The Canadian Red Ensign

The Canadian Red Ensign

Saturday, March 22, 2014

Tory Economics Part Two

In Tory Economics: Part One we saw that neither capitalism, the economic system of laissez-faire advocated by classical liberalism since the eighteenth century, nor socialism, the economic system of collective property ownership/management advocated by radicals since the nineteenth century, adequately represents the economic views of the Tory, the classical conservative who is the modern spokesman for pre-modern, pre-liberal, ideas and institutions, such as monarchy, aristocracy, the Church and the classical and Christian tradition with its vision of the good of the whole. We saw that in the twentieth century, liberalism abandoned laissez faire for Keynesian economic interventionism and the welfare state, which was perceived as a move towards socialism, prompting liberals of the older type, now called libertarians, to form an alliance with conservatives against the alliance between the socialists and the new type liberals. This led to the widespread confusion of conservatism with capitalism and of liberalism with socialism. We also saw, how in reaction against this confusion of conservatism with the older type of liberalism, some classical conservatives began to argue that true conservatism was closer to socialism, an argument called Red Toryism here in Canada, and we saw how that reasoning was a classic example of the enemy of my enemy fallacy, whether arrived at honestly and with good intentions by George Grant or though the alternate route taken by Dalton Camp.

In this essay we will look at the economic principles that arise out of the Tory position and will examine four alternative economic theories that are more compatible with the conservative project of preserving the best ideas and institutions that have been accumulating in our collective tradition since the most ancient times than either pure free market capitalism or socialism.

Note the significance of the word “pure” before free market capitalism. Each of these economic theories – economic nationalism, distributism, agrarianism, and economic humanism – is, as we will see, itself a modified version of free market economics, a voice dissenting against the mainstream of liberalism from within. In a very real sense this could even be said of socialism, the economic theory of which was built in the nineteenth century upon the foundation laid by the liberal classical economists of the eighteenth. There is an explanation for this. It was the classical liberals who pioneered the science of economics, if it can truly be thought of as a science, that laid the foundation and established the framework of economic theory, and all subsequent systematic thinking about economics has built upon their work in one way or another.

What is today called capitalism, the classical economic theory that men individually pursuing their own material self-interest in a voluntarily contractual marketplace will be led by the “invisible hand” of market forces to serve the public good by serving their own and so the best economic policy on the part of government is a hands off or laissez-faire policy, is the first economic system of its type. It is the first attempt at a comprehensive blueprint, drawn up according to modern, rational, principles, for the managing of the production and distribution of a nation’s material wealth. What the Tories defended, in response to the Whigs’ introduction of this system, was a set of arrangements that had evolved in a very different manner. Nobody had sat down, thought about the best way to organize a country economically, and come up with these arrangements. It would have been impossible to arrive at these arrangements in that way, they could only have come about as feudal agrarian nations gradually adapted to the reality of the growing bourgeois mercantile trade. Liberals and other progressives maintain that this made the Tory position weak and indefensible. The rational mind can surely come up with a system superior to any set of arrangements that are the outcome of the gradual evolution of history and tradition they maintain. The Tory position, however, is one of deep skepticism towards precisely this claim. The Tory believes that modern, progressive man has greatly overestimated the amount of positive change that can be devised and effected by the rational mind and greatly underestimated the importance of tradition which contains a self-correcting mechanism that over long periods of time operates in a way that is not dissimilar to how liberals say the “invisible hand” of the free market is supposed to work. (1) From this we derive our first Tory economic principle, that economic arrangements that have gradually evolved over long periods of time are more trustworthy and to be preferred, over the products of the rational mind’s attempt to draw up a technical schematic for a newer, better, more efficient economic system.

This principle bears something of the appearance of being a non-individualist argument for liberalism’s doctrine of laissez-faire. A rationalist design for a new and improved economic system must be imposed over an existing economic order from the top down and our first principle clearly says the government should not do this but let the existing arrangements be. Is this an illustration of what Dr. Johnson meant when he said “A wise Tory and a wise Whig, I believe, will agree. Their principles are the same, though their modes of thinking are different”?

While the answer is not a clear-cut “no” it is rather more nuanced than a plain “yes.”

The evolution of economic arrangements over time in a civil, ordered, society will involve the passing of laws, the levying of taxes, and various government projects of one sort or another, laudable and lamentable. These are all part of what governments do in their role of overseeing and administering the affairs of a civil society. For the process of natural, economic evolution to end up in a liberal laissez-faire system it would have to have occurred in the absence of government, which, whatever anarchists may claim to the contrary, is not the natural condition of man.

