With the present cancer of decay infecting the body politic, a virulence so debilitating that it induces complacency in the face of not only flagrantly unconstitutional acts of the national government but even of murder, it is an understatement to say that the “common good” is threatened. To deny, in the face of angular reality the need to return again in public life to that which is right, true, and eternal is to maintain an insouciance scarcely to be believed. And yet we have the school of Public Choice which, though full of helpful insights and thought-provoking results, bears witness that the spirit of sophistry still stalks our public discussions, not to mention the already politicized halls of academia, as its adherents peddle their wares under the imprimatur of Jeremy Bentham whose intellectual remains are apparently trotted out more often for viewing than his corpse. But such wares are not copper bottom. For the ills that plague us we cannot expect to find a serious balm there. Fortunately, we have an alternative to Public Choice to give us a better guide about public interest and the common good. We have the great German economist and social thinker, Wilhelm Roepke, whose vision of economic and social order is rooted thoroughly in the patrimony of Christian and classical thought and who, like the friends of form in ancient Greece, has given us in the prodigious body of his writings that example of character and humane philosophy which must serve us as light within this present darkness.
The discussion of these matters below begins with a definition and overview of Public Choice followed by a criticism of some of its main features. The criticism dwells on the ethical position of the school and the errors in reasoning that are consequent, at least in part, on holding this position. Economists are familiar with these errors as problems of social traps and fallacies of composition. Other errors or questionable aspects of its models, assumptions, or analyses such as the supposed virtues of the unanimity rule (following Wicksell) and the inordinate emphasis on consent and social contract cannot be dealt with here.
Similarly, in discussing Roepke a definition and overview of his main ideas on public interest or political economy are given first and are followed by a fuller exposition and defense of his views. Paralleling the treatment on Public Choice, the defense concentrates on his ethical position coupled with his broader views of problems and solutions to questions of social order. It’s argued here that Public Choice is not only inadequate as a political model but is morally harmful to the public good while Roepke’s counsel in these matters is morally sound and politically healthy.
What is Public Choice?
The representative source for this school of thought, the locus classicus, is the work of James M. Buchanan and Gordon Tullock in their book The Calculus of Consent, a volume which purports to show the “logical foundations” of democracy. The public interest as defined in orthodox political science is considered nothing but a “grail-like search” and should be replaced with one that sees politics as a function of individual economic interests. Its adherents thus want to apply the market view to politics believing the political process is not essentially different from market trading. Just as Western thought has had to break away from the scholastic condemnation of trade to free the economy, so now we must break away from the lingering scholasticism in political theory and recognize self-interested pursuit in politics is just as real as in the market. We are to broaden the opportunities for self-interests to “advance” or “perfect” those of the “community.” This is their answer to the issue of the “public good.” It is based on the belief that there is no such thing as the “public good.” There are only individual “goods,” that is, only individual interests.
The Public Choice market model approach can be described in other but still familiar terms along with some other features. It is positivist and methodologically individualist. It claims to be scientific, merely describing behavior, the way real people actually engage in the political process, or the process of public choosing. Accordingly, government is considered a process facilitating collective action. Collective action is merely the action of individuals taken as a group rather than taken individually. Since the state is merely a human artifact, a machine, a set of processes, it is subject to change and is perfectible. But since there is no transcending concept of “welfare” or “justice,” the standard for indicating “better” or “worse” a rigorous insistence on consent, preferably unanimity and the Pareto criterion, is necessary. They are especially concerned to establish “constitutional rules” or basic procedures within which other government action is to occur. “Improvement” must be in the interests of all. At the constitutional level this is conducted by “free individuals attempting to formulate generally acceptable rules in their own long-term interest.”
Norman Barry gives still another description of Public Choice. He distinguishes “procedural” from “end-state” liberals explaining that the former advocate a process of free exchange between individuals whatever the outcome of the process. But the latter base their views on ethical or metaphysical grounds and have a vision of what the end-state should be. Accordingly, he defines Public Choice adherents as “procedural liberals” who are ethical subjectivists, believing men are only utility-maximizers. Public policy should accordingly be fashioned to help individuals maximize freedom and choice. Ethical objectivists are anathema since the imposition of values by society on individuals would be seen as tyranny by them.
Jack Wiseman similarly explains that Public Choice uses market features as the standard against which non-market decisions are judged.
Peacock and Willgerodt explain Public Choice as that form of liberalism which “is characterized by the devising of rules which determine the role of the state by approximating to market exchanges as closely as possible. The outcome of the process of consent which the procedural rules are designed to promote cannot be the subject of some a priori judgment of value.”
The Sin of Public Choice
While Public Choice has several flaws, the undoubted fons et origo of the major ones, and none is more serious, is its ethical nihilism. This denial of the objective grounds of morality leads its adherents to claim their models, analyses, and policy prescriptions are mainly, if not completely, positive and realistic though they also claim they are “avowedly individualist, rationalist, and secular.” While proceeding from the subjective value commitment to individualism, their behavioral assumptions (mainly utility maximization) are really ethically neutral they say, their task being primarily one of analysis. In their words: “We propose to analyze the results of various choice-making rules on the basis of this behavioral assumption, and we do so independently of the moral censure that might or might not be placed on such individual self-seeking action.”
