Wilhelm Röpke Diagnosed Austrian Economics Flaw: It Needed Morals

Mandeville, LA – Exclusive Transcript – Most of you know, have read, and love and admire Professor Tom Woods.  He’s affiliated with the Mises Institute, has written about von Mises.  Many of you go to LewRockwell.com and you’re very familiar with von Mises’ work.  You’re probably not familiar with Röpke’s.  The reason you’re not familiar with Röpke is because, one, Röpke was a Catholic, and, two, he let his Catholicism dictate to him what he thought about economics. Check out today’s transcript for the rest….

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Begin Mike Church Show Transcript

Mike:  I found this essay that was written by Ralph — I knew Ralph Ancil had written it, I just couldn’t remember where he had written it at.  I found it at First Principles, the home of intellectual conservatism, which in 2015 is an oxymoron.  I digress.  Ancil wrote this in part — two Austrians, Wilhelm Röpke and Ludwig von Mises — you all know Ludwig von Mises.  There’s a Mises Institute in Auburn, Alabama.  Most of you know, have read, and love and admire Professor Tom Woods.  He’s affiliated with the Mises Institute, has written about von Mises.  Many of you go to LewRockwell.com and you’re very familiar with von Mises’ work.  You’re probably not familiar with Röpke’s.  The reason you’re not familiar with Röpke is because, one, Röpke was a Catholic, and, two, he let his Catholicism dictate to him what he thought about economics.  Von Mises didn’t.  Röpke’s view — he was an Austrian.  Röpke’s view is tempered by his

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morality or by his quest to live a more moral life and to encourage others to do so.  Economics just happened to be his field of study.  Ralph Ancil has just written — gosh, I can’t tell you how many pieces and several books about Röpke.  Ancil is an expert on Röpke.

Last hour when I was talking about escorting all the illegals to the border is fine and dandy if that’s how it works out.  It’s not going to fix the problem of why they’re able to come here and work and do all the things that they were doing in the first place.  That will not fix the underlying issue.  It won’t even address it.  It won’t even admit that there is an underlying issue.  Ask yourself the question: Which of these three businesses do you wish to work at?  A mom-and-pop family that has the business with the family members working, friends, close friends, neighbors, and relatives, serving a purpose in the community and deriving adequate subsistence from it.  Or where most people work today, hanging out around water coolers, playing air guitar, and complaining about their lot in life.  There’s an intermediate step.  If you missed the first hour and you’re intrigued by this, go get it on the SiriusXM On Demand app.  Here’s what Ancil wrote, in part:

[reading]

One of the reasons for Röpke’s belief that industry should be broken up into smaller firms involves the nature of consumer demand: “The more individual and changing the demand, so much the less suitable is big business mass production, particularly where all articles are subject to changes of fashion.” Big business often has the rigidity characteristic of the Dinosaur “whereas the smaller concern is distinguished for its greater pliability and resistance to crises.” Small businesses have a greater ability to withstand the business fluctuations that inhere in the free market. That size is truly efficient which survives these boom and bust cycles, and which allows the business to function throughout the entire cycle. The task, then, involves discovering both the technological and organizational possibilities or combinations which will best promote industrial decentralization in the light of sociological or humane factors

[end reading]

Mike:  I’m just going to interject here.  This is a Wisdom Wednesday.  Let me just add the philosophical point of view of what Ancil is writing about and what Röpke said.  How is it that the big business then, if it is a dinosaur and it’s not able to get out of its own way — and it can’t in most instances — how does it survive market fluctuations?  Noodle on that for a moment.  At the end of this I’ll tell you how it survives.  You probably already know but will come back to this. [/private]

[reading]

Present industrial practices conforming to the cult of the colossal, are depersonalizing and mechanizing. Massiveness and minute division of labor should be replaced. Of course, Röpke argues, this proposal is only for those industries that can be decentralized without significant decreases in output. But he adds: [E]ven if certain sacrifices have to be made as regards immediate and measurable profitableness and technical practicability, it must nevertheless be stressed that this sacrifice will be repaid in a wider, social sense and may in the long run even redound to the advantage of the enterprise itself.

If we take certain sociological consequences into account, then even the most technically efficient form of production may be expensive for society as a whole. His attitude is perhaps best illustrated by a story Russell Kirk tells. When Röpke showed Ludwig von Mises the public garden plots in Geneva, von Mises commented: “A highly inefficient way of producing foodstuffs!” Röpke responded: “But perhaps a highly efficient way of producing human happiness.”

[end reading]

Mike:  Therein lies the rub that we were just talking about.  Where von Mises just sees economics and finances as a means to an end themselves, Röpke sees them as but a mere necessity that the human must participate in.  But it is not the purpose of the human.  There’s a vast difference there.

End Mike Church Show Transcript