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In Ropke’s writings, Erhard saw a way out of the totalitarian
structures of socialism--be it Hitler’s National Socialism or Stalin’s
Soviet Communism. Both systems,
Ropke insisted, “rested their platforms on implicitly or explicit economic
arguments, especially promises of increased prosperity, more fairly distributed
throughout the population. It is no
accident that each movement claimed the title ‘socialist’” (p. 50).
And he also discerned that all forms of socialism are deeply immoral, for
they “’give too little to man,
his freedom, and his personality; and too much to society’” (p. 56).
Ropke’s works brought readers like Erhard “words of transformation,
offering them once more firm ground under their feet and an inner faith in the
value and blessings of freedom, justice and morality’” (p. 6).
Born in 1899 in Schwarmstedt, Germany, he grew up relishing the colorful,
productive, soul-satisfying generosity of village life, lingering memories of
which helped shape his economic thought. He
served with distinction as a soldier in WWI, following which he studied at three
universities, earning his doctorate in 1921.
After a brief stint working for the Weimar Republic, “In 1924 Ropke was
appointed extraordinarius (professor) at the University of Jena, making
him the youngest professor in the German-speaking world” (p. 30).
Successive academic appointments led him to Graz, Marburg, and Frankfurt,
where he openly opposed both socialists and
nationalists. When Adolph
Hitler came to power, most academics--Heidegger, Bultmann, et al.--maneuvered
to keep their positions. But not
Ropke! “At Frankfurt that day in
February 1933, he rose to deliver a wry, acid account of the Nazi movement as
‘a mass revolt against reason, freedom, humanity, and against the written and
unwritten millennial rules that enable a highly differentiated human community
to exist without degrading individuals into slaves of the state’” (p.
35-36). He denounced being
“’lukewarm, lazy, and cowardly in the hour of utmost danger, with having
been an obfuscated worshipper of the childish twaddle of the day!’” (p. 38).
Predictably, the Nazis moved against Ropke.
Within months he lost his tenured position.
Fleeing for his life, he sought shelter first in Holland and then in
Turkey, where he taught for four years in Istanbul.
In 1937 he moved to the Graduate Institute of International Studies in
Geneva, Switzerland, where he remained for nearly 30 years.
He found among the Swiss not only political refuge but a model for
healthy economics. The “founding
fathers” of the United States, such as John Adams and Benjamin Franklin, had
openly admired “the Helvetic Republic” as an example of “limited
government and political liberty” (p. 16).
Then, when the Swiss set forth a new constitution in 1848, they turned to
the Constitution of the United States as their model.
Consequently, since localism has suffered setbacks in America--as is
evident in the courts’ disdain for the ninth and tenth amendments--the Swiss
now enjoy “a system that is still more successfully decentralized than any on
earth” (p. 17). Swiss citizens and
cantons--not the federal government--exercise real power in the nation.
This allows intermediate institutions--families, churches, social
groups-- considerable influence in shaping and maintaining society.
It also assures low taxes. Such
localized power centers provide buffers against both the harsher edges of the
free-market economy and the voracious, totalitarian hunger of highly centralized
states.
Living amongst the Swiss, Ropke saw how efficiently--and how
justly--their system worked. It was,
he concluded, in Zmirak’s words, “no accident that the Swiss enjoy the
highest standard of living, per capita, in the world; it is the concrete fruit
of localism, liberalism, and direct economy” (p. 21).
So he made it the model for his proposals for the rest of Europe.
“Put briefly, Ropke centered his economics in the dignity of the human
person, who lives not alone but as part of a family and a community; who thrives
or suffers according to the health of those institutions; and who regulates his
own economic activity according to financial and personal incentives that
he--and not the State--is best equipped to interpret.
Ropke further held that economic incentives are most efficiently conveyed
through the price system, while non-economic goods are best preserved through
private associations such as the extended family, the village, and the church”
(p. 53).
Seeking to chart a course between ruthless free enterprise capitalism and
brutal state-run socialism, Ropke proposed a “third way” requiring “’the
powerful influences of religion, morality, and law’” to sustain it (p. 82).
Entrepreneurs, vital to an efficient economic system, must be restrained
lest they trample the weak. Bureaucrats,
necessary for any government, must be restrained lest they bloat themselves at
the public trough. Ropke
especially feared the growth of the welfare state in Europe and America, seeing
it as a democratically established dictatorial system.
The “’formidable problem of our times is the leviathan of omnipotent
government,’” he said (p. 157). The
very “national socialism” the Allies fought to destroy in Germany silently
slipped into the “welfare” systems they devised to “help” people at
home. Doing so, however innocently
they lost the very thing folks most
need: freedom!
Ropke insisted that bigness--whether corporate or governmental--all
concentrations of inordinate power must be resisted.