Surely, to recognize in politics “self-seeking action” is realistic—as far as it goes—but there is more to political reality. Two aspects of reality work against this approach. First, man has higher aspects to his nature, a need to know and identify with the transcendent truth and to practice it in his public and private life. To admit only one side is seriously to deform the analysis. It implies that the other side either doesn’t exist or is trivial, not worthy of serious “scientific” consideration. Also working against it is a social dynamic rooted, broadly speaking, in a fallacy of composition problem. While some writers recognize that individual rationality does not always or necessarily constitute social rationality, they propagate the same error in believing that what might work in the sphere of the private market will also work in the social atmosphere of politics.
These two aspects can work together. For example, Buchanan and Tullock cite the growth of pressure groups as empirical justification for their approach. They conclude:
In the face of observable pressure-group activity with its demonstrable results on the outcome of specific issues presented and debated in legislative assemblies, the behavioral premise that calls for the legislator to follow a selfless pursuit of the “public interest” or the “general welfare” as something independent of and apart from private economic interest is severely threatened. Empirical reality must have its ultimate effect on analytical models, even if this reality contains implications about human behavior that scholars with strongly held ethical ideals find difficult to accept.
With ethical concerns eating the dust of a stampeding empiricism, is it any wonder that, if such groups have grown in recent years, it is because belief in that same higher ethical truth has declined, the very belief which allows us to pursue “public interest” or “general welfare” in a manner “apart from private economic interest”? One suspects the decline in political honor is re-inforced by this very pretended neutrality when those holding such views influence the public in general or politicians in particular. We are left in a downward-spiraling social trap: the more transcendent truth is denied or relativized (as subjective opinion only) and self-interest allowed to fill the vacuum, the more the latter grows. The goal, to replace rightness with rules, is problematical because it reaffirms man in his pursuit of an autonomous, unlimited self-interest, encouraging belief he can do so with impunity. It is, then, as pernicious as it is erroneous to cite the subsequent decline of moral character in politics as an empirical reality justifying that socially disintegrating approach which helped the decline in the first place.
Especially distressing is the cynical attitude that underlies the Public Choice approach to political theory with respect to any higher aspects to man’s nature. The attitude is well illustrated in the reliance on Sir Dennis Robertson’s famous dictum concerning the need to economize love because it is so scarce. Buchanan and Tullock elaborate: “If, as Robertson [says], `that scarce resource Love…’ is, in fact, `the most precious thing in the world,’ there could be no stronger ethical argument in support of an attempt to minimize the necessity of its use in the ordering of the political activity of men.” Can one really take this as a serious ethical commitment or even a logical statement? So far as the latter goes, it is like saying that because of its scarcity, instead of trying to grow more food, one will simply eat less. As to the former, it is hardly ethical to use scarcity as an excuse to render love obsolete by substituting institutional rules. Surely this is more of an exercise in moral irresponsibility unworthy of the dignity of any science. One is reminded here of Mark Twain’s witticism: “Truth is the most valuable thing we have. Let us economize it.” We all know what that involves! A world of liars is neither Christian nor desirable and neither is a world deliberately bent on minimizing or eliminating the use of love. Just as Wagner and Tollison say, the practice of constitutional conventions strengthens our ability to manage them, so also the practice of self-interest strengthens, and expands, self-interest. Even such a utilitarian as J.S. Mill understood this Thomistic point when he wrote: “the only mode in which any active principle in human nature can be effectually cultivated is by habitual exercise.” Yet the habitual exercise of love is precisely what Public Choice advocates have no room for.
But Buchanan and Tullock are not content to minimize reliance on love, they exclude it from the definition of economic exchange. It requires that the “interest of [the] opposite number in the exchange be excluded from consideration.” Following Wicksteed’s example, the authors insist that this must have been true even for St. Paul’s tent-making activity. The concern seems to be that while the motives can be altruistic (toward some other party), the behavior in the immediate exchange must be narrowly self-interested. This distinction supposedly rescues them from advocating “economic man.” But it is at best dubious to suggest that behavior and motive can be so stringently separated; certainly, the ethics are questionable. If Paul repairs a tent in order to give a donation to a church but doesn’t care whether he is dealing righteously or justly or charitably with his customer, then he is likely suffering from a moral schizophrenia which is difficult to believe of St. Paul. (It also indicates a mild application of the end-justifies-the-means argument.) In Thomistic ethics, for example, one must use good means to achieve a good end. Thus, one can’t rob a bank to give to the local charities. Justice in exchange, that is, some consideration of the interests of the other party, must play a role. And the legitimate interest the other party can demand is justice, though charity may be appropriate in some cases. Even if one believes that, by and large, in a free and competitive market, the market price approximates justice, namely, that the legitimate interest of the opposing party is adequately considered if one charges that market price, their definition would still not be satisfied. The result is surely a brutal self-interest, a gratuitous harshness to the definition and certainly to the practice of market exchange.
