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A Humane Economy: The Social Framework of the Free Market (Wilhelm Röpke)

This classic book, by a long-dead and almost-forgotten German economist, is suddenly relevant again. I have had a copy on my bookshelf for thirty years, never read, and I was startled by how timely A Humane Economy is. Today, elements of Left and Right are ganging up to kick neoliberalism when it’s down, aiming to break the long-dominant alliance between the corporatist Left and Right, and thereby to overturn the instrumentalist view of humans as fodder for an economic machine. We are simply awaiting the next crisis to see what will emerge. Wilhelm Röpke foresaw the problems we face today, because he lived through their early days—though I am not sure his solutions are practical, at least until a lot more chaos first sweeps across the land.

Röpke is associated with the Austrian School of economics, even if he is nowhere near as famous as others in that school, such as Friedrich Hayek or Ludwig von Mises. The original Austrian-school economists, around the turn of the twentieth century, focused on the development of concepts like marginal cost, individual utility, and opportunity cost. These now-uncontroversial ideas bubble throughout Röpke’s thought, along with the idea, more controversial today, that mathematical modeling of economic activity is inferior to a qualitative analysis of how humans behave in real life. But this book is not an Austrian-school tome. In fact, it is really not focused on economics as such, nor will I discuss economics much today.

Instead, as its subtitle suggests, A Humane Economy is social analysis as informed by economics. Austrian-style economics has been successfully cast as coldhearted and tied to Ayn Rand’s Objectivism; for many, it conjures up visions of the poor dying in the dirty gutter while their entrepreneurial overlords glide by, dressed in black tie, in self-driving Teslas built of Rearden Metal. Röpke’s writing is a good counterforce to this narrow, jaundiced view. True, Röpke does adhere to core tenets of the Austrian school, calling repeatedly for curbing inflation and the welfare state, as well as making a minor pitch for the gold standard, and he engages in several drive-by shootings of John Maynard Keynes. But this is secondary to, and not the main pillar of, his vision of an economic system that underpins, and in part makes possible, a flourishing society that exemplifies Christian virtue. For Röpke, the key question is whether an unfettered free market, even if theoretically utility maximizing, should be supreme, overriding other considerations. He answers strongly in the negative.

Röpke’s views changed over his long career, as is the norm for most economists. The socially-oriented views of this book are a relatively late addition to his thought. He was once famous mostly as the technician behind Ludwig Erhard’s “economic miracle” (Wirtschaftswunder) of the late 1940s and early 1950s, whereby a destroyed Germany was resurrected, nearly overnight, as an economic powerhouse. Of course, Germany had the advantage of being full of Germans, but then and since credit has been largely given to the Austrian-school economics adopted by Erhard, who refused to listen to the howls of anguish from the dominant, Keynesian and collectivist, economists of the day. The result of, as I understand it, currency reform, the elimination of price controls, low tax rates, and the rejection of collectivism, the Wirtschaftswunder is largely forgotten today. When I first became politically aware thirty years ago, though, the Wirtschaftswunder was well known, probably because Reaganite economics tried to wear its cape, and Keynes was regarded as totally discredited. Today, it’s the reverse in both cases, probably because the Left never sleeps and never gives up, unlike conservatives.

But we are not here to discuss the Wirtschaftswunder. I am not qualified to analyze it, anyway, as to how it was accomplished, but certainly Röpke takes, without false modesty and without any apparent hesitation, full credit for the principles he espouses having been responsible. What I want to focus on is social systems as tied to economic life. Röpke’s mature thought focuses on “the nature of man and the sort of existence that [is] fitting to that nature.” He called his thinking, broadly, “economic humanism,” an implicit rebuke to mechanistic or utilitarian views of economics—found, in their most extreme form, in Objectivism, which still has large purchase on today’s Right (but is found throughout the corporatist Left and Right). Atlas Shrugged was published at almost exactly the same time as A Humane Economy, in 1960, and the contrast embodies two incompatible visions of the flourishing of Man. What Röpke offered was an analysis of reality in the service of actual humans, not an ideology that would remake reality to serve an abstract humanity. His ideas, sadly, got little traction, and the pathologies he identified and feared are much, much worse today. True, in Europe at least, conceptually his ideas were paid lip service under labels such as “Christian democracy,” but that soon left far behind what Röpke wanted, turning statist and collectivist instead, and he would be horrified by what the European Union has become—he didn’t even like the Coal and Steel Community. But let’s take his ideas on their own terms.

Röpke begins with a concise outline of why the free market is better for man and society. He rejects socialism, as he rejects all “-isms.” They are, as Eric Voegelin (another man forced to flee from the Nazis) said, “social Gnosticism,” the false idea that man can be perfected, if only the right techniques are performed with the right tools. Socialism, “that is, economic planning, nationalization, the erosion of property, and the cradle-to-grave welfare state,” sees man as a means, rather than each man as a unique individual in “the likeness of God.” In the economic realm, therefore, the free market, as opposed to socialism, “is the only economic order compatible with human freedom, with a state and society which safeguard freedom, and with the rule of law,” thereby leading to “a life possessing meaning and dignity.” But the free market is not some magic instrument either; it is merely the best economic order, and it also must be viewed with an eye to the ends of meaning and dignity for Man.