“’Away from centralization in every connection, from accumulations of
property and power which corrupt the one and proletarianise the other, from the
soullessness and lack of dignity of labour through mechanised production and
towards decentralisation in the widest and most comprehensive sense of the word;
to the restoration of property; to shifting of the social centre of gravity from
above downwards; to the organic building-up of society starting with the family
through parish and county to the nation; to a corrective for exaggerations in
organization, in specialisation, and in division of labour (with at least a
minimum of self-maintenance from one’s own soil); to the bringing back of all
dimensions and proportions from the colossal to the humanly reasonable; . . .
.’” (p. 175).
*************************************
To explore Ropke’s own writings, the most accessible is a recent
reprint of his 1960 treatise, A Humane Economy:
The Social Framework of the
Free Market (Wilmington: ISI
Books, 1998). Such an economy,
writes Dermot Quinn, “is only, in the end, a shadowy reflection of the divine
one” (p. xviii). He begins by
declaring that “the technique of socialism--that is, economic planning,
nationalization, the erosion of property, and the cradle-to-grave welfare
state--has done great harm in our times; on the other hand, we have irrefutable
testimony of the last fifteen years, particularly in Germany, that the
opposite--the liberal--technique of the market economy opens the way to
well-being, freedom, the rule of law, the distribution of power, and
international co-operation” (p. 3).
Collectivism denies personal freedom, crushes the very image of God
wherein we are created. (Ignorantly,
naively, tragically, Christians supporting socialistic economics have embraced a
movement intent on destroying the verities of their faith.)
Ropke, however, envisions man as defined by the Christian tradition.
Consequently, the truly important “things are those beyond supply and
demand and the world of property. It
is they which give meaning, dignity, and inner richness to life, those purposes
and values which belong to the realm of ethics in the widest sense.”
Man does not live by bread alone! And
yet, importantly, “There is a profound ethical reason why an economy governed
by free prices, free markets, and free competition implies health and plenty
while the socialist economy means sickness, disorder, and lower productivity”
(pp. 5-6). Freedom’s our
birthright! When it’s respected
and protected, a “humane economy” results.
The totalitarian sickness of mass democracy remains rooted in the
Jacobean ideology spawned by radicals like Robespierre in the French Revolution.
It is, above all, religious in nature.
In his earlier writings Ropke dealt almost singularly with economics.
By 1960, in A Humane Economy, he decided to clarify his deepest
convictions: “the ultimate source
of our civilization’s disease is the spiritual and religious crisis which has
overtaken all of us and which each must master for himself.
Above all, man is Homo religiosus, and yet we have, for the past
century, made the desperate attempt to get along without God, and in the place
of God we have set up the cult of man, his profane or even ungodly science and
art, his technical achievements, and his State” (p. 8).
All our technical grandeur, without God, cannot but destroy us.
Replacing God, the
collectivist State is now our gravest enemy, “the most immediate and tangible
threat” we face (p. 33). In 1787
Goethe prophetically said: “I must
say, I believe that humanism will eventually prevail; but I am afraid that at
the same time the world will become a huge hospital, with everyone nursing his
neighbor” (pp. 163-64). Whereas
classic liberalism defends human freedom, seeking to maximize individual
liberty, Jacobins stress human equality and try to redistribute the world’s
wealth. Accordingly, “The state
and the concentration of its power, exemplified in the predominance of the
budget, have become a cancerous growth gnawing at the freedom and order of
society and economy. Surely, no one
has any illusions about what it means when the modern state increasingly--and
most eagerly before elections, when the voter’s favor is at stake--assumes the
task of handing out security, welfare, and assistance to all and sundry,
favoring now this and now that group, and when people of all classes and at all
levels, not excluding entrepreneurs, get into the habit of looking on the state
as a kind of human Providence” (p. 33).
In a lengthy chapter entitled “Welfare State and Chronic Inflation,”
Ropke addresses two closely linked and equally destructive aspects of the
post-WWII era. Voters in a democracy
easily succumb to the allure of free social services and cheap money, so they
periodically indulge in a legalized “robbery by the ballot.”
“It cannot be repeated too often that what is given to the one must be
taken from the others, and whenever we say that the state is to help us, we are
laying a claim to somebody else’s money, his earnings or his savings” (p.
174). Though disguised by
adroit politicians as “compassion,” the driving passion of the masses is
envy, the desire to bring down those who prosper and distribute their wealth.
“It is,” he says, “a state which deprives people of the right to
dispose freely of their income by taking it away from them in taxes and which,
by compensation, and after deduction of the extraordinarily high administrative
costs of the system, takes over the responsibility for the satisfaction of the
more essential needs, either wholly (as in the case of education or medical
care) or in part (as in the case of subsidized housing or food).
