IT’S AN OLD STORY, the treason of the elites. Our century is littered with the names of men of brilliance in one field or another who fell prey for a time to dangerous delusions in the realm of economicsout of idealism, ignorance, or disdain for bourgeois values. Most were drawn to leftist collectivism; a very incomplete list includes W.H. Auden, Stephen Spender, Pablo Picasso, Dalton Trumbo, Jean-Paul Sartre and Jack London. A smaller group of (perhaps more luminous) talents was drawn to the far right, such as Ezra Pound, W.B. Yeats, T.S. Eliot, Charles Maurras, D.H. Lawence, Paul Claudel, Ernst Jünger and George Bernanos.
While many of these thinkers quickly found their way out of such delusions, others did not, and wasted their best years in pursuit of sterile or poisonous utopias. But the economist and social philosopher Wilhelm Röpke, father of the German postwar economic miracle, had emancipated his intellect well before his 25th birthday, thanks to reading Ludwig von Mises. In a talk given at the Mont Pelerin Society in the early 1960’s, Röpke recounted Mises’ influence as follows:
I would like to stress, on the present occasion, how immense is my debt to Ludwig von Mises for having rendered me immune, at a very early date, against the virus of socialism with which most of us came back from the First World War and thus for having enormously promoted an intellectual process of which I have given an account in the introduction of my book, International Order and Economic Integration.
Röpke was particularly devoted, even during his socialist period, to international free tradea divisive subject then and now. (President Bush isn’t even clear where he stands on this onewitness his approval of steel quotas.) Looking at the pre-war period, Röpke could see that the rise of economic nationalism had prepared the way for the chauvinism and ensuing slaughter of the Great War.
Before the breakdown of international relations was a period he considered the golden age of global trade and liberalism, the period from 1850 to 1895a world largely at peace, linked by cooperation in the production of wealth, where national borders were permeated by the free transfer of goals and currency, and producers and consumers of many (even traditionally hostile) nationalities were knitted together in a community of interest, the mutually profitable division of labor. (He was not of course blind to the many problems with the international trading system of that era; but Röpke would always insist on responding to the known flaws of a proven system by reforming it, rather than destroying it in favor of something unknown.) With his trenchantly logical mind, Röpke could see that the attemptsincreasingly popular in the wake of the Great Warto transform nations into economically self-sufficient entities and sever their remaining trade links could only lead in one direction: towards excessive nationalism and another monstrous war. He further noted that, for all the internationalist rhetoric of the Bolsheviks and other socialist movements, "nobody was immediately working for world socialism." Whatever Marxist theory might prescribe about spontaneous revolution taking place in many nations at once, rendering the nation-state irrelevant, in fact leftist parties were trying to seize power in particular territories, over which they must retain control and whose economies they must coordinatepending the global uprising, which always promised to be just around the corner. In the meantime, they must workin Stalin’s memorable phrasefor "socialism in one country." Röpke grasped the import of this before many of his fellow-reformers:
But if socialism could only be achieved within a national framework, state boundaries took on a new and primarily economic significance. Did not the simplest logic make it clear that a socialist state, which directed economic life within the nation, could not grant even so much freedom to foreign trade as had the protective tariffs against which we had protested? The deduction was this: there is only one ultimate form of socialism, the national. With that, my generation wanted nothing to do.
In fact, all too many members of Röpke’s generation were willing to embrace a nationalist socialism, in which the nationalist element would gradually come to predominate over the original, wistful fantasy of a working class solidarity that would render borders meaningless. Of course, no oneleast of all Röpkewould wish to equate the humane socialists of the Social Democratic Party in Germany with the National Socialist German Workers’ (Nazi) Party or the German Communists. But it is telling that parties with such vastly different agendas could agree on one point: that the State, rather than private individuals acting freely, should direct the flow of economic life. This told Röpke that all of the parties must be mistaken, and in the same way. Albeit to different degrees and by different means, each such collectivist philosophy elevated the State above the individual, directing his economic activityand thereby, the vast majority of his time and effortnot by persuasion but by force. For Röpke, this fact alone was devastating:
Life in the army had shown what it meant for the individual to exist as part of an apparatus whose every function assumed lack of freedom and unconditional obedience...[P]hysical degradation was also accompanied by a spiritual one that worked to the total debasement of human dignity in mass existence, mass feeding, mass sleepthat frightful soldier’s life in which a man was never alone and in which he was without recourse or appeal against the might (inhuman but wielded by man) that had robbed him of his privacy.