Indeed, Buchanan and Tullock do seem to follow Mark Twain’s model to economize on truth also. The entire effort to reduce politics to trade means there are few if any mutually exclusive issues. Accordingly, if there are no either/or situations, there are no right or wrong issues or cases which are to be evaluated on their merits alone; there are only individual interests (desires). The entire effort to extend trade to politics (logrolling and side payments) at the expense of all mutually exclusive alternatives, or as nearly as they can theoretically get to this, is simply another form of the denial of truth in politics. Everything collapses before the principle of freedom of trade thus helping to fulfill what Marx claimed of the bourgeoisie: they deconstruct traditional society and eliminate all manner of chartered freedoms in the name of one sacred principle: free trade baptized in the “icy water of egotistical calculation.” We are then truly left with what Peter Viereck called the “Sahara of inhuman aridity: the belief in Economic Man.”
However, it is not merely belief in the rational calculating man, but also the explicit and implicit pronouncements that one’s model is “rational” in a sense that the exclusion of values or morals is somehow reasonable and right. Used this way “rationality” is itself a value as “rational” is a value judgement, though by their premise—that values have no objective existence or grounds—the statement is as arbitrary as it is sentimental. The ultimate irrationality of the approach is rivaled only by the non-neutrality from which it proceeds. Without ultimate values (ends), there is no rationality.
The wrongness of Public Choice is also found in its pragmatic functionalism, long the plague of social science, which rejects essentials that preserve important distinctions. The “function” emphasized here is, of course, “market exchange,” selling or trading. This functionalism blurs the distinction, for example, between a prostitute and a professor (Buchanan and Tullock’s example) as well as more generally between private action in the market and public action in politics, between private goods (interests) and public goods (interests). The systematic application of this method is to strain all of social reality through one principle. All that is visible in any analysis is the economic function of “selling,” that something is sold, not what is sold and its moral rightness. That it is possible for a professor to sell his teaching services without compromising the integrity of his work or the dignity of the science but that prostitution necessarily excludes integrity and dignity is an essential difference of paramount importance. Yet the difference is lost in the methods used here. Pronouncements for the acceptability of one over the other are merely expressions of subjective preferences and therefore arbitrary and so are not to be imposed on others. (Of course, their own preference for freedom and individualism is just as arbitrary.) To use the words of Leslie Charteris’ detective character, The Saint, everyone is entitled to his own damned heresies. I won’t interfere with your perversion, even though it imposes costs on me, because then you or others might interfere with my perversion which would involve even greater costs for me. This is the “normative nihilism” with which they would inflict us.
Perhaps the trait most cited as typifying Public Choice is the view that the appurtenances of a “just” social order are achieved through ignorance and uncertainty. In a kind of Rawlsian world, reasonable rules will be forthcoming because nescience about the future will prevent anyone from skewing the political system in his favor. The goal seems to be a kind of moral magic, a prestidigitation on the techniques of rules operating on common human frailty. In older language they want to take the base metal of self-interest (the private vices of Bernard de Mandeville) and turn it into the gold of “public good” (as they understand it). In short, the functional result will look like orthodox justice without drawing upon its principles. The classic example is their concern for budget deficits and their efforts to replace the older ethos against deficits with a constitutional rule or the attempt to derive “ethical” results from their political cum economic models.
But is functional disinterestedness, arising from ignorance and uncertainty about future income positions, a sufficient basis for good government or society? Can an ethical (or virtuous) result be effected (systematically and socially) without ever taking stock of ethics (or virtue) proper, indeed, without even believing that values exist objectively? In the case of budget deficits, institutional rules or procedures to guide the pursuit of self-interest in political discourse will not replace the lost ethos or serve as a basis for deriving an “ethic.” In the problem of intergenerational equity, for example, unanimity and consent of the non-voting or even not yet existing generation can’t apply and the problem is not solved by any amount of Rawlsian “gedanken” experiments or general application of market methods.
In fact, Public Choice advocates do not see that politicians have been imitating the market only too well and this contributes to our problems such as deficits. As each politician looks exclusively to his own self-interest he is unable to consider the interests of the whole without running the risk of losing his office. Though this sort of prisoner’s dilemma is recognized, it is not seen as the very essence of that efficiency-producing conformity that powers the free market. Real entrepreneurs follow what Talbot Page has called a Gresham’s Law of costs: external costs drive out internal costs, that is, one seeks to spread costs over as large a number of people as possible and keep the benefits to a few and competition compels conformity. It is assumed that because rules work for some smaller or marginal group they will work for the group as a whole. But constitutional rules are like the police: they operate effectively only at the margin given that the rest of the community is faithful to the more fundamental values the rules are intended to protect. One simply can’t have the entire community in need of policing. Just as the group seeks to short-circuit morality through rules, so also the individual seeks to short-circuit the group and its rules by any means calculated to succeed. In this way, by making the market the standard for politics (absolutizing the market), Public Choice makes matters worse. Because market imitation is simultaneously the effect and a further cause of that rent-seeking activity so widely deplored, we should hardly be content to accept more of the hair of the dog that bit us. There must be a positive commitment to enduring values.
Yet Buchanan and Tullock argue that it is useless to make normative statements unless one suggests modifications in organizational rules. But one may rather say fairly the opposite: it is useless to modify organizational rules unless one suggests how they will be adhered to in good faith, not ignored or changed whenever it is deemed inconvenient (especially since constitutional as well as operational rules are subject to continuous change and in the absence of character derived from adherence to truth, inconvenient rules are simply changed or ignored). But to do this would be to suggest an ethos, a set of objective values which are the ground and justification for rules; and in some cases, if the values are adhered to, the rules are not even necessary. Indeed, the more rules there are, the more dependency on rules is created at the expense of personal integrity which breeds only more rules. As Sennholz rightly observes in the context of national deficits: “No political regulation, law, or amendment can impose integrity on people who prefer profuseness, dependence, and debt.”
