Why Capitalism Is NOT a Substitute For republicanism

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Mandeville, LA –  On today’s show I mention this wonderful post of a speech Dr. Russel Kirk gave in 1988. After reading this piece I was moved to take the task of promoting this work because it says everything about modern conservatism (which is a misnomer now see here) and why it is doomed to fail with reverting to “small is beautiful conservation.” Thanks to Winston Elliot III and The Imaginative Conservative blog for the post.

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Is Davis a Traitor? In Paperback, get it signed by the Editor! Click here to find out how!

The Humane Economy of Wilhelm Roepke

by Russell Kirk
Today I offer you some observations concerning Wilhelm Roepke, a principal social thinker of the 20th century – and, incidentally, the principal architect of Germany’s economic recovery at the end of the Second World War. His books are out of print in this country at present, but I plan to reprint in a series that I edit, The Library of Conservative Thought, his study The Social Crisis of Our Time, and later other books of his (they are now in print, ed.). And to my remarks on Professor Roepke, I shall add certain related reflections of my own.

Roepke told me once, apropos such alternative means of subsistence in industrial society, of an amusing exchange between himself and Ludwigvon Mises … During the SecondWorld War, the city of Geneva had made available to its citizens plotsof ground along the ring around the city where the ancient walls hadstood. On these allotments, in time of scarcity of food, the people ofGeneva, particularly the laboring folk, could cultivate vegetables forthemselves. These allotments turned out to be so popular, both as recreation and as a source of supplementary food, that the city continued to make this land available to applicants after the war was over. Now Mises, who had been professor years before at the Geneva Institute of International Affairs, came to visit Roepke in Geneva, about 1947.Happy at the success of these garden allotments, Roepke took his gues to see Genevan working people digging and hoeing in their gardens. But Mises shook his head sadly: “A very inefficient way of producing foodstuffs!” he lamented. “Perhaps so,” Roepke replied. “But perhaps avery efficient way of producing human happiness.”

Roepke was the principal champion of a humane economy: that is, an economic system suited to human nature and to a humane scale in society, as opposed to systems bent upon mass production regardless of counterproductive personal and social consequences. He was a formidable opponent of socialist and other “command” economies; also a fearless, perceptive critic of an unthinking “capitalism.” Although German by birth, during the Second World War, Roepke settled at Geneva, where he became professor of economics at the Graduate Institute of International Affairs. There he wrote Civitas Humana; The Social Crisis of Our Time; Economics of the Free Society; The Solution of the German Problem; and the essays included in the volumes Against the Tide and Welfare, Freedom, and Inflation. The title of his last book, A Humane Economy, which was published in America, was suggested by me.

A gentleman of high courage and a sincere Christian, Roepke set his face against both the Nazis and the communists. He was intellectually and physically vigorous: an accomplished skier, he always climbed back up the mountainside, rather than riding a chair-lift. Knowing that man is more than producer and consumer, Roepke detested Jeremy Bentham’s utilitarianism and found that most of his fellow economists perceived human existence imperfectly, being blinkered by utilitarian dogmata.

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Before turning to Roepke’s arguments, I venture to offer some background of his thought during the disorderly period that followed upon the Second World War, a time during which the idea of grand-scale social planning exercised a malign power. Roepke was the most effective opponent of that Plannwirischaft.
That highly speculative division of knowledge, which our age calls “economics,” took shape in the 18th century as an instrument for attaining individual freedom, as well as increased efficiency of production. But many 20th century teachers and specialists in economics became converts to a neo-Jacobinism. (Burke defines Jacobinism as “the revolt of the enterprising talents of a nation against its property.”) Such doctrines of confidence in the omnicompetence of the state in economic concerns came to predominate in state polytechnic institutes and state universities especially. Quite as 18th century optimism, materialism, and humanitarianism were fitted by Marx into a system that might have surprised a good many of the philosophies, so 19th century utilitarian and Manchesterian concepts were the ancestors (perhaps with a bend sinister) of mechanistic social planning. The old Jacobins scarcely realized that their centralizing tendencies were imitative of the policies of the “old regime”; so it is not surprising that recent humanitarian and collectivistic thinkers forget their debt to Jeremy Bentham. Yet the abstractions of Bentham, reducing human beings to social atoms, are the principal source of modern designs for social alteration by flat.

