March 20, 2011


Wilhelm Roepke and the ‘Third Road’ (Patrick M. Boarman, Autumn 1977, University Bookman)

[I]t is Roepke also who reminds us, in the other half of his monumental life’s work, that the market economy, valuable as it is, does not exhaust human nature, that it is subordinated to higher ends. The German title of what is, perhaps, Roepke’s most representative book is, in this regard, significant. That title, rendered as A Humane Economy is Jenseits von Angebot und Nachfrage. Literally translated, it means “Beyond Supply and Demand.” For Roepke, the most important things do, in fact, lie beyond supply and demand. While one must have bread, he cannot live by bread alone. In short, while Roepke remained a trenchant critic of economic “knownothingism,” which believes that only the perverse workings of the capitalistic system prevent everybody from having everything he wants all the time, he was equally opposed to a morally and spiritually obtuse “economism,” uncaring of or contemptuous of the things which lie beyond supply and demand. [...]

“On the one side,” he wrote (in A Humane Economy): “are those who believe that society and economy can be reconstructed from above and without considering the fine web of the past. They believe in radical new beginnings; they are reformers inspired by an optimism that is apparently proof against any failure. On the other side are those who possess a sense of history and are convinced that the social fabric is highly sensitive to any interference. They deeply distrust every kind of optimistic reforming spirit and do not believe in crusades to conquer some new Jerusalem; they hold, with Burke, that the true statesman must combine capacity for reform with the will to prudent preservation.”

Characteristic of Roepke’s concern for balance, for the golden mean, and for meta-economic values are. the following passages from a foreword he wrote to an early edition of Die Lehre von der Wirtschaft (Economics of the Free Society):

”It would be a profound misapprehension to imagine that a slogan embodying a mere return to old-style rugged individualism is the battle-cry that will help us win the spiritual victory over collectivism. For we cannot ignore the fact that the debacle of economic liberalism[1] is due in great part to its own insufficiencies, to its abortive endeavors, to its degeneration. Nor can we any longer deny that the chief causes of this decay are to be found in humanity itself: the spiritual, moral, and political aberrations which foster the creation of a mass society and the revolt of the masses which such a society engenders. Now it is precisely certain economic and social developments of the liberal era that have contributed decisively to this evolution. In order, therefore, to study and judge these developments, we must keep an open mind and not tie ourselves to the economic platform of historical liberalism.

“I am looking beyond laissez-faire and collectivism for a third road, the only road which still remains open to us. Elsewhere,[2] I have described what we may expect to encounter along this road: an economic and social order founded on liberty, justice, and human dignity; an order which does not neglect the nature of man and one which, while giving free rein to the powerful instinct of self-preservation, adds to its other benefits that of material abundance. In looking for this road, I seek to avoid one of the deep-seated fallacies of our time which Thierry Maulnier felicitously named the ‘Manichaean doctrine’—the habit, that is, of thinking always in pairs of diametrically opposed ideas and of confining oneself without exception to an exclusive choice between two extremes (inflation or deflation, laissez-faire or planned economy, etc.) . . .

“Economic freedom is no doubt a necessary condition for the maintenance of ‘the good society,’ but scarcely a sufficient one. There is grave danger of allowing ourselves to be distracted from the main issue by exclusive concern with this one point, important though it may be.

“The main issue becomes clear if we ask ourselves the question: what is the opposite pole of collectivism? Economic freedom? Hardly. A return to economic freedom would certainly lessen monopoly abuses and would eliminate some other imperfections of the economic system. But would there be any significant change in the other morbid phenomena of our time? Would a country which no longer has farmers or artisans or a stable middle class get all these things at one fell swoop thanks to economic freedom? Would the individual find more meaning and dignity in his work? But if a simple return to economic freedom will not procure all these advantages, how can we expect people to become enthused over such a program? Must we not offer something in addition? . . .”

It was because Roepke was not tied to the platform of historical capitalism that his prescriptions for the reestablishment of the market economy in Germany after the war met with acceptance on the part of his countrymen.

Posted by at March 20, 2011 9:16 AM

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