There is a significant implication in this last statement. If natural, economic, evolution could only give us liberal laissez-faire if it occurred in an unnatural state of anarchy, then actual liberal capitalism did not arise through the practice of the policy it preaches. This is confirmed by history. The industrial capitalism of the late eighteenth and nineteenth centuries was not the result of the English government suddenly becoming enlightened by the publication of Adam Smith’s book and adopting laissez-faire policies. Smith’s book came out at the end of over two centuries of aggressive state action taken by Parliamentary Whigs representing the rising new urban merchant-manufacturing class against feudal-agrarian arrangements. These actions, such as the Acts of Enclosure that privatized the commons, were designed to break the feudal security of agrarian workers, uproot them, and drive them from the farms and villages and into dependence upon the new factories in large cities such as Manchester. (2) Liberalism’s promotion of the doctrine of laissez-faire resembles the way in which certain merchants, after having made their fortunes off of the transport and sale of slaves, began to preach the abolition of slavery.

Ironically, therefore, the Tory principle of preferring natural evolution to rational planning would seem to promote a policy of laissez-faire towards traditional economic arrangements, with the understanding that those traditional arrangements include certain state actions, whereas the liberal doctrine of laissez-faire required massive state intervention into those economic arrangements.

One of the oldest rivals to the classical liberal economic doctrine of laissez-faire is economic nationalism. Classical liberals frequently equate economic nationalism with mercantilism but while there are similarities between the two they should not be confused. Mercantilism, depending upon how you look at it, was either the last phase of the pre-industrial economy or the first phase of capitalism. It was the policy of European governments, in the age of discovery, exploration, and increasing international trade, before the industrial revolution and the development of mass production, of managing their country’s trade balance with the goal of always running a surplus, i.e., exporting more than they imported. The idea behind mercantilism was that by running a constant trade surplus, goods would keep going out, currency in the form of precious metals would keep coming in, and the country would keep getting richer and richer.

Economic nationalism is not mercantilism. Whereas mercantilism was a form of pre-industrial economy, economic nationalism, like the liberal classical economics of Adam Smith, is a theory about the development of an industrial economy. Smith argued that an industrial economy would be best served by a domestic laissez-faire policy and by international free trade. Economic nationalism is basically the idea that a country’s government should protect its developing industries with tariffs and use tax revenues to build and maintain such industry supporting infrastructure as roads, railroads, and canals.

To the historian it may seem odd to argue that economic nationalism is more Tory-friendly than Smith’s economic liberalism. In the first major free trade argument in the late seventeenth century, it was the Tories who argued for free trade with France and the Whigs who argued against it. This had more to do with politics and religion than economics, with the Tories supporting James II in his desire for closer ties with Catholic France and the Puritan Whigs aghast at the suggestion, but at least one of the Tory free traders, Sir Dudley North, made the case in economic terms. (3) Apart from this early debate, the Tories were historically protectionists but the protection they favoured was agricultural protection. The first economic nationalists were Whigs, before Adam Smith’s ideas became liberal orthodoxy, and the first elaborate economic nationalist system to be developed was that developed by American republicans after the revolution. This was the “American system” of Alexander Hamilton and Henry Clay. The major nineteenth century theorist of economic nationalism, the German liberal Friedrich List was largely inspired by the Hamilton-Clay American System which he encountered while living in exile in the United States from 1825-1830.

Although historically economic nationalism is liberal in origin, having been first proposed by English Whigs, developed by American republicans, and systematically expounded by a German liberal, it came to be accepted by Tories or conservatives as an alternative that is preferable to laissez-faire. Thus List’s treatise (4) inspired the economic policy of Prussia’s traditionalist, aristocratic, and royalist “Iron Chancellor”, Otto von Bismarck, in the unified Germany. List’s theories were also the theoretical basis of the “National Policy” of Canada’s first Prime Minister, Sir. John A. MacDonald, and remained part of the Conservative Party’s platform until Brian Mulroney became a free trader in the 1980s. In the United States the Republican Party was built upon the Hamilton-Clay system and it too remained on the Republican Party platform until the Reagan era. (5)

