Roepke and the Restoration of Property:
The Proletarianized Market
by Ralph Ancil
In a discussion with another famous conservative, Richard Weaver objected to the view that the solution of our problems lies in following in the footsteps of “our ancestors.” This was not enough, he argued, for we must ask “Which ancestors?” After all, some were wise while others were foolish. In a similar manner we may ask: Is it enough to say we are in favour of a market economy? Like Weaver, we can respond by asking: “Which market economy?” Some forms are better than others. This was certainly the view of German economist Wilhelm Roepke who believed the best defense of a market economy was to distinguish its basic principles from the historical form the industrialized, capitalistic economy actually took. By observing this distinction, Roepke was able to defend the ideal of a free and humane market economy without becoming trapped into defending those distortions many critics of capitalism rightly identified. However, for those of us on the political right, this may prove uncomfortable. We are perhaps unused to such a distinction and live in the world restricted to two choices: either some form of the welfare state, where we are arguably on the road to communism, or alternatively, a laissez-faire market economy.
But if we are willing to entertain the possibility of more than one form of market economy, we are brought back to the basic question: “Which free market economy should we be advocating?”
by Ralph Ancil
In a discussion with another famous conservative, Richard Weaver objected to the view that the solution of our problems lies in following in the footsteps of “our ancestors.” This was not enough, he argued, for we must ask “Which ancestors?” After all, some were wise while others were foolish. In a similar manner we may ask: Is it enough to say we are in favour of a market economy? Like Weaver, we can respond by asking: “Which market economy?” Some forms are better than others. This was certainly the view of German economist Wilhelm Roepke who believed the best defense of a market economy was to distinguish its basic principles from the historical form the industrialized, capitalistic economy actually took. By observing this distinction, Roepke was able to defend the ideal of a free and humane market economy without becoming trapped into defending those distortions many critics of capitalism rightly identified. However, for those of us on the political right, this may prove uncomfortable. We are perhaps unused to such a distinction and live in the world restricted to two choices: either some form of the welfare state, where we are arguably on the road to communism, or alternatively, a laissez-faire market economy.
But if we are willing to entertain the possibility of more than one form of market economy, we are brought back to the basic question: “Which free market economy should we be advocating?”
Roepke saw that our choices of market economy come in two basic shapes:
- (1) the proletarianizedmarket economy and
- (2) the propertied market economy.
Roepke argued strenuously all his life for the latter and not the former.
What is a proletarianized market economy? It is a deformity inherited from previous historical periods as well as from certain immanent tendencies in modern economies. Roepke was particularly critical of what he called “historical capitalism” (“historical liberalism”) because it contained a number of such inherited abuses and distortions from the past which concentrated an excessive amount of wealth in the hands of a few, and left most people with little or no productive property of their own and hence dependent solely on their wages and salaries, the fluctuations of the market, and on those whose wealth gave them disproportionate influence on the direction of policies as well as on the economy. (See especially his Social Crisis, pp. 100-148.) These dependent people were proletarians because they had only their labor to sell. When proletarianized, people become insecure and tend to seek relief in times of economic trouble through the expansion of government welfare benefits. Thus the growth of the proletarianized market economy and the growth of modern governments are linked. To accept these deformities and tendencies complacently, however, would merely add fuel to the fires of the critics of capitalism and promoters of some form of collectivism. In Roepke’s view, some vigorous alternative is needed, though it cannot be a form of collectivism any more than it can be laissez-faireism.
What then is left? Part of the answer which Roepke subscribed to is to follow the German Ordo-Liberal school of economic thought: it is Liberal in its beliefs in the efficacy of the market economy in providing material well-being and freedom, but it is Ordo in the belief that a source of order is needed in the economy that originates outside it. There is a need for an economic policy that shapes or gives some direction to a market economy consistent with its nature and other social goals. This is why Ordo-Liberals came to be identified with the social market economy in Germany, and explains why Roepke’s book A Humane Economy is subtitled The Social Framework of the Free Market. A free market economy does not produce the framework upon which it rests. There are both moral and material prerequisites to such an economy if it is to serve its purposes well, and that, in part, is a matter of public policy.
But Roepke went beyond his Ordo-Liberal colleagues in specifying the fundamentals that provide the “social” part of the market system, not by being socialistic, but by being humane, and this fact makes him finally difficult to categorize. Steeped as he was in the oldest traditions of the West, in the humanistic, Erasmian school of education which includes both Christian and pre-Christian learning, Roepke brought this perspective to bear on his economic thinking so that we may finally call him a “humane economist” and say he belonged to the “humanistic school” of economic thought as much or more so than to the Ordo-Liberal school.
While we see this approach reflected in many ways in Roepke’s works, it figures prominently is his plan for the restoration of property, the economic cornerstone of his vision of a humane economy.
What is a proletarianized market economy? It is a deformity inherited from previous historical periods as well as from certain immanent tendencies in modern economies. Roepke was particularly critical of what he called “historical capitalism” (“historical liberalism”) because it contained a number of such inherited abuses and distortions from the past which concentrated an excessive amount of wealth in the hands of a few, and left most people with little or no productive property of their own and hence dependent solely on their wages and salaries, the fluctuations of the market, and on those whose wealth gave them disproportionate influence on the direction of policies as well as on the economy. (See especially his Social Crisis, pp. 100-148.) These dependent people were proletarians because they had only their labor to sell. When proletarianized, people become insecure and tend to seek relief in times of economic trouble through the expansion of government welfare benefits. Thus the growth of the proletarianized market economy and the growth of modern governments are linked. To accept these deformities and tendencies complacently, however, would merely add fuel to the fires of the critics of capitalism and promoters of some form of collectivism. In Roepke’s view, some vigorous alternative is needed, though it cannot be a form of collectivism any more than it can be laissez-faireism.
What then is left? Part of the answer which Roepke subscribed to is to follow the German Ordo-Liberal school of economic thought: it is Liberal in its beliefs in the efficacy of the market economy in providing material well-being and freedom, but it is Ordo in the belief that a source of order is needed in the economy that originates outside it. There is a need for an economic policy that shapes or gives some direction to a market economy consistent with its nature and other social goals. This is why Ordo-Liberals came to be identified with the social market economy in Germany, and explains why Roepke’s book A Humane Economy is subtitled The Social Framework of the Free Market. A free market economy does not produce the framework upon which it rests. There are both moral and material prerequisites to such an economy if it is to serve its purposes well, and that, in part, is a matter of public policy.
But Roepke went beyond his Ordo-Liberal colleagues in specifying the fundamentals that provide the “social” part of the market system, not by being socialistic, but by being humane, and this fact makes him finally difficult to categorize. Steeped as he was in the oldest traditions of the West, in the humanistic, Erasmian school of education which includes both Christian and pre-Christian learning, Roepke brought this perspective to bear on his economic thinking so that we may finally call him a “humane economist” and say he belonged to the “humanistic school” of economic thought as much or more so than to the Ordo-Liberal school.
While we see this approach reflected in many ways in Roepke’s works, it figures prominently is his plan for the restoration of property, the economic cornerstone of his vision of a humane economy.
He gives three desiderata for this restoration:
- education,
- decentralization, and
- personalization.
We can examine each one individually:
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