road-to-independence-BH-RTIDE2-detailAt the end of the Second World War, centralizers and coercive planners were mightily influential in Western Europe and in Britain, and they were not missing in the United States. The modem nation-state enjoys effective powers of coercion previously unknown in political structures. But the increase of coercion frustrates the natural course of development; economic theory as a basis for state coercion has repeatedly proved fallible; “planning” destroys the voluntary community and tries to substitute an ineffectual master plan (as, most ruinously, in Iran under the Shah); the goals of state action should be primarily moral, not economic; and thus the whole perspective of social planners is distorted. In opposition to the dominant school of economic theory just after the Second World War, such economists as Roepke, W. A. Orton, F. A. Hayek, and a handful of others strove to restrain the economic collectivists.

Although he proved himself very competent to deal with the vast postwar economic difficulties of Germany, a major industrial country, Roepke nevertheless much preferred the social and economic patterns of Switzerland, where he lived from the triumph of Hitler until the end of his life. His model for a humane economy can be perceived by any observant traveler in Switzerland.

Professor Roepke and I once conversed about the Swiss town of Thun, at the foot of Thunersee, enormous peaks looming above the town, and the beautiful long lake stretching southward from Thun’s miniature harbor. At Thun one perceives the Swiss achievement in dealing with the problem of social tranquility – and in reconciling the old world with the new. From the railway station at Thun you cross the river, make your way through twisted streets between very old but perfectly preserved houses, and presently reach the steep hill on which stand the square-towered schloss and the old church. From the battlements of the schloss, you look down upon the remains of the city walls, the venerable rathaus, and all the immaculate prosperity o
f a prospering Swiss municipality. And then your eye discovers that Thun is also an industrial town of some importance, for across the railroad tracks are factories and warehouses, busy as the old town is sedate. Here is an industrialism that has not blighted the traditional life of a society. There can be few regions more pleasant for the industrial worker than Thun. Eat at a cafe frequented by workingmen, and you are surprised by the cheerfulness, cleanliness, and good appearance of the place – which serves highly satisfactory food. Zurich, Basel, Fribourg, Bern, and other places much larger than Thun also have been successful in keeping their industrial life decent – in contrast with what industrialism has done to British, let alone American, cities.

I have mentioned Thun because it illustrates well enough the embodiment of Roepke’s idea of a humane economy. Now permit me to turn to Roepke’s thought.

Roepke seemed to have read everything. He was familiar, for instance, with the social ideas of John Calhoun and James Fenimore Cooper, concerning which most U.S. professors of economics are densely ignorant. Wilhelm Roepke knew the insights of religion and poetry, the problems of history and morality. His book, The Social Crisis of Our Time, is at heart an analysis of the menace that Roepke called “the cult of the colossal.” Social equilibrium has been overthrown in our age, Roepke knew. Here are some moving sentences of his concerning that grim subject.

Men having to a great extent lost the use of their innate sense of proportion, thus stagger from one extreme to the other, now trying out this, now that, now following this fashionable belief, now that, responding now to this external attraction, now to the other, but listening least of all to the voice of their own heart. It is particularly characteristic of the general loss of a natural sense of direction – a loss which is jeopardizing the wisdom gained through countless centuries – that the age of immaturity, of restless experiment, of youth, has in our time become the object of the most preposterous overestimation.

Of all our afflictions, Roepke continues, the product of moral decay, of consolidation, and of the worship of bigness, the worst is proletarianization. Capitalism may have introduced the modern proletariat, but socialism enlarges that class to include nearly the whole of humanity. Our salvation, Roepke argues, lie s in a third choice, something different from either ideological socialism on doctrinaire capitalism. He writes:

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Socialism, collectivism, and their political and cultural appendages are, after all, only the last consequence of our yesterday; they are the last convulsions of the nineteenth century and only in them do we reach the lowest point of a century-old development along the wrong road; these are the hopeless final state toward which we drift unless we act… . The new path is precisely the one that will lead us out of the dilemma of ‘capitalism’ and collectivism. It consists of the economic humanism of the ‘Third Way.’