We do not have to look far to see what in economic nationalism would be appealing to a traditional Tory. The Tory believes in the pre-modern idea that society is an organic and corporate whole, and that as such its good is greater and higher than the accumulated goods of each of its individual members. The liberal doctrine of laissez-faire, in which each individual looks out for his own interests and the forces of the free market work like an “invisible hand” to bring about the greater good of the society, does not acknowledge this. The liberal doctrine is not entirely wrong – remember that the Tory does not simply assert the contrary of whatever the liberal says. When it comes to our individual goods, the liberal doctrine is largely correct. You are better qualified to know what is best for you, and I am better qualified to know what is best for me, than any government could possibly be qualified to know what is individually best for you, me, and everyone else in society. The larger the society over which the government rules and the further removed the government is from those it governs, the more true this is. There are exceptions to this, of course, such as those with some sort of mental disability that hinders them from being competent judges in their own affairs, but for most people it is true that they are better judges of their own affairs than government could be. Therefore, as far as the individual goods of a society’s members go, the arguments for the free market are sound. The good of the society as a whole, however, is more than just the sum of these individual goods and is exactly what government exists to look out for. In economic nationalism, government looks out for the national good, whereas individuals look out for their own good in the market as in liberal capitalism. This balance between the national and individual good is in keeping with traditional Tory views.

This then is our second Tory economic principle, that the good of the nation as a whole, is more than the sum of the goods of its individual members. .

As liberal capitalism has progressed it has developed beyond an economy of small, family shops and businesses into an economy of large corporations. In the twentieth century the idea of free trade became more popular. Classical liberals continued to believe in it, but the newer kind of progressive liberal who abandoned domestic laissez-faire for Keynesian interventionism and the welfare state was also a free trader. Thus, in the United States, the transition from the high tariff, economic nationalism that the Republican Party had introduced in the nineteenth century to free trade, was largely overseen by the same liberal Democrats – FDR, JFK, and LBJ – who constructed America’s welfare state. Later in the twentieth century, the Conservative Parties of Canada and the United Kingdom and the Republican Party in the United States, converted to free trade as well. This nigh-universal acceptance of free trade dogma coincided with various regional and global free trade agreements. Regionally, Canada and the United States signed a Free Trade agreement, then brought Mexico in on NAFTA, and negotiated with Latin America for the FTAA, while the nations of Europe dropped their trade boundaries to form the Common Market. Globally, free traders had been working towards the integration of the world’s markets since the General Agreement on Tariffs and Trade of 1947 which eventually led to the establishment of the World Trade Organization in 1995. Laissez-faire purists will argue – correctly – that these agreements are not true “free trade” in the Smith-Ricardo-Cobden sense, but the difference is not relevant to the point I am making. These agreements have established, as true free trade would, markets that transcend national boundaries and therefore favour the creation and growth of corporations that transcend national boundaries and have no national loyalties. Advocates of free trade, the regional integration of markets, and globalism argue that this promotes the economic good of all nations involved and especially to the consumer who benefits from lower prices because of it. This is questionable, but even if it demonstrably the case that globalism is economically beneficial to each country involved it can hardly be said to be to the overall good of any country that it is part of an international economic system that promotes the growth of companies that transcend national boundaries, have no national loyalties, and answer to no national laws. This sort of economic integration promotes on the one hand, the cultural and social dissolution of the communities and societies involved, and on the other their cultural, social, and ultimately political integration into a new, international order. Observe the way the economic integration of Europe has led to the rise of the European Parliament and the European Courts of Justice and Human Rights and the continental attack upon the local traditions and national identities of each of the European Union’s member states. Apart from economic theory, one of the main reasons the Conservative Party in Canada traditionally supported MacDonald’s National Policy was to combat continentalism, this economically fuelled pull towards continental social, cultural, and political integration. One does not have to sympathize with the crude and generally ignorant anti-Americanism of the Left to see that the triumph of continentalism, whether it is economically justifiable or not, is harmful to the greater good of our country and that the same is true on a much larger scale of globalization.

Our third Tory economic principle, therefore, is that the economic good, whether of the nation or its individual members, does not outweigh the cultural, social, and political good of the nation.

Capitalism had not developed into anything remotely close to globalism yet, when a couple of English writers, who politically were dissident Liberals but religiously were conservative, traditionalist Roman Catholics, began to speak out against the direction in which they believed capitalism was headed, i.e., towards the swallowing up of the small business owner by the large company, the concentration of property in the hands of a small number of capitalists, and an agreement between those capitalists and the state whereby the bulk of the population would become an industrial labour force that would be maintained by the state during periods when the factories could not provide full employment. Socialism had been around for almost a century at the time but these writers were not socialists, being influenced by social teaching of their church which condemned socialism and its attack on private property even more vehemently than it condemned capitalism. “The problem with capitalism”, G. K. Chesterton wrote “is that there are too few capitalists”.

