TH CENTURY, for all the scientific pretenses with which it began, was in fact a Dark Age of superstition, obscurantism, and myth. While the common people, priests and some of the poets clung to reality, the nattering classes of journalists, political novelists, pamphleteers and professors were repeatedly beguiled by visions of the good society that were based on rank fantasy, bolstered by pseudo-science and lazy philosophy. (Eric Voegelin has called such worldviews "secondary realities," illusions which have been elaborated by intellectuals to the point that they mimic and replace the real world in the minds of their adherents.)
This Dark Age afflicted every area of knowledge: Economics was clouded by the inky obfuscations of Marx, biology misled by eugenics and "racial science" (and not just in Germany), psychology led down dark paths of empirically untestable conclusions imposed dogmatically by Freud. (This last is the most amazing: one doctor conceiving allegedly universal laws of the human psyche, based on a few dozen patients, all from the same place and cultural milieuwhich were taken with religious seriousness around the world! Think of the hundreds of millions of hours, dollars, and tears poured down the unproductive sinkhole of Freudian analysis, all to little avail! Scientology’s therapeutic track record is little worseand it is at least widely recognized as a cult.)
The most beguiling myths to intellectuals were socialist, falling along a spectrum which is usually designated from Left to Right: The Leftist variants, from Communism to collectivist Anarchism, which aimed at abolishing suddenly and by violence all the attributes and structures of traditional society, especially private property and the family; the centrist or Fabian varieties, which imagined a gradual collection of all wealth and power into the hands of a beneficient, godlike State; and lastly the so-called Right wing of socialism, which used radical nationalism or racialism, rather than class consciousness, as the hub around which a clockwork, centrally organized state and economy would run. The common factor uniting these fantasies was not an affirmation but a negation, a rejection of modernity, and the social class which had come to prominence with the end of the Middle Ages: the bourgeois, burgher, or free citizen of property. For all their differences, each of these ideologies chose the bourgeois citizen as their target of opportunity, the piñata whom they would beatat first rhetorically, then all too literally. Scorn for bourgeois ways and values could be found among artists, aristocrats, workers and philosophers, and permeated the writings of the political extremes.
Few thinkers of much sophistication or note stood up for the middle classinarguably the group which had led the West in its vast economic and technical expansion, from the 15th through the 19th centuries, when Europe and then the U.S. outpaced the world, leaving far behind the ancient civilizations of China and India, and the once-mighty Islamic world. Wilhelm Röpke was one of these few. In contrast to the ideologues of the extremes, or the merely pragmatist Whiggish thinkers of the late 19th century, Röpke championed a humane and variegated vision of the good society centered on that thoroughly modern figure, the burgher. Against the fashion of his day, Röpke would take up cudgels in defense of the humble bourgeois, the townsman merchant, the tradesman. This is why, in an age of strutting, imperial nations intent on swallowing their neighbors, Röpke came to choose as his social ideal Switzerland, a small confederation of once-weak medieval Cantons, which had achieved cultural influence out of all proportion to her size.
Despised by idealists, romantics and revolutionaries on the Left and Right, the bourgeois was, in Röpke’s view, a more wholesome model than the Prussian soldier or the angry, proletarian worker that transfixed the two political poles in Germany. Röpke saw in the simple virtues of thrift, honesty, fairness and moderation the real, working basis of any economy or society worthy of man. As he would sum this up, in one of his late books, A Humane Economy:
[T]here is nothing shameful in the self-reliance and self-assertion of the individual taking care of himself and his family. ... We have learned to regard the individual, with his family, relying on his own efforts and making his own way, as a source of vital impulses, as a life-giving creative force without which our modern world and our whole civilization are unthinkable. (AHE, p. 119.)
Röpke argued that no market economy could long survive in an unfree state, nor a liberal society endure a collectivist economy. The reason lay in the spiritual unity of man, the intimate, reciprocal relation between his intellectual and material conditions of life:
[C]ollectivismwhich would destroy together with the market economy the liberal character of our cultural and social systemhas its origin in the moral and spiritual spheres. (CH, p. 36, n. 7)
Röpke believed that economic freedom was finally necessary to personal autonomyand thus that not only full-scale socialism, but also social democracy and even the welfare state were long-term threats to political freedom, liberal culture and finally Western civilization. Because of this conviction, Röpke was never willing to de-couple discussions of economics from the larger debate about the rights, duties and stubbornly unchanging nature of man. In a surprising way, he seconded the Marxist insistence that an economic system and the intellectual life it sustains are ultimately inseparable. Unlike them, he chose to champion genuine freedom over a spurious equality.
Röpke’s principles were what qualified him as the ideal advocate of a market economy at midcenturya time when most thinking Europeans and many Americans had become weary of the soul-grinding materialism which had underlay nineteenth- century political economy, the atomistic emphasis on the isolated individual striving for wealth in a Darwinian world of combat for survival. (Robert Nisbet describes the growing disgust with this world view in The Quest for Community (1953)a profound work which acknowledges some debt to Röpke.) With his sophisticated, organic, increasingly multi-layered critique of capitalism and laissez-faire, and his defense of socioeconomic liberalism, Röpke undercut the easy arguments of socialists and fascists alike, who pointed constantly to the wildest abuses of economic power and monopoly as proof that the market system was intrinsically corrupt.