Roepke’s “third way” is not “gas and water socialism” or consumer cooperatives or a managed economy. Instead it is economic activity humanized by being related to moral and intellectual ends; humanized by being reduced to the human scale. Roepke proposes to abolish the proletariat, not by reducing everyone to proletarian status, the method of socialism, but by restoring property, function, and dignity to the mass of men. His ideas, although not new, are put with a clarity, practicality, and assurance that other people who wish to simplify and decentralize the economy sometimes lack. A liberal in the tradition of Tocqueville, Roepke believed in the restoration of local institutions and local choices, not in a centralized bureaucratic elite. He desired a society with reverence, stability, personal rights, and manners; he saw that, if we do not restore such a society, presently we may have no civilized society at all. The work of the French Revolution must be undone, he reasoned, not to reinstate a rule of force, but instead to recognize order and authority, established by prescription and consent. Society cannot be organized, he wrote, “in accordance with rational postulates while disregarding the need for genuine communities, for a vertical structure.”
That same infatuation with “rationalism,” which terribly damages communal existence, also produces an unquestioning confidence in the competitive market economy and leads to a heartless individualism which, in Roepke’s words, “in the end has proved to be a menace to society and has so discredited a fundamentally sound idea as to further the rise of the far more dangerous collectivism.” In such a world, where old landmarks have been swept away, old loyalties ridiculed, and human beings reduced to economic atoms, “men finally grasp at everything that is offered to them, and here they may easily and understandably suffer the same fate as the frogs in the fable who asked for a king and got a crane.”In his chapter, “The Splendor and Misery of Capitalism,” Roepke examines succinctly the maladies of our current economy and observes that the same economic disharmonies become chronic under socialism. Then he turns to the second part of Social Crisis of Our Time, entitled “Action.” Roepke there instructs us:

Socialism – helped by the uprooted proletarian existence of large numbers of the working class and made palatable for them by just as rootless intellectuals, who will have to bear the responsibility for this is less concerned with the interests of these masses that with the interests of those intellectuals, who may indeed see their desire for an abundant choice of positions of power fulfilled by the socialist state.

Roepke relishes this class of persons as masters of society even less than he does the monopolists and the managers. His object is to restore liberty to men by promoting economic independence. The best type of peasants, artisans, small traders, small and middle-level businessmen, members of the free professions and trusty officials and servants of the community – these are the objects of his solicitude, for among them traditional human nature still has its healthiest roots, and throughout most of the world they are being ground between capitalistic specialization and socialistic consolidation. They need not vanish from society; once more, they may constitute the masters of society ; for Switzerland, in any case, “refutes by its mere existence any cynical doubt regarding the possibility of realizing our program.”

The Humane Economy of Wilhelm Roepke

Loathing doctrinaire rationalism, Roepke is careful not to propound an arbitrary scheme of alteration and renovation. Yet his suggestions for deproletarianizing are forthright. Family farms, farmers’ cooperatives for marketing, encouragement of artisans and small traders, the technical and administrative possibilities of industrial decentralization, the diminution of the average size of factories, the gradual substitution for the “old-style welfare policy” of an intelligent trend toward self-sufficiency – none of these projects is novel, but they are commended by an economist possessing both grand reputation and sound common sense. Roepke saw no insuperable difficulties. To cushion society against the fluctuations of the business cycle, for instance, the better remedy is not increased centralization, a very dubious palliative, but instead stimulating men to get a part of their sustenance from outside the immediate realm of fi
nancial disturbance. Specialization often works mischief, he says:
The most extreme examples of this tendency are perhaps some American farmers who had become so specialized and so dependent on their current money incomes that when the crisis came they were as near starvation as the industrial worker. At the other, more fortunate end we see the industrial worker in Switzerland who, if necessary, can find his lunch in the garden, his supper in the lake, and can earn his potato supply in the fall by helping his brother clear his land.

