and promoting . . . self-employment’.Footnote 55 Similarly, the EDU collectively ‘denounced the fact that socialists and communists were politicising the trade union movement and thus instrumentalising it for their own political ends’. The EDU working group on Eurocommunism, chaired by Thatcher’s Conservative party, suggested that ‘socialists’ and communists were barely distinguishable. Its 1979 report claimed that freedom was threatened by not only Eurocommunism but also ‘all European Social Democratic parties’, which were suspected of being Marxists.Footnote 56 This chimed with Strauß’s own thinking.
In addition, Strauß’s international ideological mission led him to provide political and financial support to various emphatically anti-democratic political figures and movements.Footnote 57 As a 1980 newspaper report put it, ‘Strauß [tried] to organise the defensive battle against the Soviets and their allies worldwide, whether in Greece under the colonels, Chile, Rhodesia or South Africa’.Footnote 58 He also sent significant sums of money to hard-right political parties founded after the transition to democracy in countries such as Spain and Portugal, while rhetorically lending legitimacy to Augusto Pinochet’s military dictatorship in Chile.Footnote 59 In 1977, he even visited Chile, meeting Pinochet and delivering several speeches that praised the liberal economic order that had been established by force.Footnote 60 F.A. Hayek himself echoed Strauß’s defence of the Pinochet regime in an article published in the official magazine of the CSU’s Hanns Seidel-foundation.Footnote 61
When he ran as the Union’s chancellor candidate in 1980, Strauß moved still further towards fundamental ideological confrontation, presenting the choice as being between ‘freedom’ and ‘socialism’.Footnote 62 Like Thatcher in 1979, he campaigned with the explicit aim of securing an absolute majority for the Christian Democrats. He consistently portrayed the Social Democrats as merely the moderate wing of a hard-left, violent ‘Volksfront’ and had Edmund Stoiber – then secretary general of the CSU – announce that the National Socialists had primarily been socialists too.Footnote 63 However, Strauß’s eventual defeat in the 1980 election also demonstrated the electoral limits of a highly polarising, Thatcher-style strategy in West Germany. The wider German public was not ready to support a more radical pro-market approach, nor was there a majority for neoliberal ideas and policies within the CDU and CSU.Footnote 64
And yet, Strauß’s entrepreneurship of ideas facilitated subsequent ideological shifts, since it helped embed neoliberal ideas more firmly within the ideological repertoire of West German Christian Democracy. Indeed, Strauß’s neoliberal register offered the Union a new means of sharpening its profile in relation to its opponents, particularly the Social Democrats. In the early 1980s, under Helmut Kohl’s leadership, the party adopted more themes associated with neoliberalism, such as a greater emphasis on fiscal restraint, individual responsibility and the limitations of the welfare state.Footnote 65 It also branded Social Democracy as ‘collectivist’. These ideas were cautiously framed, and economic and social policy at the federal level did not follow suit in the Kohl era.Footnote 66 In fact, the document that most sharply articulated a supply-side programme at the federal level in the early 1980s – Otto Graf Lambsdorff’s 1982 memorandum on overcoming the ‘growth weakness’, which precipitated the change in government that brought Kohl to power – came from the liberal FDP rather than the Union.Footnote 67 Nonetheless, this was a critical juncture, in which neoliberal ideas and concepts gradually gained traction within German Christian Democracy, with important consequences for later developments.Footnote 68 Indeed, according to Thomas Biebricher, it was the Christian Democrats’ mix of a ‘neoliberal apostrophising of freedom and self-realisation with a rigid moralising discourse on personal responsibility, discipline and debt’ in the 1980s that paved the way for the more emphatic neoliberalisation of German Christian Democracy that culminated in the CDU’s 2003 Leipzig Programme.Footnote 69
Mehr Privat, Weniger Staat: Wolfgang Schüssel in 1980s Austria
We now turn to the second key Christian-Democratic figure who advocated neoliberal ideas at a time when they were hardly mainstream among Christian Democrats: the young Wolfgang Schüssel. His story and influence on his party differ markedly from those of Strauß because he entered professional politics in a very different era. Unlike Strauß, he began promoting neoliberal ideas not in the aftermath of 1968, when many Christian Democrats attempted to redefine themselves in line with the progressive spirit of the late 1960s, but rather in the late 1970s and early 1980s, when neoliberal ideas were already gaining popularity on the centre-right in general and within the ÖVP in particular.Footnote 70