Communism is no longer the main threat to the Western social order (Röpke presciently predicts its collapse), but that should not hide that socialism is just as much as Communism an affront to meaning and human dignity. Still, the market economy is not, of itself, the complete answer to social Gnosticism. We also need a society where “wealth would be widely dispersed; people’s lives would have solid foundations; genuine communities, from the family upward, would form a background of moral support for the individual; there would be counterweights to competition and the mechanical operation of prices; people would have roots and would not be adrift in life without anchor; there would be a broad belt of an independent middle class, a healthy balance between town and country, industry and agriculture.” This set of basic concepts is the core of A Humane Economy. Certainly, none of these, Röpke’s ends, are fashionable, except perhaps the first; in fact, most of them are usually rejected as bizarre, reactionary, or simply offensive, in today’s facile public discourse. But that’s Röpke’s point, of course. He would not be surprised.

The protean word “freedom” occurs often in this book, which might lead the modern reader to think that Röpke would endorse modern liberal democracy, the core of which is exaltation of freedom to do whatever one wants. But to Röpke, freedom explicitly does not mean “license, arbitrariness, laxity, [or] unlimited demands.” Thus, Röpke rejects the Enlightenment, or what it has led to, whether he admits it or not. How can there be “higher purposes of life and society” if each person is completely free to choose for himself what is the good? He directly knocks man’s comfort and ease, the goal of Enlightenment thinkers from Francis Bacon onwards, off its pedestal. “Economism, materialism, and utilitarianism have in our time merged into a cult of productivity, material expansion, and the standard of living.” Enough is abundance to the wise, says Röpke, and freedom means the ordered freedom of virtue.

Given this frame, what problems and decisions must still be made in respect of the free market? To Röpke, there is no problem worse, there is no problem that threatens individual meaning and dignity in the modern world more, than “mass and concentration.” Röpke is very, very down on “mass.” He tells us that a formless mass of atomized individuals has been created by modernity, exacerbated by certain aspects of the free market, so we must limit the free market in order to obtain, instead, “decentralization and deproletarianization.” Only in this way can the society Röpke identifies as ideal be approached.

Unsurprisingly, Röpke begins by citing and channeling José Ortega y Gasset, who originated the concept of the “mass man.” Röpke notes that Ortega’s words, from thirty years before A Humane Economy, have become absorbed such that they have largely lost their impact; everyone thinks the “other fellow” is the mass man, or that it is all a false alarm—“these people would have us believe that everything is as it should be and that paradise is just around the corner; the paradise of a society whose idea of bliss is leisure, gadgets, and continuous fast displacement on concrete highways.” Too many believe that everything is awesome “just because of the ever rising consumption of things by which the standard of life is thoughtlessly measured.” The goods culture rules all, fueled by the vice of easy consumer credit, but everyone is bored and dissatisfied, in large part because their personal connection with work has been severed, for which more goods, or as I like to say, five percent more cheap Chinese crap every year, does not substitute. (Here Röpke sounds much like Oren Cass in The Once and Future Worker, or Matthew Crawford in Shop Class as Soulcraft.) Along the same lines, mass also means everyone is crowded together and permanently isolated from even casual contact with nature. None of this is the fault of the market economy; it is a condition of modernity. “On the contrary, the market economy, with its variety, its stress on individual action and responsibility, and its elementary freedoms, is still the source of powerful forces counteracting the boredom of mass society and industrial life, which are common to both capitalism and socialism. Only, the market economy must be kept within the limits which we shall presently discuss.”

All this is convincing, although unlike Ortega, whose objection to mass was reduction in the quality of the real, organic aristocracy, Röpke’s objection seems mainly to be all those damn people and their damn concrete jungles. True, it’d be much better if we spent less time traveling to work and more time in solitude with nature. But Röpke seems to think the world is one giant New York City as shown in 1950s movies, full of alienated commuters wearing gray wool suits. This is silly and takes a part for the whole. Thus, when he takes his focus to its logical conclusion, Röpke falls apart, or at least undermines his own argument. He decides, and shrieks, to the extent the descendant of Lutheran pastors can shriek, that the real problem for the West is—overpopulation. He is terrified that Europe and America have become too full, and it’s getting worse, both because it’s jam-packed and because all those people can’t possibly have a decent spiritual life, even if they can be fed. Why precisely either of these things is true Röpke does not explain. But with words that now have bitter irony, he demands immediate, strong action to cut the birth rate, praising that “public opinion in Japan, for example, has by now come around to the view that the birth rate must be adapted to the death rate.” He flatly rejects that improved agricultural methods can ever keep pace with population growth, predicting starvation, along with the degradation of the masses. In short, in Charles Mann’s typology, Röpke is a Prophet, not a Wizard. But the Prophets have all, always, been proven wrong. Röpke has also been proven wrong, catastrophically so, and this whining about what was even then a nonexistent problem debilitates his entire argument about mass society, even though it does not obviate it.

