The following excerpt comes from Wilhelm Röpke's excellent book, A Humane Economy: The Social Framework of the Free Market, first published 60 years ago.
One of the oversimplifications by which social rationalism distorts the truth is that Communism is a weed particular to the marshes of poverty and capable of being eradicated by an improvement in the standard of living. This is a fatal misconception.
Surely everyone must realize by now that the world war against Communism cannot be won with radio sets, refrigerators, and widescreen films. It is not a contest for a better supply of goods—unfortunately for the free world, whose record in this field cannot be beaten. The truth is that it is a profound, all-encompassing conflict of two ethical systems in the widest sense, a struggle for the very conditions of man's spiritual and moral existence. Not for one moment may the free world waver in its conviction that the real danger of Communism, more terrible than the hydrogen bomb, is its threat to wipe these conditions from the face of the earth. Anyone who rejects this ultimate, apocalyptic perspective must he very careful, lest, sooner or later, and perhaps for no worse reason than weakness or ignorance, he betray the greatest and highest values which mankind has ever had to defend. In comparison with this, everything else counts as nothing.
If we want to be steadfast in this struggle, it is high time to bethink ourselves of the ethical foundations of our own economic system. To this end, we need a combination of supreme moral sensitivity and economic knowledge. Economically ignorant moralism is as objectionable as morally callous economism. Ethics and economics are two equally difficult subjects, and while the former needs discerning and expert reason, the latter cannot do without humane values.
Let us begin with a few questions which we, as economists, may well put to ourselves. Are we always certain of our calling? Are we never beset by the sneaking doubt that although the sphere of human thought and action with which we deal is one of primary necessity, it may, for that very reason, be of a somewhat inferior nature? Primum vivere, deinde philosophari (first live, later philosophize)—certainly. But does this dictum not reflect an order of precedence? And when the Gospel says than man does not live by bread alone, does this not imply an admonition that once his prayer for his daily bread is fulfilled, man should direct his thoughts to higher things? Should we be free of such scruples and doubts—and this is not a matter for pride—others will assuredly bring them to our attention.
I myself had a characteristic experience in this respect. Some years before his death, I had the privilege of a discussion with Benedetto Croce, one of the greatest minds of our age. I had put forward the proposition that any society, in all its aspects, is always a unit in which the separate parts are interdependent and make up a whole which cannot be put together by arbitrary choice. I had maintained that this proposition, which is now widely known and hardly challenged, applied also to the economic order, which must be understood as part of the total order of society and must correspond to the political and spiritual order. We are not free, I argued, to combine just any kind of economic order, say, a collectivist one, with any kind of political and spiritual order, in this case the liberal. Since liberty was indivisible, we could not have political and spiritual liberty without also choosing liberty in the economic field and rejecting the necessarily unfree collectivist economic order; conversely, we had to be clear in our minds that a collectivist economic order meant the destruction of political and spiritual liberty. Therefore, the economy was the front line of the defense of liberty and of all its consequences for the moral and humane pattern of our civilization. My conclusion was that to economists, above all, fell the task, both arduous and honorable, of fighting for freedom, personality, the rule of law, and the ethics of liberty at the most vulnerable part of the front. Economists, I said, had to direct their best efforts to the thorny problem of how, in the aggravating circumstances of modern industrial society, an essentially free economic order can nevertheless survive and how it can constantly be protected against the incursions or infiltrations of collectivism.
This was my part of the argument on that occasion, during the last war. Croce's astonishing reply was that there was no necessary connection between political and spiritual freedom on the one hand and economic freedom on the other. Only the first mattered; economic freedom belonged to a lower and independent sphere where we could decide at will. In the economic sphere, the only question was one of expediency in the manner of organizing our economic life, and this question was not to be related with the decisive and incomparably higher question of political and spiritual freedom.
The economic question was of no concern to the philosopher, who could be liberal in the spiritual and political field and yet collectivist in the economic. The important movement for the defense of spiritual and political freedom was liberalismo, as Croce called it, to distinguish it from liberismo, by which slightening term he designated the defense of economic freedom.
Croce's view hardly needs to be refuted today, and even his followers will not be inclined to defend it. But Croce's error has had a fatal influence on the development of Italian intellectuals and has smoothed the way to Communism for many of them. The mere fact that so eminent a thinker could be so utterly wrong about the place of economic matters in society proves how necessary it is to thresh this question out over and over again.
Naturally nobody would dream of denying that the aspect of society with which the economist deals belongs to the world of means, as opposed to ends, and that its motives and purposes therefore belong to a level which is bound to be low, if only because it is basic and at the foundation of the whole structure. This much we must grant a man like Croce. To take a drastic example, what interests economics is not the noble beauty of a medieval cathedral and the religious idea it embodies, but the worldly and matter-of-fact question of what place these monuments of religion and beauty occupied in the overall economy of their age. It is the complex of questions which, for instance, Pierre du Colombier has discussed in his charming book Les chantiers des cathedrales. We are fully aware that what concerns us as economists is, as it were, the prosaic and bare reverse side of the décor. When the materialistic interpretation of history regards the spiritual and political life of nations as a mere ideological superstructure on the material conditions of production, we are, as economists, very sensitive to the damning revelations of a philosophy of history that reduces higher to lower-a feeling which proves our unerring sense of the genuine scale of values.
All of this is so obvious that we need not waste another word on it. But equally obvious is the argument with which we must safeguard a proper place in the spiritual and moral world for the economy, which is our sphere of knowledge. What overweening arrogance there is in the disparagement of things economic, what ignorant neglect of the sum of work, sacrifice, devotion, pioneering spirit, common decency, and conscientiousness upon which depends the bare life of the world's enormous and ever growing population!
The sum of all these humble things supports the whole edifice of our civilization, and without them there could be neither freedom nor justice, the masses would not have a life fit for human beings, and no helping hand would be extended to anyone. We are tempted to say what Hans Sachs angrily calls out to Walter von Stolzing in the last act of Die Meistersinger: "Do not despise the masters!"
We are all the more entitled to do so if, steering the proper middle course, we guard against exaggeration in the opposite direction. Romanticizing and moralistic contempt of the economy, including contempt of the impulses which move the market economy and the institutions which support it, must be as far from our minds as economism, materialism, and utilitarianism.
Wilhelm Röpke (1899-1966) was one of the most influential economists of the twentieth century. A key architect of Germany's post-World War II "economic miracle," he wrote Economics of the Free Society, The Moral Foundation of Civil Society, The Social Crisis of Our Time, A Humane Economy, and other books.
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