Pragmatic functionalism also threatens the “values” of individualism and democracy embraced by the Public Choice school. The forcefulness of reason rests in its grounding in the realities of logic operating on objective (moral and aesthetic) values. But if the rhetoric of political discourse is taken as another exercise in market exchange, or like advertising to facilitate market exchange, if it is taken only in this functional sense to achieve consent, no distinction is left between persuasion from oral argument (or verbal “violence”) and that of physical violence. Far from being a frivolous comment, the point is rooted in historical experience and is the subject of scholarly concern. Hitler’s practice of rhetoric and violence is one such example of pragmatism literally applied in the pursuit of vulgar self-interest in general and the achievement of near unanimity in the German Reichstag in the spring of 1933 in particular. If public interest is nothing but the sum of individual desires, as the Bentham-to-Buchanan school has argued, there is then no objective basis to oppose the use of violence as part of the calculus of consent. Though Public Choice advocates would undoubtedly repudiate the use of force, their position is one of sentimentality only. It is arbitrary unless it can be grounded in a transcending higher reality (e.g. justice).
Perhaps even more important is the “sinking in upon the moral being” in Yeats’ phrase which comes from telling people, in effect, their values and ideals are merely subjective preferences no different in kind than their taste in ice cream. What is left but the “eat, drink and be merry for tomorrow we die” attitude? That such attitudes have important social effects should be obvious. It certainly contributed to political and social problems in Germany as Hamerow explains. In his study on the 19th century causes of World War II, he comments: “Something youthful and ingenuous vanished from the political life of Central Europe after 1848, and in its place came the disillusioned egotism of an acquisitive society worshipping its cakes and ale.” We know the frightful consequences that followed: neither individualism nor democracy were to withstand the morally and socially corrosive effect of this orgy of materialistic desire. And in the wake of that lesson we are justified in harboring similar concerns in any ideology that preaches to us a “cakes and ale” philosophy of politics.
In fact Buchanan and Tullock conclude their famous book with this obiter dictum: “Man’s reason is the slave to his passions, and recognizing this about himself, man can organize his own association with his fellows in such a manner that the mutual benefits from social interdependence can be effectively maximized.” It would take us too far afield in the present format to detail rigorously the philosophical and theological sins of Public Choice adumbrated in this as in other statements, aside from a passion for a “cakes and ale” materialism. It is describable as a form of “social gnosticism” which is the belief that perfection is immanent through an act of man. It is a form of modern subjectivism and “alchemy” which seeks to fuse the real with the ideal and the subjective with the objective and fact with value. It suffers from the same nagging flaws of philosophical pragmatism/instrumentalism as mainstream economics does, which I have detailed elsewhere with respect to cosmology, axiology and methodology. Suffice it to say here that the traditional Christian formula is very much the reverse: reason, enlightened by both common and special revelation, is to dominate desire, not serve it. That same transcending truth which informs this reason orders and orients in the polis the pursuit of the objectively existing “common good,” the public interest. If there is any grail-like search it is in the belief that the enduring values of mankind can be treated by scientific analysis in a neutral manner. Values, by their very nature, cannot be treated thus; they can only be accepted or rejected. Somewhere a commitment must be made. Any broad treatment of public life is necessarily non-neutral; either it inclines in favor of values (truth) or against them. Public Choice, despite efforts to hedge on this, is against them. The problems and objections outlined above are ultimately rooted in the failure of Public Choice advocates to ground their models in transcendent truth preferring, instead, to work from within an inevitably immanentist and finally self-defeating subjectivism from which no appeal to contracts, consent and mutual gains can rescue the faithful. Fortunately, not all economists have been misled in this way and one of the most important, who spoke on these very issues, was Wilhelm Roepke.
What is Roepke’s View of the “Public Good”?
Wilhelm Roepke was the chief economic architect in the reconstruction of the post-World War II German economy. His writings significantly influenced Finance Minister Ludwig Erhard in this regard as well as leaders in France and Italy. Roepke was an ardent nemesis of Nazis and Communists before very many others saw the evil of these movements and was accordingly one of the first German professors dismissed from his university position because of Nazi pressure. However, he also was critical of historically received capitalism. As a result of these views he articulated what he called a “Third Way.” The “Third Way” is his very broad view of the good society and implicitly contains his understanding of “public interest.” His views often coincide with those of the Ordo Liberals of Europe but also are distinguishable from them despite close cooperation with them.
Roepke believes our present “spiritual interregnum” is an “age of a spiritual and moral vacuum which was brought about by the dissolution and disintegration of all traditional values and norms, by the drain of one whole century on the cultural reserves.” Everything older has been devalued and worn out. This is “why nihilism, pure activism and dynamism striving to drown the meaninglessness of our time, why lack of principles has become as much a characteristic of our age as mankind’s hunger for the definite, the stable and absolute…” The moral, political, and aesthetic nihilisms that stalk us correspond to a “paralysis in the human body.” As the meaningfulness of life is lost with a rejection of transcendent reality, solace is sought in dynamic action, as if a Cartesian matter-in-motion, the colliding atoms of self-interest, could substitute for metaphysics.
