Distributism: Novel Economic System

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I have never written much about Distributism because, to quote Gertrude Stein, there is no there, there.  Chesterton and Belloc I think used Distributism primarily as a springboard to attack the capitalism they both loathed.  The details were kept vague because it was obvious that, unless humanity were suddenly to become exempt from sin, the implementation of such a system, if it could be implemented at all, would require a very powerful state indeed, something that Chesterton and Belloc both loathed just as much as they loathed capitalism.  Thus Distributism was something to be trotted out in their writings periodically, but neither Chesterton or Belloc made any attempts to seriously implement it in the real world, and of course one would not expect a pair of writers to do so.  That would be done, if at all, by those inspired by the concept.  However, although the concept evokes a lot of sturm und drang on Catholic blogs, attempts to implement it in reality have been precious few and far between.  It is therefore only appropriate that a science fiction novelist, John C. Wright, has examined a concept that I think will always remain firmly ensconced in the fictional realm:

 

 

A reader asked me my opinion of Distributionism, which is GK Chesterton’s tentative venture into economic philosophy.

For better or worse, my take on Distributism is uniformly and unabashedly negative. You see, I had studied economics for many a year before I stumbled across the writings of Mr Chesterton, and I found him wise and witty and much to be admired in all other areas but this one. Once he starts writing about rich folk, he speaks frothing nonsense, and there is a touch of hatred, of true malice, in his tone I do not detect anywhere else.

Chesterton holds that the concentration of wealth into a few hands was bad for all concerned, and looked favorably on the idea of each man owning his own means of production, and their incomes being more equal.

By what means this was to be accomplished is left vague in his writings. Whether this was to be by a medieval guild system, or some form of government-run syndicate, or an all-volunteer affair, is never mentioned one way or the other. He states clearly that he opposes the Enclosure Laws, by which common greens, formerly owned and used communally, were made private property; but he does not state clearly how, or even if, he would reverse this.

His position differs from Socialism mainly by being nondoctrinaire by being unclear.

Go here to read the rest.  Distributism has as much chance of ever being a major economic system as does the economic system of Utopia (No Place) by Saint Thomas More, which is a very good thing.  Attempts to implement economic systems in the real world that rely on reshaping how humans behave has a track record, one which no one sane should be eager to emulate.

26 Responses to Distributism: Novel Economic System

  • The economy is a hard thing to study! A chimera — not just a horse of a different color, but an animal made of parts of different animals ..always moving and racing through the landscape. Anyone who studies it within a certain time and culture is studying something very different that someone who studies it a century later in a different culture.

  • I’m not sure Distributism has ever been properly delineated much less any means of achieving it put to paper. As for Chesterton, I did not have the impression his antagonism extended much father than the landed interest. Of course, he wrote such a heap of material you could likely find an example.

  • I find that a lot of my friends who are very earnest, intelligent right-brained types, who love Chesterton, want to believe in Distributism.

    I think economics is a subject that requires a lot of left-brain type of thinking, though.

    My favorite writer, Whittaker Chambers, is an example of this. But even he helped appreciate the subject more late in his life, as he worked towards completing a college degree in Maryland. There is a wonderful passage in a letter to William F. Buckley where he writes about his frustration with being able to understand the concept of the Production Possibilities Curve, but not being able to graph it.

    That’s the left-brain, right-brain difference. I think Chambers would also appreciate the lamentation that modern economics has become overtaken with math!

  • I’ve always thought distributism was a freaking pipe dream. The Chesterbelloc were not trained in economics, yet we’re supposed to believe that two guys who never studied this subject came up with a system that would solve the world’s economic problems? To the best of my knowledge, neither of them ever had to run a business or meet a payroll.
    It is also my understanding that both of them were socialist or heavily influenced by it in their early years. Chesterson himself said that a person who was a socialist was one who was most likely to be a distributist. It is interesting to note that many of the earliest articles on distributism appeared in the radical leftist magazine The New Age.
    But the biggest thing that irks me about these people is their insufferable arrogance toward those of us who refuse to believe their pie in the sky foolishness. They automatically think, like a typical fanatic, that anyone who is leery of their hobbyhorse is one the wrong side of history and God. Yet, they have never brought any project to life that would prove their ideas would work in the real world. Of course, they’re always claiming co-ops like Mondragon are distributist, but that’s bullfeathers. Any reading of the history of co-ops shows they’re just another form of capitalism.
    If one desires to see some sound Catholic writings on distributism, go to http://traditioninaction.org/ and read their articles on it. Also Thomas E. Woods “Beyond Distributism” has a very good analysis of the fallacies of this idea.

