April 09, 2008

Dispassionate Conservatism

Wilhelm Ropke’s name is often misused by lovers of Leviathan. I once heard that Karl Rove, of all people, was reading A Humane Economy, and found in it an inspiration for the mindless slogan “compassionate conservatism.” Clearly Rove was no better at reading economics than at reading the public mind.  If there’s one president in the past 30 years whose policies would have horrified this good German liberal, it’s George W. Bush—whose reign of error combined mind-boggling profligacy with public funds, a careless eagerness to send other men’s sons (and DAUGHTERS!) into battle, and contempt for reason and even the English language.

Since lately I’ve been writing and speaking about Ropke, I’ve been hearing back from people who wonder what he might have said about current problems—for instance, the mortgage lending crisis. When a colleague wrote me about this question, I wrote the following—my best attempt to apply this wise man’s principles to today’s economic crisis:

Wilhelm Ropke knew the importance of encouraging widespread home-ownership. Indeed, as a market economist influenced by the Distributists (Chesterton and Belloc), he thought most people should also have enough land to farm—as a back-up in case of economic depression. However, he also held the virtue of THRIFT as essential to the survival of a free economy and healthy social order. He would not have acceded to our current system of government-backed loans to buyers of homes with dubious credit, and would heartily disapproved of the practice which gave rise to the current crisis—banks encouraging people to “trade up” to homes they really cannot
afford. I suspect that he would see the situation today as an opportunity for the government to step back, banks to feel the discipline of the market, and individuals to take a more realistic view of the size and quality of homes they
can afford—and the wisdom of seeing them primarily as investment properties, or cash cows they can mortgage to fund consumer spending.

It turns out I’m not the only person wondering “What Would Wilhelm Do?” There’s an excellent piece on Lewrockwell.com which goes into the subject in greater depth. Check it out here.

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