Wilhelm Röpke
Encyclopedia
Wilhelm Röpke was Professor of Economics, first in Jena
Jena
Jena is a university city in central Germany on the river Saale. It has a population of approx. 103,000 and is the second largest city in the federal state of Thuringia, after Erfurt.-History:Jena was first mentioned in an 1182 document...
, then in Graz
Graz
The more recent population figures do not give the whole picture as only people with principal residence status are counted and people with secondary residence status are not. Most of the people with secondary residence status in Graz are students...
, Marburg
Marburg
Marburg is a city in the state of Hesse, Germany, on the River Lahn. It is the main town of the Marburg-Biedenkopf district and its population, as of March 2010, was 79,911.- Founding and early history :...
, Istanbul
Istanbul
Istanbul , historically known as Byzantium and Constantinople , is the largest city of Turkey. Istanbul metropolitan province had 13.26 million people living in it as of December, 2010, which is 18% of Turkey's population and the 3rd largest metropolitan area in Europe after London and...
and finally in Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
, and the main spiritual father of the German social market economy
Social market economy
The social market economy is the main economic model used in West Germany after World War II. It is based on the economic philosophy of Ordoliberalism from the Freiburg School...
, theorising and collaborating to organise the post-World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
economic re-awakening of the then destroyed German economy, deploying a program which sometimes is now referred to as the Soziologischer Liberalismus. Röpke & company (Walter Eucken
Walter Eucken
Walter Eucken was a German economist and father of ordoliberalism. His name is closely linked with the development of the "social market economy".-Life:...
, Franz Böhm
Franz Böhm
Franz Böhm was a German politician, lawyer, and economist.-Early Life:Franz Böhm was born on 16 February 1895 in Konstanz...
, Alfred Müller-Armack
Alfred Müller-Armack
Alfred Müller-Armack was a German economist and politician.He was professor of economics at University of Münster and University of Cologne. Müller-Armack coined the term "social market economy" in 1946....
and Alexander Rüstow
Alexander Rüstow
Alexander Rüstow was a German sociologist and economist. He originated the term neoliberalism meant as a synonym for Ordoliberalism but the term has undergone a change of meaning. He was one of the fathers of the "Social Market Economy" that shaped the economy of West-Germany after World War II...
) elucidated the ideas about Soziologischer Liberalismus (a sociologically inclined variant of Ordoliberalism
Ordoliberalism
Ordoliberalism is a school of liberalism that emphasised the need for the state to ensure that the free market produces results close to its theoretical potential . The theory was developed by German economists and legal scholars such as Walter Eucken, Franz Böhm, Hans Grossmann-Doerth and Leonhard...
), which then were introduced formally by Germany's post-World War II Minister for Economics Ludwig Erhard
Ludwig Erhard
Ludwig Wilhelm Erhard was a German politician affiliated with the CDU and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery , particularly in his role as Minister of Economics under Chancellor Konrad Adenauer...
, operating under Konrad Adenauer
Konrad Adenauer
Konrad Hermann Joseph Adenauer was a German statesman. He was the chancellor of the West Germany from 1949 to 1963. He is widely recognised as a person who led his country from the ruins of World War II to a powerful and prosperous nation that had forged close relations with old enemies France,...
's Chancellorship. Röpke and co.'s economic influence therefore is widely considered largely responsible for promoting Germany's post-World War II Economic "Miracle"
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...
, so called. Röpke was also an historian.
Work
In his youth Röpke was first inspired by socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
and afterwards by the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
economist Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
. Despite this, the post-World War II economic liberation
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...
enabling Germany to once again lead Europe, which Röpke and his allies (Walter Eucken
Walter Eucken
Walter Eucken was a German economist and father of ordoliberalism. His name is closely linked with the development of the "social market economy".-Life:...
, Franz Böhm
Franz Böhm
Franz Böhm was a German politician, lawyer, and economist.-Early Life:Franz Böhm was born on 16 February 1895 in Konstanz...