  • “Chesterton and Belloc I think used Distributism primarily as a springboard to attack the capitalism they both loathed.”
    .
    What Chesterton and Belloc loathed was the abuse of capitalism. The indulgence and practice of greed combined with lust, avarice and all sin which denigrates the human person, destroys man’s sovereingty over himself and defiles mankind.
    ,
    Capitalism is to be practiced with all the virtues but mostly the virtue of charity in generosity. Capitalism is the reward for hard work and is the conduit for charity.
    .
    The virtue of charity may not be imposed by the state, nor tax money extorted for distributism.
    .
    Distributism is stealing by the state and taxation without representation. Actually, anything the state does that is not orthodox is taxation without representation.
    .
    Who gave the state the authentic power to scrape the immortal, human soul from the newly begotten human being? Denying the human soul is atheism, pure and simple. The devil is not an atheist.
    .
    One sailor says to the other sailor: “He (Jack Sparrow) is so evil even the devil spat him out.” a Truther.

  • My feeling about distributionism is that it is just like other schemes that implement Christian morality: well meaning, impractical, and yet probably needed for inspirational purposes.

    Let’s take the example of the accumulation of money in the hands of a few. Under capitalist theory this should not be a problem: the money is deposited in banks where it can be loaned to everyone. In practice this may or not happen; the large depositors do have the clout to influence the banks into lending practices that favor themselves and discriminate against everyone else. This creates diseconomies. Government can certainly establish regulations to combat such diseconomies, but regulations can also cause diseconomies, as we was in the events leading to the 2008 crash and as we see in today’s Little Depression.

    It would seem that Distributionism would fail as a legislated program, but it should succeed as an inspiration. Large depositors would refrain from unduly influencing banks if they kept its principles in mind, and so the banks would function better for all with minimal regulation. Such self-restraint has always been the basis of public morality in a free republic anyway, so why not extend it to the economic sphere?

  • Let’s take the example of the accumulation of money in the hands of a few. Under capitalist theory this should not be a problem: the money is deposited in banks where it can be loaned to everyone. In practice this may or not happen; the large depositors do have the clout to influence the banks into lending practices that favor themselves and discriminate against everyone else. This creates diseconomies. Government can certainly establish regulations to combat such diseconomies, but regulations can also cause diseconomies, as we was in the events leading to the 2008 crash and as we see in today’s Little Depression.

    1. There is no “Little Depression”

    2. Wealthy people invest their money in a variety of instruments and conduits: equities, bonds of various sorts, commercial and municipal paper, mortgage backed securities, asset backed securities, exchange-traded funds, hedge funds, REITS, &c. Very few are going to maintain large bank deposits or have a large mass of funds in certificates of deposit.

    3. I do not know who you fancy is being ‘discriminated against’, how, or why.

  • Who is the Rich Man That Shall Be Saved?

    I was googling names and came across this compendium post on Distributism in TAC.

  • Art, you state:
    1. There is no “Little Depression”
    Answer: Some call our current malaise a “Great Recession”. I (that’s in me, myself, and I) think that is a misnomer, because the malaise is due to an investment psychology similar to that of the 1930’s.
    2) Wealthy people invest their money in a variety of instruments and conduits
    Yes, I know, and I could cite a classical capitalist defense of each one. I simplified my argument to just banks because I didn’t want to write a book. It’s not wrong to do so.
    3) I do not know who you fancy is being ‘discriminated against’, how, or why.
    What, it’s not permissible to discuss discrimination in the abstract? Like it could never happen for reasons not foreseen? C’mon!

