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Book Review: Wilhelm Ropke

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Wilhelm Röpke: Swiss Localist, Global Economist
by John Zmirak (Wilmington, Del.: ISI Books, 2001); 229 pages; $24.95.

WITHOUT A DOUBT, Wilhelm Röpke was one of the leading free-market economists of the 20th century and one of the most influential thinkers in Germany after the Second World War. Many years ago, an economist acquaintance of mine, who had studied with Röpke in Geneva, Switzerland, in the late 1950s, said that when he came into the seminar room there was electricity in the air. From the moment he began to speak, Röpke’s reason and passion for freedom and the humane society filled the room.

Born in 1899, he was one of the bright, young stars of German intellectual society in the late 1920s, being at the time one of the youngest university full professors. Yet in the early 1930s he chose to take a stand against the rising tide of Nazi collectivism. A week after Hitler came to power at the end of January 1933, Röpke delivered a public lecture in which he stated that Nazism meant the end of culture and civilization in Germany. The country was turning to brutality, force, and irrationalism.

Shortly afterwards he was visited by Nazi thugs, who attempted to “reason” with him. He concluded that he could not remain in Hitler’s new Germany and went into exile. He first taught at the University of Istanbul in Turkey. Then in 1937 he accepted a position at the Graduate Institute for International Studies in Geneva, a position he retained until his death in 1966.

With the retirement or passing away of many of the academic scholars who had studied with or known Röpke, an increasingly small circle of people are familiar with his writings and ideas. Only an occasional article appears about him. (See, for example, Richard Ebeling, “Wilhelm Röpke: A Centenary Appreciation,The Freeman, October 1999 — there is no charge to log in.)

The Intercollegiate Studies Institute has now sponsored the first detailed book-length exposition and appreciation of Röpke’s ideas in English under the title Wilhelm Röpke: Swiss Localist, Global Economist, by John Zmirak. In the opening chapters, Zmirak summarizes Röpke’s life and presents a general outline of many of his ideas. He then turns to a more detailed analysis of Röpke’s contributions.

The rise of Nazism in Germany and collectivism in general, as well as the coming of the Second World War, crystallized Röpke’s vision of how this disaster had befallen Europe and what path European civilization had to follow if it was to recover its freedom, prosperity, and humanity. With war all around him, Röpke devoted the early 1940s in neutral Switzerland to writing a series of books, International Economic Disintegration (1942), The Social Crisis of Our Time (1942), Civitas Humana (1944), International Order and Economic Integration (1945), and The Solution of the German Problem (1946), which diagnosed Europe’s intellectual and ideological diseases and proposed cures for its cultural, political, and economic ailments.

Nazi and communist collectivism, Röpke argued, had not arisen out thin air. For more than a century, intellectual forces were at work in Europe in general and especially in Germany that were creating the environment for these ideological monsters. Along lines similar to ideas developed by Friedrich A. Hayek also in the 1940s, Röpke argued that the age of reason and scientific rationality in the 18th and 19th century had generated an irrational rationalism. The power of man’s reason to master the secrets of nature in the physical sciences had created a growing belief that man could, likewise, learn the secrets of the “laws” of society and then bend them to remake that society in any shape and form that his reason suggested to be better, fairer, and more just. Man would control his own destiny by redesigning the social order through centralized planning and regulation.

The lure of central planning

Men were enraptured with the idea of “designing” social institutions, “planning” community development, and “molding” human nature and character. Röpke bemoaned the emergence of what he called the “cult of the colossal” in which monuments, machines, and material objects were built bigger than life. Giant cities, huge industrial facilities, large congested congregations of humanity in vast urban areas all reduced men to puny little creatures with everything around them outside any normal human proportion.

Men in this setting, Röpke feared, were increasingly reduced to a gray mass with little individuality, fewer connections to their families or local communities, and no anchors to the customs, traditions, and values that make up a humane and meaningful existence as a human being.

Here was an easy breeding ground for collectivist demagogues promising to end people’s sense of alienation and their loss of a sense of meaning to life and place in society. Communists promised a “new man” in a new socialist world of universal brotherhood and humanity for all workers. Fascists and Nazis promised a “new man” in a new nationalist and racially purified society with order, hierarchy, and collective belonging for those of the “master” race and nationality.

But, Röpke insisted, these promises would lead and were leading only to a reality of tyranny, violence, and destruction. Political and economic collectivism meant the crushing of the individuality and freedom of actual men in the name of creating the New Man.

Out of the ashes of the Second World War, as Zmirak explains with care, Röpke proposed reforms and changes to restore the freedom and dignity of the individual. This required decentralization of political power, the institutional reestablishment of competitive free markets, and restoration of society and its structures to a normal human dimension. Many of the political and economic reforms outlined by Röpke in the books he wrote in the 1940s served as the inspiration for the market-oriented policies introduced into West Germany starting in the late 1940s. These policies helped generate the famous “German miracle” that resulted in Germany’s rising from the ashes of defeat to become an economic powerhouse in postwar Europe. Zmirak explains in detail the extent to which and the manner in which Röpke’s ideas influenced the recovery of Germany.

But the third element in Röpke’s agenda for the reconstruction of European society, the remaking of its social institutions, led him away from freedom and the free market. Röpke believed that there needed to be a proper balance between urban development and rural community life, for the establishment of which government had to zone and regulate the development and size of cities, industries, and communities.

He considered that unregulated capitalism in the 19th century had dehumanized man through the concentration of industry, the grayness of factory employment and the dull uniformity of mass production. Government had to control the size of industry, protect and support small business and greater self-employment, and foster diversity of local production. And he advocated social safety nets in the form of limited welfare programs, job training, and agricultural subsidies. These forms of government intervention, regulation, and redistribution were advocated in postwar Germany under the name of the “social market economy.”

Beginning in the 1950s, Röpke already warned of the dangers from the growth of the welfare state and its financing through inflationary monetary policies. But once having conceded the principle of the right and responsibility of the government to intervene in these ways within the market society, he never successfully explained how the interventionist-welfare state was to be prevented from expanding beyond the bounds of his own personal preferences.

Zmirak records Röpke’s concerns over the postwar welfare state and criticisms of it, but he, no more than Röpke, explains how the circle can be squared. Röpke, tragically, was a leading intellectual father of both the rebirth of market freedoms in Europe and the interventionist state that now handicaps it. Escaping from Röpke’s welfare-state legacy is one of the challenges friends of freedom now face in the 21st century.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).