Wilhelm Röpke’s Political Economy
by Samuel Gregg
(Edward Elgar Publishing Inc., 216 pages, $125)
Many people, particularly on this side of the Atlantic, have
never heard of Wilhelm Röpke. That is a shame since he is one
of the most important economists of the 20th century, a true
Renaissance man, a polymath, and a father of the German
“economic miracle.” He displayed unique moral
courage, was often politically incorrect, and was perhaps the
sharpest critic of Keynesianism. Ludwig Erhard claimed he
“illegally obtained Röpke’s books… which I absorbed as the desert
drinks life-giving water.”
Röpke, a full professor at the age of 24, was also the
first German professor to lose his job in 1933 when the Nazis came
to power. As an exile who would not cave in to Hitler and the SS,
he never returned to his native land. Less well known to the
English-speaking world than Hayek, Mises, or Friedman, there has
been no book length treatment of his economic thinking before this,
although numerous biographies exist.
We are extremely grateful then to the brilliant researcher
and scholar, Samuel Gregg of the Acton Institute, for a concise,
penetrating, and thorough analysis of Röpke’s contribution to
intellectual life. It breaks new ground, is highly readable, and
adds considerably to the economic literature. It should become
mandatory reading for every student of political
economy.
As the intellectual author of Germany’s post-World War II
economic resurrection, Röpke is an under-appreciated thinker who
informed policymaking. Gregg rightly calls him a Smithian, as he
was against the unlimited power of the state. Put positively, he
was much more. Röpke was an “economic humanist” of the first order.
He historically showed how the Great Depression came to limit
economics as a science and how collectivism is incompatible with
authentic human freedom.
The purpose of Gregg’s masterful book is to provide a
descriptive and critical introduction to Röpke’s understanding of
political economy. This is unquestioningly an exercise in
historical recovery. The focus is on four subjects that concerned
Röpke up until his early death in 1966. They are: the challenge of
business cycles, the unending growth of the welfare state, full
employment and inflation, and international economic
relations.
Röpke’s political economy was attuned to
“interdependence,” where empirical analysis is not
separated from normative judgment. With a profound focus on “human
flourishing,” Ropke was enlightened beyond today’s narrowly trained
economists and econometricians because of his scope and vast
intellectual and multidisciplinary horizons. By returning
modern economics to the Aristotelian realm of ethics from which it
originally emerged, Röpke achieved a new synthesis. For him the
market economy allowed people to exercise their “natural liberty”
— rooted in the Christian realism of St. Augustine.
As part of the Austrian School, as opposed to the
Historical School, Röpke can be best placed in the context of other
major modern economic thinkers such as Eucken, Rustow, Böhm, and
Miller-Armack. Breaking with the
dirigiste past together they sought to articulate an
economy rightly framed on order. For them economics was a
normative social science. They discerned values beyond utility.
This is a style of political economy that needs to find a revival
as it is sorely lacking in today’s boring mathematized journals and
small gauge discussions about trends in data.
For Röpke, as presented by Gregg, economics has
unfortunately occupied a “restricted vision.” This view parallels
the better-known thoughts of Hayek, who likewise warned about the
scientism of economics and was an equally harsh critic of Lord
Keynes and his overly ardent followers. Both witnessed what they
called “the failure of intellectuals” and their near total
surrender to the evils of socialism portrayed as a “road to
serfdom” inhabited, if not dictated, by government
bureaucrats.
With liberty constantly under attack, this timely
treatment of Röpke’s “Christian Humanism” is a perfect antidote or
remedy to the crisis that abounds and surrounds us on every front.
It appears even in our most recent economic collapse and massive
government interventions cum bailouts we are plagued with
an incessant belief in what Röpke termed, “the folly of human
perfectibility.” Our newly anointed political ones have an
unflinching belief in the state to solve all our problems and cure
all our ills. If only they knew. If only they had read
Röpke.
Gregg is absolutely correct to make the connections to the
Scottish Enlightenment thinking in Röpke’s opus. It is an
insight worth exploring further. Röpke sought to avert welfare
statism but held a conservative attachment to tradition, especially
to the mediating structures of civilized life. This is critically
noted by Gregg and could be amplified since the space between the
Individual and the all-powerful State is where life is actually
lived.
This conflict with what could be called classical
liberalism and the priority of freedom in the economic realm
continues today. Ordoliberalism owes a great debt to the Scottish
Enlightenment. But the tension between social conservatism on one
side, and economic liberalism, even in Republican politics, on the
other, continues into our present era. Until it is resolved —
perhaps by reemploying the likes of Röpke or his seminal ideas, we
will be one handed and fail to see the full dimensions of ordered
liberty. Such division also undercuts potential conservative
political power — dividing it into two warring camps, of social
vs. economic conservatism. A cohesive model of the social market
economy offers a viable alternative.
This brilliant, analytical intellectual history will
hopefully bring back interest in both Röpke and his “Humane
Economy.” We would all be the beneficiaries.
