The Humane Economy of Wilhelm Roepke

The Politics of Prudence, by Russell Kirk (ISI Books, 1993).

Permit me to offer you some observations concerning Wilhelm Roepke, a principal social thinker of the twentieth century—and, incidentally, the principal architect of Germany’s economic recovery at the end of the Second World War. His books are out of print in this country at present, except for The Social Crisis of Our Time, of which I brought out a new edition recently. And to my remarks on Professor Roepke I shall add certain related reflections of my own. 

Roepke was the principal champion of a humane economy: that is, an economic system suited to human nature and to a humane scale in society, as opposed to systems bent upon mass production regardless of counter-productive personal and social consequences. He was a formidable opponent of socialist and other “command” economies; also a fearless perceptive critic of an unthinking “capitalism”. Although German by birth, during the Second World War, Roepke settled in Geneva, where he became professor of economics at the Graduate Institute of International Affairs. There he wrote Civitas Humana; The Social Crisis of Our Time; Economics of the Free Society; The Solution of the German Problem; the essays included in the volumes Against the Tide and Welfare, Freedom, and Inflation. The title of his last book published in America, A Humane Economy, was suggested by me.

A gentleman of high courage and a sincere Christian, Roepke set his face against both the Nazis and the Communists. He was intellectually and physically vigorous: an accomplished skier, he always climbed back up the mountainside, rather than riding a chair-lift. Knowing that man is more than producer and consumer, Roepke detested Jeremy Bentham’s Utilitarianism, and found that most of his fellow-economists perceived human existence very imperfectly, being blinkered by utilitarian dogmata.

Before turning to Roepke’s arguments, I venture to offer some background of his thought, during the disorderly period that followed upon the Second World War, a time during which the idea of grand-scale social planning exercised a malign power. Roepke was the most effective opponent of that Planwirtschaft.

That highly speculative division of knowledge which our age calls “economics” took shape in the eighteenth century as an instrument for attaining individual freedom, as well as increased efficiency of production. But many twentieth-century teachers and specialists in economics became converts to a neo-Jacobinism. (Burke defines Jacobinism as “the revolt of the enterprising talents of a nation against its property”.) Such doctrines of confidence in the omnicompetence of the state in economic concerns came to predominate in state polytechnic institutes and state universities especially. Quite as eighteenth-century optimism, materialism, and humanitarianism were fitted by Marx into a system which might have surprised a good many of the philosophes, so nineteenth-century utilitarian and Manchesterian concepts were the ancestors (perhaps with a bend sinister) of mechanistic social planning. The old Jacobins scarcely realized that their centralizing tendencies were imitative of the policies of the Old Regime; so it is not surprising that recent humanitarian and collectivistic thinkers forget their debt to Jeremy Bentham. Yet the abstractions of Bentham, reducing human beings to social atoms, are the principal source of modern designs for social alteration by fiat.

At the end of the Second World War, centralizers and coercive planners were mightily influential in western Europe and in Britain, and were not missing in the United States. The modern nation-state enjoys effective powers of coercion previously unknown in political structures. But the increase of coercion frustrates the natural course of development; economic theory as a basis for state coercion has repeatedly proved fallible; “planning” destroys the voluntary community and tries to substitute an ineffectual master plan (as, most ruinously, in Iran under the Shah); the goals of state action should be judicial rather than economic; and thus the whole perspective of “social planners” is distorted. In opposition to the dominant school of economic theory just after the Second World War, such economists as Roepke, W. A. Orton, F. A. Hayek, and a handful of others strove to restrain the economic collectivists.

Although he proved himself very competent to deal with the vast postwar economic difficulties of Germany, a major industrial country, nevertheless Roepke much preferred the social and economic patterns of Switzerland, where he lived from the triumph of Hitler until the end of his life. His model for an humane economy can be perceived by any observant traveler in Switzerland. 

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Professor Roepke seemed to have read everything. He was familiar, for instance, with the social ideas of Calhoun and Fenimore Cooper, concerning which most American professors of economics are densely ignorant. Wilhelm Roepke knew the insights of religion and poetry, the problems of continuity and morality. His book The Social Crisis of Our Time is at heart an analysis of the menace that Roepke called “the cult of the colossal”. Social equilibrium has been overthrown in our age, Roepke knew. Here are some moving sentences of his concerning that grim subject:

“Men, having to a great extent lost the use of their innate sense of proportion, thus stagger from one extreme to the other, now trying out this, now that, now following this fashionable belief, now that, responding now to this external attraction, now to the other, but listening least of all to the voice of their own heart. It is particularly characteristic of the general loss of a natural sense of direction–a loss which is jeopardizing the wisdom gained through countless centuries–that the age of immaturity, of restless experiment, of youth, has in our time become the object of the most preposterous overestimation”.

