Wilhelm Röpke, Wieder aufwärts! (1935)

Wilhelm Röpke’s economic commentary interprets recovery from the world depression as evidence of the market economy’s resilience, while insisting that lasting prosperity requires renewed international integration. Its optimism is conditional: private investment is reviving, but monetary instability, protectionism, and isolated national expansions threaten recovery. The argument moves from American policy to agriculture and the institutional conditions of a restored world economy.

Röpke opens with an imagined sleeper awakening after two years, making both political deterioration and economic improvement newly visible. Habituation to worsening conditions can weaken the impulse to resist them:

Manches wird ihn weit mehr entsetzen als uns, die wir uns an fortgesetzt gesteigerte Dosen vieler schlimmen Dinge in Wirtschaft und Politik wahrscheinlich mehr gewöhnt haben, als der Entfaltung eines energischen Abwehr- und Reformwillens gut ist.

English translation: Many a thing will horrify him far more than it does us, who have probably grown more accustomed to continually increased doses of many evil things in economics and politics than is good for the development of a vigorous will to resistance and reform.

The same distance permits a clearer appreciation of recovery. Röpke treats the United States as the most conspicuous instance. Against expectations of the bourgeois order’s collapse, he interprets American revival as a vindication of economic moderation, attributing its acceleration to the cessation of monetary experimentation, suspension of the NRA’s planning provisions, and restoration of entrepreneurial confidence.

Wie man damals voraussagen konnte, hat sich die psychologische Bedeutung dieses plötzlichen Szenenwechsels als entscheidend herausgestellt.

English translation: As one could foresee at the time, the psychological significance of this sudden change of scene has proved to be decisive.

Policy credibility connects his political judgment to his economic explanation. Recovery depends less on public orders themselves than on whether businesses regain confidence to invest. Röpke distinguishes self-sustaining private expansion from activity maintained by government expenditure. Rising share prices may express productive recovery and reinforce confidence, rather than merely indicate speculation: the depression’s vicious circle can give way to mutually supporting investment and production.

He also rejects the contention that earlier prosperity exhausted profitable investment opportunities. Deferred equipment replacement, technical innovation, and housing provide substantial outlets. The danger may therefore shift from inadequate investment to excessive expansion. Dollar undervaluation, abundant bank credit, and gold inflows driven partly by European insecurity could foster another boom. Possible restraints include American price increases that diminish undervaluation, alongside expenditure reductions and taxation for debt service.

The American turn matters beyond domestic recovery:

Amerika ist zu einem starken Anwalt der Besonnenheit gerade auf denjenigen beiden Gebieten geworden, auf denen die Entscheidung über die Wiedergesundung der Weltwirtschaft fallen wird: auf dem Gebiete der Währungspolitik und auf dem der Handelspolitik.

English translation: America has become a strong advocate of prudence precisely in those two fields in which the decision concerning the recovery of the world economy will be made: in the field of monetary policy and in that of commercial policy.

Röpke emphasizes tariff reductions and unconditional most-favoured-nation treatment, particularly in the agreement with Canada. Their importance lies in supporting wider commercial integration rather than an exclusive continental bloc. Easier access for imports could also counter the gold inflow threatening American monetary balance.

The wider survey considers British and Swedish expansion, recovering raw-material markets, and agriculture. Röpke differentiates structural overproduction of grain from the more cyclical weakness of higher-value agricultural products, demand for which should increase with urban purchasing power. Agricultural policy should facilitate adjustment toward these products rather than obstruct it through artificially high grain prices. Such protection raises feed costs while reducing consumers’ capacity to purchase other farm products.

Germany illustrates these contradictions. Rising agricultural output alongside declining agricultural employment challenges protectionism’s social justification. Damage to exports further depresses industrial employment and demand for agricultural goods. Farming, urban purchasing power, and foreign trade therefore constitute interconnected policy domains.

The concluding qualification concerns recovery’s international structure. Simultaneous national upswings do not yet amount to a reintegrated world economy. Even Britain’s expansion encounters domestic limits, while distress in ports and export districts reveals the costs of restricted exchange. American trade initiatives, proposals for Danubian economic reconstruction, and Austria’s normalization of external financial relations offer grounds for hope. Monetary stabilization remains fundamental; Röpke assigns the gold standard the role of guaranteeing a stable international currency system. Recovery thus vindicates decentralized adjustment under enabling institutions: credible policy, freer trade, and an ordered international monetary framework.