This prompted me to wonder: What if Roepke were around today? What would this man, who, at a time when such questions were truly a matter of dispute, eloquently defended markets and private ownership against the folly of outright socialism as well as its mixed-economy cousin, social rationalism, think of what capitalism has wrought in America since his death in 1966?
In his beautiful book A Humane Economy: The Social Framework of the Free Market, Roepke has a long chapter entitled “The Conditions and Limits of the Market.” Published in 1960, Roepke’s concerns seem almost quaint to modern ears. Take his brief against advertising: “[O]nly the blind could fail to notice that commercialism, that is, the luxuriance of the market and its principles, causes the beauty of the landscape and the harmony of the cities to be sacrificed to advertising. The reason that the danger is so great is that although money can be made from advertising, it cannot be made from resistance to advertising’s excesses and perversions.” This, Roepke characterized as an insidious “asymmetry.”
Then there was the danger of installment buying. Yes, installment buying!
[T]here is no symmetry in the market economy between the forces favoring this extraordinarily widespread modern form of sales promotion and the forces which impede it. Yet the warmest supporter of installment buying will not deny that it is in danger of excess and degeneration. As in the first case, asymmetry is due to the fact that the impulses originating in the market work to the benefit of consumer credit because the interests of those who want to to sell their wares are joined by the special interests of the finance institutes making money out of installment-plan sales.
“The supporters of the market economy do it the worst service by not observing its limits and conditions … and by not drawing the necessary conclusions,” he went on.
Now, just imagine if Roepke had lived to witness the degradation of lending standards during the subprime mortgage era.
For Roepke, the market economy depended for its proper function on moral goods outside of itself: the bourgeois virtues, for example, inculcated by families, churches, and communities; and public-spirited elites capable of adjudicating disputes with an eye toward the long run. It depended overall on a Burkean sense of balance that ensured that the communitarian spirit did not slide into collectivism, ownership into plutocracy, democracy into demagoguery.
The market economy must find its place in a higher order of things which is not ruled by supply and demand, free prices, and competition. It must be firmly contained within an all-embracing order of society in which the imperfections and harshness of economic freedom are corrected by law and in which man is not denied conditions of life appropriate to his nature.
Again, these are the words of a pro-market economist who dissented from the midcentury social-democratic consensus as administered by figures like John Kenneth Galbraith. He was no “squish.” And yet I don’t think I’d lose a bet that a solid majority of those who describe themselves as conservative today would recoil at those words.
In fact, I’m 100-percent certain I wouldn’t lose that bet.