Chesterton, who wrote everything from mysteries and spy novels to serious and light verse to literary criticism and Christian apologetics, was one of the writers in question. His friend Hilaire Belloc who wrote poetry and historical biography and ran for office as a Liberal was the other. After Chesterton converted from Anglicanism to Roman Catholicism in 1922 and became an advocate with Belloc for a modified liberal economic system that incorporated Catholic social teaching their mutual friend and enemy, Irish playwright and Fabian socialist George Bernard Shaw dubbed them the “Chesterbelloc.”

The term for the system of economics they promoted, which is probably best explained in Chesterton’s Outline of Sanity, (6) is distributism. Late in the nineteenth century, Pope Leo XIII had issued an encyclical entitled Rerum Novarum, in response to the ”spirit of revolutionary change” that had been “disturbing the nations of the world” and which had “passed beyond the sphere of politics and made its influence felt in the cognate sphere of practical economics”. (7) In the encyclical the Pope opposed this spirit of revolution and condemned the socialists who “working on the poor man's envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all, to be administered by the State or by municipal bodies” in no uncertain terms. “They are”, the Pope wrote, “moreover, emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community.” (8) This condemnation was not an endorsement of liberal capitalism. The Pope also condemned the conditions that had given birth to revolution and socialism and called for “some opportune remedy” to be found “for the misery and wretchedness pressing so unjustly on the majority of the working class” which he attributed to the abolition of “the ancient workingmen's guilds”, leaving a vacuum in which the working man was “surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition.” The encyclical defends the private ownership of property against socialism, which strikes “at the interests of every wage-earner” by seeking to “deprive him of the liberty of disposing of his wages, and thereby of all hope and possibility of increasing his resources and of bettering his condition in life” but laments that “the hiring of labour and the conduct of trade are concentrated in the hands of comparatively few” and calls for changes whereby the conditions of the working classes improve are improved and it becomes easier for them to save their wages and become property owners themselves.

It is from this teaching, that faithful Catholics like Chesterton and Belloc derived their idea of distributism, which is basically the idea that property, rather than being owned collectively by society through the state as in socialism, or privately by a small class of capitalists, ought to be privately owned but that private ownership should be widely distributed throughout the largest number of people in society. What the distributists were basically advocating was a large middle class of small property owners. Here again it may seem strange, regardless of the origins of the idea in Roman Catholic teachings, to suggest that distributism is closer to the views of the Tory than orthodox liberalism. The Tory Party that supported the House of Stuart against the Puritans in the seventeenth century, drew its support from the titled nobility, landed gentry, Anglican clergy, and the country peasants. It was the Puritans who sought support among the middle classes, particularly the merchant trading classes. Later, in the nineteenth century, it was Robert Peel the heterodox Tory leader who championed liberal policies to attract the middle class vote, whereas Benjamin Disraeli, the more orthodox Tory leader, sought to attract the vote of the lower, working classes. (9) Nevertheless, it should be remembered that between those two centuries was the century of Dr. Samuel Johnson, the son of a middle class bookseller and a man of impeccably orthodox High Tory views. Tories have always believed in hierarchy and in society’s need for aristocratic leadership, but they also believe in the maintaining the stability and security of the social and civil order, and it has been recognized as wisdom since the days of Aristotle (10) that a society is most stable when the middle class is the largest. Much depends, of course, upon what is meant by “middle class”, a term that has become so flexible as to be almost meaningless. A rising commercial class that threatens the civil order in its avarice will meet with Tory opposition as it did in the seventeenth century, whereas a settled bourgeois class of civilly responsible property owners as the bedrock of a secure social and civil order will meet with Tory approval and support.

Our fourth Tory economic principle, therefore, is that economic policy must support the stability and security of the social and civil order. Related to this principle and also derived from the preceding discussion are our fifth, sixth, seventh and eighth Tory economic principles which are respect and support for the private ownership of property, support for the leadership of an aristocratic class (11), support for a secure, stable, and large middle class of bourgeois small property owners, and support for the rights and well-being of the labouring classes. (12)