Röpke finally gets to some other objections to mass, although again, unlike Ortega, he focuses on quantity, not quality. (He does think quality also is a problem—the mass is undereducated and undercivilized, proud of it, and bitterly opposed to any form of natural hierarchy or aristocracy, which results in the degradation of all finer aspects of culture.) Collectivism necessarily follows enmassment (Vermassung in German); the destruction of intermediary institutions and the furtherance of mass, atomized, life in a self-reinforcing process. Ideologies such as Communism come to seem attractive, and their attractiveness is not reduced by shorter working hours or improvements in the standard of living. Röpke notes that social disintegration is a much more important contributor to the appeal of Communism; “Communism prospers more on empty souls than on empty stomachs.” He also makes points commonly made today but prescient then, such as that mass leads to conformism, but not the conformism of eccentricity, which is found in tradition, or the conformism of stagnation, but rather the “conformism of being non-conformist,” attacking everything traditional just to show how daring one is.

Ultimately, this enmassment leads to despotism. Here (and often throughout the book), Röpke cites Tocqueville, noting how he foresaw that the new egalitarian, Jacobin-type, democracy of America could easily end in a soft despotism. Röpke’s only disagreement is that he thinks the despotism’s end is totalitarianism, with nothing soft about it. It’s not that Röpke doesn’t like democracy—he is fine with a federalist, subsidiarist, mixed democracy of the older English or Swiss type (he lived in Switzerland for the rest of his life after fleeing the Nazis in 1933). It’s modern democracy, what is now called “liberal democracy,” that he doesn’t like, because it recognizes nothing outside the changeable and often odious will of the mass, which, in particular, tends to destroy recognition of property and lead to socialism and collectivism, always wanting to “forever reopen every question.” “Mass democracy,” where the sovereignty of the (imaginary) people is supreme, necessarily ends in despotism. Still, Röpke does sound a note of hope, that since all this is “a violation of human nature . . . which is bound, sooner or later, to end in an acute crisis, which might just possibly have the salutary effect of bringing us back to our senses.” He would not be pleased to see that exactly the opposite has happened, and liberal democracy has already descended into the early stages of its totalitarian phase, in an accelerating downwards trend. But perhaps that does not contradict Röpke, and the crisis has simply been delayed.

Given this analysis and these problems, Röpke’s next theme is how precisely the market should be made to serve man, not man the market. “[The market] must be firmly contained within an all-embracing order of society in which the imperfections and harshness of economic freedom are corrected by law and in which man is not denied conditions of life appropriate to his nature.” Both free competition and inviolable private property are essential for these goals; without the latter, there can be no freedom at all. Röpke would be horrified at corporate concentration today, which at least is one of the few things on which the anti-corporatist Right and Left can wholly agree. However, the means, the free market, should not be confused with the end, human flourishing, the “higher purposes of life and society.”

Even in his strictly economic choices, “the ordinary man is not homo economicus, just as he is neither hero nor saint. The motives which drive people toward economic success are as varied as the human soul itself.” The free market itself collapses without strong moral supports—not only basic morals, such as not cheating and lying, but also a commitment to free competition, and opposition to monopoly, whether by producers or labor unions, and these morals must come from outside the market, from a strong society. This implies that the market cannot dominate society—that large areas of society must remain outside the market. But, in the modern world, everything is infected with advertising and everything, even Mother’s Day, is commercialized. The result is a market that is not controlled, and which contributes to the problems caused by enmassment.

Of course, the problem with noting that “it cannot be said often enough that in the last resort competition has to be circumscribed and mitigated by moral forces within the market parties,” is that it presupposes that there are external moral forces still extant. Again channeling Ortega, Röpke calls explicitly for a “revolt of the elites,” of “a minority that forms and is willingly and respectfully recognized as the apex of a social pyramid hierarchically structured by performance.” They are a “class of censors,” without which “no free society . . . can subsist.” The rich, in particular, need to both serve in this class, and contribute to the common good through subsidies of art and other cultural goods, “in honest self-assessment of one’s ability to pay and in voluntary fulfilment of an honorary duty.” This class has both rights and duties not applicable to the mass, unrelated to, and above, the market. A fine vision, and I’m all for a class of censors, but such a class setup is so alien, both in practice and thought, to today’s society, despite the best recent efforts of Jordan Peterson to rehabilitate hierarchy, as to be laughable as a realistic program.

In the second half of the book, Röpke turns more to economics with a social gloss, instead of social policy with an economics gloss. Here, he castigates the welfare state, which beyond a minimum that helps people in true need and only until they can stand on their own, is destructive of all the important things in society that he has already identified; it enables enmassment and concentration and is destructive of excellence. For the most part, the West has outgrown the welfare state, and now it has become merely “a tool of social revolution.” He discusses inflation in what I assume are Austrian-school terms, insisting that growth should be funded by saving (noting that the welfare state discourages saving) and finding in chronic inflation the source of many societal disorders. He discusses challenges facing developing economies, criticizing those that cannot internally generate capital and instead demand capital from the West, without adopting any of the necessary systems or mechanisms to make that capital fruitful. (Sixty years of trillions of dollars being pumped into the Third World, to no effect whatsoever other than to enrich a few despots, have proven Röpke more than right. This brings up a point that Röpke does not make explicitly but is necessarily true from his premises, which is that any society that does not have the spiritual and moral underpinnings of the West, or rather that the West once had, cannot really succeed in either economic or human flourishing. Röpke does point out the importance of the bourgeois values, in combination with the free market and aristocratic excellence, all informed by a strict moral code, as key to achieving a flourishing society. He does not point out such a combination has never existed anywhere else in the world outside the West.)

