WILHELM ROPKE: APOSTLE OF A HUMANE ECONOMY.(German economists)

Wilhelm Ropke was a German with a singular history. He was born at Schwarmstedt near Hanover in 1899, the son of a country doctor and the descendant of a long line of Lutheran pastors. The year of his birth, marking a transition not only between two centuries, but between two profoundly different worlds, had a special significance for Ropke who, as he pointed out to me at a later time, felt himself to be a true child of the 19th century; though with one foot in the 20th. The Great War, in which Ropke served and was decorated for valor, was a shattering experience for the teenaged recruit, collapsing the world of his youth while offering nothing to replace it. The insanity of that fratricidal conflict and the barbarities he witnessed in the trenches of Picardy came to stand, for Ropke, as symbols of the modern condition at its worst: the physical and moral degradation of "mass existence, mass feeding, mass sleep." His anguish and indignation over the war were ultimately transmuted into anger at the "unlimited powers of the state" which had inflicted this horror on mankind.

It was the experience of the war, ironically, that was to furnish Ropke with his life's mission: to discover and proclaim the economic, social and moral truths that would prevent war, preserve freedom and salvage what was left of human dignity. The search led initially to socialism. For was it not a capitalistic society that had spawned the War? But then, for Ropke and a handful of like-minded contemporaries, there were second thoughts and intensive reflection on the ultimate consequences of such a choice. It became clear that a consciously constructed economic order is not only necessarily tyrannical--the designers and implementers of such an order are the rulers of those being ordered--but is also exclusively national (and nationalistic), since only one national economy at a time can be planned. And with that kind of nationalism (which the War was allegedly fought to eradicate), "my generation," declared Ropke, "wanted nothing to do."

In pursuit of his self-prescribed mission, he took his doctorate in economics at the University of Marburg in 1921. Subsequently, he taught economics at the Universities of Jena and Graz, and, at the age of 29, received an appointment as full professor at Marburg. The galloping inflation which beset the Republic in 1921-23 and the havoc it wreaked amongst the German middle class left an indelible impression on the young economist and provoked him to the battle with inflation which was to continue all his life. In 1931, nevertheless, in a gesture characteristic of his realism and balance, Ropke, then serving as an advisor to the Bruning government, vigorously opposed its deflationary policies to which he attributed the rising unemployment in Germany. In this sense, Ropke was espousing Keynesianism five years before Keynes did so in his monumental treatise, The General Theory of Employment, Interest, and Money [1936]. Had Ropke's urgent pleas to the German government to enact "Keynesian" policies been taken se riously, the unemployment crisis conceivably could have been mitigated which, in turn, might have averted the assumption of power by

Hitler. In the event, the advice of the young economist, unfortunately for the world, was rejected.

In later years, Ropke gave full credit to Keynes for his contribution to the advancement of theory, but also warned against making temporary remedies for depression permanent policy prescriptions. He charged Keynes with doing psychological damage to the propensity to save--a crucial pre-requisite to capital formation and thus to progress--and with accustoming a new generation to a kind of economic logic which revolves solely about the question of how "effective demand" can be most securely maintained at the highest possible level. This error was to prove fateful, he maintained, given that the real problem of the postwar era was how an inflationary boom can be braked in time.

Those were the years not only of economic tumult but of real political danger to the young professor and his family. Anti-totalitarian to the core, Ropke came into early conflict with the tribunes of the Third Reich. Even before the elections to the Reichstag in 1930, he had delivered a warning to the farmers of Lower Saxony which was unmistakably directed against the Nazis. "No one," he declared, "who votes National Socialist on September 14, can later say he had not known what the result would be. He should know now that he voted for chaos instead of order, destruction instead of reconstruction. He should know that he voted for war within and for mindless destruction without. Vote, but vote so that you will not share the guilt for the disaster that is likely to befall us!" In an address delivered at Frankfurt on February 8, 1933, one week after Hitler's assumption of the chancellorship, he described the new regime as a "new form of barbarism." A threatening visit to his family by representatives of the SS soon followed.

Rather than knuckle under to the Nazis, Ropke quit his post at Marburg and chose exile, one of the first German professors to do so following Hitler's takeover. It was the beginning of a tumultuous and perilous odyssey for him and his family, first to Holland and Switzerland, then to Turkey where the Kemal Ataturk government entrusted him with the reorganization of the department of economics of Istanbul University, and finally, in 1937, to the Institute in Geneva (a division of the University of Geneva), whose chair of economics he occupied with eclat and growing renown for the next three decades.

Beyond Supply and Demand

However, in 1946 I was not privy to all of this information. Indeed, as a recently arrived American exchange student, Ropke's name, other than his general political orientation, meant little to me--his major works were not yet available in English. Also, economics was not yet my discipline. I had come to Geneva fresh from Columbia University where I had received a master's degree from the School of Journalism; my undergraduate work was in languages, history, and philosophy. But here I was, anyhow, pursuing a degree in political science and in Ropke's classroom at the suggestion of a friend, i.e., more or less by accident, sampling his course entitled "European Economic Reconstruction" --a highly pertinent label, given that Europe, in 1946, was still very much a basket case economically, and with the defeated enemy, Germany, still knee-deep in rubble.

As I think back on that first…