Wilhelm Röpke: An Economist for Our Time

The following is an excerpt from the new introduction to the ISI Books paperback edition of Wilhelm Röpke’s classic work on economics A Humane Economy.  Röpke’s insights on liberty and free markets are as important and relevant today as when he introduced them in 1960, and Samuel Gregg, director of research at the Acton Institute and member of the Royal Historical Society, offers the perfect window into  Röpke’s work and thought.


The current world crisis could never have grown to such proportions, nor proved as stubborn, if it had not been for the many forces at work to undermine the intellectual and moral foundations of our social system and thereby eventually to cause the collapse of the economic system indissolubly connected with the social system as a whole. Notwithstanding all the harshness and imperfections of our economic system, which cry out for reform, it is a miracle of technology and organization; but it is condemned to waste away if its three cardinal conditions—­reason, peace, and freedom—are no longer thought desirable by the masses ruthlessly reaching for power. —Wilhelm Röpke, 1933

When the German free-market economist Wilhelm Röpke spoke these words in a public address at Frankfurt am Main on February 8, 1933, none of his listeners doubted who he had in mind by “the masses ruthlessly reaching for power.”[1] Only nine days earlier, Weimar Germany’s president, Field Marshal Paul von Hindenburg, had appointed the leader of the National Socialist German Workers’ Party, Adolf Hitler, as chancellor of Germany.

From Röpke’s perspective, the Nazis’ accession to government was a disaster. As a highly decorated First World War veteran, a young distinguished academic, and, importantly, not Jewish, Röpke could have conformed to the regime’s demands and perhaps risen to high office. But Röpke had no illusions about where he believed Hitler would lead Germany, and he spoke his mind. No one was surprised that Röpke was among the first German professors to lose his position when, on April 7, 1933, the National Socialists purged Germany’s universities of scholars who were outspoken anti-Nazis, Jewish, or both.

Röpke departed into exile in November 1933. He initially found refuge in Amsterdam. Then, at the invitation of Turkish president Kemal Atatürk, Röpke joined other German intellectual refugees from National Socialism in Turkey, where he was appointed to a teaching position at the University of Istanbul. In 1937 Röpke accepted a post at Geneva’s Graduate Institute of International Studies, where he taught until his death in 1966. One of his colleagues at Geneva in the late 1930s was the prominent free-market economist Ludwig von Mises, who had been a major influence on Röpke’s thought. Mises’s book Socialism (1922) had inspired Röpke to resist the temptation to embrace top-down planning as the way of the future.

Exile did not diminish Röpke’s engagement in the world of ideas. Unlike most of his fellow free-market German economists, Röpke enjoyed an intellectual reputation that extended beyond the frontiers of the German-speaking world. Röpke wrote prolifically, including several books, dozens of academic papers, and hundreds of newspaper articles.

Coming from a family that had produced Protestant clergy, lawyers, doctors, and civil servants, Röpke had studied law and then economics at the universities of Tübingen and Göttingen. He earned his doctorate under the supervision of Walter Troeltsch, a specialist in the economics of unemployment, at the University of Marburg in 1921. Röpke’s doctoral thesis concerned the economics of German potash mining industry, which happened to be one of Germany’s most heavily cartelized industries. This experience marked the beginning of Röpke’s lifelong interest in curbing monopolies. For a later dissertation (known as his habilitation—a dissertation required of anyone with a doctorate who wanted to teach in German universities), he studied the economics of business cycles, a topic to which he consistently returned.

In 1924 Röpke was appointed professor at the University of Jena at the age of twenty-four, thereby becoming Germany’s youngest professor. He spent part of his tenure at Jena in the United States, where he studied the economic problems of agriculture. After spending time at the University of Graz in 1928, Röpke returned to the University of Marburg the following year to assume a full professorship.

As his public remarks after Hitler’s rise to power suggest, Wilhelm Röpke did not confine himself to the ivory tower. He advised various German governments on economic policy. Before taking his position with the University of Jena, he spent a year in the German Foreign Office advising the Weimar government on how to pay Germany’s war reparations. In 1930–31 he served on a government commission studying unemployment. After the Second World War he played a key role on the currency-reform council assembled by the man the Allies had made responsible for overseeing the economy of the Western-occupied zones of Germany, Ludwig Erhard.