Roepke told me once, apropos such alternative means of subsistence in industrial society, of an amusing exchange between himself and Ludwig von Mises – who, though agreeing with Roepke in a good many matters, was a disciple of Jeremy Bentham in his utilitarianism. During the Second World War, the city of Geneva had made available to its citizens plots of ground along the ring around the city where the ancient walls had stood. On these allotments, in time of scarcity of food, the people of Geneva, particularly the laboring folk, could cultivate vegetables for themselves. These allotments turned out to be so popular, both as recreation and as a source of supplementary food, that the city continued to make this land available to applicants after the war was over.

Now Mises, who had been professor years before at the Geneva Institute of International Affairs, came to visit Roepke in Geneva, about 1947. Happy at the success of these garden allotments, Roepke took his guest to see Genevan working people digging and hoeing in their gardens. But Mises shook his head sadly: “A very inefficient way of producing foodstuffs!” he lamented. “Perhaps so,” Roepke replied. “But perhaps a very efficient way of producing human happiness.”

Humanizing of economic structure was the kernel of Roepke’s proposals. They are not detailed in Roepke’s book, The Social Crisis of Our Time, nor buttressed by tables of statistics. But they are cheering. In Wilhelm Roepke’s pages, political economy has an ethical foundation; and it is made clear that the purpose of industry is personal security.

Roepke was no apologist for an abstraction called “capitalism” – a Marxist term, incidentally , foolishly pinned to themselves by numerous vain glorious champions of economic competition. He knew that the worship of Mammon is ruinous.

Because of his independence of thought, Roepke’s influence extended to some curious quarters. A few years after the war, Roepke was invited to Florence, where some distinction was to be conferred upon him. Descending from his railway coach at the Firenze station, Roepke was greeted by dignitaries and escorted by mounted carbinieri to the Palazzo Vecchio. There he was received enthusiastically by a great throng of the rank, fashion, officialdom, and intelligentsia of Florence. This crowd parted abruptly to make way for some personage who was hurrying toward Roepke on the dais. The man approaching him was fantastically dressed in unusual colors, fat, gesticulating, and effeminate seeming. This person seized Roepke’s hands, kissing them ardently. “Maestro! Maestro!” he murmured; then bowing low, he retired backward into the assemblage.

Roepke had been astonished at the splendor of this gathering in the Palazzo Vecchio; he was yet more surprised at the adulation of this odd personage. “Who is that gentleman?” he inquired of his hosts. “Why, don’t you know him, Professor Roepke? He is your disciple, the man who invited you to Firenze and arranged this ceremony. He is the Chief for the Communist Party in Firenze.”

Italian communists notoriously differ from their comrades in most of Europe; already, at the time of Roepke’s visit, they were endeavoring to seem almost bourgeois. Perhaps their Florentine chairman may have perceived in Roepke an economist fruitful in means, however much their ends might differ. Yet Roepke, who had been a fearless opponent of the Nazi regime, assailed the communists with equal intrepidity.

At Florence, as elsewhere, Roepke spoke of the human condition and of how we might win our way back to a humane economy. Three decades later, we have lost ground in this endeavor. Washington, London, and Moscow are even more obsessed by the Gross National Product than they were in the 1950s, although the paper statistics of the GNP have not produced contentment or stability, and the terrorist walks abroad. There comes to mind the legend inscribed on a chateau’s sundial in 1789: “It is later than you think.” The nexus of cash payment, never a strong social link, does not suffice to keep down fanatic ideology or even to assure prosperity.

Permit me now to shift the scene to the U.S., and the time to half a century ago, on a June morning. I was then a guide at Greenfield Village. There came up to me, unexpectedly, a tall but stooped old man in a black suit and a sailor hat – my employer. He knew my face, but not my name; in that I had the advantage of him, for I was aware that his name was Henry Ford. He took me into the little brick shed where he had constructed his first automobile, and there he told me of those days in 1893 – told me with satisfaction, yet satisfaction tinged with uneasiness, as if he wished to be sure of the approbation of the young – “It don’t seem long since I built it.” He glanced out the window at his enormous museum of a dead America, Greenfield Village, which encompassed us; and then he stared across the wooded acres of his lands toward the stacks of the Rouge Plant, hemmed about by the ugly streets of East Dearborn and Melvindale and River Rouge. In those fladands, once, he had been a farm lad; and now be had obliterated, without willing it, the country he had known as a child, except for this lifeless sanctuary within brick walls. In his heart, I suspected then, was doubt. The economy he had created was inhumane.