But his diagnosis, while severe, is neither overly cynical nor reductionist:
…men’s actions are not exclusively, and not even predominantly, determined by their class interests, but at least as much by general and fundamental emotions and concepts of value which unite them beyond all barriers of class and group interests and without which society and state could, in fact, not exist, and to which one need only appeal to evoke an echo: they are a simple sense of justice, a desire for peace, order and unity; a love of the native soil; a feeling of affinity with the national cultural and historical traditions, readiness for sacrifice, helpfulness, chivalry and fairness.
Based on these and other shared features Roepke articulated a view of the “common good” whose chief characteristic is perhaps its “balance” or “proportion.” By this is meant the recognition of different but legitimate spheres of human activity ordered in such a way that it conforms to human nature and meets all of the legitimate desires and needs of man. One may call this institutional pluralism (but Roepke firmly opposed axiological pluralism). Man’s basic institutions – government, family, church and private property -are a divinely ordained patrimony which good stewardship requires us to receive with veneration and respect from our forefathers and to pass on safely to our heirs. For Roepke society is like a healthy body where the organs are in their proper places and function according to their nature and ends. The prescriptive ends of man are an essential part of his writings. The public good is rooted in traditional common norms, especially justice, including “social justice.”
The Rightness of Roepke
The humane philosophy of Wilhelm Roepke is diametrically opposed to that of the Public Choice school. While Roepke would agree with many of the concerns voiced by Public Choice advocates, such as excessive government and fiscal irresponsibility, his diagnosis and therapy are not the same and above all, the philosophical foundation from which he proceeds is different. Unlike the Public Choice school, Roepke proceeds in his analysis and policy recommendations from a commitment to enduring values which form the foundation of his vision of the good society and which are immersed in the Western Christian and classical heritage. In other words, he is not a nihilist or positivist. Norman Barry describes him rightly as an “ethical objectivist.” Jack Wiseman suggests that he has a “pre-conceived ‘moral’ position from which the rules for market intervention can be derived…” He would probably in the current jargon be called an “end-state” liberal if we follow the description of Peacock and Willgerodt:
“End-state liberalism”…presupposes some ethical postulates – some ultimate aims which characterize a “good society” – which are translatable into “proximate” aims described by “economic” variables such as individual economic freedom and a “just” distribution of income and wealth. The procedural rules governing the operation of the private and the public economy are to be judged by their efficiency in promoting the aims themselves…
If Public Choice advocates are “procedural” liberals, and Roepke is an “end-state” liberal, we are faced immediately with some problems of comparison. Roepke, for example, will not dwell on procedures in the pursuit of subjective self-interest very much, though they are implicit in what he says, just as Buchanan and Tullock make no statement on specific end-states, though one might argue that these, too, are broadly implicit in the specification of the procedures—and model assumptions—themselves. To explain Roepke then is to dwell on his vision and draw what conclusions we can from this.
Roepke’s “ethical objectivism,” aside from simply being morally right, saves him from falling into the trap of pragmatic functionalism and so losing sight of essential differences. Much of his criticism of communism/socialism is applicable also to Public Choice. While communism/socialism tries to invade the economy with politics and political solutions, Public Choice does the opposite and tries to invade politics with economic solutions or methods of the market. Instead of communizing the economy, it attempts to commercialize politics. The two spheres are different in Roepke’s view and need to be kept separate. The “imperium” of government deals with the general, common and objective aspect of public life while the “dominium” of economics is primarily individual, detailed and involves much that is subjective.
The extension of “economic man” into politics is another example of that barbaric rationalism which Roepke criticizes as one of the chief sins of historical liberalism. It absolutizes the market, not recognizing its limits and conditions, and makes it autonomous (as it does reason). Rather, the market needs a “firm moral, institutional and political framework.” We need to compensate “the socially disintegrating effects of competition by integrating forces outside the market and outside competition.” As he writes:
…the ultimate moral support of the market economy lies outside the market. Market and competition are far from generating their moral prerequisites autonomously. This is the error of liberal immanentism. These prerequisites must be furnished from outside, and it is, on the contrary, the market and competition which constantly strain them, draw upon them, and consume them.
Instead of extending the non-moral approach from the market to politics, Roepke would rather restore ethical norms to the market. Thus he could hardly consider market exchange as an adequate model of political discourse. The drain on moral stamina not only disqualifies it as a political model but one must even protect the rest of society from the debilitating effect of competitive markets.
Nor does Roepke entertain illusions about autonomous, rational self-interest as a guide generating disinterested results in the face of uncertainty and ignorance of future personal advantage. Speaking like a modern-day Cicero against utilitarianism, he says:
Where there are no principles or where principles cannot be effectively implemented, economic policy is at the mercy of the day’s political whims and so becomes a dangerous source of uncertainty, which merely aggravates nervousness and vacillation. All of this together is bound to impart to economic policy one overriding quality: it will follow political expediency, the line of least social resistance…
This same applies to policy in general. Roepke’s “principles” are not those of maximizing utility or “procedures” to safeguard libertarian individualism but, rather, another name for (objective) justice and truth. Upon no other basis can a sound economy or society rest; rules are certainly not enough. In his words: “But if one tells the various group interests nothing else than that loyal observance of the rules of the competitive price mechanism is in the interest of all and if no strong moral forces are at the same time working to curb their appetites, one must not be surprised by the disappointing results.” He would undoubtedly say the same about constitutional rules.
