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Ethics, Market, and the Federal Order. The Political Philosophy of Wilhelm Röpke

  • Carlo Lottieri EMAIL logo

Abstract

The moral and political philosophy of Wilhelm Röpke is among the finest instances of European classical liberalism in the twentieth century, and in many occasions he stated that only a society which understands the importance of markets can be reconciled with human dignity. Röpke elaborated a political theory that focused on the harmony between moral principles and economic law. In this sense, his liberalism is unique not only because it defends private property and competition as pillars of a thriving economy, but above all that it provides the preconditions of a society that can remain secure from the immorality of despotism and subsequent ethical degeneration. To that end he upheld an economic order based on voluntary cooperation as the basis for a more humane society, emphasizing the role of institutional competition and federalism. Röpke’s cultural conservatism should not therefore be misunderstood, as it is very much connected with his defense of the essential role of property. It is only in this sense that he found in liberal humanism a third way, which is not however situated halfway between the market and socialism, but which represents instead a defense of a competitive society that is aware of its own historical and cultural basis.

Acknowledgements

I thank the “Fondazione Ferdinando e Laura Pica-Alfieri” of Lugano (Switzerland) for its support to my research on Wilhelm Röpke.

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  1. 1

    He was a very prolific writer. For an extensive bibliography of his books and articles, see: Gregg (2010, 183–97).

  2. 2

    Röpke (1942a, 1945a). Together with Civitas Humana, these two volumes constitute Röpke’s important trilogy.

  3. 3

    Röpke (1944). In a recent English edition, first published in 1996 and subsequently reissued in 2002, the title Civitas Humana is translated as The Moral Foundations of Civil Society.

  4. 4

    Röpke (1960, 92). It is important to emphasize that, in Röpke’s opinion, those who wish to do good must act with a strong sense of responsibility in order to avoid the superficial behavior of the so-called do-gooders (which could also harm those who receive their help): “I think it a superior form of giving to consider first and foremost whether it may be the best thing to do as far as the recipient of one’s gift is concerned” (Röpke 1960, 91–92).

  5. 5

    German neo-liberalism included quite different positions at the same time. In this tradition there were economists and legal scholars (Walter Eucken and Alfred Müller-Armack, for instance) with attitudes and ideas often quite far from classical liberalism. See Sally (1998).

  6. 6

    His opinion was that “the Roosevelt Administration, influenced by a set of particularly confused ideas, pulled at levers which brought disorder into the whole mechanism of recovery, almost up to the present day” (Röpke 1932, 205).

  7. 7

    In his “Preface” to Crises and Cycles, in 1936 he remarked that his book was already set in type when Keynes’ new work was published, but in spite of that he believed that “the reader will be able easily to discern where and why the bold views of Mr. Keynes do not coincide with those set forth in the present book” (Röpke 1932, VI).

  8. 8

    In Civitas Humana there is an ample discussion of Lord William Beveridge’s plan (1944) and of the egalitarian ideology implied by his theses.

  9. 9

    See especially Röpke (1963).

  10. 10

    Erhard showed that he had perfectly learned his teacher’s lesson when, in the summer of 1948, he decided “to cancel as soon as possible as many provisions as possible regarding supply and prices,” believing that “with the transition of economic policies from government control to the market economy” he was doing “something more than taking administrative measures, strictly speaking” (Erhard 1957, 22–23). By liberating of the economy, he was rejecting the totalitarian vision of society.

  11. 11

    An example of the frequent misunderstandings of Röpke’s works can be seen in the conclusion drawn in this passage, taken from a recent work about Erhard: “Röpke condemned the Nazi dictatorship and its barbarous attack on civilization. He defended free market as well as a conservative and romantic view aiming to reform Germany and Europe. He proposed a competitive economy based on private property and regulated by a strong State. Röpke rejected laissez-faire, but also feared collectivism” (Mierzejewski 2004, 23). It is clear that this passage contains contradictory statements, originating from serious misunderstandings, since Röpke’s criticism of historical capitalism is attributed to a negative judgment of the market economy.

  12. 12

    It is interesting to mention how Carlo Antoni defined the third way formulated by Röpke: “in 1942, we obtained a copy of Röpke’s The Social Crisis of Our Time, with its suggestion of a ‘third way’ between socialism and historical capitalism, that is, a ‘compliant’ intervention of the State with a defense of the free market against cartels and monopolies” (Antoni 1967, 132; my emphasis.)