I mention Henry Ford in this connection not because I mistake him for a conspicuous example of the inhumane capitalist, but rather, because he retained some sense of community and some respect for our cultural patrimony. At large expense, he had undertaken several attempts toward reconciling the old rural order with the new urban industrial life. For one thing, he had purchased and restored water mills in small towns of southern Michigan – Plymouth, Nankin Mills, Waterford, and elsewhere – with the intention of maintaining industrial employment on a humane scale and nurturing small town life. He made available small garden plots near these mills to Ford employees who might wish to cultivate their own vegetables and flowers; at the Plymouth mill, my uncle, a Ford chemist, was the only person to request and work such a garden. Although doubtless Henry Ford would not have employed the word “proletarian,” these experiments were meant to help factory hands keep from sinking into a proletarian condition. But all was abandoned at Ford’s death; and the Ford Foundation, inheritor of most of his great wealth, has wasted its benefactions in grandiose abstract schemes that do nothing to humanize the economy.

All my life I have known the city of Detroit, called during World War II “the arsenal of democracy.” In Celine’s famous novel Journey to the End of Night, the journey terminate
s at Detroit. In the shocking decay of that great city nowadays, we behold the consequences of an inhumane economy – bent upon maximum productive efficiency, but heedless of personal order and public order. Henry Ford’s assembly-line methods had much to do with the impersonality and monotony of Detroit’s economic development; and so, in some degree, did Ford’s concentration of his whole productive apparatus at the Rouge Plant; but of course Henry Ford had no notion, in the earlier years of his operation, of what might be the personal and social effects of his highly successful industrial establishment; nor did the other automobile manufacturers of Detroit. Indeed, they seem still to be ignorant of such unhappy consequences, or else indifferent to the consequences, so long as profits continue to be made. Consider the wiping out of Poletown through the unholy alliance of industrial, municipal, and ecclesiastical power structures, regardless of the rights and the wishes of Poletown’s inhabitants – all to build on the site of Poletown a new industrial complex, which already, far from supplying the promised increase in tax revenues for Detroit, is involved in grave difficulties.

An economy obsessed by an alleged Gross National Product – no matter what is produced, or how – becomes inhumane. A society that thinks only of alleged efficiency, regardless of the consequences to human beings, works its own ruin. Here there comes to my mind a passage from the writings of W. A . Orton, an American conservative economist, a contemporary of Roepke. In his book The Economic Role of the State, Orton ironically describes the cult of efficiency:

Let us therefore praise the great god Efficiency. All he demands is that we make straight his path through the desert and purge the opposition…. How much more mastery is evident in the controls of a supersonic plane than in the clumsy splendor of some medieval shrine! How much higher a peak of human achievement! Human? Let us not be too particular about that, for this is where science plays the joker… . We arrive at ‘justice’ without mercy, ‘liberation’ without liberty, ‘victory’ without peace, ‘efficiency’ without effort, ‘power’ without potency – because the means we collectively employ lie on a plane so different from that of the ends we humanly desire that, the more they succeed, the more they fail. That is the nemesis of all ‘great powers’ and the end of all who put their trust in them. God knows, this is not a new story.

Detroit, now ruinous and ungovernable, more frequently referred to as “the murder capital of America” than as “the arsenal of democracy,” has worshipped the great god “Efficiency.” Detroit, during my own lifetime, has produced tremendous wealth in goods and services. But it has been a social failure. And so have nearly all of America’s other major cities.

