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

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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"Free Economy and Social Order" is Wilhelm Röpke's foray into sophisticated Libertarian theology. (Reader's of Jerry Coyne's blog, Why Evolution is True, will get the reference.) Like Christian theologians who simply assume God shares their personal preferences, Röpke simply assumes that a market economy must necessarily rest on his bourgeois buergerliche social foundations. Like Christian theologians who simply assume that secular morality expropriates the superstructure of Christian morality without the sustenance of its divine foundation, so too does Röpke simply assume that the establishment of markets in the "proletarianized" society is a hollow caricature without the sustenance of buergerliche social values. Röpke employs two obvious fallacies here: First, the post hoc fallacy: the buergerliche society uses markets; therefore, the former is a necessary precondition for latter. Second is the reverse genetic fallacy: the market economy is assumed to be inherently good; its source, therefore, must be inherently good. But there is no actual argument here. Why can the market economy not be simply a toolbox "of prices, of markets, of supply and demand, of competition, of wage rates, of interest rates, of exchange rates, and whatnot"? Why must it rest on some arbitrary set of social values? As a Christian theologian cannot tell us how ordinary human morality cannot be anything but the work of God, Röpke cannot tell us why a market economy (even granting the value Röpke assumes of markets) cannot rest on anything but his "narrow-minded and 'reactionary'" petit-bourgeois society.

What is more interesting, however, is how Röpke describes his necessary social foundations of individual liberty. What Röpke makes absolutely explicit is that Libertarianism is not about the society of peacefully coexisting autonomous individuals. Instead, his buergerliche society rests on "a solid and necessarily hierarchical structure." And this is the essence of individual liberty: not freedom from coercion, but the freedom of the superior individual to coerce the inferior masses. All of Röpke fundamental values require coercion, but to preserve the illusion of liberty, the coercion is placed behind the pillars of property and money. Indeed, these structure are indeed absolutely necessary to maintain the illusion that the superior individual is not coercing the inferior, but rather to protect the objective value of property. The parallels with Christian theology are again apparent: coercion is not used to impose the will of clergy and nobility on the masses, but simply to guide sinners to God's graces.