Of all our afflictions, Roepke continues, the product of moral decay, of consolidation, and of the worship of bigness, the worst is proletarianization. Capitalism may have introduced the modern proletariat, but socialism enlarges that class to include nearly the whole of humanity. Our salvation, Roepke argues, lies in a third choice, something different from either ideological socialism or doctrinaire capitalism.

“Socialism, collectivism, and their political and cultural appenages are, after all, only the last consequence of our yesterday; they are the last convulsions of the nineteenth century and only in them do we reach the lowest point of a century-old development along the wrong road; these are the hopeless final state toward which we drift unless we act,” Roepke writes. “The new path is precisely the one that will lead us out of the dilemma of ‘capitalism’ and collectivism. It consists of the economic humanism of the ‘Third Way’.”

That same infatuation with “rationalism” which terribly damages communal existence also produces an unquestioning confidence in the competitive market economy and leads to a heartless individualism which, in Roepke’s words, “in the end has proved to be a menace to society and has so discredited a fundamentally sound idea as to further the rise of the far more dangerous collectivism.” In such a world, where old landmarks have been swept away, old loyalties ridiculed, and human beings reduced to economic atoms, “men finally grasp at everything that is offered to them, and here they may easily and understandably suffer the same fate as the frogs in the fable who asked for a king and got a crane.” 

In his chapter “The Splendor and Misery of Capitalism”, Roepke examines succinctly the maladies of our present economy and observes that the same economic disharmonies become chronic under socialism. Then he turns to the second part of The Social Crisis of Our Time, entitled “Action”.

“Socialism–helped by the uprooted proletarian existence of large numbers of the working class and made palatable for them by just as rootless intellectuals, who will have to bear the responsibility for this—is less concerned with the interests of these masses than with the interests of those intellectuals, who may indeed see their desire for an abundant choice of positions of power fulfilled by the socialist state,” Roepke instructs us.

Roepke relishes this class of persons as masters of society even less than he does the monopolists and the managers. His object is to restore liberty to men by promoting economic independence. The best type of peasants, artisans, small traders, small and medium-sized businessmen, members of the free professions and trusty officials and servants of the community—these are the objects of his solicitude, for among them traditional human nature still has its healthiest roots, and throughout most of the world they are being ground between “capitalistic” specialization and “socialistic” consolidation. They need not vanish from society; once more they may constitute the masters of society; for Switzerland, in any case, “refutes by its mere existence any cynical doubt regarding the possibility of realizing our program.” 

Loathing “doctrinaire rationalism”, Roepke is careful not to propound an arbitrary scheme of alteration and renovation. Yet his suggestions for deproletarianizing are forthright. Family farms, farmers’ cooperatives for marketing, encouragement of artisans and small traders, the technical and administrative possibilities of industrial decentralization, the diminution of the average size of factories, the gradual substitution for the “old-style welfare policy” of an intelligent trend toward self-sufficiency—none of these projects is novel, but they are commended by an economist possessing both grand reputation and sound common sense. To cushion society against the fluctuations of the business cycle, for instance, the better remedy is not increased centralization, a most dubious palliative, but instead the stimulating of men to get a part of their sustenance from outside the immediate realm of financial disturbance. Specialization often works mischief, he says:

“The most extreme examples of this tendency are perhaps some American farmers who had become so specialized and so dependent on their current money incomes that when the crisis came they were as near starvation as the industrial worker. At the other, more fortunate end we see the industrial worker in Switzerland who, if necessary, can find his lunch in the garden, his supper in the lake, and can earn his potato supply in the fall by helping his brother clear his land.” Humanizing of economic structure was the kernel of Roepke’s proposals. For him, political economy had an ethical foundation.

Roepke was no apologist for an abstraction called “capitalism”—a Marxist term, incidentally, foolishly pinned to themselves by numerous vainglorious champions of economic competition. He knew that the worship of Mammon is damnable. 

