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Volume 18, Number 1 (Autumn 1977)

Wilhelm Roepke and the ‘Third Road’

Patrick M. Boarman

The enormous span of Wilhelm Roepke’s interests and writings complicates the task of doing justice to his thought within the confines of an essay. Hence, I have elected to focus on just one aspect of his approach and of his philosophy, but one that has proved to be decisive in the practical implementation in our time of some of Roepke’s ideas. I refer to his overriding concern for balance, for proportion, for moderation in all things. One of his most important books, as yet untranslated in English, bears the characteristic title Mass und Mitte, which may be freely translated as Measure and Moderation.

Whether in his economic writings or in his wide-ranging excursions into political and social theory, the pendulum of Roepke’s thought moves irresistibly toward the vital center and away from extremes. At the same time, he did not achieve his legendary status as a fighter for freedom by diluting his defense of principle or by yielding to compromise for the sake of harmony. The harmony he sought was not in the area of polemics. It was an organic phenomenon, the natural harmony in the affairs of both men and nations that results from a right order of things, not only in the economic sphere but in all the multitudinous and intersecting frameworks—historical, cultural, political, environmental, moral, even religious—that make up the totality of human life. Roepke, one of the clearest thinkers of the age, had an unusually clear and detailed conception of what would be found in the “center” he espoused. And he excoriated such contentless phrases as “the mixed economy” (the favorite incantation of exegetes of the Keynesian gospel) as drivel, implying that any old combination of government with the market economy is feasible or desirable. In fact, as he tirelessly argued, there are very clear limits to the quantitative and qualitative roles that government can play in the market economy and which, when transgressed, lead to the death of the market and the nightmare of collectivism.

As a man of the center, Roepke also rejected all artificial schemata—be they economic, sociological, or philosophical, and however tricked out in elegant mathematical formulae—that tended to make out of human beings who are, in reality, infinitely rich and variegated and unique, one-dimensional pieces of matter. In that spirit, he took to task, repeatedly, the overweening pretensions of a particular scientific method, namely the quantitative-casual-deterministic method, which, dominant at first in the natural sciences, subsequently triumphed as well in the behavioral and social sciences with a gradual suppression of all qualitative-teleological-moral thought.

While denouncing with undiminished vigor the quantitative-geometric approach to human behavior, which he viewed as essentially anti-human, Roepke was himself one of the most lucid and ardent proponents of a rational economics, based on the free market, on private property, and, on competition. In his historic contributions to the science of economics, building on the work of his great predecessors in the classical tradition, he constantly emphasized the need for a non-emotional, non-hysterical approach to economic questions, and he underscored the dangers of an economically ignorant moralism which, trying to build a good society in disregard of the economic verities would end in the destruction of the foundations of material well-being and in the inevitable accession to power, in this extremity, of totalitarians of the left or of the right.

At least half of Roepke’s huge outpouring of tracts, essays, and books is concerned with this theme of defending the principles of economics against an antirational, obscurantist pseudo-moralism. It was such an approach, overlaid with nihilism, that began to take hold in his own country in the 1930s, took over completely in the Nazi period, and, in spite of the manifest successes of the free economy in the postwar period, was again on the rise in the Western world in the final years of Roepke’s life.

Hence, it was and remained for him a first order of business in the struggle for human freedom to make clear, over and over again, that the market economy is not alone the economic system which accords best with that freedom but that, to our great and undeserved good fortune, it is the most productive as well. He was at pains to point out that government is not some kind of fourth dimension, a cornucopia of goodies that can be endlessly tapped without cost, that scarcity is still the fundamental law of economic life, and that everything we have and hold is likely to go down the drain if the market economy is destroyed. In all these respects, the market economy in his view, is a thing to be prized. It has an immanent ethic that adapts it to the highest goals of our culture.

book cover imageBut it is Roepke also who reminds us, in the other half of his monumental life’s work, that the market economy, valuable as it is, does not exhaust human nature, that it is subordinated to higher ends. The German title of what is, perhaps, Roepke’s most representative book is, in this regard, significant. That title, rendered as A Humane Economy is Jenseits von Angebot und Nachfrage. Literally translated, it means “Beyond Supply and Demand.” For Roepke, the most important things do, in fact, lie beyond supply and demand. While one must have bread, he cannot live by bread alone. In short, while Roepke remained a trenchant critic of economic “knownothingism,” which believes that only the perverse workings of the capitalistic system prevent everybody from having everything he wants all the time, he was equally opposed to a morally and spiritually obtuse “economism,” uncaring of or contemptuous of the things which lie beyond supply and demand.