, Alfred Müller-Armack
Alfred Müller-Armack
Alfred Müller-Armack was a German economist and politician.He was professor of economics at University of Münster and University of Cologne. Müller-Armack coined the term "social market economy" in 1946....
and Alexander Rüstow
Alexander Rüstow
Alexander Rüstow was a German sociologist and economist. He originated the term neoliberalism meant as a synonym for Ordoliberalism but the term has undergone a change of meaning. He was one of the fathers of the "Social Market Economy" that shaped the economy of West-Germany after World War II...
) were the intellectual muscle behind, occurred by implementing policy divergent to that advocated by Ludwig Von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
. Though the two men shared some beliefs in certain areas, Röpke & co. instead formed the school of Ordoliberalism
Ordoliberalism
Ordoliberalism is a school of liberalism that emphasised the need for the state to ensure that the free market produces results close to its theoretical potential . The theory was developed by German economists and legal scholars such as Walter Eucken, Franz Böhm, Hans Grossmann-Doerth and Leonhard...
, to advocate free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
but with more Central Bank and State
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
influence than what Austrian School economists
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
suggest is required. Unlike many mainstream Austrian School economists
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, Röpke and the Ordoliberalists
Ordoliberalism
Ordoliberalism is a school of liberalism that emphasised the need for the state to ensure that the free market produces results close to its theoretical potential . The theory was developed by German economists and legal scholars such as Walter Eucken, Franz Böhm, Hans Grossmann-Doerth and Leonhard...
conceded that the Market Economy
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
can be more disruptive and inhumane unless Central Bank and State
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
intervention is permitted a role to play. Following Alexander Rüstow
Alexander Rüstow
Alexander Rüstow was a German sociologist and economist. He originated the term neoliberalism meant as a synonym for Ordoliberalism but the term has undergone a change of meaning. He was one of the fathers of the "Social Market Economy" that shaped the economy of West-Germany after World War II...
, Röpke concluded that free markets' vaunted efficiency and affluence can exact social and spiritual forfeits. In consequence, he envisioned a positive and more extensive role for the state, as rule-maker, enforcer of competition, and provider of basic social security. In spite of this, however, Röpke remained a political decentralist that rejected Keynesian economics
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
, deriding it as "a typically intellectual construction that forgets the social reality behind the integral calculus".
For Röpke, right
Right
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...
s and moral
Ethics
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.Major branches of ethics include:...
habits (Sitte) were key elements which the Central Bank and State
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
(opposed to the Market-Economy
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
) needed to subtly help organise. With a "conforming" social, economic, and financial policy, the task of which is to protect the weak "beyond the market," to equalize interests, set rules of the game, and limit market power, Röpke strove for an economic order of "economic humanism
Humanism
Humanism is an approach in study, philosophy, world view or practice that focuses on human values and concerns. In philosophy and social science, humanism is a perspective which affirms some notion of human nature, and is contrasted with anti-humanism....
," something which he also referred to as the "Third Way
Third way (centrism)
The Third Way refers to various political positions which try to reconcile right-wing and left-wing politics by advocating a varying synthesis of right-wing economic and left-wing social policies. Third Way approaches are commonly viewed from within the first- and second-way perspectives as...
." Röpke stood for a society and social policy in which human rights are given the highest importance. He believed that individualism
Individualism
Individualism is the moral stance, political philosophy, ideology, or social outlook that stresses "the moral worth of the individual". Individualists promote the exercise of one's goals and desires and so value independence and self-reliance while opposing most external interference upon one's own...
must be balanced by a well-thought-out principle of sociality and humanity. Significantly, Röpke's economic thought is highly congruent with Catholic social teaching
Catholic social teaching
Catholic social teaching is a body of doctrine developed by the Catholic Church on matters of poverty and wealth, economics, social organization and the role of the state...
. As he grew older, Röpke increasingly appreciated the overall, general benefits of a society that embraces spirituality, particularly in contrast to societies where spirituality is marginalized or demonized.
