An extensive commemorative publication has been published to mark the 75th birthday of the Federal Constitutional Court, which will be celebrated with a ceremony next Monday. On more than 1,000 pages, constitutional law teachers analyze the influence of “Karlsruhe” on constitutional life. There are chapters on migration, environmental protection, the armed forces and government finances. You will look in vain for a chapter on the market economy.
Unfortunately, this gap is symptomatic of how we deal with the economic foundations of constitutional life: the market economy has long had a shadowy existence in constitutional law theory and also in the jurisprudence of the Federal Constitutional Court. This lack of attention contradicts the fact that almost all facets of constitutional life have an economic component. The eroding trust in state institutions, which is now also being felt by the highest constitutional guardians, has a lot to do with economic uncertainty.
The economic vacuum in the anniversary commemorative publication was of course not intentional. The author canceled on the editors at short notice. Your contribution should have been: “The constitution of the social-ecological market economy.” But this topic already raises questions. Because the “social-ecological” market economy is not thought of as liberal in its approach, but rather as regulatory in two respects.
Since 1954, the Federal Constitutional Court has maintained that the Basic Law is “economically neutral”. This interpretation is not mandatory. Market economy and basic economic rights belong together. Private property, professional freedom and entrepreneurship, personal development, freedom of contract and collective bargaining autonomy not only secure income and prosperity, they also form the basis for redistribution in the spirit of the social market economy. Nevertheless, the Karlsruhe court does not treat economic freedoms with the necessary attention.
Law professors have long pointed out that the Constitutional Court controls state interference in political rights such as freedom of expression and freedom of assembly more strictly than when the state intervenes in professional freedom through economic regulation. Health and occupational safety are traditionally given priority in the German welfare state. In addition, there is climate protection, which the constitutional guardians interpreted in their controversial decision of 2021 as a constitutional obligation to achieve climate neutrality. The more climate change threatens to burden future generations, the more other interests will have to give way. But what happens when the economy runs out of energy for the transformation that the climate resolution is supposed to drive forward? One can only hope that the First Senate will take a more thorough look at the burdens on the economy when it decides on constitutional complaints from climate activists again soon.
The upcoming ruling on inheritance tax has immediate economic significance. If the court remained true to its own jurisprudence, the exemption rules for business assets would have to remain in place. Anyone who raises fairness arguments against this should be reminded that the German tax authorities tax companies far above average compared to international standards. Added to this is the massive burden of bureaucracy. Freedom of occupation, on the other hand, aims at “activities that are as unregulated as possible,” as the Constitutional Court emphasizes. However, this jurisprudence would only gain traction if the court took the problem of accumulating corporate obligations into account. Individual investigation and reporting obligations may be reasonable, but as a whole they can become a disproportionate burden. There is an urgent need for development in Karlsruhe jurisprudence.
As desirable as it would be for the constitutional guardians to monitor economic freedoms more closely, one should remain realistic. How competitive the German economy is – or not – depends largely on European regulation. The Constitutional Court rightly claims ultimate control authority in order to protect Germany from attacks by the EU. But it cannot stop the deplorable political development of weakening the European regulatory framework in favor of political market control. This means that even the powerful Federal Constitutional Court is overwhelmed.