The soundness of Roepke’s approach stems from his application of a broad view of human nature, including prescriptive ends, to specific policy issues. He understands the disintegration of personality, integrity and morals, which constitutes the social crisis of our time, is in large measure a disintegration of genuine communities. Community requires warm personal relationships that are stable, local and small in character, where individual freedom is balanced with social responsibility. This is part of what he means by “forces outside the market,” the context of community, supporting but also limiting, the sphere of private self-interest. It is to the procedural liberals in today’s jargon that Roepke’s criticism of historical liberalism and rationalism still applies when he says they are blind to the structural laws of society, a blindness which encourages the belief that it is possible to organize society in accordance with rational postulates while disregarding the need for genuine communities, for vertical structure, for authority and hierarchy. A rationalist republican will no more understand that a monarchy can be a superior form of government where it has really legitimate roots than he will be able to grasp how much federalism, the family or a sense of tradition, really mean to the health of the state.
Genuine communities supporting free markets exhibit certain essential attitudes and beliefs. These are exemplified not in the besotted “bourgeois” of a Louis-Philippe, the “citizen king” who advised his subjects to “get rich,” but in the hearty “burgher,” the vir bonus, the plain good man upon whom, like the Roman and later American Cincinnatus, depended a good economy and community. Roepke outlines the contents of this spirit:
This buergerlich foundation of the market economy must be frankly acknowledged…In fact, the market economy can thrive only as a part of and surrounded by a buergerliche social order. Its place is in a society where certain elementary things are not only respected but colour the whole life of the community: individual responsibility, respect for certain indisputable norms, the individual’s striving, in all honesty and seriousness, for advancement and for developing his faculties, independence anchored in property, responsible planning of one’s own life and that of one’s family, thrift, enterprise, the assumption of well calculated risks, the sense of workmanship, the right contacts with nature and the community, the sense of continuity and tradition, the courage to brave the uncertainties of life on one’s own account, the sense of the natural order of things.
This “buergerlich” spirit and social order envisioned by Roepke gives pre-eminence to duty which can be enlisted to deal with economic and political problems. To prevent the corruption of competition, for instance, it is necessary to base it on “certain definite ethical norms” among which are “a certain professional pride which deems it humiliating to defraud, to bribe or to misuse political power for one’s own selfish purposes” and those who depart from this standard should be “socially ostracized as violating the dictates of decency.” One needs, indeed, a “terror regime of decency” to deal with special interest groups in both politics and the market.
The “buergerlich” spirit depends on the leadership of a natural nobility including the historical role of the rich burgher to look beyond his own special interests to consider those of the community instead of playing the part of the “hidebound bourgeois.” Of the richesse oblige, Roepke writes, the wealthy man is “to contribute to the filling of the gaps left by the market because they are in the realm of goods outside the play of supply and demand, but which gaps must not be left for the state to fill if we want to preserve a free society.” Patronage of the arts is one historical instance; education is another. As still another instance Roepke cites voluntary taxing as a social function of natural and informal nobility to support legitimate activities of government: “This function is to be fulfilled by the rich in the same spirit in which in the old days the Hanseatic burghers of Bremen used to pay property taxes: in honest self-assessment of one’s ability to pay and in voluntary fulfillment of an honorary duty.” The good burghers of Bremen did not apparently operate on the postulates of Public Choice.
This same spirit helps Roepke address the realities of self-interest run amok as in the case of rent-seeking and special interest groups but his answer is quite different from Public Choice. To decrease the conflicts between private interests as well as with the public interests, it is necessary to reduce the range of market dependence or increase that of self-sufficiency. In the context of special interests, he explains:
But the method which alone holds promise of a remedy is equally obvious to us and since the real and basic origin of the evil is the division of labor, pushed to extremes and interlocking everything in the most complicated manner, our first thought will be to return to a simpler stage by increasing the sector of self-sufficiency and strengthening local relations between producer and customer…as much as possible…[W]e should consider that the division of labor has possibly been developed too far, so that the strain on frail human morality has become excessive. We must not forget that the growing anonymity of all social and economic relations has removed those whom we are bound to treat with fairness to an increasingly remote distance. This explains how someone who is punctiliously honest in dealing with people he knows may have no scruples in procuring advantages for himself at the cost of an abstract community of consumers and receiving a subsidy from the state which has to be borne by the shadowy totality of the tax payers…Instead of wringing our hands in despair over the wickedness of the human race, we would do better to bemoan a sociological order which of necessity promotes man’s less noble traits. Let us also remember that if the bare existence of men is, by virtue of an all-pervasive division of labor and the market economy, made dependent on the continuous sale of a single product or a service, a cloud of insecurity hovers over them which is bound to make them cold hearted and nervous…Let us then, at least to some extent, return to the old easy-going spirit by assigning less importance to money matters, which is possible by increasing the sector of simple economic relations (self-sufficiency and local selling and buying) at the expense of the sector of anonymous competition, and we shall have taken the first steps towards reconstruction. We are convinced that cultivation of the local sphere in this sense will do wonders.