Between 1947 and 1948 that council forcefully advocated the German economy’s liberalization. Röpke was perhaps most responsible for developing both the intellectual and the public case for implementing measures that went squarely against the Keynesian and social democratic consensus of the time. Within ten years, these reforms—specifically currency reform and the abolition of price controls—produced the miracle that made West Germany the economic powerhouse of Western Europe. Such success, however, did not stop Röpke from critiquing policies undertaken by many of the politicians and public officials to whom he provided intellectual support. In 1950, for example, West German chancellor Konrad Adenauer commissioned Röpke to write a defense of his government’s economic policies. The resulting paper not only praised Erhard’s liberalizing measures but also criticized emerging trends of government intervention.

Often unwilling to wait for policy makers to ask his opinion, Röpke entered the public square. The publication of his book The German Question (1946) had similar effects on postwar German public opinion as Friedrich von Hayek’s Road to Serfdom (1944) had on Anglo-American audiences. Likewise, many of Röpke’s newspaper articles had a profound impact on informed opinion. One of his more famous pieces was an article in the Catholic weekly Rheinische Merkur. It is widely regarded as one of the most important articles that helped prepare German public opinion for Erhard’s reestablishment of the market economy in West Germany in 1948.

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Like many others of his generation, Röpke was shaped by his military service in World War I. That experience had a profound influence on his thought. Initially, Röpke’s antinationalism and antiwar positions translated into support for socialism. To his surprise, however, his university studies (and especially his study of Mises) led him to conclude that his protest against war and nationalism mandated “a commitment to liberalism in the sphere of international economic relations; in other words, to free trade.”[2] The same reaction also aroused in Röpke “a great wariness about the powers of the modern state and, along with this, about the powers of the various pressure groups within the nation.”[3]

Röpke was acutely conscious that intellectual trends were heading in a different direction. But having made his choice, he never recoiled from its consequences. His views on what sound political economy required, Röpke wrote, “meant speaking against most of the groups and policies that prevailed in the field of economics between the wars.”[4] Taking such stands was, he believed, the intellectual’s nonnegotiable moral responsibility.

Scholars typically place Röpke in the “neoliberal” tradition associated with twentieth-century figures such as Franz Böhm, Walter Eucken, Alfred Müller-Armack, and Alexander Rüstow. Many economists also associate Röpke with the Austrian School, of which Mises and Hayek were perhaps the most prominent members. Both descriptions are fitting. With neoliberal economists, for example, Röpke shared an interest in modifying capitalism in ways compatible with free competition. And like the Austrian School, Röpke made significant contributions to business cycle theory and emphasized the importance of sound money, being a strong advocate of the gold standard. It is also worth noting that Röpke was one of the earliest and fiercest critics of the moral and economic fallacies of the welfare state.

But ultimately, neither label is sufficient to capture Röpke’s thought or influence. One of Röpke’s most important realizations was that economics had to be attentive to “the nature of man and the sort of existence that was fitting to that nature.”[5] He wrote that his economic thinking had “come with good reason to be called ‘economic humanism.’”[6]

To understand the nature of man required the study of history. Like other economists of his generation, Röpke spent much of his career reflecting on events that directly affected the contemporary world, including the First World War, the Great Depression, the rise of Hitler, and the Second World War. But he is notable for the fact that he believed the events he was living through were not isolated phenomena. His work reflects his long-standing interest in Western intellectual history and his conviction that the seeds of current problems were buried deep in Europe’s past. He saw Hitler’s rise, for example, as part of a wider chain of events, including certain inadequacies in economic liberalism. Similarly, Röpke traced a straight line between France’s Jacobin revolutionaries of the 1790s and the expansive welfare states that began to characterize Western European democracies in the mid-twentieth century.

This attention to history contributed to Röpke’s impatience with those economists who, he held, sought to reduce economics to a mathematical science of aggregates. Although he believed there were economic laws that societies defied at their peril, Röpke also thought that careful reflection on the past provided guidance for the present and future, especially if an economist was committed to preserving and extending particular moral values. This conviction contributed to Röpke’s insistence on the limits of economics as a science.

