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The economic prerequisites of our constitution


The economic prerequisites of our constitution

In his contribution, Konstantin Chatziathanasiou presents some considerations on the relationship between the constitution and economic inequality. Not only does he address the importance of socio-economic inequality for the constitution, he also goes into the constitutional handling of economic inequality. He is particularly interested in limiting poverty, but even more in the question of limiting wealth.

Dealing with economic inequality is one of the great challenges of our time. For the readers of this blog, this sentence sounds anything but new. He probably only elicits a tired smile from them. From the point of view of a legal scholar, however, the matter is less clear. This is because jurisprudence tends to be reticent when it comes to the topic of economic inequality. There are a number of notable exceptions, but they also diagnose a void. 1

The explanation for this reluctance is obvious. Questions of distribution are political questions. For a lawyer, they therefore belong in parliament, not in front of the judges' bench. There are weighty normative reasons for this division of tasks. Nevertheless, jurisprudence would be doing itself – and society – a disservice if, as a consequence, it closed its eyes to the problem. On the one hand, economic inequality can have far-reaching consequences for the law. On the other hand, jurisprudence also has something to say about these consequences. In terms of legal dogma, it can show political scope for action, in legal theory it can provide information about possible risks and at least create awareness of the problem.

In this contribution I would like to present some considerations on the relationship between the constitution and economic inequality, which I have presented elsewhere in more detail and with more evidence. 2  The overarching research question that concerned me is how dealing with distribution issues contributes to the stability of an institution that can only partially rely on sanctions for its own survival. The following contribution begins with some theoretical considerations on the effects of distribution on the constitution. Then I touch on the discourse on socio-economic inequality in Germany in order to devote myself in more detail to the constitutional, practical handling of economic inequality. I'm interested in the limitation of poverty, but I'm even more interested in the question of how to limit wealth.

Constitutional Theoretical Significance of Socio-Economic Inequality

It is worth taking a theoretical approach to the question of the significance of economic inequality for the constitution. What effects are conceivable? Does a constitution have economic prerequisites?

One hypothesis is particularly relevant here. Economic equality could be a de facto prerequisite for the legitimacy of a constitution, i.e. a condition for its recognition. Legal scholars speak of the “autonomy” of the constitution, meaning that a constitution has no external enforcement authority. In political economy there is talk that a constitution must be “self-executing”. 3  The addressees of a constitution must assume that they are better off under the constitution than outside. Which circumstances now lead to the fact that citizens* feel better off under a constitution and have no incentive to ignore the constitution or to join a constitution-breaker? The question is not easy to answer. But among the possible factors that increase the likelihood of an institution being accepted is the distributive justice (or fairness) that the institution is associated with producing. The argument can be historical, but we can also draw on experimental evidence at the individual level. 4

Another consideration has a long – and checkered – tradition in political theory. Economic equality can be understood as a functional condition of a democracy . 5  On the one hand, distribution struggles can be understood as a stress test of a democracy, on the other hand, a certain economic position of the individual can be seen as a prerequisite for being able to act politically free from dependencies. The last consideration was used earlier to justify exclusion. A modern understanding of democracy, on the other hand, infers from it the need to put people in the right position to act politically on their own responsibility. In addition to empowering the economically weak, another challenge lies in countering the disproportionate influence of the economically strong. Voter turnout is already lower among the weaker. In addition, those who are better off can better represent their interests, for example through lobbying. 6  A self-reinforcing vicious circle lurks here.

Socio-economic inequality in Germany

So far I have left out what exactly is meant by economic inequality. The answer is anything but trivial. The first question that arises is what should actually be measured: income, assets, social mobility, opportunities? There are challenges in operationalizing these items. The question then arises as to how the comparison should be implemented: Do you rely on the Gini coefficient or do you choose a more sensitive measure? The readers of this blog should have more than just an inkling of the difficulties lurking here. From this it can already be guessed that legal scholars who want to tie in with these measures of inequality – be it theoretical or legal dogmatic – will also face challenges. 7  On the other hand, wealth inequality is relatively high, which recent research underscores once again. 8th

Constitutional reactions under the Basic Law

How are constitutional considerations and data-based descriptions processed in current constitutional law? The textual evidence of the Basic Law is very poor, especially in comparison to the Weimar Constitution. The welfare state principle is anchored in Art. 20 Para. 1 GG (“democratic and social federal state”) and Art. 28 Para. 1 Sentence 1 GG (“republican, democratic and social constitutional state”). In the words of the Federal Constitutional Court, it obliges the legislature "to ensure a balance between social differences and thus a fair social order". 9  The specification, however, lies in the hands of the democratically legitimized legislature. The Federal Constitutional Court emphasizes its scope, but formulates minimum requirements.

