Röpke, Wilhelm (1899-1966)
Encyclopedia
Wilhelm Röpke, economist and author, was an economist of the Austrian School and a key influence on Ludwig Erhard, the economic minister of West Germany following World War II.
Röpke was a professor of economics at the University of Marburg when Adolf Hitler became chancellor of Germany in 1933. An outspoken critic of the Nazis, Röpke left his native Germany that same year to accept a position at the University of Istanbul. He remained in Turkey until 1937, when he joined the faculty of the Graduate Institute of International Studies in Geneva, a post he held until his death in 1966.
Röpke’s early writings were on business cycle theory. His views on the causes of economic downturns were largely consistent with the writings of F. A. Hayek and other Austrian economists of the period. However, he was more sanguine than many of his Austrian colleagues about using credit expansion to help an economy recover from a depression. Still he was highly critical of John Maynard Keynes’s “pump-priming” theories, which he argued “followed the banner of ‘full employment’ right into permanent inflation.”
While at Geneva, Röpke was a colleague of economist Ludwig von Mises, who left Geneva in 1940 for the United States. Röpke, too, had employment opportunities in the United States, but he declined offers from the New School for Social Research, a haven for many continental scholars during World War II, and opted to stay in Europe instead. In 1947, he joined Hayek, Mises, and others at the founding meeting of the Mont Pelerin Society, and he served as president of that organization from 1961 to 1962.
In the 1950s, Röpke turned his attention away from strictly economic issues to problems of political and social theory. Although remaining a steadfast proponent of the market economy, he emphasized the importance of social norms and religion. In his most famous book, A Humane Economy: The Social Framework of the Free Market, Röpke argued,
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. We may be certain that some day the whole world will come to see, in a blinding flash, what is now clear to only a few, namely, that this desperate attempt has created a situation in which man can have no spiritual and moral life, and this means that he cannot live at all for any length of time, in spite of television and speedways and holiday trips and comfortable apartments.
Röpke also was skeptical of some of the effects of industrialization. In particular, he feared that large corporations compromised the spirit and humanity of their employees. Although such industrial powers “may become the source of grave perils to free society,” Röpke insisted that “the most immediate and tangible threat is the state itself. I want to repeat this because it cannot be stressed too much.” Along with Walter Eucken, Alexander Rüstow, and others, Röpke advised Ludwig Erhard on how to reform the West German economy following World War II. This group of Ordoliberals, as they came to be known, pushed for a substantially more market-oriented system than that which preceded it, along with a modest system of transfer payments consistent with modern welfare state goals. Röpke was later quite critical about the growth of such transfer programs.
Ultimately, Röpke’s liberalism must be viewed in light of his commitment to decentralization—political, social, and economic. In A Humane Economy, Röpke described the “natural order” as having the following characteristics:
[W]ealth would be widely dispersed; people’s lives would have solid foundations; genuine communities, from the family upward, would form a background of moral support for the individual; there would be counterweights to competition and the mechanical operation of prices; people would have roots and would not be adrift in life without anchor; there would be a broad belt of an independent middle class, a healthy balance between town and country, industry and agriculture.
It is not surprising, then, that Röpke has been viewed favorably by both libertarians and social conservatives, such as Russell Kirk, who deemed Röpke his favorite economist. Indeed, Röpke can be viewed as a major figure in the fusionist project championed by National Review editor Frank S. Meyer.
Further Readings
Ebeling, Richard M. “Wilhelm Röpke: A Centenary Appreciation.” The Freeman: Ideas on Liberty 49 no. 10 (October 1999): 19–24.
Pongracic, Ivan. “How Different Were Röpke and Mises?” Review of Austrian Economics 10 no. 1 (1997): 125–132.
Röpke, Wilhelm. Against the Tide. Chicago: Regnery, 1969.
———. The Economics of the Free Society. Chicago: Regnery, 1963.
———. A Humane Economy: The Social Framework of the Free Market. Chicago: Regnery, 1960.
Zmirak, John. Wilhelm Röpke: Swiss Localist, Global Economist. Wilmington, DE: ISI Books, 2001.