That it has been six decades since Röpke wrote, and all the problems he identified are infinitely worse, suggests that either they are not problems, or we are blinded to the existence of the problem by being subsumed within it, like the proverbial fish who does not know what water is. Or, perhaps, wealth papers over the problem for the classes that have control, leaving two types of mass-men, the wealthy in the professional-managerial elite, who get by even if they are largely unhappy and alienated, and the rest of society, hanging on by their fingernails, spiritually vacuous and desperate, with many falling into degradation and despair, as in J. D. Vance’s Hillbilly Elegy, when they cannot hang on any longer. Given that on every single measure society is far, far worse off than in his time, it is little surprise that much of Röpke’s “humane economics” seems like a fantasy—a pleasant one, but one seen from very far away.

Therefore, I am not sure what to conclude from this book. Despite the modest optimism he sometimes displays, what Röpke describes as necessary is so far from reality, and today’s world so much more degraded than the world in which Röpke lived, that implementing any aspect of Röpke’s program seems more like science fiction than realistic social policy. This is not a problem unique to Röpke—all the popular books nowadays on the Right with similar complaints fall down on solutions. Similarly, while I am not as expert on such books on the Left, and their (very different) solutions would give Röpke conniptions, with their collectivist demands for more, rather than less, state control, I suspect their solutions aren’t any more realistic. My guess is that this is at root a problem of enmassment, the Gordian Knot of our advanced, consumerist society. But, after all, there was a way to untie that knot, with enough will.

For my part, since my purpose in reading this book is to continue constructing my own political movement, Foundationalism, I note that economics should be subordinate to politics. It is not that politicians should dictate economics, but that they should recognize that certain general principles are the most likely to create flourishing, and work within those principles, not treat economics like Asimov’s Multivac, able to create a precise answer and effect for every question and request. For the most part, as far as I can tell with my limited economics knowledge, those principles are essentially those Röpke advocates. As I say, I don’t see a path to implementing them in the immediate future; if anything, the immediate future is likely to see a turn back to leftist collectivism and other massively destructive and pernicious theories that Röpke, with the Wirtschaftswunder in his rear mirror, thought had been mostly left behind. But if anything of my political program can be implemented, it can all be implemented, if the upheaval is great enough, and Röpke’s “economic humanism,” or some close variant of it, probably holds the key to sustainable economic progress that enhances, rather than harms, human flourishing.

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  1. A couple comments:

    1.) As further background on the man and his ideas, you and your readers may enjoy browsing the following, one is a bibliographic biography and the other is a biographical podcast…

    2.) This line seems controversial: “economics should be subordinate to politics”

    Since this is the internet and it’s really hard to ask this without it sounding like a condescending challenge, please try not to read this with any malice or school-marmery to it. I disagree with the idea but I wish to thoughtfully disagree here because I am wrestling with a similar philosophical dilemma that you’re wrestling with which is understanding that government (and politics) isn’t going anywhere anytime soon and as long as we’re stuck with it we want to be considerate of what can be done about what must be done. Here are my questions:

    a.) How is this statement any different from the views of the progressives, socialists, communists, etc., with whom you might disagree? Is your answer that they misunderstand economics and thus make errors in their politics, or that they have different political ends, or something else? This just seems like something that makes you more similar than different to them.

    b.) If we exchanged the word economics for “physics”, would it sound as reasonable to say “physics should be subordinate to politics”? What if we substituted “business”, which falls under the rubric of economic activity, and said “business should be subordinate to politics”? I want to understand better why you think economics should kow-tow to political needs but something like physics maybe stands on its own? (Or maybe you would argue physics SHOULD be subordinate to politics, in which case I’d like to understand what that means and implies!)

    • Charles says

      Economics isn’t a science, so comparing it to physics fails at the starting gate. Well, more precisely, I accept CW’s point in the comments, channeling Polanyi, that there are fairly scientific elements (supply/demand curves), and “provisioning.” But the scientific elements are only useful on a micro scale, for understanding tiny markets or a part of the whole for greater markets. They are not what most people mean when they talk about economics.

      In other words, economics as it affects society is “provisioning.” It’s an way to help understand how people interact in markets, at its core. That implies two things. First, that precision, such as specific inputs leading to specific outputs, is impossible. Broad strokes are the only feasible way to approach economics; it’s entirely evident that generally free markets produce the best results and are most in keeping with human freedom, which, all else being equal, is generally a good thing. That says little, though, about such things as whether we should have a gold standard. Second, and directly to the question, those broad strokes are, or should be, subordinate to societal goals. The goal is not to have a free economy, or freedom as such; it is to have a flourishing society. It is entirely possible, and in fact obvious, that some economic choices lead to pernicious societal effects, even if average wealth may thereby by increased. Therefore, in the course of political action, those economic choices should be avoided, and others taken—even though everyone, or everyone on average, is as a direct result left poorer in monetary (or other strictly economic) terms. That’s what I mean by “economics should be subordinate to politics.” (Similarly, business, which is just a subset of economics, should be equally subordinate to the politics of flourishing.)