In the same period in which Chesterton and Belloc were promoting distributism in England, several American writers were promoting a related concept in the United States. A group of poets, essays, and novelists who had met at Vanderbilt University in Nashville, Tennessee in the early 1920s founded a journal called The Fugitive which ran for about three years and earned them the label “The Fugitives”. The leaders of this group later became the core of a group of writers who called themselves “The Twelve Southerners.” The most distinguished members of this group were poet and critic Allen Tate, (13) poet, historian and essayist Donald Davidson, novelist and poet Robert Penn Warren, novelist and playwright Andrew Nelson Lytle and literary critic John Crowe Ransom. They came together in 1930 to publish an anthology of essays entitled I’ll Take My Stand. (14) It was an eclectic collection but it had the general theme that just as how in the American internecine conflict of 1861-1865 and the following Reconstruction period the industrial, Puritan, North had invaded, sacked, and conquered the traditional, agrarian, South, destroying forever her old way of life so modern industrialism as a whole was invading and destroying the way of life of small town, rural, America. There was enough similarity between their ideas and those of the distributists that a sequel of sorts, entitled Who Owns America? (15), was later published that included contributions from many of the original twelve and from some English distributist writers.

The Southern Agrarians were not primarily defending an economic system so much as a way of life. They argued that a rural way of life, based upon agriculture, was healthy for families and communities, and promoted religion, virtue, and respect for tradition. All of this they saw threatened by modern technological progress, industrialization, and urbanization. This was an unmistakably conservative point of view. One of their students was Richard M. Weaver, who became an English teacher at the University of Chicago, and who launched a revival of conservative thought in North America with the publication of his book Ideas Have Consequences in 1948, which traced the development of modern thought and the decay of classical and Christian civilization from the nominalism of William of Occam in the fourteenth century to the development of the atomic bomb in the twentieth.

Today, the most widely known spokesman for their views is Wendell Berry of Kentucky, an acclaimed essayist, poet, and novelist who lives out his agrarian philosophy by farming his homestead in as close to the old ways as is still possible. In his essays he defends localism against globalism, small farms and businesses against mega-corporations, and traditional ways against modern ways, reminding us of our basic human need for a way of life that listens to and is in harmony with the natural rhythms of life. In his novels, which tell the stories of the Coulters, Catletts, Feltners, Beechums and Wheelers of Port Williams, Kentucky he provides a portrait of the old way of life whose passing away he chronicles as a testimony to the fact that modern man has paid a price for the advantages that come with technological and industrial advancement and that what has been lost may very well have been worth more than what has been gained. Andy Catlett, a recurring character and often narrator of these novels, speaks with the voice of his creator when he says:

Increasingly over the last maybe forty years, the thought has come to me that the old world in which our people lived by the work of their hands, close to weather and earth, plants and animals, was the true world; and that the new world of cheap energy and ever cheaper money, honored greed, and dreams of liberation from every restraint, is mostly theater. This new world seems a jumble of scenery and proper never quite believable, an economy of fantasies and moods, in which it is hard to remember either the timely world of nature or the eternal world of the prophets and poets. And I fear, I believe I know, that the doom of the older world I knew as a boy will finally afflict the new one that has replaced it. (16)

The English Tories of the seventeenth and eighteenth centuries, fought for a rural, agrarian, lifestyle against the encroaching urbanism and industrialism of modernity. The agrarian lifestyle they fought for was one rooted in feudalism, the lifestyle of squire and peasant. This was different kind of agrarian lifestyle from that of the small, family farm, lifestyle promoted by Wendell Berry although Berry’s antecedents, the Twelve Southerners, had looked for their inspiration to the antebellum South, the culture and civilization of which was one of the closest to feudalism that North America has ever seen. Nevertheless, in modernity, with its vision of progress, its materialistic worldview, its drive to dominate nature with technology and to emancipate the human will from traditional constraints, the agrarianism of the traditional English High Tory and that of the Southern Agrarian have a common enemy, and it is not surprising that the critique of modernity in the writings of Canada’s premier Tory philosopher George Grant and that in the writings of America’s agrarian sage Wendell Berry, often echo one another.

What can we glean by way of principle from this? The major agrarian insight is that rural life, the life of the farm and small town, is in many ways more conducive to the cultivation of virtue, to the practice of religion, to raising a family, to neighborliness and community, and to the good life in general, than the hurly-burly of modern city life. This does not mean that cities are an evil. In ancient times Plato identified the reason cities are organized and built as the promotion of the greater good of the whole. It seems paradoxical that the life of the country is better suited to fulfilling the raison d'être of the city than the life of the city, but it is best to think of the country and the city as symbiotic, each needing the other. Our ninth Tory economic principle is that no economic policy, whether it be capitalist or socialism, can be properly regarded as good which promotes the expansion of the city at the expense of the life of the country.