I am arguing that, unless we begin to think of humanizing our American economy, our cities will continue to disintegrate, and the American people will grow increasingly bored and violent. Some people in authority are beginning to understand that human nature will revolt at having an inhumane scale thrust upon humankind. The failure of high-rise public housing, in city after city, is an illustration of this hard truth. In Newark, New Jersey – the one large city in America that is worse decayed than Detroit – the Scudder Homes, a monolith of “housing” thirteen stories high, was demolished by high explosives, life having become intolerable there for the low-in come tenants. Town houses of two or three stories are being built as replacements – a healthy reaction against public housing anonymous collectivism. New Jersey’s manager of the federal Department of Housing and Urban Development, just before the destruction of Scudder Homes, delivered a public address. In his words, “Sophocles said, ‘Though a man be wise, it is no shame for him to live and learn.’ It is no shame for us to learn from this experience.”

Is it so difficult, after all, to convince Americans that simplicity may be preferable to complexity, modest contentment to unrestrained sensation, decent frugality to torpid satiety? If material aggrandizement is the chief object of a people, there remains no moral check upon the means employed to acquire wealth: violence and fraud become common practices. And presently the material production of such a society commences to decline, from causes too obvious for digression here. Our industrial economy, of all economic systems man ever created, is the most delicately dependent upon public energy, private virtue, fertility of imagination. If we continue to fancy that efficiency and affluence are the chief aims of human existence, presently we must find ourselves remarkably unprosperous; – and wondrously miserable. So instructing us for the past half century President Bush speaks of bringing about “a kinder, gentler America.” That consummation, so much to be desired, requires the humane imagination. And study of the thought of Wilhelm Roepke will nurture that imagination.

This lecture was given to the Heritage Foundation on July 3, 1989. A slightly revised version of this lecture is included as chapter 8 of  Dr. Kirk’s book, “The Politics of Prudence.”

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Host of the Mike Church Show on The Veritas Radio Network's CRUSADE Channel & Founder of the Veritas Radio Network. Formerly, of Sirius/XM's Patriot channel 125. The show began in March of 2003 exclusively on Sirius and remains "the longest running radio talk show in satellite radio history".

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Anthony Palumbo

Mr. Church, I appreciate your engagement with free market literature, but I must disagree here with the sort of system Kirk proposes. For one, Kirk views free market thinkers universally as consequentialists. This is simply not true. The moral basis of a free market is clearly base in John Locke, in the praxeology of Mises, and in the rule of law of Hayek. Other than Kirk’s incorrect description of free market thinkers, here are my problems with the system Roepke and Kirk explain:
First, it isn’t rooted in any way in human action. It is guided by human nature and ends, which is fundamentally misguided. If we do not start with how men act, and instead start with how men ought to be, then we cannot talk of how men ought to be. Human action derives not what humans ought to be, but what humans are. Here, we begin with the self- evident, or, in terms of deduction instead of induction or idealism. It constrains us both from beginning away from idealism or the ideology so prevalent in modern thinking.
Second, this third way you speak of is shown by Mises to be impossible. All economies, even socialist Russia, are run by the market system and prices. In Human Action, Mises correctly points out that you can’t be a “mixed market,” half socialist or half free market, no more than a women who gives a half-birth. The economy is ordered by God to act according to the pricing structure. It is, as Thomas Woods has shown in The Church and the Market, how God ordered the universe. You may not like it, but that it is how God ordered the universe. To denigrate man away from a market which is free into what you propose to be the end of man, would be, in the words of C.S. Lewis, the abolition of man. It would be, as Lewis points out of the modern nation state, “A tyranny exercised for the good of its victims.” Lewis writes:

It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be “cured” against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.

Third, although I appreciate Kirk greatly(especially in regards to morality, ethics, epistemology, and foreign relations) he is so much an idealist that he never defines anything. No where does he define conservatism, capitalism, or market in any concrete terms. Sure, saying that conservatism is the permanence of all, and then listing the order of correct knowledge(which is exactly what Kirk does in the Conservative Mind) explains what a conservative attitude is geared toward, but it never states what conservatism is itself. You do have this in Burke nor in modern conservatives like Thomas Sowell, Goldwater and Buckley, and certainly not in the praxeologists.

Would love your thoughts, please comment.x