Influence
In particular, from 1930-31 Röpke served on a government commission examining unemployment, and from 1947-48 on Germany's post-World War II currency reform council. Furthermore, Röpke personally advised the Chancellor of (post-World War II) West GermanyWest Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
, Konrad Adenauer
Konrad Adenauer
Konrad Hermann Joseph Adenauer was a German statesman. He was the chancellor of the West Germany from 1949 to 1963. He is widely recognised as a person who led his country from the ruins of World War II to a powerful and prosperous nation that had forged close relations with old enemies France,...
, and his Minister of Economics, Ludwig Erhard
Ludwig Erhard
Ludwig Wilhelm Erhard was a German politician affiliated with the CDU and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery , particularly in his role as Minister of Economics under Chancellor Konrad Adenauer...
up until the late 1950s, and therefore is credited with contributing the intellectual backbone of the now infamous German Economic "Miracle"
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...
.
Occupying West Germany following the conclusion of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
conclusion, the 'Western Allies' (America & Britain) had continued to implement an economic policy of rationing, wage and price controls, coupled with continued excessive printing of paper money. Production then consequently collapsed and prominent businessmen once again became unwilling to accept the (relatively) worthless currency, triggering widespread shortages and the mainstreaming of a grey-market barter economy in substitute. Röpke’s The Solution to the German Problem (1947) illuminated the negatives of the Western Allies' continuing of Hitler's economic policies. Instead, Ropke diagnosed abolishing price controls and replacing the reichsmark with a sound, more trustworthy currency. Accordingly, price and wage controls were then incrementally abolished and on June 21, 1948, the new Deutsche Mark begun to formally circulate. These long-range policy initiatives, however, spawned some civil unrest immediately following their implementation by increasing unemployment. Despite these disturbances and stoically supported by Ropke’s learned newspaper writings, the Minister of Economics Ludwig Erhard
Ludwig Erhard
Ludwig Wilhelm Erhard was a German politician affiliated with the CDU and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery , particularly in his role as Minister of Economics under Chancellor Konrad Adenauer...
persevered with foresight, and this eventually amounted to “a great personal vindication for Röpke” - Röpke and his allies had “made West Germany immune to communism.”
He was president of the Mont Pelerin Society
Mont Pelerin Society
The Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
from 1961-1962. But as a result of a longer quarrel with Friedrich August von Hayek he stepped down and quit his membership in the Mont Pelerin Society.
Online works
- Crises and Cycles (1936)
- International Economic Disintegration (1942)
- The German Question (1946)
- The Social Crisis of Our Time (1950)
- International Order and Economic Integration (1959)
- A Humane Economy: The Social Framework of the Free Market (1960)
- Economics of the Free Society (1963)
- Against the Tide (1969); posthumous essay collection
- Two Essays by Wilhelm Roepke (1987)
See also
- Contributions to liberal theoryContributions to liberal theoryIndividual contributors to classical liberalism and political liberalism are associated with philosophers of the Enlightenment. Liberalism as a specifically named ideology begins in the late 18th century as a movement towards self-government and away from aristocracy...
- LiberalismLiberalismLiberalism is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally, liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights,...
- OrdoliberalismOrdoliberalismOrdoliberalism is a school of liberalism that emphasised the need for the state to ensure that the free market produces results close to its theoretical potential . The theory was developed by German economists and legal scholars such as Walter Eucken, Franz Böhm, Hans Grossmann-Doerth and Leonhard...
- Mont Pelerin SocietyMont Pelerin SocietyThe Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
External links
- Wilhelm Röpke’s Political Economy by Samuel Gregg
- The Social Market Economy - U.S. Library of Congress
- "How Different Were Ropke and Mises?" by Ivan Pongracic
- A biography of Röpke - by Shawn Ritenour
- Wilhelm Röpke - Library Collections (including his entire correspondence in original) - Library of the Institute for Economic Policy, University of Cologne, Germany
- Wilhelm Röpke - Library Collections (German Page) - Library of the Institute for Economic Policy, University of Cologne, Germany
- "Wilhelm Röpke: A Centenary Appreciation" by Richard M. Ebeling ("The Freedom: Ideas on Liberty," October 1999)