To fully understand Schüssel’s role, it is helpful to consider the broader context in which he began his political career. Like their German counterparts, the Austrian Christian Democrats lost power for the first time since the Second World War at the end of the 1960s. And like the CDU/CSU in Germany, the ÖVP responded by initiating a process of internal programme debate. Many of those who played a leading role in these discussions believed that Christian Democratic parties should renounce their conservative commitments and ‘evolve into people’s parties of the progressive centre’, as this is where a critical mass of voters appeared to be located post-1968.Footnote 71 Influential party strategists argued that the core of the ÖVP’s agenda should be a form of ‘progressive realism’, where progressivism was defined as ‘standing up for the disadvantaged and the weak’.Footnote 72 The 1972 Salzburg Programme, a modernising manifesto, was formulated in this spirit. Inspired by Catholic social teaching, it emphasised the important role of trade unions and social partnership in making capitalism more socially responsible.Footnote 73 Full employment was treated as a prerequisite for the freedom of every citizen. The party’s 1977 economic policy agenda, known as the ‘Taus Plan’ after its chairman Josef Taus, equally focused on securing jobs and achieving full employment while expressing ample ‘optimism about the regulatory capacity of the public sector’.Footnote 74
In the 1970s, the ÖVP generally found itself in a difficult position as it was up against a Social Democratic Party (SPÖ) that held almost complete hegemony (between 1970 and 1983, the SPÖ even formed a single-party government with an absolute majority). Against this backdrop, some younger ÖVP officials tried to reposition the party by calling for an update to the traditional concept of the ‘social market economy’. One of the key programmatic texts of the mid-1970s, co-authored by the ÖVP’s liberal secretary general, Erhard Busek, championed extensive privatisation to liberate citizens from their excessive dependence on the state.Footnote 75 As Kriechbaumer argues, this was already indicative of the growing influence of ‘neoconservatism and neoliberalism’ within the party.Footnote 76 Meanwhile, the ÖVP began to play a central role in the emerging transnational associations of Christian Democratic and conservative parties. Since the ÖVP was excluded from the EPP as membership was restricted to parties from EC countries, leading ÖVP officials such as Andreas Khol and Alois Mock devoted considerable time and energy to the EDU.Footnote 77 ÖVP chairman Josef Taus became the first president of the EDU and was succeeded by Alois Mock as both ÖVP chairman and EDU president. This is significant because, as we saw, the EDU quickly adopted a fairly neoliberal political agenda.
There was arguably a real tension between the new internal demands for deregulation and the EDU’s broader economic policy agenda, on the one hand, and the ÖVP’s stance as set out in the Salzburg Programme and the Taus plan, on the other. However, as the EDU was a powerful means of disseminating ideas, engaging with the vision and goals of those who advocated neoliberal ideas – and, like Thatcher, won elections on neoliberal platforms – appeared to have a significant influence on ÖVP politicians. The ideological trajectory of Alois Mock, the EDU’s second president, is indicative of this. Initially, Mock was firmly committed to Catholic social teaching; as chairman of the Austrian Association of Wage Earners and Salaried Employees (ÖAAB), one of the three Bünde that form the ÖVP’s broader social base, he wholeheartedly endorsed the ‘progressive’ reframing of the party initiated by the Salzburg Programme in the early 1970s.Footnote 78 From the late 1970s onwards, however, his views morphed into a blend of Catholic social teaching and neoliberalism.Footnote 79 The ‘Mock Plan’, the ÖVP’s 1981 economic policy agenda, was already marked by increasing scepticism towards the state’s regulatory power, reading like a search for a third way between ‘permanent increase in state intervention’ and ‘total condemnation of the state’.Footnote 80 The following year, a revised version of the Mock Plan was released that openly advocated for supply-side economic policies and extensive privatisations. These shifts also reflected the structural pressures noted above: the post-war corporatist and Keynesian consensus appeared to have reached its structural limits in the face of the stagflation crisis of the late 1970s, when it became clear that more interventionist economic policies were fuelling inflation rather than helping economic growth.Footnote 81
In short, after a decade in opposition and with new transnational alliances in place, the ÖVP was slowly gravitating towards promoting privatisation and freedom from state intervention in the early 1980s. Focusing on these themes since the 1970s, Wolfgang Schüssel made a considerable contribution to this development; indeed, he would gradually emerge as one of the most influential neoliberal ‘entrepreneurs of ideas’ within his party. In 1975, Schüssel became general secretary of the Austrian Economic Association (ÖWB), the organisation that primarily represented employer interests. Like his predecessor at the helm of the ÖWB, Erhard Busek, Schüssel stood for a new generation of ÖVP politicians who, despite their more traditional Catholic background, supported revising, if not overcoming, the statist and corporatist legacies of the Austrian version of ‘social capitalism’. Instead of expansive state ownership and far-reaching collective bargaining, they favoured a more liberal approach to economic and social policy.Footnote 82