  • 1. There was a 5% decline in the rate at which goods and services were being produced during the period running from mid-2008 to mid 2009. There has been some overhang with regard to the labor markets and chronic problems with fiscal policy (which is mostly the responsibility of the Congress and the President). There is nothing remotely resembling the scale and severity of what went on during the period running from 1929 to 1941 (which included an economic contraction that ran on for 40 months in which production was declining at a rate of 9% per annum). The one point of comparison would be that it was co-incident with a banking crisis. See Anna Schwartz on this point: the problems of the banking system were ones of liquidity during the former period and solvency during the latter.

    2. No, it is not, if you do not give some sense that you understand what the social processes are. You implied that banks were making bad business decisions in giving sweetheart loans to their large depositors. With regard to commercial banks, their large depositors are likely to be businesses, but commercial and industrial loans make up perhaps 20% or so of their portfolio cross-sectionally assessed. About 30% would be residential real estate loans, about 15% would be consumer loans, about 25% would be commercial real estate loans, and 15% would be a miscellany of loans (farm loans, loans to governments, loans to philanthropies, interbank lending, securities lending &c). A higher share of their origination stream would be in residential real estate as those loans are more likely than commercial real estate to be sold to mortgage pools.

    So, which sort of clients are getting sweetheart loans, and what sort of loans are they receiving, and why is the competitive position of the extending banks not observably injured by this patronage?

  • TomD: “My feeling about distributionism is that it is just like other schemes that implement Christian morality: well meaning, impractical, and yet probably needed for inspirational purposes.”
    .
    It is HOW distributism and capitalism are executed or exercised. Distributism is not Chirstian morality. Distributism is government extortion, implemented to secure votes.
    .
    Christian morality imbues capitalism with grace. I give you what you need to survive and you give me what I need to survive: capitalism and the exercise of freedom.

  • Art,
    1) Stating “some overhang with regard to the labor markets” is an awfully elliptical description of the tens of millions of people who are un- or underemployed thanks to business stagnation. Most of the people I talk to believe that including the people who no longer look would bring the numbers up to 15-20%, which is Depression levels. Yes, corporate profitability has returned, but the profits are not being reinvested due to fear of future losses (hence the similarity with the 1930’s). Also, one of the reasons that the economy has avoided a Great Depression is that so much of it is a service economy that didn’t exist in the 1930’s – without this things would be much worse.
    2) You are totally misreading my original post
    You wrote “You implied that banks were making bad business decisions in giving sweetheart loans to their large depositors.”
    No I didn’t. I explicitly stated (not implied) that such things could happen (“might or might not”), as opposed to an idealistic view of capitalism which says that such things shouldn’t or ought not to happen.
    My apologies if my original wording caused this confusion, but you can’t tell me my intention was different from what I know it to be.

    But…a close friend used to work for a lending institution, and I later heard interesting stories of preferential lending to the powerful and influential. I know of a media person who became quite a slum lord. I can’t point out an example of a large depositor expecting special treatment (I made that up as an hypothetical example), but I do know of others who did receive special treatment for other reasons. Another friend lost her job when her bank folded – a developer persuaded them to not report his loans to his credit report, since he was such a special customer. No one was prosecuted, the developer declared bankruptcy but is back in business today, and my uncle’s stock in the bank is now in my scripophily collection since it has no other value.

  • Mary, I guess I meant to write something a little different.

    Capitalism is an economic system as much as it is a set of ideals, but those ideals are amoral. Distributism is a set of economic ideals with a distinct morality, but it is not a system because it lacks the rigor of real life (hence Don’s use of the “there is no there, there” quote).

    In this way I see distributism as the economic analog to pacifism. I think that a foreign policy based on pacifism is a really bad idea, and in many cases pacifism in one’s personal life is a really bad idea. Yet the Gospels undeniably contain pacific (and distributionist) undercurrents, and a total dismissal and negation of pacifism in our lives would be a denial of Christian morality. They should remain ideals for each individual’s conscience, and nothing more.

  • Whenever I tried read something about Distributism, it seems on one hand they set up a straw man of socialism that sounds nothing like any version have heard seriously proposed: on the other they set up a straw man of capitalism that sounds nothing like any version have heard seriously proposed.