He spoke always of the human condition and how we might win our way back to a humane economy. Three decades after Roepke’s death, we have lost ground in that endeavor. Washington, London, Tokyo, and Moscow are even more obsessed by the Gross National Product than they were in the ‘Fifties, although the paper statistics of the GNP have not produced stability or contentment and the terrorist walks abroad. There comes to mind the legend inscribed on a chateau’s sun-dial, in 1789: “It is later than you think.” The nexus of cash payment, never a strong social link, does not suffice to keep down fanatic ideology, nor even to assure prosperity. 

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An economy obsessed by an alleged Gross National Product—no matter what is produced, or how—becomes inhumane. A society that thinks only of alleged Efficiency, regardless the consequences to human beings, works its own ruin. Here there comes to my mind a passage from the writings of W. A. Orton, an American conservative economist, a contemporary of Roepke. In his book The Economic Role of the State, Orton ironically describes the cult of Efficiency:

“Let us therefore praise the great god Efficiency,” Orton writes. “All he demands is that we make straight his path through the desert and purge the opposition… How much more mastery is evident in the controls of a supersonic plane than in the clumsy splendor of some medieval shrine! How much higher a peak of human achievement! Human? Let us not be too particular about that, for this is where science plays the joker… We arrive at ‘justice’ without mercy, ‘liberation’ without liberty, ‘victory’ without peace, ‘efficiency’ without effort, ‘power’ without potency–because the means we collectively employ lie on a plane so different from that of the ends we humanly desire that, the more they succeed, the more they fail. That is the nemesis of all ‘great powers’ and the end of all who put their trust in them. God knows, this is not a new story.”

Detroit, the city I have known best, has worshiped the great god Efficiency. During my own lifetime, Detroit has produced tremendous wealth in goods and services. But the city has been a social failure, and so have most of America’s other cities. Once called “the arsenal of democracy,” nowadays Detroit, become ruinous and ungovernable, more frequently has been referred to as “the murder capital of America.” In Celine’s famous novel Journey to the End of Night, the journey terminates at Detroit. 

In the shocking decay of that great city, one beholds the consequences of an inhumane economy–bent upon maximum productive efficiency, but heedless of personal order and public order. Of course the automobile manufacturers of Detroit, in the early years of their operation, had no notion of what might be the personal and social effects of their highly successful industrial establishment; nor had anyone else. But they seem still to be ignorant of such unhappy consequences, or else indifferent to the consequences so long as profits continue to be made. In a later chapter of this book I will take up Detroit again.

My argument is this: unless we begin to think of humanizing our American economy, our cities will continue to disintegrate, and the American people increasingly will grow bored and violent. Some folk in authority are beginning to apprehend that human nature may revolt at having an inhumane scale thrust upon mankind. The failure of high-rise public housing, in city after city, is an illustration of this hard truth. In Newark, New Jersey–a city worse decayed than Detroit, if that be conceivable–the Scudder Homes, a monolith of “housing” thirteen stories high, was demolished by high explosive, life having become intolerable there for the low-income tenants. Town-houses of two or three stories are being built as replacement: a healthy reaction against public housings’ anonymous collectivism. New Jersey’s manager of the federal Department of Housing and Urban Development, just before the destruction of Scudder Homes, delivered a public address. In his words, “Sophocles said, ‘Though a man be wise, it is no shame for him to live and learn.’ It is no shame for us to learn from this experience.”

Is it so difficult, after all, to convince Americans that simplicity may be preferable to complexity, modest contentment to unrestrained sensation, decent frugality to torpid satiety? If material aggrandizement is the chief object of a people, there remains no moral check upon the means employed to acquire wealth: violence and fraud become common practices. And presently the material production of such a society commences to decline, from causes too obvious for digression here. Our industrial economy, of all economic systems man ever created, is the most delicately dependent upon public energy, private virtue, fertility of imagination. If we continue to fancy that Efficiency and Affluence are the chief aims of human existence, presently we must find ourselves remarkably unprosperous–and wondrously miserable.

Roepke, Orton, Colin Clark, and a few other political economists have been so instructing us for the past half­ century. President Bush speaks of bringing about “a kinder, gentler America.” That consummation, so much to be desired, requires the humane imagination. And study of the thought of Wilhelm Roepke may nurture that imagination.

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