I have taken the title from a line in When Money Fails, by
Gary North:
Wilhelm Röpke was not the most technically
competent free market economist of our time, but he was the most accurate one.
He was the one economist in the free market tradition who has forthrightly
acknowledged that social theory is broader than economic theory. Economics is a subset of social
theory, not the other way around. Röpke spent a great deal of time thinking
about the moral foundations of the modern social order.
The issue being addressed is economic, the
division of labor society:
This
is not a technical issue; it is a moral issue. The division of labor did not
increase in the West apart from the West’s social and moral order.
North’s piece is focused on the moral and
legal framework that makes the division of labor possible. I intend to
move in a slightly different direction.
North cites Röpke; the subject work is
Röpke’s International
Economic Disintegration. Röpke wrote the book in the late
1930s, published in 1942. I will focus on Chapter V, beginning page 67 in
the embedded PDF:
THE problem to be discussed here is deemed
so important, that it should be used as the starting point of any causal
analysis of the present disintegration of world economy worthy of the name.
In reading both North and Röpke, it seems
to me the discussion could also be applied to the social order much more
broadly defined. Chapter V is entitled “THE IMPORTANCE OF THE
EXTRA-ECONOMIC FRAMEWORK FOR THE WORKING OF THE ECONOMIC PROCESS.” I will
propose considering it in the following context:
THE IMPORTANCE OF THE EXTRA-POLITICAL
FRAMEWORK FOR THE WORKING OF THE LIBERTARIAN PROCESS
As has been remarked earlier, no one will
seriously dispute that this traditional spirit of economic science was, and
still is, largely coloured by belief in not only the sociological autonomy, but
also the sociologically regulating influence of the market economy.
Röpke
suggests that a robust market economy cannot survive or thrive absent a
framework that is found outside of pure economic science – a market economy
cannot function in just any social environment. One might consider: can the NAP properly function autonomously,
without consideration of the broader social framework?
If the answer is yes, then anything goes –
the libertines and the dreamers are right. If the answer is no, one might
decide to take Hoppe more seriously when considering the NAP.
Implicitly and explicitly, it was and still
is held that a market economy based on competition and essentially unhampered
by any agency outside the competitive market is an ordre naturel which,
once freed from all impediments, is able to stand indefinitely on its own feet…
Thus the competitive market appeared to be
a “philosopher’s stone,” which turned the base metal of callous business
sentiments into the pure gold of common welfare and solidarity…
With government (as we know it today) out
of the way, is it reasonable to expect that a libertarian order would blossom
out of the remains – without any other changes or requirements? Could the
libertarian order stand “on its own feet”…“once freed from all impediments”?
If yes, score one for the libertines and
dreamers; if no, Hoppe gets a shout.
So far the competitive market economy was
considered sociologically autonomous: it needed no special laws, no special
state or special society, required neither a special morality nor any other
irrational and extra-economic forces and sentiments.
Can a libertarian society survive and
thrive under any conditions, without a “special society” or a “special
morality” or any other “forces and sentiments” outside of the NAP? If it
can, the libertines and dreamers are correct. If it cannot…well, you
know.
Rarely or never was this belief stated so
crudely, but surely few will to-day deny that the general tendency of the
liberal philosophy ran—and in some quarters still runs—in this direction.
This is also the general tendency of those
who believe a libertarian society can survive and thrive under any social or
moral framework. Maybe they are right, maybe not.
Far from consuming and being dependent on
socio-political integration from outside the economic sphere, the competitive
market economy produces it—or so runs the argument.
Does the NAP produce an orderly
society, or are certain conditions within society necessary
pre-conditions for the NAP? As to economics, Röpke suggests that certain conditions are
necessary pre-conditions:
If views like these were ever held at all,
it has become obviously impossible to continue to hold them to-day. …we are
forced emphatically to deny that this order is anything like an ordre
naturel independent of the extra-economic framework of moral, political,
legal and institutional conditions…
The world around us tells us that achieving
a society grounded in the NAP is far more difficult and far more complicated
than achieving a relatively sophisticated division-of-labor economy. To
open one’s eyes is to see this reality. If extra-economic moral and
institutional conditions are necessary for the proper functioning of the
relatively simple division-of-labor economy, how much more true must it be for
achieving a society that respects the non-aggression principle?
…it is highly doubtful…that economic
integration can be sufficiently relied upon to produce automatically the degree
of socio-political integration it requires.
The chicken or the egg? Does this
question apply also to consideration of the NAP in a broader social context?
Röpke offers his view:
…it
would be a great mistake to think that that would make the market system an
ethically neutral sphere. On the contrary, it is a highly sensitive artefact of
occidental civilization, with all the latter’s ingredients of Christian and
pre-Christian morality and its secularized forms…
Before jumping on me or Röpke, note that he
includes “its secularized forms.”
Conclusion
It is difficult to imagine how the leading
thinkers of former generations could have been more or less blind to this
fundamental truth, which seems so obvious and even trivial to us to-day.
Are Röpke’s thoughts regarding the
division-of-labor economy equally applicable to the libertarian political order
and to some of the “leading [and not-so-leading] thinkers” of this school?
I just wonder….
Reprinted with permission from Bionic
Mosquito.