    Then they split the difference between the straw men.

    This leaves me with a distinct lack of confidence in the concept.

    Like much “social Justice” commentary it misses the point. SJ is about how to act ethically in what ever economic system one has the misfortune to be located. It is NOT a prescription for how to set up an economic system.

  • “SJ (social Justice) is about how to act ethically in what ever economic system one has the misfortune to be located. It is NOT a prescription for how to set up an economic system.”
    .
    Makes sense.
    .
    I see capitalism as an economic system grown and run, even to the ground, by the people and distributism as an economic system grown and run by the government, a government that has funded human sacrifice, pornography, a government that has become corrupt and unfit to grow and run distributism, a government no longer of the people, for the people and by the people.

  • Art Deco wrote, “As for Chesterton, I did not have the impression his antagonism extended much father than the landed interest.”

    The reason being that his model (which he took from Belloc) was France, where the Revolution had turned ten million tenants into heritable proprietors. Thus, in Orthodoxy, he refers to, “the square social equality and peasant wealth of France.”

    Tocqueville described this exercise in Distributism in a speech to the National Assembly:
    “And as for property, gentlemen: it is true that the French Revolution resulted in a hard and cruel war against certain property-holders. But, concerning the very principle of private property, the Revolution always respected it. It placed it in its constitutions at the top of the list. No people treated this principle with greater respect. It was engraved on the very frontispiece of its laws. The French Revolution did more. Not only did it consecrate private property, it universalized it. It saw that still a greater number of citizens participated in it. [Varied exclamations. “Exactly what we want!”]

    It is thanks to this, gentlemen, that today we need not fear the deadly consequences of socialist ideas which are spread throughout the land. It is because the French Revolution peopled the land of France with ten million property-owners that we can, without danger, allow these doctrines to appear before us. They can, without doubt, destroy society, but thanks to the French Revolution, they will not prevail against it and will not harm us. [“Excellent.”]”

  • “The reason being that his model (which he took from Belloc) was France, where the Revolution had turned ten million tenants into heritable proprietors.”

    Which was a myth. Between 30-50% of French farmland was owned by peasants prior to the Revolution. The actual transfer of land to peasant purchasers during the French Revolution was minor and much of it of marginal utility. Church lands nationalized only accounted for six percent of all land in France. The main beneficiaries of “land reform” in the French Revolution were the politically influential who became large landholders under Napoleon. The peasants did benefit from the abolition of feudal dues but that had little impact on the amount of land they farmed.

  • The peasants did benefit from the abolition of feudal dues but that had little impact on the amount of land they farmed.

    What the 19th c. agrarian reforms did was to alter the tenure regime, transferring allodial rights over rustical land to the peasantry who had previously held only rights of occupancy. That actually is a benefit to the peasantry even if not one acre of demesne land is transferred. It has some more generalized benefits inasmuch as these legal changes allowed the formation of factor markets in continental Europe. IIRC, somewhat less than a 10% of the acreage in France consisted of ecclesiastical land and about 20% was demesne land.

  • Two things strike you about Chesterton’s discussion of ‘property’. One is that absent any peculiarly ‘distributist’ measure, owner-occupied housing went from strongly atypical to normal among wage-earning populations in the post-war period in the United States. The source of this was a financial innovation which was jump-started by federal policy but which does not require state intervention to maintain it: the 20%-down-30-year mortgage issued by commercial and savings banks, which replaced the 5 year balloon mortgage issued by insurance companies (which was modal prior to 1930). The other thing that strikes you is that self-employment is atypical for a reason. Most who attempt it close their businesses after a few years because they are not making anymore than they might as an employee and have all the uncertainties which attend self-employment.

    There’s a great deal of interest in producer co-operatives in distributist literature. Producer co-operatives are benign, though there are theoretical and empirical complaints about the effect of such on labor markets. However, if you interest yourself in fostering this form, you do have to inquire what sort of sociologically discoverable impediments there are to the formation of such. They are common in timber production and agricultural marketing, but nowhere else. Why is that? What lesson can you draw from the Yugoslav experience with producer co-operatives?