In Economics of the Free Society (1937), Röpke had addressed this charge directly, investigating the ethical roots of the market economy, and contrasting it to the moral maxims of rival, collectivist systems. He begins the discussion with a stark formulation: "The struggle against scarcity...is the eternal basis of every human economy." (EFS, p. 21). Individuals may conduct this struggle, he suggests, according to one of three methods:
There is, first, the ethically negative method of using violence and/or fraud to procure for ourselves, at others’ expense, the means of overcoming scarcity. The second method is the ethically positive one of altruism, thanks to which goods and services are supplied to us without our being required to give anything in return.
The third method does not lend itself to such brief description. It is not founded on egoism, if this implies that individual well-being is achieved at others’ expense. Neither is it founded on a selfless altruism, if this implies that individual well-being is neglected in order that others may benefit. It is, rather, an ethically neutral method by which, in virtue of a contractual reciprocity between the parties to an exchange, an increase of one’s own well-being is achieved by means of an increase in the well-being of others. This method, which may be termed "solidarity," means that an increase in my well-being is achieved in a way which not only does not deprive others of well-being, but which yields them, as a by-product of my gain, an increase in their own well-being. (EFS, pp. 20-21).
Later in the book, Röpke would say of business owners that
[T]he entrepreneur appears in a genuinely competitive market economy as a sort of trustee whom the community has placed in charge of its means of production. Comparing the costs of his services with those of a bureaucratic state-controlled economy, our entrepreneur may be regarded as a very inexpensive public servant, one who really assumes risks, while the politician is apt to be answerable only to God and history. (EFS, p. 192).
But Röpke was not a naive enthusiast for business interests or the investing class. He recognized that
it is possible to combine the first method (fraud and/or violence) with the third (business)... "War, trade and piracy an inseparable trinity," declares Goethe’s Mephistopheles (Faust, II, 5), and, in truth, the history of the trading and colonial nations is a history of invasions, piracies, and oppressive exploitation. It offers us a depressing demonstration of the truth that when left to our own devices, we tend to choose the first method, and return nothing in exchange for a service received. Only the powerful influences of religion, morality, and law appear able to induce us to adhere scrupulously to the third method. (EFS, pp. 21-22).
As a man well-educated in the liberal arts, whose family’s roots lay not in business but in the Lutheran ministry and the practice of medicine, Röpke could understand why the "ethically neutral method of exchange" which lay at the heart of the market economy failed to inspire admiration among idealists, reformers and religious critics of modernity. In partial answer, he pointed out that human motives are not quite so simple as they might appear, that
even the pure businessman who adheres unbendingly to the principle of exact reciprocity in exchange does not, by so doing, remain completely neutral in an ethical sense. His unbending conduct, and the conduct of those with whom he does business, is at bottom conditioned by the acceptance of certain ultimate principles, for the lack of which the business society itself will in the long run founder. It is, therefore, of great importance not to forget the moral reserves which nourish the prosaic and in itself ethically neutral world of business, and with which it stands or falls. (EFS, p. 22).
Röpke went on to analyze the rise of the business ethic in historical terms:
The evolution of the last few centuries can then be regarded as a process in which the domain of internal morality has been continuously enlarged while its content has been simultaneously diluted. In the Middle Ages, trade among a small group of provincial guilds was rigidly circumscribed while a large place was reserved to charity a natural outgrowth of the deeply religious spirit of that time. But beyond these confines there was much unscrupulous and unrestrained exploitation. In the course of the development which saw the rebirth of ancient morality (humanism) and the secularization of the substance of Christian morality, the principle of sacrifice lost much of its force, even among members of the same family. In its stead appeared a new principle, and one which served at the same time to reduce the practice of violence and exploitation to negligible proportions, viz., the selfsame business principle we have been discussing.
Not all the consequences of this development were happy ones. "Business" has occasionally lain its cold and impersonal hand on the family, requiring children to pay their parents for room and board; and science, art, even religion itself, have become commercialized to a lamentable extent. On the other hand, the general use of the business method has had the effect of narrowly circumscribing the area in which violence and exploitation can be profitably employed and of enlarging the sphere of activities yielding equal benefits to the participants. (EFS, p. 23).
It was this historic evolution which offended the sensibilities of socialist, fascist, and reactionary alike; each wished in his own way to repeal this transformation and recreate a society free of the business principle. Of course, the attempt to ground a society’s economics on altruism rather than business invariably results in the resort to fraud or force as millions of starving peasants in Russia could testify. The best is indeed the enemy of the good.
Röpke located the ethical center of a market economy not in the liberty of the individual to dispose of his capital or labor according to some unconditioned right of property the standard libertarian argument for freedom of contract. This was one of the justifications for historic capitalism which had been widely rejected by the time he wrote, as extremes of poverty removed from millions of workers any meaningful "freedom" to negotiate with employers.
Rather, Röpke strove to show that the common good was best served by leaving sovereignty in the hands of consumers, allowing individuals to choose among a wide variety of goods and services offered by many suppliers. The principle of competition, he believed, must be sacrosanct, since it served to police the behavior of businessmen better even than a strict, impartial legal system (which he also insisted was needed). Any assaults on competition, any attempts to remove from consumers what he called their "sovereignty," he regarded as a threat to the heart of the market economy. Hence Röpke’s undying opposition to protectionism, monopolistic business cartels, "closed" union shops, and regional trading blocs. Essentially, he treated each of these phenomena as attempts to corrupt the business ethic with that of force and fraud. The best way to avoid them, he always believed, was to disentangle the State as much as possible from the economy for the benefit of both, to preserve each one from corruption. Röpke’s message could not be more timely than it is today.