Wilhelm Röpke’s Political Economy

Wilhelm Röpke’s Political Economy

Samuel Gregg

Wilhelm Röpke is best known for his decisive intellectual contributions to the economic reforms that took post-war West Germany from ruin to riches within a decade. In this informative book, Samuel Gregg presents Röpke as a sophisticated économiste-philosophe in the tradition of Adam Smith, who was as much concerned with exploring and reforming the moral, social and intellectual foundations of the market economy, as he was in examining subjects such as business-cycles, trade-policy, inflation, employment, and the welfare state. By situating Röpke’s ideas in the history of modern Western economic thought, Samuel Gregg illustrates that while Röpke’s ‘neoliberalism’ departed from much nineteenth-century classical liberal thought, it was also profoundly anti-Keynesian and contested key aspects of the post-war Keynesian economic consensus.

Chapter 4: Toward a New Economic Liberalism

Samuel Gregg

Subjects: economics and finance, history of economic thought, political economy, politics and public policy, political economy

Extract

The whole edifice of the Reich will collapse, and much more completely than in 1918, since the whole framework of the national economy, of the monetary and financial system, of communications and administration, which in 1918 had largely remained intact, will now fall into hopeless ruin. Again in contrast with 1918, there will this time no longer be any organized political life, no parties and programmes, no group ready and able to take over the bankrupt estate of the Third Reich, but only prostration and immense longing for peace . . . Wilhelm Röpke, 1945 Memorandum to Allied Diplomats (cited in Röpke [1945b] 1946, p. 186) On 7 May 1945, Colonel-General Alfred Jodl, Chief of the Wehrmacht’s Operations Staff, signed the instruments for Germany’s unconditional surrender. Once dominant over continental Europe, National Socialism was extinguished. Marxism–Leninism, however, was poised to achieve a stranglehold over much of Europe. While many Western Europeans were prepared to resist the political collectivism imposed on most Soviet-occupied nations, opposition to extensive economic planning was weaker. Despite the considerable anti-socialist sentiment in Europe and North America revealed by the publication of Hayek’s Road to Serfdom in 1944, nothing better symbolized the low regard in which capitalism was held than the Labour party’s sweeping victory in Britain’s 1945 general election. With its explicit commitment to nationalizing the British economy’s ‘commanding heights’ and creating a cradle-to-grave welfare state, the Labour government’s efforts to implement key provisions of the 1942 Beveridge report suggested that comprehensive economic planning was the...

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