Apostle of a Humane Economy – Remembering Wilhelm Röpke

As a teenaged soldier in World War I, Wilhelm Röpke was a horrified witness to the barbarity of that fratricidal European conflict. The experience moved him to commit his life thenceforward to the discovery and proclamation of the economic, social, and moral truths that might serve to prevent a recurrence of the catastrophe. The galloping inflation of the 1920s left an indelible impression on the young economist and provoked him to a battle against inflation which was to continue for the rest of his life. Still, exhibiting even then unusual realism and balance, Röpke opposed the deflationary policies of the Brüning government to which he attributed the rapidly rising unemployment in Germany. He was thus a Keynesian five years before Keynes published his General Theory in 1936. In the end, Röpke’s advice was disregarded, a fateful decision which may have facilitated the seizure of power by Hitler. Anti-totalitarian to the core, Röpke was bound to come into conflict with the tribunes of the Third Reich. Following a series of speeches and articles in which he attacked the Nazis he was forced to flee, first to Istanbul and subsequently to Geneva, where he remained until his death in 1966. In his years in Geneva, Röpke continued his crusade against totalitarianism, whether of the right or the left. In numerous articles and books, he set forth his recipes for a free society and economy based on the market mechanism. The market economy for which Röpke pleaded, however, differed fundamentally from the “capitalism” of the 19th and early 20th centuries which he believed had perished of its own inadequacies and degeneracies. As early as the 1930s, he advocated a “third way” between the extremes of a paleo-capitalism based on laissez-faire on the one hand, and a socialist planned economy on the other. While Röpke was an unbending opponent of the omnipotent state, and of the bloated modern welfare state in particular, he was equally opposed to reducing the role of government in the economy to that of a mere nightwatchman. He contended that, on the contrary, a viable market economy requires an effective and energetic government committed to providing essential infrastructures and to establishing and maintaining a stable monetary and fiscal system as well as securing competition and restraining monopoly, whether of capital or labor. The “social market economy” that was installed in West Germany after the war under the aegis of Röpke’s friend, Ludwig Erhard, and to which Röpke had made decisive contributions, represented a deliberate attempt to divorce the market idea from historical capitalism. Germany’s so-called “economic miracle” of the postwar years provided dramatic proof that the market can yield a quite different result within a different institutional framework. In his seminal works Röpke carried this concept further, pointing out that the wellbeing of any society rests upon much more than its purely economic arrangements.Indeed, it extends far beyond the merely economic, the merely sociological, the merely political, to the very bedrock of the human condition, to the moral and spiritual, and, indeed, to the religious foundations of human existence.