      When someone on the Left says something similar, his claim is (I think) not different in kind, but in degree. If your desired end state of society is total equality, certain economic choices must be made to obtain and maintain that equality. Those choices are both empirically disastrous for economic prosperity and overly destructive of freedom. That’s why they’re bad—the balance is struck at the wrong place.

  2. Really interesting article on a great find (I want to see what else is on your bookshelf!)

    If I may, there are two closely related books worth checking out. The first, written by Erhad about the Wirtschaftswunder, is “Prosperity Through Competition”. He lays out how they went about setting conditions for powerful economic growth, and what forces they had to fight (if I recall, pro-inflation advocates, and those who sought to “soften” or prevent some of the necessary reforms).

    I’m amazed how he pursued a course of true competition among firms, and the remarkable results that followed.

    In contrast, Jonathan Tepper’s account of today’s economy shows how corporate and political forces have largely quashed competition (with a few exceptions in disruptive technologies).His book, “The Myth of Capitalism: Monopolies and the Death of Competition” has received much-needed attention. Probably worth reading.

    Secondly, in response to The Lion’s point (#2) above, our political institutions write the rules within which the economy operates – perhaps what Röpke meant. However, the forces within the economy influence our political actors (and even the form of our political institutions). So I see the system as recursive, rather than one “subordinate” to the other. And in our time, this largely unchecked feedback loop has resulted in the modern corporatist state (disproportionately run by the Davos elites).

    Now in terms of solutions, we clearly need countervailing political forces to fight this corporatist state. We must change the rules and norms of our political and social institutions. How? Start small. Start local. Create communities. Learn, and then participate in the political process (I know Charles, you think this is hopeless – I’m more optimistic). Only after we start to grow local communities can we begin to influence the political and economic setting.

    I’m working on outlining a new economic arrangement for the 21st century, and figuring out how to implement on a local level. This arrangement must must reinforce virtuous individual pursuits, and support virtuous families and community. To do so, we need pathways to achieve Rousseau’s “general will” – equal to “collective” (gasp!) ends. As Aristotle proclaims in his Nichomachean Ethics, government exists is to foster individual virtue (arete) and eudaimonia – which includes service to the community. Not a bad starting place! But we have a LONG ways to go to achieve the necessary social, political economy.

    • Charles says

      A great deal is on my bookshelf! About 6000 books, to be precise. But very few have been there thirty years. I have multiple rolling bookcases in my office. One, next to me, has “upcoming” books. Another has “to be cataloged” books that have arrived. A third has dictionaries (OED, etc.) and writing books (Fowler, CMS, Ward Farnsworth’s books).

      Erhard’s book looks excellent. It seems hard to get. I hate print-on-demand books, but I have just discovered that AbeBooks, though owned by Amazon, (a) permits filtering out print-on-demand, unlike Amazon and (b) almost always has old books available, shipping from the UK or other foreign countries, when Amazon says “Unavailable.” So I will get a copy there. I have Tepper’s book; just started reading it today!

      I am going to respond to the economics comments, including yours, separately. And I would love to see your economic arrangement, in part because (a) I am deficient in economic knowledge and (b) I am less interested in economics, but need good ideas to put into my own program!

    • I agree that the best (and I think only) solution to the dominance of the “corporatist state” is to begin from the bottom up. I myself live on a small farm and understand the virtues of self reliance and the value of a viable community.

      I’m amazed to this day how most people seem to have difficulty understanding that the state and the corporation have developed over time into a single dynamic entity which cultivates dependence and conformity. I believe what fuels this entity are the delusions of ideology – “ideas” that the state and the corporation actually are separate and that they actually embody different interests and values.

      I’m no economist but my own readings of history and philosophy suggest to me that thinking of “capitalism” or “freed markets” as an economic system is to completely misunderstand the nature of the modern world. The notion of the “free exchange of goods and ideas” is all well and good only insofar as it is restrained by other institutions and virtues. Adam Smith himself understood this quite well. When those institutions and those virtuous individuals are subverted, as they have been, then people turn to the state for control and regulation. There is no such thing as purely unregulated free markets, there never were and never will be. Over time the state and the corporation have discovered an identity of interests – the most elemental of which is the cultivation of a dependent populace.

      It seems that Ropke intuitively, and correctly in my opinion, understands that economics must be subordinate to culture. The problems of the modern economy are actually the problems of how we moderns understand reality. We moderns do not see ourselves as a participants in nature rather we understand nature as an object outside of ourselves to be exploited or managed or saved. The problems with capitalism as an economic system are merely symptoms of capitalism as a metaphysical system.

        • Your thought about our problems stemming from “how we understand reality” reminds me of Yuval Harari’s “Sapiens”

          “Sapiens rule the world, because we are the only animal that can cooperate flexibly in large numbers. We can create mass cooperation networks, in which thousands and millions of complete strangers work together towards common goals. One-on-one, even ten-on-ten, we humans are embarrassingly similar to chimpanzees. Any attempt to understand our unique role in the world by studying our brains, our bodies, or our family relations, is doomed to failure. The real difference between us and chimpanzees is the mysterious glue that enables millions of humans to cooperate effectively.