In 1973 a book came out that was met with support on both the left and right from those dissatisfied with capitalism, socialism, and the way the two had become increasingly indistinguishable from each other. This book, written by a German born, British economist who had studied under Keynes, garnered insights from the Buddhists in Burma, and then converted to Roman Catholicism and become an acolyte of the distributism of Chesterton and Belloc, was E. F. Schumacher’s Small is Beautiful. (17) Schumacher blasted modern, large-scale economies, as being unsustainable systems of production that would rapidly deplete natural resources and called for the development of new types of technology, more appropriate for use in decentralized, local economies. The subtitle of his book was “a study of economics as if people mattered” a title that hints at that of a work that appeared thirteen years previously, by another German born economist influenced by the distributists. That book was A Humane Economy (18) by Wilhelm Röpke. Röpke’s “economic humanism” is the fourth and final economic theory that we will be discussing in this essay.

Like Schumacher, Röpke was born in Germany and also like Schumacher, had fled Germany at the rise of the Third Reich. He later returned to help Germany rebuild its economy after the war, although he ultimately settled in Switzerland. Whereas Schumacher had learned economics from John Maynard Keynes, the father of the progressive liberal idea of kickstarting the economy with low interest rates and government spending, Röpke was a disciple of the Austrian School of economics. The Austrian School of economics was a school of laissez-faire liberalism that had started in the late nineteenth century with Carl Menger as a response to Marxism. Its most important theorist was Röpke’s mentor and contemporary, Ludwig von Mises, and its best known exponent was Friedrich A. Hayek. Like his Austrian colleagues Röpke was a life-long defender of the free market and private enterprise but in less absolute terms. The difference is perhaps best illustrated in an anecdote that Russell Kirk liked to share about how a couple of years after the end of World War II, Mises had come to visit Röpke in Geneva, and Röpke had shown him the garden plots that the city had allocated to citizens during the war for growing their own vegetables, a practice that had been extended due to its popularity. Mises’ response was to shake his head and say “A very inefficient way of producing foodstuffs”, to which Röpke rejoined “But perhaps a very efficient way of producing human happiness.” (19)

It was Russell Kirk who suggested the title A Humane Economy to Röpke, for a book which offers a free market critique of Keynesianism and the welfare state in the context of a larger critique of mass society. This critique expands upon themes that Röpke had addressed in earlier works, like The Social Crisis of Our Time, in which he had identified trends within the liberalism of the eighteenth and nineteenth centuries, towards proleterization, i.e., the process whereby “a considerable part of the world’s population has been pushed into a sociological and anthropological position which characterized by economic and social dependence, a rootless, tenemented life, where men are strangers to nature and overwhelmed by the dreariness of work” (20) and the “cult of the colossal” (21) that had led to the rise of the totalitarian systems that were threatening Europe and the world at the time, such as National Socialism and Communism.

There are five chapters in A Humane Economy, the first of which is a re-appraisal of what he had written in The Social Crisis of Our Time. The second is an extensive critique of mass society, defined by the condition of omnipresent crowdedness, as people live together in mass dwellings (apartments, condominiums, etc.), move from place to place en masse (traffic), work in mass factories and office buildings, and spend their leisure time in mass activities. These conditions are obviously the result of a growth in world population, Röpke notes, and while the West may have escaped the more obvious Malthusian consequences of exponential population growth through economic expansion, the proleterization of the bulk of the population and the expansion of welfarism and inflationary Keynesian policies, make this an unsustainable solution in the long run. The fourth chapter gives a more in depth explanation of why welfarism, which destroys the character of those who pay for it and those who receive it alike and inflationary spending do more harm than good. Even if, however, the combination of economic expansion and population growth could be kept up long term, however, why would we want to go further in the direction of mass society? “What happens” Röpke asked, “to the things which cannot be produced or expressed in monetary terms and bought but which are the ultimate conditions of man’s happiness and of the fullness and dignity of his life?” (22)

Expanding upon that question, Röpke wrote:

Is it not, we may modestly ask, part of the standard of living that people should feel well and happy and should not lack what Burke calls the “unbought graces of life”—nature, privacy, beauty, dignity, birds and woods and fields and flowers, repose and true leisure, as distinct from that break in the rush which is called “spare time” and has to be filled by some hectic activity? All these are things, in fact, of which man is progressively deprived at startling speed by a mass society constantly swollen by new human floods. (23)

The answer, of course, is yes, Burke’s “unbought graces” are part of the standard of living, and not an insignificant part at that.

