Ancil – Roepke and the Restoration of Property

Roepke and the Restoration of Property

by Ralph E. Ancil

President, Wilhelm Roepke Institute

The Philadelphia Society

Regional Meeting, Wilmington, Delaware, October 10, 1998

In a discussion with another famous conservative, Richard Weaver objected to the view that the
solution of our problems lies in following in the footsteps of "our ancestors." This was not enough he
argued, for we must ask "Which ancestors?" After all, some were wise while others were foolish. In
a similar manner we may ask: Is it enough to say we are in favor of a market economy? Like
Weaver we can respond by asking: "Which market economy?" Some forms are better than others.
This was certainly the view of German economist Wilhelm Roepke who believed the best defense
of a market economy was to distinguish its basic principles from the historical form the
industrialized, capitalistic economy actually took. By observing this distinction, Roepke was able to
defend the ideal of a free and humane market economy without becoming trapped into defending
those distortions many critics of capitalism rightly identified. However, for those of us on the
political right, this may prove uncomfortable. We are perhaps unused to such a distinction and live
in the world restricted to two choices: either some form of the welfare state, where we are arguably
on the road to communism, or alternatively, a laissez-faire market economy.

But if we are willing to entertain the possibility of more than one form of market economy, we are
brought back to the basic question: "Which free market economy should we be advocating?"
Roepke saw that our choices of market economy come in two basic shapes: (1) the
proletarianized market economy and (2) the propertied market economy. Roepke argued
strenuously all his life for the latter and not the former.

What is a proletarianized market economy? It is a deformity inherited from previous historical
periods as well as from certain immanent tendencies in modern economies. Roepke was
particularly critical of what he called "historical capitalism" ("historical liberalism") because it
contained a number of such inherited abuses and distortions from the past which concentrated an
excessive amount of wealth in the hands of a few and left most people with little or no productive
property of their own and hence dependent solely on their wages and salaries, the fluctuations in the
market, and on those who because of their wealth could exert disproportionate influence on the
direction of policies as well as of the economy. (See especially his Social Crisis, pp. 100-148.)
These dependent people were proletarians because they had only their labor to sell. When
proletarianized, people become insecure and tend to seek relief in times of economic trouble
through the expansion of government welfare benefits – and so growth of the proletarian market
economy, and growth of modern governments are linked. To accept these deformities and
tendencies complacently, however, would merely add fuel to the fires of the critics of capitalism and
promoters of some form of collectivism. So some vigorous alternative is needed, though it cannot
be a form of collectivism any more than it can be laissez-faireism in Roepke’s view.

What then is left? Part of the answer which Roepke subscribed to is to follow the German
Ordo-Liberal school of economic thought: it is Liberal in the sense it believes in the efficacy of the
market economy in providing material well-being and freedom, but it is Ordo in the belief that a
source of order is needed in the economy that originates outside it, and so there is room for an
economic policy that shapes or gives some direction to a market economy consistent with its nature
and other social goals. This is why Ordo-Liberals came to be identified with the social market
economy in Germany, and explains why Roepke’s book A Humane Economy is subtitled The
Social Framework of the Free Market. A free market economy does not produce the
framework upon which it rests. There are both moral and material prerequisites to such an
economy if it is to serve its purposes well and that, in part, is a matter of public policy.

But Roepke went beyond his Ordo-Liberal colleagues in specifying the fundamentals that provide
the "social" part of the market system, not by being socialistic, but by being humane, and this fact
makes him finally difficult to categorize. Steeped as he was in the oldest traditions of the West, in
the humanistic, Erasmian school of education which includes both Christian and pre-Christian
learning, Roepke not surprisingly brought this perspective to bear on his economic thinking so that
we may finally call him a "humane economist" and say he belonged to the "humanistic school" of
economic thought as much or more so than to the Ordo-Liberal school. While we see this
approach reflected in many ways in Roepke’s works, it figures prominently is his plan for the
restoration of property, the economic cornerstone of his vision of a humane economy. He gives
three desiderata for this restoration: education, decentralization, and personalization. We can
examine each one individually:

(1) Education. The importance of the propertied free market over a proletarianized market is
that the ownership of one’s own productive property exercises our will and mind properly. "As
distinct from income which everybody wants as a matter of course," says Roepke, "property
requires a certain exertion on the part of the will and a particular attitude of mind, things which are
anything but matters of course." (Moral Foundations, p. 156) Unfortunately, our present market
system has suffered for the past century and a half from various degrees of proletarianization and
dependency on money income, so much so that the desire for property itself has been weakened,
like a sick person who no longer has the desire to get well. Hence we have a vast educational task
to reawaken the desire for property. To possess and to hold property does not begin with a
promise but with a demand, a moral appeal because it requires "frugality, the capacity to weigh up
the present and the future, a sense of continuity and preservation, the will to independence, an
outstanding family feeling." (Moral Foundations, pp. 156, 157)

Perhaps most striking in this passage is his use of the phrase the will to independence. Freedom as
Goethe said has to be won anew every day. Property is the concrete expression of that economic
freedom which must also be won anew each day by an exercise of the will, the will to stand on your
own and the will to help others do so, so that they don’t have to depend on government either.
Property, not income, reawakens, reflects, and reinforces that will to independence that is essential
to political and economic freedom.

(2) Decentralization. The restoration of property requires that it be widely distributed. That
means the concentrations of property inherited from the past and current plutocratic sources be
simultaneously opposed. Small property holdings must be the goal of a humane policy. Otherwise,
as Roepke argued: "Concentration of property which usually implies concentration of the means of
production, is in effect the negation of property in its anthropological and social sense." (Moral
Foundations, p. 157) Concentrated forms of property ownership may have their economic uses
but they are hurtful to property understood as something fulfilling human nature broadly and deeply.