Schüssel was first elected to the Austrian parliament in 1979. However, it was probably in his capacity as secretary general of the ÖWB that Schüssel had his greatest impact on programmes and policies, emphasising issues such as supporting ‘small and medium-sized enterprises’, as well as promoting ‘flexible working hours, privatisation and tax cuts’.Footnote 83 One ÖVP politician summarises Schüssel’s arrival and his new ideological impulses as follows: ‘He was a young, open, liberal politician. . . . Very unconventional things were discussed in the ÖWB at the time: deregulation, de-bureaucratisation, topics familiar from the Reagan era in America.’Footnote 84 In short, Schüssel was convinced that the state’s involvement in society should be drastically reduced, and he worked to build a case for this within the party.Footnote 85 He routinely appealed to Reagan and Thatcher as examples of how to run a country, citing their policies of privatisation – a favourite example of his was the 1984 privatisation of British Telecom – deregulation and tax cuts.Footnote 86 As with Strauß, his avowed enemies were ‘socialism’ and ‘socialists’.Footnote 87
Schüssel eventually co-authored two key programmatic texts with Johannes Hawlik: More Private – Less State: Suggestions for Limiting Public Tasks (1983) and Let Up on the State: Proposals for Limiting and Privatising Public Tasks (1985). Both books argue that the Austrian state had too much power over the economy and citizens’ lives in general, and that this power must be limited through privatisation. ‘In Austria’, Hawlik and Schüssel claim, ‘too much government, too much bureaucracy and too much regulation are blocking the market and suppressing private initiative’.Footnote 88 The much longer and more thorough Let Up on the State marshals a great deal of evidence in support of the thesis that there is too much state ownership and intervention in Austria, stifling competition and impeding freedom. Hawlik and Schüssel argue that the Austrian state of the early 1980s held a quasi-monopolistic position in many areas, leading to economic stagnation rather than growth and discouraging entrepreneurial activity. Affirmatively citing leading neoliberal theorists such as Milton Friedman, the two authors then list the advantages of privatisation for employers (‘Managers are freed up for their actual operational tasks. It is certainly no surprise that privatised companies are extremely profitable after a period of transition’) and employees (‘in Thatcher’s Britain, there are special offers and preferential treatment for employees who want to buy shares in their own company’). Hence, ‘no public monopoly should be sacrosanct’.Footnote 89
Within the ÖVP, there seems to be widespread agreement that Schüssel’s credo of ‘more private, less state’, and the 1983 book that specified what this meant, provided the ideological foundation for the party’s eventual support for privatisations and larger supply-side reforms amid the era’s fiscal crisis.Footnote 90 However, as they amounted to a near-complete rejection of the Austrian post-war corporatist consensus, Schüssel’s ideas were not immediately adopted without being watered down. In the run-up to the 1986 general election, for example, ‘[s]ome sections of the ÖAAB feared that the consistent focus on . . . neoliberal positions would have negative repercussions for their own clientele, while the [ÖWB] did not want to see the social partnership climate endangered and was already working towards a new edition of the grand coalition’.Footnote 91 Thus, as in Germany, the shift to neoliberalism was perhaps more evident in the ÖVP’s rhetoric than in policy. While a programmatic reorientation was clearly underway, it initially resulted in a hybridised agenda combining neoliberal language and ideas with a number of existing policies – an integrative approach that ÖVP leaders were well aware of and endorsing.Footnote 92
An interesting document in this respect is the ÖVP’s 1986 election manifesto (entitled ‘Austria first’), which begins with the declaration that it is ‘high time for more freedom’ and continues with a statement that reads like a variant of the CDU’s 1976 campaign slogan, ‘Freedom instead of socialism’, that is, ‘Sixteen years of socialism in Austria have caused many people to feel that they are no longer free citizens, but serfs’.Footnote 93 This may be seen in retrospect as a watershed moment for the ÖVP: it was the first time that more aggressive neoliberal language was chosen for an official election manifesto.Footnote 94 That said, the manifesto did not renounce the ÖVP’s commitment to maintaining full employment, nor did it de-emphasise social policy or welfare. Thus, as one historian of the ÖVP notes, ‘Although the ÖVP adopted . . . neoliberal positions, it did not abandon fundamental, traditional elements of Catholic social teaching’.Footnote 95 Finding a middle ground between the party’s different ideological traditions remained a priority.