          This mysterious glue is made of stories, not genes. We cooperate effectively with strangers because we believe in things like gods, nations, money and human rights. Yet none of these things exists outside the stories that people invent and tell one another. There are no gods in the universe, no nations, no money and no human rights—except in the [collective minds] common imagination of human beings.”

          I would argue that the specific details of those “stories” matter enormously. Do we believe in a hyper individualistic secular world, and find our identities through “politics” and “consumption ” (aka lifestyle choices)?

          Or do we have stories about our world based on trust & community, based on virtues that require putting higher goals ahead of self.

          And I believe that can only happen brick by brick, person by person, community by community.

          • Charles says

            I think your conclusion is certainly right. But I am not as quick as Harari to say that cooperation is the only thing that makes humans successful. Sure, cooperation is necessary—as Jonathan Haidt notes, chimpanzees are simply incapable of even cooperating to carry a log. But beyond that, brains and family relations are also critically important, both to not being chimpanzees, and to a successful society. Ants cooperate, after all, flexibly and in large numbers. And, of course, his claim that stories are the only type of existence that God, or money, or certain human rights, have, is silly and typical Harari.

          • I find it relevant that you bring up the concept of “stories” as it is precisely the disappearance of stories which is symptomatic of the modern world; Another word for stories being myth.

            I believe a myth is generated by the imagination’s encounter with reality. Historically myths told us who we were and how the world worked. Myths contained knowledge of unity. And of course a religion is mostly the institutionalization of certain mythic understandings of reality.

            With the emergence of science we no longer require some unified understanding of reality. Science, as Heidegger says, becomes our way of revealing reality. Science reveals reality by breaking it into pieces. Technologies transform the pieces which in turn are reproduced by industry. This is why I think of “capitalism” as a whole metaphysical system.

            And perhaps most significantly, human consciousness adapts to this new reality.
            Which is to say, human consciousness not only fragments, we come to embrace and celebrate our fragmentation ( “education” “skepticism” or “diversity” are words which are symptomatic of this state)

            To get back to our unique human ability to bind together with stories, with some common understanding of reality. This common understanding to be viable must not simply be a theoretical excercise but an imaginative transformation of experience.

            At this point I’m a little skeptical when Yuval Harari says, “there are no gods in the universe, no nations, no money, no and no human rights – except in [the collective minds] common imagination of human beings.” I think it erroneous to suggest that all we human beings need to do is tell some compelling story which resonates with enough people in order to generate a more or less harmonious society. Ideas of “gods”, “money”, “human rights” etc may persist in the imagination but they are not simply the products of the imagination. Such ideas, at least historically and as any true poet understands, arise from an encounter and transformation of powers beyond ourselves.

            The name for the notion that human ideas make reality is: “Idol worship”

      • Charles says

        Well, that’s a better response than my responses, so +1! If the comments section had a way to highlight, I would do that. As would Röpke, I’m sure.

    • Charles says

      I responded separately to the Lion’s question on subordination of economics to politics. But I agree there is a recursive element—though, perhaps, it’s more of a capture element, where the wrong politics leads to the wrong economics through deliberate action, not through feedback.

      I don’t think local communities are hopeless! I just think they need weaponry to clear the ground first, or simultaneously.

      And as I say, I want to see the new economic arrangement—which, I suspect, will be of the type that vindicates my claim that economics is subordinate to politics. It must, if it “reinforces virtuous individual pursuits.”

    • I agree that any significant change on these matters must come from the bottom up. Unregulated markets do indeed cause social disruption and alienation but, as Adam Smith himself affirms, this is best regulated by local institutions and personal virtue.

      With the collapse of local institutions and the subversion of personal virtue we turn to the state to regulate markets. This not only empowers the state, but ultimately creates the vast and arcane web of regulations which ultimately serves to protect and facilitate large corporations.

      The state and the corporations share a common understanding or reality and not surprisingly have become increasingly interdependent. They are invested in a dependent populace whose brains are fragmented by ideology into believing the state and the corporation are actually in conflict. Politicians, both Left and Right, always, under all the bullshit say this: “Trust me, give me more power and . . .”

      • Oops! my first entry did not appear for several hours so I retyped another thinking it just didn’t take.

      • I like your sentiment. But I don’t see how markets can be governed by local institutions.

        Unless we outlaw international and interstate commerce (a dumb idea IMHO), then markets need to be governed by uniform laws, created by a national legislature, enforced by the executive branch, and mediated by the courts.

        Should the power of the corporatist state be scaled back? Absolutely!! But eliminated…? That frightens me! Much as I love my neighbors, I don’t want them deciding what belongs to me (vs anyone else), what I can and can’t do (i.e. what’s illegal), and who makes sure we abide by the rules (vigilante justice? mob lynchings?).

        In order to have effective national markets, we need balanced countervailing forces to reach compromise within the political economy. But, as I think we all agree, these must be interwoven with and supported by strong local institutions and communities.

        Choral societies anyone…?

        (oblique reference to Robert Putnam’s study of historic Italian civic society)

        • “But I don’t see how markets can be governed by local institutions” Actually I said regulated” not “governed” which has a slightly different connotation. If I take a book out of the library rather than buy it from Amazon aren’t I influencing, i.e regulating a market? Recently my neighbors and I helped cut firewood for an elderly neighbor who, being an old Yankee, would not apply for state fuel assistance – isn’t that, albeit in a tiny way, affecting the fossil fuel market? My wife belongs to an organic farmers organization which ultimately facilitates the selling of her products – isn’t that influencing the food markets?