  13. 13

    Russell Kirk rightly pointed out that “Röpke’s third way was not a shallow socialism, or something that could be reduced to consumers’ cooperatives or to an administered economy. On the contrary, it meant an economic activity, humanized through its strong relationship with its moral and intellectual ends, and also by being traced back to a humane dimension (Kirk 2004, IX.)

  14. 14

    Zmirak (2001, 13). For the German-Swiss economist “only a solid social structure predicated upon individual virtue, cohesive families, and local communities could counterbalance the frequently disruptive side effects of the dynamic, highly efficient market system” (Zmirak 2001,13.)

  15. 15
  16. 16

    Besides, Röpke did not mean to overestimate the distance between his position and that of the old liberals of the positivist and utilitarian school: “there is a fine line between old liberals and neoliberals, and it would be deplorable if, by exaggerating the differences, we detached ourselves from people whose ideas are generally very close to ours (Röpke 1964b, 183–84).

  17. 17

    Röpke (1958, 296). As Zmirak pointed out, Röpke “preferred the Swiss social model to the French” (Zmirak 2001, 16).

  18. 18

    Röpke (1944, 25–26). Here he is not far from Bourne (1917).

  19. 19

    His interest in Switzerland is largely a consequence of his condemnation of the nation-state institutions: “Ever a foe of nationalism, Röpke pointed to the eighteen century as the zenith of European civilization – before ideas were branded by their country of origin and yoked to the service of intolerant nation-states” (Zmirak 2001, 9).

  20. 20

    “Röpke opposed attempts to abolish borders and concentrate power in the hands of transnational bureaucracies” (Zmirak 2001, 9–10).

  21. 21

    For an introduction to these themes and to the relationship between Franz Brentano and Carl Menger, see Smith (1996).

  22. 22

    As Hayek remarked, “Röpke realised at an early stage, perhaps earlier than most of his contemporaries, that an economist who is nothing but an economist cannot be a good economist” (Hayek 1959, 196).

  23. 23

    Röpke (1959a, 67). He also criticized those whom he defines as “scroungers of the market economy,” that is, those who have clear ideas about the necessity of economic freedom but readily give up their principles when useful to obtain any kind of public help (Röpke 1959a, 68).

  24. 24

    Gerald Schwarz rightly recalled Röpke’s statement that “the fact that many people spending their time on the weekends gardening in their own little piece of land in suburban areas may be a totally inefficient way of producing vegetables, but it is a very efficient way of producing happiness” (Schwarz 2000, 136.) Russell Kirk ascribes this statement to a conversation between Röpke and Mises in 1947, when the latter had gone to Geneva to see him and had been negatively impressed by such an (according to him) inefficient way to produce food. Kirk attributes this inability to understand the “economic” dimension of Sunday gardening to Mises’ utilitarianism (the author of Human Action), but it is also true that Mises was a champion of economic subjectivism, and, therefore, of the idea that is impossible, from the outside, to define as efficient or inefficient any kind of behavior, as one cannot know why the individual is behaving that way and what his or her preferences are. In this sense, despite the anecdote, it can be said that Röpke’s statement was seemingly influenced by Mises. See Kirk (1989).

  25. 25

    When analyzing the hostility of Christians toward the market and their preference for socialist theses he is not accusing Catholicism, but he is instead stressing how this error is made by both Catholic and Protestant clergy (Röpke 1944, 70).

  26. 26

    As underlined by Campbell, “Röpke was a Protestant following the tradition set by Hugo Grotius, originating in Erasmian ideas. As a humanistic Christian, in its positive meaning, he was very much in keeping with the Catholic tradition” (Campbell 2002, XIII).

  27. 27

    “Communism is based more on empty souls than on empty stomachs” (Röpke 1960, 85–86).

  28. 28

    According to Campbell, “Röpke always knew well that he was not building the City of God, or a church. He knew his own limits as much as his own strengths; he was a social scientist, not a religious prophet. He was not Saint Augustine. He left the Civitas Dei, the City of God, to other people” (Campbell 2002, IX).

  29. 29

    On this theme see also Yamawaki (2001, 188–201).

  30. 30

    To be precise, the only actual criticism that Röpke formulated against the 1961 encyclical is that it is too reticent against Communism, which should be judged, instead, as “the most terrible danger ever to have threatened Christianity” (Röpke 1962, 122).

Published Online: 2014-5-29
Published in Print: 2014-7-1

©2014 by Walter de Gruyter Berlin / Boston

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