Day 3: The sophisticated theology of the market (summary)

Free Economy and Social Order by Wilhelm Röpke. Originally published on January 11, 1954. (summary) (response)

Day 3 of Robert Wenzel's 30 Day Reading List on Libertarianism

Day 0: The Libertarian catechism

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In "Free Economy and Social Order," Wilhelm Röpke sets underlying Libertarian social values as the necessary foundation for the market economy. Röpke asserts that because explicitly socialist and communist societies lack this foundation in Libertarian values, their use of market economies can be at best a mere "gadget." More importantly, Welfare-State capitalists, who consider the fundamental Libertarian values to be "contemptible and reeking of narrow-mindedness and 'reaction'" should, Röpke says, explain their own underlying social values or be seen as simply borrowing ideas from communism. Röpke sets up a fundamental binary distinction: the Libertarian, buergerliche social order, founded on private property as well as

individual responsibility; respect of certain indisputable norms; the individual's honest and serious struggle to get ahead and develop his faculties; independence anchored in property; responsible planning of one's own life and that of one's family; thriftiness; enterprise; assuming well calculated risks; the sense of workmanship; the right relation to nature and the community; the sense of continuity and tradition; the courage to brave the uncertainties of life on one's own account; the sense of the natural order of things.

In contrast, the "proletarianized" society lacks "a solid and necessarily hierarchical structure," without which the buergerliche society cannot exist, and the market economy that can emerge only from the buergerliche cannot be effective. There is no middle ground between these two ideas, no compromise, only the Good and the Evil.

Even in 1954, Röpke believes that the Western democracies are already well down the road to the "proletarianized" society. One chief culprit is Keynesian economics, which abandons private property, savings, and thrift, and embraces "the Bohemian spirit," extolling subsistence, debt, and profligacy, leading to nothing less than the abandonment of the very idea of civilization, the civil society.

Fundamentally, all these notions of civilization rest on the sacred nature of money. Röpke illustrates the proper regard to money by noting two episodes from France's revolutionary period of the late 19th century. In the first, the Bank of France rebuffs Gambetta's (presumably Léon Gambetta, republican champion of petit bourgeois and later Prime Minister) request to print money to finance the republican revolution; Gambetta, although presumably empowered to demand the money, is, according to Röpke, so ashamed of his request that he does not insist. Later, the even the leaders of the Paris Commune do not, because of their respect for the sanctity of money, do not expropriate the gold and printing presses of the Bank which is at least physically under their control. Even the communists show a reverence for money that today's modern so-called "capitalist" leaders dismiss; therefore modern "civilization" is clearly no civilization at all.