          I have nothing in principal against rules and regulations for corporations, but, it seems to me, the most effect way to reduce the powers of corporations and the state is to minimize how much power we give them in what little ways we can.

  3. Charles,

    Thank you, very nice review. I was completely ignorant of Ropke. Adversaria below:

    The discussion of his intellectual movement toward delineating the social outcomes of economics and markets reminds of recent changes in Russ Roberts’ views(of Econtalk fame – which you should give a try if you aren’t a listener). He has always been a strong proponent of the market, and of economic growth and increased standard of living as the holy grail of economic sciences (think Tyler Cowen – Stubborn Attachments) but he has recently made a strong shift toward realizing that human flourishing is more than consumption, consumptive potential, and life expectancy. Recent interviews of Sebastian Junger, Yoram Hazony, and Jordan Peterson have really highlighted this.

    I may have asked you before, but are you familiar with John Medaile, John Mueller, or any of the other modern distributists? Or with John Ruskin? Ruskin’s short collection of essays “Unto this Last” may be of interest to you.

    Your statement about economics: ” I note that economics should be subordinate to politics” may benefit from an understanding of Karl Polanyi’s substantivism. Which is basically the view that there is economics as a science – supply and demand curves, inflationary pressure, the iron law of wages, etc. and there is another meaning or facet of economics that has to do with societal functioning, what Polanyi called “provisioning” this is the mix of occupations, the norms for exchange, the preferred or allowed corporate structures, etc. This second type of “economics is a collection of historical, cultural, and public policy artifacts that are what most people think about when they are deciding whether or not the economy is good and good for us. The lack of this sort of language causes a lot of confusing, and frequently those of us on the right are reticent to endorse economic regulation (social or legal) because it is seen as ignorance of the science of economics.

    This may interest you:

    • Charles says

      I have subscribed to Roberts! I have been looking for a new podcast, so that is helpful. Nope, not familiar with any distributists—though I know who Ruskin is, and ordered his book. (I have discovered that AbeBooks allows easy filtering out print-on-demand books, and getting original versions, which are infinitely preferable.) That said, distributism sounds very interesting; I just haven’t turned to it. Any recommendations for good overview works?

      I have stolen your Polanyi distinction for my response in the comments to the Lion; it strikes me as exactly right.

      I can never make up my mind about SSC. Part of it is that everything is so damn long (yes, I know that’s the pot calling the kettle black). But half of it is insightful, and half dumb. It annoys me. So on that link, Alexander seems to be going down a reasonable path—namely, that what the West exemplifies now is not actually Western civilization, just an emanation, a puff of smoke off the real Western civilization. But instead he immediately veers off, to define modern Western culture as what “works,” the successor of what came before in the West. To do this, he conflates two separate things—ones to which there is an objectively correct answer, or at least better answers, such as medicine; and ones that happen to be modern Western left-leaning values, and tries to lump them in with the first group, even though there is no necessary connection at all.

      So, he tells us that modern Western gender norms (by which he means Left norms, ignoring that those are far from universally accepted in the West, and moreover change every day by Left fiat) exist because they “work.” He doesn’t say what he means by that. It can’t be “work” like antibiotics work. So it must just be sophistry.

      Although he doesn’t use the term, what he seems to be claiming is that Enlightenment political principles are the end state of man, because only they work (thanks, Francis Fukuyama!) But that’s not true. Thus, if the Industrial Revolution had happened in Tibet, it is true that we in America would have its benefits—medicine, iPhones, communications, transit. It is not necessarily true that everyone would have democracy, or the same gender norms, or the harm principle, or any Enlightenment principle whatsoever.

      When he talks about “universal culture,” similarly, he conflates Coca-Cola replacing both yak’s milk and cider with WEIRD morality replacing other cultures’ morality. That latter doesn’t happen as much as he thinks, and often happens only because we force it on other cultures (Dreher is always talking about this). There is no necessary reason to suppose that, for example, more communication leads to more WEIRD morality. More likely this is just a flash in the pan, and in fifty years will be largely forgotten, viewed as failed and stupid experiment. (Review of the new book Empty Planet coming up soon!)

      Alexander is also wholly off-base in what Western culture is, by saying it has something to do with Thor and maypoles. This suggests almost unbelievable stupidity, but is probably just a mask for not wanting to have to talk about what it really is, what it has wrought (namely, everything material he loves in the modern world, which would never, ever, have been generated by the Caliphate or the Chinese), and that until very recently was dominant in the ruling, and all the other, classes of the West—which suggests it could be again. He just dodges this entire topic. Again, probably fear, but maybe stupidity.

  4. I got my copy of Prosperity Through Competition from the Ludwig von Mises Institute (for $15). You can also download as a pdf from them for free.

    Who the hell is Ludwig von Mises you ask? He was an Austrian American prewar economist, and strong proponent of classical liberalism. A professor at NYU, he and Ayn Rand held many views in common. You may recognize the name of his student, Friedrich Hayek.

    I have no idea if you might enjoy this (Keynes vs. Hayek Rap Battle), but I thought it was pretty funny – and educational too!