limitation of poverty

The first minimum requirement that I would like to address here is the limitation of poverty. The Federal Constitutional Court derives from the guarantee of human dignity and the welfare state principle a "fundamental right to guarantee a decent subsistence level". 10  This is not just about “naked life”. This fundamental right also includes "those material requirements" that are "essential for a minimum level of participation in social, cultural and political life". 11  This normative idea reflects the theoretical consideration that political participation depends on a certain economic minimum. However, the procedure for determining this minimum is essentially left to politicians. The court restricts itself to a rationality check, thus demanding a comprehensible procedure from the legislature. Occasionally, however, there are also impulses where the situation appears to be politically muddled, for example in the area of ​​"sanctions" for recipients of unemployment benefit II. 12

limitation of wealth

The limitation of poverty is therefore recognized as a constitutional concern. But what about limiting wealth? We mentioned above that the political representation of interests can also be distorted by wealth. Does constitutional law respond to this theoretical and empirical challenge? Absolutely. An interesting example of a reaction to the dangers of unequal participation can be found in the Federal Constitutional Court's ruling on party financing. 13  I would like to highlight a dissenting opinion that the (then) judges Susanne Baer, ​​Reinhard Gaier and Johannes Masing wrote on the inheritance tax decision of the Federal Constitutional Court in 2014. 14

In separate opinions, constitutional judges express their deviation from the Senate majority. This deviation can only relate to the reasons for a decision. The Senate decision on inheritance tax was about inheritance tax privileges for business assets, which allowed tax advisory practice a number of design options for minimizing inheritance tax. The privilege was justified by the fact that companies should be protected from liquidity problems and jobs should be secured. However, the court declared the blanket privileges for companies of all sizes and without a needs test to be disproportionate and incompatible with the principle of equality (Article 3(1) of the Basic Law). 15

The dissenters supported the verdict, but wanted to add a reference to the welfare state principle to the reasons for the decision. 16  The inheritance tax is also an instrument of the welfare state to prevent the accumulation of wealth in the hands of a few because of their origin. According to the DIW, wealth inequality has increased. 17  The inheritance tax works against this background 

"counteracts the danger that, due to an increasing unequal distribution of resources, the opportunities for social and political participation are drifting apart and ultimately influence and power are becoming increasingly independent of individual performance and are tied to one's origin. With this purpose, the inheritance tax is an instrument with which the state counteracts unequal opportunities in life.” 18

In the argumentation of the dissenting vote, the above-mentioned constitutional considerations can be found again. On the one hand, this applies to the warning against a concentration of economic and political power, on the other hand, the idea of ​​“unequal opportunities in life” also ties in with the factual considerations of legitimacy and fairness that have been cited.

However, the jurisprudential classification of the dissenting opinion becomes challenging. We have already seen that the textual starting points in the Basic Law for the social are rather manageable and must be considered vague. A constitutional necessity of equalization may not be accepted on this basis, but at the same time the concern of limiting wealth is constitutionally not excluded. In his own dissenting opinion, Ernst-Wolfgang Böckenförde had already rejected the "sanctified status" of property and its accumulation, since otherwise there was a danger "that inequality could increase unbridled and the free legal order itself would be annulled." 19  An extreme concentration of wealth thus challenges our understanding of the primarily liberal restraint of the Basic Law. 

But are such considerations constitutional law or constitutional theory? In a nutshell, the answer is: it depends on who is speaking. As legal scholars, we would do well to point out where the law is underdetermined, what scope there is and how this scope should be filled in a meaningful way from a theoretical perspective. In short: I would first assign the considerations made here to constitutional theory. However, constitutional judges have a special role. They are called upon to interpret the constitution in an updated manner in view of changing challenges - and with recourse to previous scientific achievements. 20  It would therefore not be appropriate to apply the same standards here. Special votes in particular can play a pioneering role in updating constitutional content, as Andreas Voßkuhle points out. 21

In all of this, however, there is another challenge that will probably sound familiar to the readers of this blog: The calculations on economic inequality referred to in the dissenting vote also need to be critically assessed. This applies all the more against the background that these calculations are part of the justification strategy with which the normatively under-determined welfare state principle is to be upgraded or made more concrete.

According to the DIW, wealth inequality in Germany is above the OECD average – but the informative value of this statistic is known to be limited: On the one hand, common criticism points to the fact that the home ownership rate in Germany is very low in an international comparison. On the other hand, no pension entitlements are taken into account in these statistics. 22 Against this background and in view of the income inequality “moderated” by the welfare state, there should not yet be any risk in Germany that could be considered constitutionally relevant in a fundamental sense. However, this does not mean that life chances are not being restricted in certain areas: Just think of the possible worsening of wealth inequality as a result of pending inheritances or the challenges that even middle-income earners face on the housing markets.


Socio-economic inequality poses several challenges for constitutional jurisprudence. Certain theoretical assumptions must be considered at least plausible: Socio-economic equality is an important legitimacy resource of a constitution. In addition, fundamental challenges for democratic decision-making go hand in hand with socio-economic inequality. So there are good reasons to follow the economic inequality discourse from a jurisprudential point of view as well. Conversely, it should also be worthwhile to (critically) observe from an economic point of view how jurisprudence and constitutional jurisprudence process economic findings normatively.


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