A Humane Economy represents the fullest fruition of Röpke’s “economic humanism” and his critique of mainstream economic thought and practice. Economics, from Röpke’s standpoint, was not an ideology, philosophy, or religion. Instead it was a social science capable of providing society with powerful insights into reality but incapable of encapsulating reality in its entirety. Röpke opposed collectivist policies not simply because economic science told him they were bound to inflict misery on millions. He also regarded collectivism as incompatible with authentic human freedom. Summarizing his view on economics’ relationship to morality, Röpke wrote:


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.[7]


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A Humane Economy, the first edition of which appeared in German in 1958, was partly an effort to explore economic development in positive-scientific terms and partly a response to the particular challenges of the age. But it also laid out certain normative propositions that, in Röpke’s view, preceded and outlasted contemporary circumstances. These principles, he believed, would enable capitalism to overcome some of the philosophical burdens under which it had labored since the eighteenth century, limit the state to a small number of clearly defined economic roles, and prevent interest groups from using state power to escape free competition.

A Humane Economy thus represents an effort to integrate economics with a broader enterprise of influencing economic and social policy toward particular moral, social, and political goals. For Röpke, economics was not simply about studying the growth of wealth; it also concerned how to create and use this wealth to facilitate the freedom and happiness of all. Hence, although Röpke regarded positive economic science as having its own worth, he recognized its limits for determining the appropriate course of action in given circumstances. Röpke believed not just that economics ultimately should serve certain values—most notably liberty and order—but also that the economy, like all facets of human existence, is not self-sufficient. In A Humane Economy he wrote:

The market economy, and with it social and political freedom, can thrive only as a part and under the protection of a bourgeois system. This implies the existence of a society in which certain fundamentals are respected and color the whole network of social relationships: individual effort and responsibility, absolute norms and values, independence based on ownership, prudence and daring, calculating and saving, responsibility for planning one’s own life, proper coherence with the community, family feeling, a sense of tradition and the succession of generations combined with an open-minded view of the present and the future, proper tension between individual and community, firm moral discipline, respect for the value of money, the courage to grapple on one’s own with life and its uncertainties, a sense of the natural order of things, and a firm scale of values.[8]

Röpke supported free markets rather than socialism not merely because markets were more efficient from the standpoint of utility. Markets also allowed people to exercise their freedom in ways that brought a certain order to human affairs, while simultaneously solving the economic problem of scarcity. In part, Röpke’s conclusions were derived from empirical observation concerning the operations of markets and planned economies and their respective consequences for political order. Yet they also owed something to his long observation of human nature and certain conclusions that he reached about the character of human beings. Humans, he claimed, were driven to a large extent by the type of enlightened self-interest Alexis de Tocqueville portrayed in Democracy in America. But Röpke’s understanding of man—his philosophical anthropology—is also rooted in what might be called the tradition of Christian realism often associated with St. Augustine.

Terms like conservative and liberal are regularly used to label a range of not-always compatible political, philosophical, economic, and religious positions. Arguably, such terms have proved insufficiently stable to convey particular meanings over long periods of time. Yet for all these problems, the normative vision underlying Röpke’s economics might be accurately called one of conservative liberalism, insofar as it combines the “conservative” value of order with the “liberal” underscoring of human liberty. A question for readers of A Humane Economy is whether there is a tension between Röpke’s “liberal” focus on freedom and his “conservative” interest in order. This may simply be an irresolvable tension in the grand Western tradition to which Röpke regarded himself as belonging.

What is not in doubt, however, is the manner in which A Humane Economy challenges not only the direction of much post-1945 economic science but also those who question the market economy’s moral and economic benefits. In the twenty-first century, responding to such challenges remains more urgent than ever.


Samuel Gregg is director of research at the Acton Institute. He has written and spoken extensively on questions of political economy, finance, economic history, and natural law theory. He is the author of several books, including The Commercial Society (2007), Wilhelm Röpke’s Political Economy (2010), and Becoming Europe (2013).


[1] This introduction draws with permission on Samuel Gregg, Wilhelm Röpke’s Political Economy (Cheltenham, UK: Edward Elgar, 2010).

[2] Wilhelm Röpke, “The Economic Necessity of Freedom,” Modern Age, 3 (3), 1959: 229.

[3] Ibid., 230.

[4] Ibid., 231.

[5] Ibid, 231–32.

[6] Ibid., 232.

[7] Wilhelm Röpke, A Humane Economy: The Social Framework of the Free Market, translated by Elizabeth Henderson (Wilmington DE: ISI Books, [1958] 1998, 104).

[8] Röpke, A Humane Economy, 98.