  5. Charles,

    I agree that Scott Alexander at SSC can be frustrating to read. He is firmly embedded in the progressive-liberal, rationalist, silicon-valley, techno-optimist community and he can’t always see beyond the silo. However, I keep returning to him because he is extremely charitable, he thinks out loud (or on virtual paper), he has interesting, and sometimes novel, ways of framing issues, and he seems epistemically honest – he admits when he doesn’t know or when he’s trying to work something out. Though he is committed to liberalism he sees and feels that something isn’t right, which shows up strongly in pieces like Meditations on Moloch and The Toxoplasm of Rage. While I often disagree with him, I usually find his articles (with the exception of inside baseball articles about pharmaceuticals and psychiatry) thought provoking.

    As to this particular piece, I am more sympathetic to SA’s position. I agree with you that what Alexander is calling “universal culture” is more particular that he recognizes. It arose from the west due to the nexus of philosophical and religious ideals and if another part of the world would have industrialized first (which I’m not convinced could have happened without some of that pre-existing milieu) the exported values would have been of a different flavor. However, it seems obvious that “WEIRD values” are out competing other values in a variety of markets. That is partly because they are more economically and socially efficient in the short-term. Low entropy as SA puts it. More egalitarian gender roles leads to more women in the work force, leads to rapidly expanding economy – in the short term. In the long run I think it lead to absolute disaster, traditional cultures account for that, they have lasted for a long time, the “universal culture” is an eat drink and be merry for tomorrow we die bargain. The same goes for media consumption. All over the world American media (spectacle movies, pop music, and pornography primarily) are out competing local and traditional expression of culture – even where those localities are still producing “cultural” products for local consumption they basically ape American content. This is partly because of the sexual norms (or lack there of) and exhibitionism displayed. Appealing to peoples base urges works everywhere, and the only way to combat it is strong de facto or de jure social norms. In other words some sort of censorship.

    Your reference to “Empty Planet” reinforces that, in the short run, the universal culture has proven incredibly memetically successful. Birth rates and levels of religiosity have collapsed everywhere. Material culture has risen to great heights. This is all obviously not sustainable in the long term, but memetics don’t have to work long term.

    Last, SA’s wrestling with the implications of his own liberalism on the toleration and promotion of out-groups and far-groups is helpful. He recognizes the contradiction in the way his liberal peers treat southern evangelical and frog worshiping natives and he admits that his moral/intellectual framework doesn’t provide the answer to the problem. One of the good habits that the rationalist community recommends is noticing confusion and pressing on it rather that smoothing it over to maintain ideological cohesion. This is something we should all do.

    • Charles says

      Interesting, and perhaps I should reach more SSC. I’ll grant that WEIRD values may spread in large part not because of forced export, but because they comport with the baser aspects of human nature. Either way, not a good long-term strategy!

  6. Charles,

    For a primer on distributism I like John Medaile’s book “Toward a Truly Free Market.” I think the distributists (and Ruskin) are good at putting their finger on problems and pointing out the ways that the logic of the market encourages atomism and destroys social cohesion, but they often lose me on the proposed solutions. Some distributist stuff seems like perfectly reasonable policy ideas to encourage distributed social capital and decrease rent seeking and concentration of wealth and influence, But other proposals just sounds like Christian socialism (in the vein of Europe’s sclerotic welfare states).

    Many distributists are also Georgists, or at least are sympathetic to Georgism. Phillip Bess (Notre Dame architecture professor) has quite a bit of stuff on the topic (such as:, he has a book called “Till we Have Built Jerusalem” but I haven’t read it.

    • Charles says

      I’ve ordered Medaile’s book; thanks! I’ve never understood Georgism–it just seems impractical. But maybe I should study it.

  7. max says

    The assumption that economics is subservient to politics stems from a logical fallacy. Since the state (the machinery of politics) can and does control human behavior, and since men are always engaged in the making of a living, in which the laws of economics operate, it seems to follow that in controlling men the state can also bend these laws to its will. The reasoning is erroneous because it overlooks consequences. It is an invariable principle that men labor in order to satisfy their desires, or that the motive power of production is the prospect of consumption; in fact, a thing is not produced until it reaches the consumer.
    Hence, when the state intervenes in the economy, which it always does by way of confiscation, it hinders consumption and therefore production. The output of the producer is in proportion to his intake. It is not willfulness that brings about this result; it is the working of an immutable natural law. The slave does not consciously “lay down on the job”; he is a poor producer because he is a poor consumer.
    The evidence is that economics influences the character of politics, rather than the other way around. A communist state (which undertakes to disregard the laws of economics, as if they did not exist) is characterized by its preoccupation with force; it is a fear state. The aristocratic Greek city-state took its shape from the institution of slavery. In the nineteenth century, when the state, for purposes of its own, entered into partnership with the rising industrial class, we had the mercantilist or merchant state.

    “Economics was everywhere and politics nowhere” was a phrase used to describe this productive, energetic, innovative, decentralized trading nation in the mid-nineteenth century. What a wonderful picture of economic freedom unencumbered by political extraction is conjured up by that description.
    Switzerland has been able to retain some of these characteristics despite the predations of the twentieth century.

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