As the 1980s drew to a close and the collapse of communism in Central and Eastern Europe further increased the popularity of pro-market thinking, the ÖVP moved further in the direction that Schüssel and other advocates of neoliberalism within the party had envisaged. The ambitious programmatic text of 1989 that introduced the term ‘eco-social market economy’ combined a commitment to free markets with concern for environmental and social issues. And, crucially, it incorporated Schüssel’s slogan, ‘More private – less state’, using it as a heading for proposals such as the dissolution of state monopolies, the privatisation of the electricity sector and the sale of publicly owned housing.Footnote 96 In fact, Schüssel – who had become minister for economic affairs in April 1989 – chaired the ‘discussion forum’ on privatisation at the ÖVP’s party convention in November of that year, where the core ideas for the new economic agenda were developed.Footnote 97 This made his impact on the party’s broader agenda more visible than ever before: calls for a fundamental ‘reconsideration of the role of the state in the economy . . . and the economic freedoms of citizens’ were now mainstreamed within the party.Footnote 98
Overall, Schüssel’s ‘entrepreneurship of ideas’ played a key role in steering his party towards a more neoliberal approach since the late 1970s. Schüssel’s power steadily increased in the 1990s, and when he became chancellor in 2000, he used the coalition government with Jörg Haider’s ‘populist’ Freedom Party to implement long-championed policies, establishing a reformist, market-friendly profile as the core trademark of the ÖVP. Indeed, the two governments led by Schüssel broke decisively with the post-war legacy of corporatist policy-making and Keynesian demand-side economics, promoting private ownership, fiscal consolidation, structural reforms and a leaner state.Footnote 99 Thus, Schüssel’s programmatic influence far exceeded Strauß’s, though both were important agents of neoliberal transformation.
Conclusion
Both historians and sociologists have argued that neoliberalism became mainstreamed because ‘entrepreneurs of ideas’ successfully campaigned for market-centred solutions to social and political problems.Footnote 100 In this article, I have reconstructed how processes of neoliberal programmatic transformation unfolded within two of Western Europe’s most influential Christian Democratic parties. While they have always provided a political home for free-market liberals, the West German and Austrian Christian Democrats were initially reluctant to endorse neoliberal ideas such as comprehensive privatisation and market deregulation. However, as they attempted to reinvent themselves in opposition during the 1970s, they began to find inspiration in neoliberal thinking, which at the time was gaining ground among centre-right parties across Europe. Two influential entrepreneurs of ideas, Franz Josef Strauß and Wolfgang Schüssel, systematically promoted neoliberalism within their parties long before it became widely accepted, thus facilitating later neoliberal shifts. Their roles and impact on their respective parties differed considerably, but examining their activities and the context in which they advocated for ‘more private, less state’ helps to better understand the gradual shift away from Catholic social doctrine and corporatism that the (West) German Union and the Austrian ÖVP underwent, illuminating a long-term process of ideological change that continues to shape European Christian Democracy.
Acknowledgements
I would like to express my gratitude to the journal’s editors and the two anonymous reviewers for their insightful and helpful comments. An earlier version of this piece was presented at LMU Munich, and I would like to thank all participants for their suggestions. Benjamin Thomas kindly provided written feedback on an initial draft of the piece.
Competing interests
I declare that I have no significant competing financial, professional or personal interests that might have influenced the presentation of the work described in this manuscript.
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