While he would ultimately come to see the virtues of military life for a small class of men at all times (and in grave emergencies, for entire societies), Röpke would never lose his disgust for the regimentation, anonymity and depersonalization that the military mobilization of men entails. Any philosophy which proposed this wartime model for the whole of society all the time was profoundly repugnant, both aesthetically and morally (indeed, for the classically-minded Röpke, the two categories were never divorced).
Thus from a rejection of nationalism, and militarism, Röpke came to conclude that he must reject any form of collectivist polity. As he came to believe:
War was simply the rampant essence of the state, collectivity let loose, so was it not absurd to make one’s protest against the dominance of man over man take the form of collectivism? Not all the pacifist, antimilitarist, and freedom-demanding statements of even the most honest socialists could obscure the fact that socialism, if it was to mean anything at all, meant accepting the state as Leviathan not only for the emergency of war, but also for a long time to come.
The Civic Imperative
Röpke would devote the rest of his life to refuting these errors, and building up a new rationale and elaboration of orthodox, liberal economics. In this, his work seconded that of Mises, Hayek, and the rest of the Austrian Schoolincluding its increasingly dominant American wing, based in Chicago, and led by Milton Friedman and James Buchanan. But Röpke went further than technical economics, into the social, legal and philosophical issues which frequently overwhelmed economic principles.
From his personal experience and his expansive reading, Röpke knew that the primary appeal of socialism did not lie in the technical arguments which could be offered for its efficiency or rationality, but rather in the apparent moral and cultural superiority of a system which claimed to enshrine justice in the very workings of an economic system that had heretofore seemed amoral (if not immoral). This conviction was shared by many on the Right as wellin particular, Catholic conservatives who resented the dominance of economic over religious values implied by liberal capitalism, and the farmers and small businessmen who felt threatened by the "creative destruction" unleashed by free market competition. Socialism, with its pretensions towards cooperation for the common good, and fascism, with its promises of an end to class struggle in the name of patriotism, each seemed to accord better with key elements of the Western tradition of political philosophy than liberalisma creation of 18th century Enlightenment thinkers, with an accretion of Social Darwinism. Since neither of these movements is particularly compatible with traditional, Christian categories, there was apparently little common ground on which advocates of the market and conservatives could meetlittle they could agree upon in 1945, apart from an aversion to atheistic Communism.
More than any other thinker in the 20th century, it would be Röpke who helped to build a bridge between advocates of the free market on the one hand, and Christian humanists and conservatives on the other. Along with other members of the "neo-liberal" school of economists (which was based at Freiburg, where they published the influential journal Ordo), Röpke would offer intellectual support for the coalition of economic liberals and Christian conservatives which successfully resisted a Communist takeover in Western Europe, and built up prosperous societies atop the rubble of the Third Reich and the war it unleashed. The version of free market liberalism which emerged from the interplay of Röpke, his disciple Erhard, and other neo-liberals would be dubbed "the Social Market economy," in recognition of its broad concern with the common good, with "social" values traditionally neglected by apologists for capitalism. The movement that dominated most anti-Communist governments after World War II, Christian Democracy, was an outgrowth of the Social Market philosophy; it was buoyed in power by the pragmatic success of Social Market policies at stimulating economic recovery. Such a movement would have been inconceivable in the pre-war period, when it seemed to many Christians and conservatives that the most energetic advocates of their social values stood on the far Right, among the corporatists and fascists. The events of the Second World War demolished such illusions, leaving social conservatives with no intellectual home. It was largely the intellectual work of Röpke and his associates, and the brilliant political maneuvering of Ludwig Erhard and Konrad Adenauer, which made possible the emergence of a new, moderate conservatism in Europea movement whose principles are in many ways more dominant than ever, as even socialist parties must acknowledge the central role of the free market and global trade in creating wealth.