Wilhelm Röpke: Review of Paul Mombert’s Einführung in das Studium der Konjunktur (1922)

Wilhelm Röpke’s journal book review welcomes Mombert’s introduction as a successful pedagogical synthesis while using it to clarify the scope and conceptual organization of business-cycle research. Its movement is from a diagnosis of a gap in German economics, through an assessment of Mombert’s achievement and limitations, to Röpke’s own distinction between active and passive business-cycle policy. The central judgment is appreciative but discriminating: Mombert offers a valuable comprehensive treatment, yet the broader study of economic fluctuations still requires greater systematic clarity and attention to social psychology.

Röpke opens with Albert Schäffle’s earlier call for a monograph on economic conjunctures. German economics, working alongside foreign and especially Russian crisis researchers, had helped transform the study of crises into an investigation of the rhythms of economic life. Yet this theoretical enlargement had not produced the penetrating account Röpke wanted. Social-policy and land-reform assessments of fluctuations were insufficient: research needed to explain their social-psychological and economic-mechanical character and observe their diverse effects on economic units and their relationships. The gap was particularly conspicuous because Konjunktur, borrowed from commercial usage, had become firmly established in German economic terminology.

Mombert’s achievement must nevertheless be judged according to his instructional purpose:

Ohne Berücksichtigung der didaktischen Absichten des Verfassers würde man mithin zu einer falschen Einschätzung seines Werkes gelangen, dessen Wert gerade darin besteht, daß diese Absichten als völlig gelungen gelten müssen.

English translation: Without taking account of the author’s didactic intentions, one would therefore arrive at a mistaken assessment of his work, whose value consists precisely in the fact that these intentions must be regarded as having been fully realized.

Röpke thus distinguishes successful exposition from an advance in substantive knowledge. Mombert primarily consolidates existing understanding, but this does not diminish the importance of his comprehensive undertaking. The book surveys crisis and business-cycle theory, supplies a short history of fluctuations since the foundation of the German Reich, examines their particular effects on the national economy, and concludes with forecasting and policy. This final section considers how private enterprises and public bodies respond to actual, possible, and desirable market conditions.

The definition organizing that sequence also determines its historical limits:

Grundlegend für die Erörterungen M.s über Konjunktureinfluß und Konjunkturpolitik ist der Konjunkturbegriff, den er zum Ausgangspunkt wählt: „Konjunktur“ als die langwellige, dreiphasige und organische („endogene“) Wirtschaftsrhythmik, wie sie die moderne kapitalistische Volkswirtschaft vor dem Kriege auszeichnete.

English translation: Fundamental to M.’s discussions of the effects of the business cycle and business-cycle policy is the concept of the business cycle that he chooses as his starting point: “Konjunktur” as the long-wave, three-phase, and organic (“endogenous”) economic rhythm characteristic of the modern capitalist national economy before the war.

Röpke accepts the resulting prewar focus as consistent with Mombert’s premises. He nevertheless insists that wartime and postwar conditions remain worthy of investigation despite their abnormality. His announced intention to supplement this account through a broader investigation marks a difference of scope: the familiar endogenous cycle does not exhaust the phenomena a general theory of economic conjunctures should address.

The review’s most concrete intervention concerns policy classification. Mombert distinguishes private adjustment to an existing market situation from measures that anticipate a turning point through forecasting or influence the cycle itself. Röpke argues that this ostensibly twofold distinction actually contains three functions. He therefore separates active policy, directed toward a desirable market situation, from passive policy, which adjusts either to existing conditions or to possible future conditions. Reichsbank discount policy exemplifies the active category; private-bank discount policy illustrates the passive one. Anticipatory adjustment can approach active influence when the actor possesses sufficient economic power. Conceptually, however, responding to present and prospective conditions belongs together: foresight alone does not make adaptation equivalent to deliberate intervention.

Röpke closes by praising the book’s sustained derivation of fluctuations as a historical category from the economic mechanics of the modern exchange economy. This provides an explanatory foundation, but leaves a further task:

Darüber hinaus bleibt die Aufgabe, es in Beziehung zu setzen zur sozialpsychischen Dominante unserer Zeit.

English translation: Beyond that, the task remains of relating it to the dominant social-psychological characteristic of our age.

The review’s significance lies in this conjunction of endorsement and extension. Röpke values historical specificity and economic mechanism while seeking a wider account of fluctuations, sharper distinctions between adaptation and intervention, and an explanation connecting economic rhythms with the social psychology of their period.