  • I think the effort by some Chestertonians (and I’m a great admirer of the man) to create a distributist economic model is what befuddled me about distributism. Perhaps I have now reached a simpleton’s understanding of it, but it does seem that distributism is really nothing more than a romantic ideal expressed in non pragmatic ways. Schumacher”s Small is Beautiful seemed to be an attempt at systematic distributism. For Chesterton, distributism was a part of the family centered paradigm which required home ownership and sustenance against a modern economic world occupied by hudge and gudge.

  • I haven’t spent time chasing after it–or Marxism, actually–but it seems like
    Distributism is to Subsidiarity
    as
    Marxism is to charity. (The Christian kind, not just the “give people stuff” kind.)

    An attempt to make a sort of system to produce a good outcome. As many folks have pointed out, “from each by his ability, to each by his need” is not an inherently bad thing, but….
    ****

    For examples of where they work, there’s the family unit for charity (…ideally) and WinCo, plus some other “employee owned” places.

  • Art Deco.

    You are quite right to draw a distinction between ownership and occupancy rights.

    According to strict feudal notions the dominium utile or property is regarded merely as a burden on the dominium directum or superiority. The superior owns the land and the vassal does not. Thus, in Scotland, to convey the superiority, the granter dispones “All and whole the lands &c,” excepting from the warrandice the previously constituted feu right, whereby the dominium utile has been already carried to the vassal or vassals.

    In pre-Revolutionary France, the feu-duties were often very onerous: 30% of the crop (i.e. one-third after deducting the teind) was not unusual. In addition, there were the bannalités, whereby the vassal was thirled or astricted to the superior’s mill, oven, wine-press &c. Then, there were the casualties of superiority, notably the relief payable on the succession or entry of an heir or singular successor (including a grant in security), often a duplicand of the feu-duty.

    There was very little allodial land in France; even great nobles held by some nominal reddendo (a pair of gilt spurs or the like) as an acknowledgement of the king’s or a subject superior’s right. The only people who owned their land outright were six ecclesiastics, the Archbishop of Reims, the bishop-dukes of Laon and Langres and the bishop-counts of Beauvais, Châlons-en-Champagne and Noyon and six temporal lords, the Dukes of Burgundy, Normandy and Aquitaine (later Guyenne) and the Counts of Flanders, Champagne and Toulouse. Everyone else held of the Crown or of a subject superior

  • As long as economies of scale exist, Distributism will remain a pipe dream. Or worse.

  • Mary De Voe wrote, “Distributism is stealing by the state…”

    And yet the encyclical Populorum Progressio (1967) declares “If certain landed estates impede the general prosperity because they are extensive, unused or poorly used, or because they bring hardship to peoples or are detrimental to the interests of the country, the common good sometimes demands their expropriation.” I take this to be an example, for it is difficult to suppose that one régime applies to immoveable property and another to movables or to intellectual property, or that the one is liable to expropriation and the others are not.

    This was well understood by the National Assembly during the French Revolution. Take Mirabeau (a moderate) “Property is a social creation. The laws not only protect and maintain property; they bring it into being; they determine its scope and the extent that it occupies in the rights of the citizens” So, too, Robespierre (not a moderate) “In defining liberty, the first of man’s needs, the most sacred of his natural rights, we have said, quite correctly, that its limit is to be found in the rights of others. Why have you not applied this principle to property, which is a social institution, as if natural laws were less inviolable than human conventions?”

  • Michael Paterson-Seymour: ““If certain landed estates impede the general prosperity because they are extensive, unused or poorly used, or because they bring hardship to peoples or are detrimental to the interests of the country, the common good sometimes demands their expropriation.””
    .
    Amendment 5 – Trial and Punishment, Compensation for Takings. Ratified 12/15/1791.
    No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
    .
    This situation is covered under the Fifth Amendment of the U. S. Constitution known as the “takings clause”. Property taken at eminent domain must be used for the common good. True value must be given to the owner if only to reaffirm social property laws not of natural laws.
    .
    Also it is good to note that Distributism as an economic system must be ratified and approved by the will of the people. The President counts only as one citizen.

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