What people eventually retain from their income is pocket money, to be
spent on television or football pools” (p. 158).
To resist such statism, Ropke continually praises sound currency and
private property, essentials for a free society.
A free market economy requires “the institution of private ownership,
in the true sense of legally safeguarded freedom to dispose of one’s own
property, including freedom of testation” (p. 94).
Inflation, encouraged by economists like John Maynard Keynes and
implemented by politicians like Franklin D. Roosevelt, eats away at the innards
of a good society. A certain
euphoria always surrounds inflation, but generally “things happen just as they
are described in the second part of Faust in the famous paper-money
scene: ‘You can’t imagine how it
pleased the people.’ But that is
precisely the dangerous seduction of inflation:
it begins with the sweet drops and ends with the bitter” (p. 195).
And, equally important, free folks need houses, lands, savings
accounts--resources sustaining their independence from the state.
Unfortunately, John Locke’s firm conviction-- that we are by nature
entitled to life, liberty, and property--no longer stands.
Private property has increasingly been subjected too state control.
***********************
Soon after fleeing Germany, while teaching in Turkey, Ropke published,
shortly before the Nazis marched into Vienna in 1937, Economics of the Free
Society (Grove City, PA: Libertarian
Press, Inc., 1994). One finds
herein a marvelous introduction to the discipline of economics--readable and
understandable without compromising its scholarly integrity.
One learns about the importance of the monetary system, the division of
labor, marginal utility, etc. Ropke
knows how to use illustrations and simplify theoretical abstractions.
He also defends the classical, liberal, free market economy.
Amazingly enough, the apparent anarchy of the bewilderingly complex free
market produces order. Unlike the “commanded
order” of socialist systems, the “spontaneous order” of the
free market provides the very best economy known to man.
Importantly, however, “He who chooses the market economy must, however,
also choose: free formation of
prices, competition, risk of loss and chance for gain, individual
responsibility, free enterprise, private property” (p. 268).
He explains, for example, why money--serving as a medium of exchange, a
common denominator--is a positive good. Money
enables the free market to thrive, makes possible the credit system, savings and
investment, efficiently enabling the distribution of goods.
“It is, as Dostoievsky once expressed it, ‘coined freedom’” (p.
88). Consequently, debasing the
currency, indulging in inflation, deeply harms the economy--and ultimately
persons. Sound money (preferably
tied to the gold standard, Ropke insists) truly blesses mankind.
Reams of learned articles have sought to escape the fact, but “for
thousands of years men have continued to regard gold as the commodity of highest
and surest worth and as the most secure anchor of wealth.
One may protest this as often as one likes--the fact remains” (p. 107).
He also helps one understand the rich and the poor.
And understanding is truly needed in an area routinely distorted by
demagogues of various sorts. Railing
against the rich on behalf of the poor gains considerable currency for public
figures. “But instead of trying to
acquire the facile reputation of a ‘social-minded’ man by vague demands for
a ‘just wage,’ by railing against ‘interest slavery’ and
‘profiteering,’ by emotional outpourings over ‘gluttonous landlords,’
and real estate ‘speculators,’ and instead of shoving aside a
‘liberalistic’ the objections of those who understand something of these
matters, one would serve his country better by applying himself to an
unprejudiced study of the complex interrelationships of the economy” (p. 195).
Would that professors and preachers and politicians learned something
before pontificating on economic injustices!
The free market, basic to a healthy economy, rightly functions only
within a deeply moral society. Healthy
markets “cannot function unless there is general acceptance of such norms of
conduct as willingness to abide by the rules of the game and to respect the
rights of others, to maintain professional integrity and professional pride, and
to avoid deceit, corruption, and the manipulation of the powers of the state for
personal and selfish ends. The big
question of our time is whether we have been so heedless and unsparing in the
use of our moral reserves that it is no longer possible to renew these vital
props of our economic system and whether it is yet possible to discover new
sources of moral strength” (p. 27).
Summing up his case, Ropke says that his “’third road’ of economic
policy is, above all a road of moderation and proportion.
It is incumbent upon us to make use of every available means to free
our society from its intoxication with big numbers, from the cult of the
colossal, from centralization, from hyper-organization and standardization, from
the he pseudo-ideal of the ‘bigger and better,’ from the worship of the mass
man and from addiction to the gigantic. We
must lead it back to a natural, human, spontaneous balanced, and diversified
existence” (p. 271). Sadly enough,
amidst incessant progress man “forgot man himself:
forgot his soul, his instincts, his nerves and organs” (p. 271).
What Ropke proposed, in 1937, was that we take the road “favoring of
the ownership of small and medium-sized properties, independent farming, the
decentralization of industrial areas, the restoration of the dignity and meaning
of work, the reanimation of professional pride and professional ethics, and the
promotion of communal solidarity” (p. 271).
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