In this connection, I think it can be fairly said that Roepke, with his perception of the infinitely complex and variegated sources of human happiness and with his immense knowledge of the literary, cultural, and spiritual legacy of the past, and of the essential links between the past and the present, was uncomfortable with the simplistic mechanics of an exclusively economic interpretation of human affairs.

One small incident, symbolic of this point, is worth mentioning. In 1946, as a student in Roepke’s seminar, I was invited to his home in Champel in Geneva, a great privilege. We got to discussing the war, just over, and the immense tragedy of it, and Roepke recounted an episode in which, during the war, he has met, quite by accident, his old friend and colleague, Ludwig von Mises. He remembered von Mises saying that if only the principles of free trade had been followed from the beginning, World War II might never have happened. I don’t recall Roepke’s exact reply to this, but he was, in effect, struck dumb. And he remarked to me that it was incredible that anyone with a fair knowledge of German or of European history could reduce the German question—the darkest and most sombre question of the age, with myriad roots reaching back hundreds of years—to a mere set of economic arrangements. For Roepke, this kind of economic determinism, though employed in the defense of capitalism, is just as fallacious as the Marxian version of economic determinism, directed to the justification of the dialectic. Both are wrong in equating society and history with the economy.

So it was, too, that Roepke, a man born in 1899, hence with one foot, so to speak, in the nineteenth century, could look back on that century and, confronting the gruesome horrors of the twentieth, find a great deal to admire. In particular, he often praised the signal accomplishments of the infant capitalist economy of the early nineteenth century. But he found much to condemn in the subsequent evolution of “historic” capitalism, with its incipient tendencies toward monopolism and giantism, its obsessive materialism, its drive toward mass production and the associated erection of a mass culture based on mass consumption. He deplored the attendant shrinking of the spheres still left to individual creativity and initiative and to the “unbought graces of life,” a Burkean phrase he was fond of citing. In historic capitalism, he saw also the seeds of a later full-blown hostility to the preservation of, the small organic community, of small industry, of the peasant farmer, of a way of life made to “the measure of man.”

If Roepke himself had an obsession, it was his passionate detestation of “the cult of the colossal,” of the accoutrements of an increasingly mechanistic, quantitative, super-efficient, perfectionist, and mathematized society. He saw this cult, expanded to a culture, as the progenitor of the mass man, spiritually starved, desperately bored, and hence critically vulnerable to the new pseudo-religions of nationalism and socialism, and of their variant species, brown or red.

Also, Roepke believed that one of the most noxious of the poisons of modernity is its fierce contempt for the past. He bemoaned the educational jacobinism and spiritual egalitarianism which sees in the maintenance of a classical tradition, notably the teaching of Latin and Greek, a symbol of elitism, hence deservedly hated by mass man, unable to summon the discipline that such study requires. In this context, he cited an incident in the German Parliament—the Bundestag—in which a Social Democratic member angrily responded to the use of a three word Latin phrase, “Vigilia praetium libertatis,” as follows: “Reden Sie deutsch im deutschen Bundestag.” (“Speak German in the German Parliament.”) It was against this grotesque putting down of the cultural legacy of the West that Roepke fought an unending, if often discouraging battle.

“On the one side,” he wrote (in A Humane Economy): “are those who believe that society and economy can be reconstructed from above and without considering the fine web of the past. They believe in radical new beginnings; they are reformers inspired by an optimism that is apparently proof against any failure. On the other side are those who possess a sense of history and are convinced that the social fabric is highly sensitive to any interference. They deeply distrust every kind of optimistic reforming spirit and do not believe in crusades to conquer some new Jerusalem; they hold, with Burke, that the true statesman must combine capacity for reform with the will to prudent preservation.”

