~A Humane Economy~ is an astute treatise and insightful look at the social and political framework of the market economy. Wilhelm Röpke is a brilliant German-born economic, social and political thinker, and perhaps my favorite amongst the so called "Austrian school." He stands apart from his colleagues in that he thinks on a more humane level rejecting crude utilitarian calculations in favor of sound and prudent empirical reasoning. This brilliant German economist of the "Austrian school" stood up to the centralising and dehumanising policies of the Nazis. Röpke recognised that collectivist ideologies lay waste to civil society-destroying the intermediary institutions between individual and state. When the State acts to supplant the natural civil associations with state institutions to empower and enhance the state, it destroys the moral fabric of communities, saps the nation's economic vitality and usually leads to twin perils of centralisation and atomisation. Röpke recognized that allocating resources by the free play of supply and demand is the most humane system and as such he was champion of the market economy. He was influential over German economist Ludwig Erhard, who architected the Federal Republic of Germany's postwar economic plan, which emphasized free enterprise while effectively curtailing state controls (i.e. price fixing, rationing, and state enterprises.)
Röpke would attest that mammon is not the measure of all things. In Röpke's eyes, the intangibles-that is to say faith, family and tradition-are the things that animate life and give it meaning. Röpke recognised the limitations of the market economy. Röpke possessed a remarkable sense of prudence and conservative sobriety in his thinking as it relates to the political economy. He rejected the idea of making economists into social engineers whether in the interests of "efficiency" or "social justice." And amongst his "Austrian" colleagues like F.A. Hayek and Ludwig von Mises, he brought economics to a more humane level, rejecting crude utilitarian logic in favor of more sound empirical reasoning to defend the market economy. Furthermore, he refrains from the market idolatry that is so common to libertarian apologists for the free-market these days. Libertarians frequently espouse an ideology that can be summed up as "everything in the market, nothing outside the market." (This, of course, turns Mussolini's statist mantra on its nose.) Röpke recognised something that libertarians miss with their penchant for crude utilitarian calculations and their amoral neutrality that often makes being an avowed "libertarian" indistinguishable from being a "libertine." Many libertarians content themselves writing diatribes defending the "robber barrons" of the yesteryears while praising the colossal (i.e. Wal-Mart and oil cartels.) In their efforts to defend any and everything related to "the private sector," these reductionists forget that the apparently sporadic interventions of the state often come at the behest of big business. Many capitalists" content themselves with cozy public-private partnerships that translate to steady, predictable profits and a regulated environment that drowns small business competition. Big business typically possesses a considerable advantage over their smaller competitors, because they can absorb the regulatory costs much easier and they can influence the regulators and regulations. Röpke, however, scorns the "cult of the colossal" not in demagogic rhetoric, but in the rhetoric of an economist. He likewise sees "big business" as a concomitant pillar of "big government" and its regulatory state. Röpke possessed some peculiarities in his lexicon that set in him apart from his colleagues, but his motive for such peculiarities was principled. Röpke rejected characterising socialism as a "planned economy" and he recognised that the market economy facilitated economic activity "planned" by entrepreneurs as opposed to state planners. He preferred the delineation of "market economy" to "capitalism" since what often passed for capitalism in the early twentieth century was a large interventionist welfare state in a cozy lockstep relationship with big business monopolists. This was state corporatism not capitalism. Moreover, "capitalism" was, of course, coined by its chief critic Karl Marx and while the term captures the importance of capital to the market economy, it remains rather sterile and ideological. What is more, "capitalism" typically delineates a materialistic consumerist ideology or images of big business rather than a social framework based on the market economy.
Unlike libertarians and some classical economists who too often dwell in the realm of abstract theory, Röpke possessed a gritty realism: first, he recognised that there is interplay between between political and economic processes; and he recognised the value of state intervention in prosecuting acts of force and fraud, enforcing contracts and upholding private property rights. As an economist, he could offer prescriptive wisdom on the proper and limited role of the state in the economy while elaborating upon the causes and consequences imprudent state interventions (i.e. price-fixing, inflation, production quotas, monopolies, cartels, overtaxation and overregulation.) Röpke essentially favored economic laissez-faire overseen by a night-watchmen state that exercised profound restraint in its interventionism least it hinder or even cripple a nation's potential for prosperity. Underlying Röpke's humane economy is the idea that a market economy needs a prudent civil framework, widespread distribution of property, a strong entrepreneurial middle class and emphasis on parochial traditionalism. Anyway, Röpke itinerates the need for sound monetary and fiscal policy on the part of the state. He holds that the gold standard is the only real safeguard against the vicious boom-and-bust cycles of modern capitalist society. Röpke recognised that a market economy flourishes when tradition and community guard against the centralising depredations of both the state and big business. Röpke further emphasised the principle of subsidiarity, which in Europe today seems to survive only in that beautiful alpine island of parochialism, namely Switzerland. Though, Switzerland may be losing its vitality as it is straddled by the colossal and cosmopolitan EU super-state as if it is ready to be cansumed.
In the Humane Economy, Röpke surmised that: "The market economy, and with social and political freedom, can thrive only as part and under the protection of a bourgeois system. This implies the existence of a society in which certain fundamentals are respected and color the whole network of social relationships: individual effort and responsibility, absolute norms and values, independence based on ownership, prudence and daring, calculating and saving, responsibility for planning one's own life, proper coherence with the community, family feeling, a sense of tradition and the succession of generations combined with an open-minded view of the present and the future, proper tension between individual and community, firm moral discipline, respect for the value of money, the courage to grapple on one's own with life and its uncertainties, a sense of the natural order of things, and a firm scale of values." To answer those who might sneer at this, Röpke nimbly replies, "Whoever turns his nose up at these things... suspects them of being 'reactionary'... may in all seriousness be asked what ideals he intends to defend against Communism without having to borrow from it."
John Zmirak does a wonderful job profiling the life and work of a very brilliant man. Bravo! Röpke's ideas are remarkably original, but even so are analogous to that of conservative sociologist Robert Nisbet, Anglo-Catholic distributists like Chesterton and Belloc, and the Southern agrarians. You might check out their works as well if Wilhelm Röpke interests you.
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