by Allan C. Carlson
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| Wilhelm Röpke |
Wilhelm Röpke was an unusual free-market economist working in a difficult time. I believe that we should see him, first of all, as a product of 1914, the year which launched what he called “the devastation on so gigantic a scale to which mankind, then having gone mad, dedicated itself.” Mustered to war as a young man, Röpke served in the trenches on the Western Front. He concluded that a civilization “capable of such monstrous depravity must be thoroughly rotten.” Röpke pledged that if he “were to escape from the hell” of the Great War, he would devote his life to “preventing the recurrence of this abomination.” He also resolved that war “was simply the rampant essence of the state,” collectivism run amuck, and he launched his life-long “struggle against economic nationalism . . . , monopolies, heavy industry and large scale farming interests,” all of which he believed had given encouragement to the terrible conflict.
A second starting point for his economic views was Christian. A descendent of German Lutheran pastors, Röpke held to that concept which “makes man the image of God whom it is sinful to use as a means” and who embodies inestimable value as an individual. Noting that the idea of liberty had appeared uniquely in Christian Europe, he concluded “that only a free economy is in accordance with man’s [spiritual] freedom and with the political and social structures . . . that safeguard it.”
The key pillar of that social structure, Röpke maintained, was the natural family. Along with religion and art, he held that the family did not exist for the state, but was “pre-statal, or even supra-statal.” In its essence, family life was “natural and free,” while the “well ordered house” served as the very foundation of civilization. Derived from “monogam[ous] marriage,” he said that the family was “the original and imperishable basis of every higher community.” The “centre of gravity” for planning and living one’s life should be in that “most natural of all communities—the family unit.” The autonomous family also stood first “in opposition to the arbitrary tendencies of the state.” Indeed, the natural family became the touchstone of his quest for a truly Humane Economy.
And yet, despite this strong affirmation of the natural family as critical to free society, Röpke’s analysis also led him to several conundrums or dilemmas surrounding family life. For example, he avoided discussing ways in which certain incentives of a free economy might tend to weaken family bonds. Surprisingly, Röpke was also hostile both to the American “Baby Boom” and to the new suburbs in which the young Boomers lived. He criticized the creation of large families, although these were in practice a common and fairly natural product of happy home life. For related reasons, he frequently fretted about population growth. Meanwhile, he encouraged public policies that actually had pro-natalist, or pro-birth effects. What were the sources of these conflicting views?
The Humane Economy, Family Style
We should start by examining in more detail the family nature of—or the place of the family in—his desired Humane Economy. Emerging from the Great War, Röpke found himself engaged in an intellectual battle on two fronts. As he later reported: “I sided with the socialists in their rejection of capitalism, and with the adherents of capitalism in their rejection of socialism.” By capitalism, as John Zmirak noted, Röpke did not mean the free market. Rather, the term “capitalism” embodied for him “the distorted and soiled form which market economy assumed” in the period between about 1840 and 1940. The liberal quest for economic liberty had gotten off track in this era, he asserted, producing effects that would pave the way to socialist collectivism; specifically:
. . . the increasing mechanization and prolitarization, the agglomeration and centralization, the growing dominance of the bureaucratic machinery over men, monopolization, the destruction of independent livelihoods, . . . and the dissolution of natural ties (the family, the neighborhood, professional solidarity, and others).
The task facing the modern economist, Röpke said, was to eliminate “the sterile alternative” between a return to 19th Century laissez-faire and 20th Century collectivism. The needed “free economic constitution,” as he phrased it, would embrace certain basics: “the market, competition, private initiative, a free price structure and free choice of consumption.” Röpke praised the true market economy as the only system “which releases the full activity of man so natural to him while, at the same time, [curbing] his hidden tigerish tendencies which, unfortunately are no less natural to him.” A system of free economic competition alone could deliver “discipline, hard work, decency, harmony, balance and a just relation between performance and payment.” It was also the only system compatible with protection of the free personality, which offered men and women the liberty to tackle challenges in the domains of culture, the intellect, and religion.
All the same, a market economy was not easy to achieve. As Röpke explained, “it is an artistic construction and an edifice of civilisation which has this in common with political democracy: it demands and presupposes . . . the most strenuous efforts.” Among other needs, the free market required a “high degree of business ethics together with a state ready to protect competition.” Looking to the failures of the 19th Century, Röpke was relentless in exposing the “sins” of monopoly, including:
Privileges, exploitation, . . . the blocking of capital, the concentration of power, industrial feudalism, the restriction of supply and production, the creation of chronic unemployment, the rise in living costs and the widening of social differences, lack of economic discipline, [and] the transformation of industry into an exclusive club, which refuses to accept any new members.
He favored legal devices such as the Sherman Anti-Trust Act found in America to protect competition from these disorders.
Röpke was also an enthusiastic champion of free international commerce. A healthy economy, he insisted, “does not place collectivist shackles on foreign trade.” Efforts to build high tariff walls, he believed, actually “impoverished” small-scale producers. He consistently called for “a liberal and multilateral form of world trade with tolerable tariffs, most-favored-nation clauses, the policy of the open door, the gold standard, and the elimination of closed compulsory [trading] blocks.”