Characteristic of Roepke’s concern for balance, for the golden mean, and for meta-economic values are. the following passages from a foreword he wrote to an early edition of Die Lehre von der Wirtschaft (Economics of the Free Society):

”It would be a profound misapprehension to imagine that a slogan embodying a mere return to old-style rugged individualism is the battle-cry that will help us win the spiritual victory over collectivism. For we cannot ignore the fact that the debacle of economic liberalism[1] is due in great part to its own insufficiencies, to its abortive endeavors, to its degeneration. Nor can we any longer deny that the chief causes of this decay are to be found in humanity itself: the spiritual, moral, and political aberrations which foster the creation of a mass society and the revolt of the masses which such a society engenders. Now it is precisely certain economic and social developments of the liberal era that have contributed decisively to this evolution. In order, therefore, to study and judge these developments, we must keep an open mind and not tie ourselves to the economic platform of historical liberalism.

“I am looking beyond laissez-faire and collectivism for a third road, the only road which still remains open to us. Elsewhere,[2] I have described what we may expect to encounter along this road: an economic and social order founded on liberty, justice, and human dignity; an order which does not neglect the nature of man and one which, while giving free rein to the powerful instinct of self-preservation, adds to its other benefits that of material abundance. In looking for this road, I seek to avoid one of the deep-seated fallacies of our time which Thierry Maulnier felicitously named the ‘Manichaean doctrine’—the habit, that is, of thinking always in pairs of diametrically opposed ideas and of confining oneself without exception to an exclusive choice between two extremes (inflation or deflation, laissez-faire or planned economy, etc.) . . .

“Economic freedom is no doubt a necessary condition for the maintenance of ‘the good society,’ but scarcely a sufficient one. There is grave danger of allowing ourselves to be distracted from the main issue by exclusive concern with this one point, important though it may be.

“The main issue becomes clear if we ask ourselves the question: what is the opposite pole of collectivism? Economic freedom? Hardly. A return to economic freedom would certainly lessen monopoly abuses and would eliminate some other imperfections of the economic system. But would there be any significant change in the other morbid phenomena of our time? Would a country which no longer has farmers or artisans or a stable middle class get all these things at one fell swoop thanks to economic freedom? Would the individual find more meaning and dignity in his work? But if a simple return to economic freedom will not procure all these advantages, how can we expect people to become enthused over such a program? Must we not offer something in addition? . . .”

It was because Roepke was not tied to the platform of historical capitalism that his prescriptions for the reestablishment of the market economy in Germany after the war met with acceptance on the part of his countrymen.

That concept had, in fact, been so strongly discredited that the word “capitalism” was and is never used to describe the German economic system after 1948. The accepted terminology is “the social market economy.” And note well that in this concept, which, of course, lay behind the German economic revival, the state is taken for what it is, a locus of great power which, though we should be concerned to limit, we should not fear to use for good ends. Though Roepke was an enemy of big government, as he was of big anything, and feared the misuse and abuse of government power, he believed that, rightfully used, it could play a major role in the creation and establishment of those framework institutions—monetary, fiscal, and juridical—that are crucial to the survival of the market economy.  

1. The use (or abuse) of the term “liberalism” in the United States to designate an ideology which advocates increasing government interference into private life should not be confused with the meaning which Europeans attach to it. By Europeans, liberalism is still understood in its pristine sense of freedom from government regimentation; this is the sense in which Roepke employs the term throughout.

2. For a full and explicit statement of the author’s program of the “third road,” the reader should consult his trilogy: Civitas Humana, William Hodge & Co., London, 1948; The Social Crisis of Our Time, University of Chicago Press, 1950; International Order and Economic Integration, Dordrecht, Holland, 1959; A Humane Economy, Henry Regnery Co., Chicago, 1960; and Economics of the Free Society, Henry Regnery Co., Chicago, 1963, esp, Chap. IX.

Patrick M. Boarman (1922–) is translator of Wilhelm Roepke’s Economics of the Free Society (Regnery, 1963) and the author and editor of several other books. He is president of Patrick M. Boarman Associates, an international business consulting firm based in Palos Verdes, California, and has held professorships at Pepperdine University, the University of Geneva, and other institutions. He is Professor Emeritus of economics at National University in San Diego.

Posted: March 20, 2011 in Best of the Bookman.

All great systems, ethical or political, attain their ascendency over the minds of men by virtue of their appeal to the imagination; and when they cease to touch the chords of wonder and mystery and hope, their power is lost, and men look elsewhere for some set of principles by which they may be guided.

Russell Kirk

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