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Wilhelm Röpke (1899–1966) pp 109–120Cite as

Was Wilhelm Röpke Really a Proto-Keynesian?

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Part of the book series: The European Heritage in Economics and the Social Sciences ((EHES,volume 20))

Abstract

Fèvre examines the difficulties of the commonly encountered qualification that Wilhelm Röpke’s early work is “proto-Keynesian.” By focusing on his 1936 Crises and Cycles and previous publications, Fèvre shows that Röpke attempted a synthesis by drawing upon various inspirations in business cycle theory. The major impulses stemmed from J.M. Keynes, with concepts from the period before his General Theory, and F.A. Hayek, both of whom in Fèvre’s assessment were equally important for Röpke regarding different phases of the business cycle. Röpke’s innovative approach to the secondary depression and “liberal interventionism” as a possible solution for this depression type receive further attention. Moreover, Röpke’s political insights from the same publications help to understand why Röpke’s latest works were characterized by such a virulent anti-Keynesianism.

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Notes

  1. 1.

    Within a broader perspective, the study directed by Peter E. Hall (1989) on The Political Power of Economic Ideas: Keynesianism Across Nations showed how Western countries’ countercyclical fiscal policies combatting unemployment were developed primarily without any reference to Keynes. Franklin D. Roosevelt’s New Deal is an obvious example, but other examples can be found in Sweden, France, and Italy (see also Bateman, 2006, pp. 283–286).

  2. 2.

    Between 1932 and 1936, a series of publications—Röpke (1933, 1934, 1935a, 1936c, 1936d)—can be traced where he specified certain aspects of his business cycle theory.

  3. 3.

    For a recent account, see Hagemann (2013, pp. 45–47).

  4. 4.

    If Röpke “cannot help feeling deep sympathy with the general trend of ideas of the psychological school” of which Arthur C. Pigou is the main exponent (Röpke 1936a, p. 97), he rejected it as a proper explanation of the business cycle on the basis of two interrelated arguments. First, psychological factors do not concern the ultimate causes of the ups and downs of the cycle but constitute mere adjunction to oscillations. Second, the ultimate causes are to be found in fluctuations in “real facts of economic life” (such as the value of money, costs or prices, income structure, etc.) and the “real task consists in showing how these psychological events connect up as a whole” (Röpke 1936a, p. 96).

  5. 5.

    Röpke (1936c, p. 325) gave credit especially to John M. Clark (1917) for having developed this concept.

  6. 6.

    For the controversy between Hayek, Sraffa, and Keynes following the publication of Prices and Production, see Kurz (2000).

  7. 7.

    Röpke gave a good explanation of that plan in his “Trends in German Business Cycle Policy”: “What in effect the plan amounted to was that the most burdensome taxes (business taxes, turnover tax, etc.), while not actually abolished, were transformed into liquid assets. The whole system was rather complicated, but its meaning can be summed up by saying that in the place of certain taxes, a forced loan was instituted, the titles to which, thanks to the collaboration of the banking system, could be sold or employed as collateral. In other words, a certain amount of taxes were virtually abolished, but the financial burden of this abolition was temporarily shifted from the state to the banking system, which would expand credit to the corresponding extent. This assumed that business men would employ their Steuergutscheine, not for paying off or consolidating old debts—improving their own liquidity, as it were—but for making new investments in working or in fixed capital” (Röpke 1933, p. 432, emphasis in the original).

  8. 8.

    For the search for consensus in the business cycle theory in the 1930s, see Boianovsky and Trautwein (2006).

  9. 9.

    See also Ellis (1938).

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Authors and Affiliations

  1. Centre Walras-Pareto, University of Lausanne, Lausanne, Switzerland

    Raphaël Fèvre

  2. Centre d’Économie de la Sorbonne, University Paris 1 Panthéon-Sorbonne, Paris, France

    Raphaël Fèvre

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  1. Raphaël Fèvre
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Correspondence to Raphaël Fèvre .

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Editors and Affiliations

  1. Laboratoire AGORA, University of Cergy-Pontoise, Cergy-Pontoise, France

    Patricia Commun

  2. Wilhelm Röpke Institute, Erfurt, Germany

    Stefan Kolev

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Fèvre, R. (2018). Was Wilhelm Röpke Really a Proto-Keynesian?. In: Commun, P., Kolev, S. (eds) Wilhelm Röpke (1899–1966). The European Heritage in Economics and the Social Sciences, vol 20. Springer, Cham. https://doi.org/10.1007/978-3-319-68357-7_7

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