Economic Freedom and Interventionism

The great catastrophes that befell Germany in the first part of our century were the inevitable effect of its political and economic policies. They would not have happened at all or they would have been much less pernicious if there had been in the country any noticeable resistance to the fatal drift in official policies. But the characteristic mark of Germany in the age of Bismarck as well as later in that of World War I General Erich Ludendorff and of Hitler was strict conformity. There was practically no criticism of the interventionist economic policies and still less of inflationism. The great British economist Edwin Cannan (1861-1935) wrote that if anyone had the impertinence to ask him what he did in the Great War, he would answer, “I protested.” Germany’s plight consisted in the fact that it did not have, either before the armistice of 1918 or later, anybody to protest against the follies of its monetary and financial management. Before 1923 no German newspaper or magazine, in dealing with the rapidly progressing fall in the mark’s purchasing power, ever mentioned the boundless increase in the quantity of banknotes printed. It was viewed as un-German not to accept one of the “loyal” interpretations of this phenomenon that put all the blame upon the policies of the Allies and the Treaty of Versailles.

In this regard conditions in Germany have certainly changed. There is in Germany today at least one monthly magazine that has both the courage and the insight to form an independent judgment on the economic and social policies of the government and the aims of the various parties and pressure groups. It is the Monatsblätter für freiheitliche Wirtschaftspolitik, edited now already for six years by Doctor Volkmar Muthesius. It is published by the Fritz Knapp Veriag in Frankfurt. Excellent articles written by the editor and a carefully selected group of external contributors analyze every aspect of contemporary economic and social conditions.

Doctor Muthesius and his friends are unswerving supporters of free trade both in domestic and in foreign affairs. They reject the lavish bounties doled out to agriculture at the expense of the immense majority, the urban population. They are keen critics of the cheap demagogy of the government’s alleged antimonopoly campaign. They unmask the dangers inherent in the privileges granted to the labor unions. In matters of taxation, a balanced budget, sound money, and “social” policies, they follow a line of thought similar to that of the American Goldwater-Republicans. They prefer the Adenauer1  regime to the only possible alternative, a cabinet of Social-Democrats, but they do not close their eyes to the shortcomings of the Chancellor’s policies. And they are not afraid of repeating again and again that it is only thanks to the United States that West Berlin is still free from Soviet rule.

A periodical that openly and without any reservations endorses the free enterprise system and the market economy is certainly a remarkable achievement in the classical land of socialism whether imperial or social-democrat or nationalist.

Reprinted from The Freeman, March 1961.

• 1 Konrad Adenauer (1876-1967) was Chancellor of West Germany from 1949 until 1963.