The Lippmann Colloquium and the Chicago attack on power

The Paris office of the International Institute of Intellectual Cooperation (IIIC) was inaugurated in the Montpensier wing of the Palais Royal in Paris in 1926. The IIIC was an advisory organization for the League of Nations which fostered international exchange between scientists, artists and intellectuals. The Palais Royal built by Cardinal Richelieu and noted for its splendour, hosted an event to discuss the failings of liberalism in 1938. This has subsequently come to be known as the Lippmann Colloquium.

The five-day meeting chaired by the French philosopher Louis Rougier was to discuss Walter Lippmann’s new book The Good Society. Among the 26 attendees were Friedrich Hayek and Ludwig Von Mises from Austria along with Wilhelm Röpke and Alexander Rüstow from Germany – all of whom were now in exile.

The Lippmann Colloquium provides an insight into a potential alternative form of liberalism: a view that was sceptical of the market, constant state intervention and of a utilitarian calculus. This chapter explores the development of these ideas in the US, and in Germany where they developed further including a focus on the role of the community and the environment. Central to the German ordoliberal movement was to create rules that eliminated concentrations of power, thereby improving upon initial conditions prior to voluntary exchange.

The Good Society launched an attack on the collectivist shift in social liberalism. During the Great Depression, President Roosevelt had argued his interventions were necessary to save capitalism and democracy. This led to the National Industrial Recovery Act which created the Public Works Administration and also introduced price and wage fixing. In France, price controls had been introduced as part of the Matignon Agreements in an attempt to end strikes by increasing real wages in addition to a programme of nationalization. The British government towards the end of the 1930s began to pursue a policy of cartelization in an attempt to bring scale to industry in the belief this would drive up productivity.

Alongside his attack on social liberalism, Lippmann asked the question why classical liberalism had failed so spectacularly. He thought that classical liberalism was just not sustainable and would eventually lead society to react with a shift towards collectivism.