Röpke continued to detail the negative consequences of mass society in cultural decay (24), the breakdown of community and the social fabric, and the spread of boredom which he saw as the “product and curse of mass society” (25), a loss of interest in life in a society whose human members are treated as cogs in a machine.

Mass society, in other words, while it may come with an increase in the availability of consumer goods, also brings with it a scarcity of other goods that are fundamental to the good life and which meet deep and essential needs in human nature.

It is significant that Röpke places his critique of mass society in the chapter immediately preceding the two chapters that deal with economics proper, for this illustrates the thesis of the book that is hinted at in its subtitled “The Social Framework of the Free Market”. Early in the third chapter on the “conditions and limits of the market”, Röpke notes the market’s advocates:

in so far as they are at all intellectually fastidious, have always recognized that the sphere of the market, of competition, of the system where supply and demand move prices and thereby govern production, may be regarded and defended only as part of a wider general order encompassing ethics, law, the natural conditions of life and happiness, the state, politics, and power. (26)

The forces that govern the market cannot govern society, Röpke went on to say. He identified an “occupational disease of the mind” of the professional economist that he called social rationalism, the tendency to identify the market with the whole of society. “Social rationalism”, he wrote:

misleads us into imagining that the market economy is no more than an “economic technique” that is applicable in any kind of society and in any kind of spiritual and social climate. (27)

This reasoning, however, if applied by socialists or Communists, can be made to make the market serve a totalitarian system. Against the social rationalist, Röpke asserts that the market economy is not universally applicable, that it “has a bourgeois foundation” (28), and that only in the proper spiritual, moral, cultural, social, and political framework can it possibly function properly. This framework, as Röpke describes it, is remarkably similar to framework that Chesterton and Belloc derived from Roman Catholic social doctrine, and Röpke, a Protestant, acknowledges his debt to the distributists and to the Roman Catholic Church.

Röpke’s economic humanism, then, combines the liberal concept of the free market and private property and the neo-liberal critique of Keynesian spending and the welfare state, with the distributism vision of small property ownership in a social and moral order influenced by orthodox Christianity. The market, in economic humanism, functions the way it functions in any other version of liberal economics, but it does not define the rest of society, it itself is ruled by the limits of the larger order.

From Röpke’s theory, we derive our tenth and final Tory economic principle, which paraphrases what our Lord had to say about the Sabbath day. That principle is simply this: the market is made for man, and not man for the market.

(1) See Michael Oakeshott, “Rationalism in Politics”, The Cambridge Journal, Vol I, 1947 and Roger Scruton, The Meaning of Conservatism (South Bend, IN: St. Augustine’s Press: 1980).

(2) See Anthony M. Ludovici, A Defence of Aristocracy: A Text Book for Tories (London: Constable & Company Ltd., 1915, 1933), particularly the second through fourth chapters, pp. 31-164.

(3) Albeit in a pamphlet, Discourses Upon Trade, that was published anonymously after his death in 1691.

(4) Georg Friedrich List, National System of Political Economy (Philadelphia: Lippincott, 1856).

(5) It is wrong, of course, to simply say that the Republican Party is the conservative Party of the United States, although many make that error. The Republicans, historically, were the successors to the Whigs after that party dissolved in 1860. Furthermore, in the nineteenth century the most conservative region in the United States was the antebellum South, a rural society where religion was more traditional (Roman Catholic, Anglican, Lutheran) and less influenced by Puritanism, with an agrarian economy and a traditional class system topped by a landed aristocracy and a culture with an almost feudal code of manners and chivalry. Ironically, this society voted for the Democrats, then as now a liberal party, although the liberalism of the time was classical Jeffersonian liberalism. The Republican Party set out to destroy this society in the war of 1861-1865 and in the Reconstruction period that immediately followed. Nevertheless, the political and economic positions of the Republican Party, like those of the Federalist Party to which Alexander Hamilton had belonged, were closer to the traditional views of the Tory Party than the views of the Democratic Party and its antecedents were, keeping in mind that on one fundamental plank in the Tory Party platform, i.e., royalism, no American party is Tory.

(6) G. K. Chesterton, The Outline of Sanity (New York: Dodd, Mead & Company, 1927).

(7) Pope Leo XIII, Rerum Novarum, “Rights and Duties of Capital and Labour” , 1891,

(8) Ibid.