Limiting the size and extent of government is a function of limiting dependence on the market. Economic independence is the prerequisite of political independence.
Roepke’s view here is quite American, even Madisonian, a comparison deserving some digression. While Buchanan and Tullock claim that their model will help us understand Madison’s concept of democracy, a careful reading of The Federalist No. 10, along with other writings, shows that he is closer to Roepke than to Public Choice both in his central concern and in his remedy. Madison wants checks and balances, to be sure, but resting on a foundation of virtuous men who are concerned for the common good. Playing off one interest against another is only the marginal process that operates on an objective ethical foundation. As Madison writes: “The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold public trust.” (The Federalist No. 57) The purpose of “effectual precautions,” such as a system of checks and balances, is much like the old lock on the barn door: it’s not so much to keep a thief out as to keep an honest man honest. Techniques may reinforce virtue; they do not replace it.
The Republican principle of majoritarian rule, for example, was rooted in a “moral theory of politics” with an emphasis on the “ability of the people…to make sound judgements regarding the virtue of their neighbors, not their ability to deliberate on matters of policy.” They were to seek a man who would be what George Mason said of Patrick Henry, a “keeper of the common virtus, of the memory that makes for honor…” Regarding the specific problem of factions, Constitutional scholar M. E. Bradford writes in summarizing Madison’s views: “Stability would result, allowing for the development of a `third force,’ a group `disinterested’ in its approach to most national questions, devoted to the laws, and inclined to reverence them as they grew older and better established.”
A free republic requires a free economy but that in turn requires a measure of security before taking on both the political and economic risks of freedom. Security is found in ownership of productive property. James Madison, and many of the other Founding Fathers believed that a free republic’s future is best safeguarded in the hands of an independent yeomanry. This was not because there would be equality of wealth, since property among freeholders can vary quite a bit, nor because all their interests would be identical, uncertain or unknowable. They would not. It was because of the lessons in virtue this way of life offered including teaching men to be free economically and politically. Surely here is a very different view from Public Choice—but very consistent with Roepke’s view on values, community and public interest.
Additional counterweights to the pull of special interests and excessive government include strengthening the operations of federalism, local government and family as well as by cultivating the adherence to “the immutable standards of natural law, continuity, tradition, historical awareness, love of country, all the things which anchor a community in the hearts of men.” As he further writes: “It is urgently necessary to strengthen the feeling for the imponderable nature of community surpassing all separate interests and immediate claims and commanding the individual’s loyalty, even unto death…” Even education based on the cultivation of the universal and classical, among other things, can be used to oppose “the teachings of utilitarianism and the specialization of knowledge.” Above all Roepke recognizes that the “most important aspect is, again, the spiritual and moral one.” He agrees with Cardinal Manning’s statement that “all human differences are ultimately religious ones.”
Insofar as the role of economics as a science is concerned, Roepke was acutely aware of the social and political dangers of pretended positivist value-neutrality. He would undoubtedly have little patience with Norman Barry’s statement: “In ethical terms, procedural liberalism precludes the imposition on a people without their consent of any political end-state, including, of course, a liberal one.” This old heresy of historical liberalism was already exposed by Roepke when he said: “One of the chief concomitants of this delusion is the framing of the liberal principle in such an absolute form that its enemies profit by it too, and are, in the name of freedom, given every conceivable opportunity to put an end to liberal democracy…” The history of the Weimar Republic which boasted it had the “freest constitution” in the world [the most proceduralist liberal?] offers a chilling lesson to the contrary. It was the adolescent tendency to absolutize democracy that led to its downfall:
It is obvious that this absolute tolerance even towards intolerance, this intransigent dogmatism of the [proceduralist] liberals, which gives a free hand to all trouble makers and agitators, thereby condemning itself to death with open eyes, must ultimately reduce `pure democracy’ to the defenseless victim of anti-liberalism, to a sort of gambling club whose rules include their non-observance…It is entirely in keeping with this degeneration of democratism and liberalism through rationalism, that it was possible to maintain, in all seriousness, that lack of opinion and beliefs form the essence of democracy and liberalism, since otherwise they could not be tolerant.
It is tempting here to dwell on the more formal analogy of Goedel’s theorem that mathematical systems are never so complete as to include the basis for the comprehensive validation of their own axioms. No system is so self-sufficient or autonomous that it can lift itself by its own bootstraps, so to speak. Roepke has a good intuitive understanding of this truth as applied to economics and society and exposed the logical error of the proceduralist commitment to absolutize, to treat as perfectly self-contained, the system of democracy and free markets. The irrationality of the procedure ultimately not only undermines its own case logically but, more importantly, is the pre-condition for the destruction of a free society.
The destructive sin of ethical nihilism manifested itself in the sciences as well as in the politics of interwar Germany. These value-free scientists were among the first to succumb to the persuasions of National Socialism. Speaking in this context on disciplinary and social disintegration Roepke writes:
The effects of this process of disintegration have, however, been particularly striking and disastrous in the case of science, for, influenced by inward instability it has increasingly become a prey to the misunderstanding that all opinions whatsoever and all decisions based on concepts of value are incompatible with the dignity of science and must needs comprise subjective arbitrariness…The effects of this relativism and agnosticism in science were bound to be all the more dangerous since it thus eliminated itself as the leading authority just at a time when the Church had already lost most of its authority. In this way a vacuum arose which was rightly felt to be unsupportable and which was finally filled by a form of pseudo-science and political pseudo-theology, a political theology of the state which in turn in many countries forcefully transformed science into a political institution; and it was precisely the spiritually rootless scientist who was the least able to oppose this development.