Decentralization, however, is simply another way of requiring the establishment of a broad middle
class whose existence is threatened by concentration. In his words, this "progressive
concentration…destroys the middle class properly so called, that is, an independent class possessed
of small or moderate property and income…," and instead gives us "the steady increase in the
number of those who are not independent, the wage and salary earners, whose economic focus is
not property but money income." (A Humane Economy, p. 32) Decentralization, independence
and the propertied middle class all go together.

Today, we are still faced with considerable concentration problems in the existence and social and
economic effects of large corporations, rootless enterprises, and generally what Roepke called the
"cult of the colossal" or what we might today dub the depersonalized "visit-our-web-site" economy.
And this brings us to the third criterion.

(3) Personalization. The property Roepke has in mind must be personal where the owner
acquires an identity in the thing owned, something which cannot be done with abstract and
anonymous shares in the stock market. The need is to reintegrate man’s personality that has been
fragmented by "growing mechanization, specialization, and functionalization, which decompose the
unity of human personality…" (Humane Economy, p. 12) Roepke wants property that will give
existence, in his words, "stability, solidity and roots" and will posses some "vital significance" (i.e.,
something decisively effecting man’s deepest sense of happiness and fulfillment as a human being).
In other words, in this context, Roepke means a form of property that is productive and can
provide a home, rooted in family, community, and tradition.

Thus education, decentralization, and personalization are the three chief features of Roepke’s
program to restore property. Beyond this, however, we have also to ask what form of property, if
any, best fits these needs?

While Roepke was fighting in the trenches in France, a member of the German Reichstag,
Regierungsrad Ritter, near the end of WWI, during negotiations with workmen [presumably on
strike or some similar class conflict] gave a Roepke-type answer to economic problems at the time,
claiming the reason for these problems, at least in part, was "…due to the fact that the workmen
spent all their pay on drink before the war, and that if they had saved everyone would have his little
house and garden and be independent." (Lutz, p. 107)

This formula is in fact the one Roepke would in time make his own: garden + house = economic
independence. We are fortunate, he argues, to have a form of property that does meet all three
criteria; and it is neither stocks and bonds, nor money income, but land. As he explains:

"This form of property possesses the still further important characteristic that it can embrace also
the Home. It is that form of property which in this double capacity can make an end of
proletarianisation…The industrial worker…can and ought to become at least the proprietor of his
own residence and garden – or allotment – which would provide him with produce from the
land…This would also render him finally independent of the tricks of the market with its wage and
price complexities and its business fluctuations. On the one hand we ought to maintain in being and
increase to the utmost of our power…all who are independent and provided already with their own
house property and means of production. On the other hand where this is not possible it should be
our aim to procure the worker or employee at least the equivalent of such an existence by providing
him with a minimum of property, and by letting him have a house and garden of his own. If there be
such a thing as a social "right" this is a "right to property," and nothing is more illustrative of the
muddle of our time than the circumstance that hitherto no government and no party have inscribed
these words on their banner. If they do not think these possess sufficient draw, we believe them to
be profoundly mistaken." (Moral Foundations, p. 159)

No wonder Milton Friedman recently called him "something of an agrarian." (Schlaes, p. 2) Both
Ritter and Roepke would likely have agreed that the proper campaign slogan for such an effort
would be not "a chicken in every pot," but rather "a garden in every plot."

An Ancient View

Now the forgoing is easy for some to dismiss as a romantic indulgence, as an exercise in sloppy
sentimentalism. But it is not. It is a hard-headed, concrete proposal that is as useful to the economy
as it is satisfying to human nature. That is what makes it finally humane. It is not the testimony of one
man only, but expresses an enduring vision in Western European thought both Christian and
pre-Christian. From the Garden of Eden in Holy Scripture to the literature of Milton’s Paradise
Lost and Paradise Regained, from Xenophon’s The Economist, where he defends the living of
the ancient "Greek country squire" and the virtue taught by living the country life, to the similar
views of the ancient Romans and the early Americans, with their image of economic independence
exemplified in the person of Cincinnatus, to the actual utility of garden plots in the Soviet economy
as well as in capitalistic European experience in the 20th century, economic independence and the
good life have been identified with this Roepke-esque formula.

More recently this view has been reaffirmed by Alexander Solzhenitsyn when he states that "[l]and
embodies moral as well as economic values for human beings…" (p. 30) Like Roepke, he argues
for a wide distribution of land ownership, including garden plots for people in urban and rural areas
alike. "There should be enough land for everybody." (pp. 33, 34)

Conclusion

So, if we want an alternative to the welfare state, to expanding government intrusion and yet have a
stable, free market economy in a society that is also just, we must stop wringing our hands over
marginal tax rates, GDP statistics, unemployment figures and mere money income, and instead find
ways to help Americans regain a measure of security and economic independence by making them
once more, as in early America, genuine property owners. Such a restoration will be the first step
toward realizing the humane economy.

References

Lutz, Ralph, ed.; The Causes of the German Collapse in 1918, Hoover War Library, Stanford
University Press, Stanford; 1934.

Roepke, Wilhelm; A Humane Economy, Henry Regnery Company, Chicago; 1960.

—The Moral Foundations of Civil Society, Transaction Publishers, New Brunswick; 1996
[1948].

—The Social Crisis of Our Time, Transaction Publishers, New Brunswick; 1992 [1942].

Schlaes, Amity; "The Foreigners Buchanan Calls His Own," in The Wall Street Journal, February
29, 1996.

Solzhenitsyn, Alexander; Rebuilding Russia; Farrar, Straus and Giroux, New York; 1991.