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. Continue reading
The search for an economic and political “third way” between socialism and capitalism has been underway since the early 20th century, if not sooner. In Catholic circles, Distributism is a third way that many are eager to discuss. I suspect many of the people reading this blog have heard of Distributism by now.
I was once attracted to the idea of Distributism, until I came to the vital question of who would be doing the “distributing” of the private property that everyone was supposed to own and how it would be done. To be vague or silent on this question is completely unacceptable. And yet there are really only two possible answers. Either people will be persuaded via reasonable argument and successful example to get together with like-minded people and distribute property in various ways, or people will be forced to do it at gunpoint.
It didn’t take me long to realize that there was really no “middle ground” between these two options, just as there is really no middle ground between free will and determinism (even if various factors can influence person’s will). If you haven’t persuaded someone to do what you want, the only other way is force. So the question becomes: is it legitimate to use force to impose an ideology on society? Is it legitimate for a band of political visionaries to come together and either use the power of the existing state or establish a new state to drag the unwilling or apathetic masses along? And does a system which is supposedly in man’s best interests need to be established at gunpoint, as if it weren’t?
(Content advisory to the above video. A few of the Rules of Acquisition are off-color. You know what the Ferengi are like.)
We have been having a debate recently on The American Catholic between Austrians and Distributists. As a devotee of free enterprise with as little government intervention as possible, I have found some wisdom in the Ferengi Rules of Acquisition as set forth in one of my favorite fictional realms: Star Trek. Many of the Rules of Acquisition of course are merely for entertainment purposes and would lead to immoral results, if not bankruptcy or prison, if attempted in reality. However, after a quarter century of running my own business, I believe these rules are insightful:
As a young convert I was very much intrigued by the ongoing discussion between Richard J. Neuhaus, George Weigel, Michael Novak and Fr. Robert Sirico — and their critics, ranging from David Schindler (editor of Communio) to Tracey Rowland and Alisdair MacIntyre. This has sometimes been described as a debate between ‘Catholic neocons’ and ‘Catholic paleocons'; ‘Whig-Thomists’ vs. ‘Augustinian Thomists’ (the latter by Tracey Roland in a famous two-part interview with Zenit).
The discussion was centered on such questions as:
One of my chief sparring partners online was David Jones, founder of the blog la nouvelle theologie. While my time of late has been preoccupied with readings in other subjects (and other pursuits), David has kept up with new developments in this ongoing discussion. Among them, the recent exchanges between Catholic-traditionalist-turned-libertarian Dr. Thomas Woods and his chief critics, Thomas Storck and Christopher Ferrara (of The Remnant)– about which David would like to offer the following remarks in a guest post:
Despite their obvious potential advantages, employee owned businesses tend to be rare. In 2004, there were an estimated 300 worker owned cooperatives in the United States. If that sounds impressive, consider that in 2001, there were over 18.3 million nonfarm proprietorships in the U.S. Nor is the situation much different overseas. The Mondragon Cooperative Corporation is typically cited as an example of a successful worker cooperative, and it is indeed quite successful . . . for a co-op. Compared to other types of businesses, however, Mondragon performs well, but not stellar. It is the seventh largest corporation in Spain, and despite being a conglomeration of more than a 100 different companies, it accounts for less than 4% of the GDP of the Basque region of Spain where it is located. When one considers that Mondragon is in all likelihood the most successful worker cooperative on the planet, the idea that the co-op’s success proves the viability of worker cooperatives generally begins to seem doubtful.
There’s nothing legally preventing people from choosing to start a workers-owned cooperative rather than some other form of business, and in fact cooperatives receive more favorable tax treatment than do standard business corporations. Why then, aren’t they more common? The question has actually inspired a fair amount of research, which has identified at least four obstacles to the success of worker owned businesses.
The “means of production” (which may be defined, roughly, as consisting of capital goods minus human and financial capital), is a central concept in Marxism, as well as in other ideologies such as Distributism. The problems of capitalism, according to both Marxists and Distributists, arise from the fact that ownership of the means of production is concentrated in the hands of the few. Marxists propose to remedy these problems by having the means of production be collectively owned. Distributists want to retain private ownership, but to break the means of production up (where practicable) into smaller parts so that everyone will have a piece (if you wanted to describe the difference between the Marxist and Distributist solutions here, it would be that Distributists want everyone to own part of the means of production, whereas Marxists want everyone to be part owner of all of it).
Where a society’s economy is based primarily on agriculture or manufacture, thinking in terms of the means of production makes some sense. In an agricultural economy wealth is based primarily on ownership of land, and in a manufacturing economy ownership of things like factories and machinery plays an analogous role. In a modern service-based economy, by contrast, wealth is based largely on human capital (the possession of knowledge and skills). As Pope John Paul II notes in Centesimus Annus, “[i]n our time, in particular, there exists another form of ownership which is becoming no less important than land: the possession of know-how, technology and skill. The wealth of the industrialized nations is based much more on this kind of ownership than on natural resources.”
Having at times been a bit critical of my co-contributor Joe’s enthusiasm for Employee Owned Companies (EOCs) and “economic democracy” in general, it seems only fair that I spend a moment looking at the good sides — and there do definitely seem to be good sides to the employee owned company model.
Being entrepreneurially-minded, employee ownership is certainly not something that I’m in principle opposed to, it’s more that I think it probably works well in certain situations, but is not a panacea.
Where It Doesn’t Work
It seems to me that certain business characteristics will make it particularly hard for EOCs to prosper. This does not mean that employees at such companies should not have company issued stock, but the amount of stock distributed to employees by the company should probably be limited to the traditional 10-20% maximum.
Companies which require large amounts of capital investment (early stage startups which are trying to grow very fast, research-intensive companies) are generally not going to be good candidates. The traditional return for investment is stock — either by the general investing public through a public stock offering, or through specific investors in a privately held company. Such companies often reserve a portion of stock for issue to employees as an incentive (or sell to them at a discount via stock options) and have company performance based compensation, but their need for capital makes it impossible for them to reserve 50%+ of company stock for employees.
I am going to provide everyone with a nice blast from the past- everyone I know respects Pope John Paul II- most orthodox Catholics refer to him as John Paul the Great. So I think what he thought officially as Pope on the question of Capital/Labor/State as part of the tradition deriving from Pope Leo XIII’s Rerum Novarum- is incredibly interesting and relevant. Here is Chapter One of Centesimus Annus with no personal commentary- let the “man” speak without any interference from me:
Pop quiz: what is the difference between a) giving directly to the poor, b) donating to a charity, and c) surrendering taxes that go to help the needy?
While you ponder that, here’s another one.
Question: if you could receive, free of charge, a) generic drugs or b) name-brand drugs, which would you choose?