(9) Peter Viereck, Conservative Thinkers From John Adams To Winston Churchill (New Brunswick, NJ: Transaction Publishers, 1956, 2005 ), p. 43. Viereck writes “The Disraeli solution was to combine both ends against the middle: to ally rural landlords and urban workers against the commercial middle class.” This greatly exaggerates, I think, the extent to which Disraeli’s policies were anti-middle class.

(10) Aristotle, Politics, Book IV, Part XI. “Thus it is manifest that the best political community is formed by citizens of the middle class, and that those states are likely to be well-administered in which the middle class is large, and stronger if possible than both the other classes, or at any rate than either singly; for the addition of the middle class turns the scale, and prevents either of the extremes from being dominant.” (Benjamin Jowett translation). A somewhat related piece of wisdom can be found in Holy Scriptures in Proverbs 30:8-9.

(11) One way or another, whether we like it or not, we will be led by an elite or ruling class. This cannot be avoided. See Robert Michels, Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy (New York: Collier Books, 1962), a translation by Eden and Cedar Paul from the original 1911 German edition. Since we must have an elite, it is better to have an aristocracy than an oligarchy, in Aristotle’s use of these terms. An aristocracy in the sense of a class of old families whose wealth is land and who may or may not have inherited titles and senate seats is not necessarily identical to Aristotle’s use of the word aristocracy to describe a ruling class that governs with the public good in mind, but a ruling class whose wealth is tied to the land is more likely to be public spirited than a ruling class whose wealth is based upon commerce, and both are more likely to be public spirited than a class that derives its power, position, and wealth from the management of transnational companies with no loyalty to any particular country. Obviously, a landed, feudal aristocracy cannot be created from scratch but that is not what I am suggesting in this priciple. The principle is that the economy should support an elite that will see its fortunes tied up with those of its country and therefore cultivate a spirit of public mindedness and not an elite that sees its fortunes as tied to a new, global, order.

(12) Labouring classes here refer to any classes who depend upon wages received in exchange for manual labour for their living.

(13) He was the United States’ Poet Laureate for 1943-1944.

(14) The Twelve Southerners, I’ll Take My Stand: The South and the Agrarian Tradition (Baton Rouge, LA: Louisiana State University Press, 1930, 1978).

(15) Herbert Agar, Allen Tate, ed., Who Owns America? A New Declaration of Independence (Wilmington, Delaware: Intercollegiate Studies Institute, 1936, 1999). Agar was not one of the twelve, or even a southerner for that matter, but was a northern distributist who supported their ideas.

(16) Wendell Berry, Andy Catlett: Early Travels (Emeryville, CA: Shoemaker & Hoard, 2006), p. 93.

(17) E. F. Schumacher, Small is Beautiful: A Study of Economics as if People Mattered (London: Blond & Briggs, 1973).

(18) Wilhelm Röpke A Human Economy: The Social Framework of the Free Market (Wilmington, Delaware: ISI Books, 1998, original edition, Chicago: Henry Regnery Company, 1960).

(19) Among other places, Kirk tells this story in his foreward to Röpke’s The Social Crisis of Our Time (New Brunswick, NJ: Transaction Publishers, 1992, a translation of a work originally published in Switzerland in 1942). It can be found on pages viii and ix.

(20) Ibid, p. 14.

(21) Ibid., p. 62.

(22) A Human Economy, p. 48.

(23) Ibid, p. 49.

(24) His evidence that mass society produces cultural decline is more than anecdotal, of course, but he illustrates his point well by contrasting an educated student who was ignorant of the myth of Daedalus and Icarus with the Greek owner of a used bookstore in Istanbul, that he had overheard reading and discussing the Odyssey with his young daughter. “These two experiences, juxtaposed” he writes “illustrate the meaning of discontinuity and continuity in cultural tradition.” Ibid, p. 60.

(25) Ibid, p. 80.

(26) Ibid., pp. 90-91.

(27) Ibid, p. 93.

(28) Ibid., p. 98.


  1. As usual much to digest and all a fascinating and clear treatment of intellectual history.

    Isn't it more accurate to say the liberal doctrine of laissez-faire was, ironically, in fact preceded by massive state intervention into those economic arrangements?

    I don't see that laissez-faire requires massive state intervention.

    1. It depends on what we understand by laissez-faire. If we understand it to mean that the state will adopt a policy of letting the economy be without major central planning the state doesn't actually have to do anything other than adopt such a policy. If laissez-faire is an economical model in which there are no or next-to-no regulations, everything is privatized, and there are no tariffs, subsidies, etc. then to create this model where it does not already exist requires major state intervention.