Even after World War II Roepke found it necessary to continue his combat against the “spiritually rootless scientist” in his own discipline as well as other social sciences and unabashedly proclaims the necessity for economics to work with basic values and objective norms. In his words:
Nor will I try to defend my outspoken use of norms and value concepts. For I am strongly convinced that not to use them would be another `trahison des clercs‘ [treason of the clerks], little better than the complementary vice of being the plaything of political passions and social emotions, which J. Benda – the French author who, by the title of his famous book, coined the phrase – had in mind. We should leave all such intellectual sins to mere intellectuals who, in contrast to the real “clercs“, are committed to nothing and believe in nothing, except possibly in a science which, by this very nihilism, loses its own value, function and dignity and can thus all the more easily be enslaved and prostituted by the political authorities as regards whom it vainly aims at being neutral.
The treasonous and vain separation of a discipline from its ethical significance reduces the disciplinarian to a mere technician who, as Richard Weaver reminds us, is indifferent to ultimate ends and values. This is disorienting not only for the discipline but for the society that looks to this discipline for guidance. There is a simple mystery to all this which Alexis de Tocqueville, whom Roepke was fond of citing, described this way: “In the ages of faith the final end of life is placed beyond life….This explains why religious nations have so often achieved such lasting results: for whilst they were thinking only of the other world, they had found out the great secret of success in this” (Bk II, Chapter XVII). Earthly success, be it political, economic or otherwise, is a “beneficial externality” obtainable only by ordering our lives around this other-worldly end.
Not being a “spiritually rootless scientist,” Roepke’s approach to policy issues was not that of the technician but was more like that of the physician. It would be a dereliction of duty for a medicus to refuse to make judgements about his patients’ health and to determine the best way of healing. He knows what the “end-state” is because he knows the human body. Similarly, after thousands of years of civilized human experience, we do have some idea of what constitutes a good body politic. It is reposited in classical wisdom and in the patrimony of Christian social thought and perhaps in deep human intuition:
…there are fundamental truths on which all men are agreed and that there are courses of action corresponding to them which are therefore, so to speak, “natural.” When not abandoning themselves to the ecstasy of mass intoxication, people know after all very well what is healthy and what is unhealthy, what is strong and what decadent, what is just and what unjust, what is legitimate and what against the law, what is in keeping with the nature of man and what is not. If they do not know it yet they will sooner or later discover it, when they have awakened and become mature.
In the present climate of social and moral decay, one can only hope this “awakening to maturity” is not along the path of agony.
Summary and Final Comments
Public Choice is a familiar body of thought. It is re-cycled Greek sophistry cast in the tradition of Bacon, Hobbes and Locke that re-unites economics and politics by collapsing the latter into the former. That is, unity is attempted by squeezing political reality through the sieve of one principle, self-pursuit in the context of market exchange. Belief in objective common good is rejected for a Benthamite definition as the sum of subjective self-interests. The result is an emphasis on pragmatic techniques (procedures or processes) for insuring social order by means of rules to contain what might be called “mutually inflicted selfishness.” Following from the discipline of economics, Pareto-optimality and methodological individualism, reliance is not surprisingly placed on consent and unanimity combined with a positivist/behaviorist pretence at being otherwise value-free and neutral. The result of all this is that Public Choice promotes the idolatry of desire, a gangrene of self-seeking on the organ of politics and a cancer of commercialization on the body of community.
Roepke, on the other hand, understood not just from academic studies but also from personal experience in Germany that liberty based on nihilism (subjectivity of values) destroys itself. He dreaded a repetition of the Weimar syndrome: total freedom ends in totalitarianism after passing through social and moral collapse. This is why his approach to economics and political economy were boldly based on objective ethics. The market is not a model for politics but like the market, politics must be contained, limited and balanced not only by opposing competing social spheres and other rules and techniques but by ordinary people adhering to basic norms, including a commitment to justice as the common good and the completion of human nature through right reason, and living in genuine communities where freedom and social responsibility are properly blended in large measure by the widespread ownership of productive property. In this his views are as American as they are ancient.
These two opposing bodies of thought resolve themselves into two choices: a society of the secular self-interest, increasingly disintegrated and corrupt, or one that seeks a way of life that is humane because it takes into account the over all complexity of human existence, seeks, and is especially rooted in, the reality of man’s need for identity and meaning in enduring values, or what the late Russell Kirk called the “permanent things.” The difference may also be summarized in a reference to Psalm 10: 3-4 (NKJV): “For the wicked boasts of his heart’s desire; he blesses the greedy and renounces the LORD. The wicked in his proud countenance does not seek God; God is in none of his thoughts.” Surely this describes all the difference between Public Choice and Roepke. Which is guilty of this sin should be obvious.
Books referenced in this essay may be found in The Imaginative Conservative Bookstore.
This essay appeared in The Legacy of Wilhelm Roepke: Essays in Political Economy by Ralph Ancil. Copyright held by the Wilhelm Roepke Institute and reprinted by permission. Read the series introductory essay here.