Ethics and Order of the Free Market

The present study analyzes the work of Wilhelm Röpke, a German economist and sociologist, who lived at the beginning of the 20th century (1899-1966). Together with Ludwig Erhard, the first German minister of Economic Affairs after WW II, and other intellectuals of his time, such as Walter Eucken and Alfred Müller-Armack, Röpke developed the theoretical and political foundations of what later would be known the German Social Market Economy. This work takes the perspective of political philosophy in analyzing Röpke's opus, specifically when it asks what philosophical approaches lie behind his concept of "right economic order", as well as his prescriptions about what constitutes the moral framework at the basis of a free market system effectively promoting human flourishing. The study also looks at the analogies which exist between the fundamental principle of decentrism, a concept underlying Röpke's political ethics, and the fundamental principles of Catholic Social Teaching. By a thorough study of the German economist's most important works, the author of this study comes to some interesting conclusions: 1. Röpke's fundamental ethical approach has some similarities to the classical approach of virtue ethics, specifically as it claims that human life has a dynamic orientation towards its fulfillment or final end. Political, ie. economic life, is seen as constitutive to this fulfillment. Virtue is conducive to a happy or fulfilled life, and a virtuous character is acquired by education, especially within a community which fosters reciprocity and honest behavior. 2. Röpke political ethics, by which he finally evaluates the appropriateness of economic policies, has been found to be congruent with some basic tenets of Catholic Social Teaching. Röpke considered Catholic Social Teaching an important support of his own fundamental claims, although proceeding from different sources. 3. Finally, the analysis of Röpke's approach helps to develop a more profound understanding of what can be called a humanistic economy, respectful of the dignity of every person and at the same time aiming towards the fulfillment of what can be considered a nature common to all human beings. This last goal is prior to any economic or functional goal and thus serves as measure and standard for the free market system and any of its institutions. Daniela Ortiz is a Senior Researcher and lecturer at the Center for Corporate Governance and Business Ethics at the FHWien University of Applied Sciences for Management and Communication. She studied Business in Vienna and Innsbruck, and Philosophy (doctorate) in Rome.

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