Maximum initiative…

"All who believe that ownership in the means of livelihood is normal to man, and necessary to liberty, and all who dislike and distrust the concentration of control advocated by Socialists and practiced by Monopolists, should join the [Distributist] League … [The League] stands for the Liberty of the Individual and the Family against interference by busybodies, monopolies, or the State … [and for] … the better Distribution of Property (i.e. ownership of land, houses, workshops, gardens, means of production, etc.). … [As such, the League] fights for small Shops and Shopkeepers against multiple shops and trusts…[, for] Individual Craftmanship and Cooperation in industrial enterprises… [, and for the] Small Holder and the Yeoman Farmer against monopolists of large inadequately farmed estates … [In a word, the League stands for] the Maximum, instead of the minimum initiative on the part of the citizen."

-- G.K.'s Weekly, March 29, 1929

A dialogue between a "real capitalist" and a "distributist dreamer"…

"Distributism does not blend or 'balance' Capitalism and Socialism. Both of these systems result in the concentration of ownership. Socialism does not 'redistribute' wealth, it denies the private ownership of it altogether…. We have been trained to believe that any significant state involvement means Socialism. This is a lie. State managed redistribution of privately owned wealth from the rich to the needy is not Socialism because the the wealth remains privately owned. … Both Capitalism and Socialism require the big state. This is true despite the Libertarian desire to minimize state involvement."

-- David Cooney, 10 Jan. 2011

A: Cooney's point about "redistribution" seems arguably correct. But where does he get his assertion about Capitalism? (Or is he ignoring the laissez-faire brand? For it never needs a "Big" government.)

B: I think the idea here is: "Wal-Mart without federal highways––oh really, now?"

A: I'm not following. And federal highways are one of the very few functions a SMALL government is actually allowed to govern.

B: Let me quote from a private and slightly revised correspondence:

"[We musnt confuse] 'prices' with 'costs.' [For] this ignores the role of externalities and subsidies. Prices can be lowered by externalizing costs. For example, WalMart could not survive if the costs of transportation were not subsidized. If there were weight and distance tolls on roads, the long range distribution system would be shown to be inefficient for low cost goods and would be confined to high-quality, rare, and high cost goods. If pollution were paid for by the producers, instead of by the gov't or simply by decreased public health, it is absurd to speak of 'low-prices.' …

"The WalMart distribution model looks this (I am using WM as an example because their operations are well-known and documented): They open a distribution center in a new area, and then saturate that area with stores along the major highways. It is obvious that the region cannot support that number of stores, but sales are not, initially, the object. As the local commerce (and competition) drys up, Walmart closes most of the stores to leave an 'optimal number,' which leaves the area at the mercy of Walmart, and stores that are remote from many people. At that point, even the pretense of low prices is lost. And this analysis ignores the cases of stores whose entire profit margin consists of the sales tax rebate."

In any event, small govt may be able to govern highways… but how did they get built?

A: Small government can = federal government, as long as it is existing within its Constitutional authority. And that's what I thought you might mean re: Wal-Mart, but Wal-Mart is no archetype of Capitalism, only of our current Socialist-laden Capitalism. A great capitalism could still exist even if Wal-Mart could not.

B: What would you say is the best actual, sustained case of laissez-faire capitalism in history (i.e. devoid of government crutches and monopolies)?

A: Several hundreds or thousands of (micro-)times in American history, most of which were in its earlier times. I'm not much of a historian, and so remember dates, etc., but I have read about them in books on history and economics. The PIGs to the Constitution and Capitalism are my better resources. (Which are, admittedly, not academic.)

But this question (which I've heard often) misses some of the point: for a single application of a single policy amidst an incredibly controlling, subsidy-laden socialist capitalism, if it frees the market in some small way, is enough of an example of laissez-faire capitalism. And I have found this to work at near 100%.

B: I'd call the "micro-times" of true capitalism just family's lives, i.e. time scales in which capitalism is effectively distributism. I am troubled by the apparent symmetry between the following claims: "Capitalism has never really been tried" and "Communism has never really been tried". It could just as easily be said that regulating monopolies under a socialist aegis frees the market for a greater number of producers, and therefore socialism is vindicated. The problem is that both capitalism and socialism seem to treat economic conditions and dynamics as a kind of trans-historical, absolute sphere of deterministic principles, as if "society" and/or "the market" were something over and above the particular people who interact. Speaking of freedom presupposes we know what freedom means, and I deny that freedom is simply the ability to do whatever. Freedom is the power to do the good, and nothing about capitalism in its theoretical purity seems to speak to "the good" (but only to "goods"). Therefore, it seems a truly-free market (i.e. a sustainable system of free people interacting towards the common good) can only be brought about by aiming market laws at the common good, which is the purpose of governance.

In any case, the point is precisely that 'real' laissez-faire capitalism (LFC) seems only to enjoy micro-spatiotemporally sustainable success, not longterm, widespread success (absent government crutches). Any theory can be made to work for a time. Look at Sweden as "proof" of socialism (never mind that it's liberalizing now that the socialist generation is growing oppressive). If LFC is practically unworkable in the real world of historical change, then it is just that: practically unworkable.

Here's a little syllogism (modus tollens): If the market M just is human behavior B, and if B is consistently and reliably rational Rr, then the market is Rr; but B is not Rr (~Rr), therefore M is ~Rr. If however M is irrational, then, either "the invisible hand" is just as 'good' a guide as "The Great Spirit of Natural Selection" or pure-market economics is ~Rr and LFC seems in dire straits.

It's an interesting conundrum: if LFC has never really, fully, truly been tried (á la Ron Paul), then it's not really been shown to be false. My query is why, if LFC is the natural order of human flourishing, it can't seem to get off the ground (i.e. it can't get really tried).

Nonetheless, let it be granted that distributism is all for smaller government, so small, in fact, that it would not amount to more than needed to protect the smallest and best government, namely, the family. That's a key point, in any event: there is a close connection between small government and small economy , on the one hand, and big economy and big government, on the other.

Or rather a second…

"Communism is that form of Capitalism in which all workers have an equal wage. Capitalism is that form of Communism in which the organising officials have a very large salary. … Both presuppose property not personal, but Worked from a centre and distributed as wages. There is a third ideal; or rather a second. It is that individuals should own and be free. … The right and essential thing [is] that as many people as possible should have the natural, original forms of sustenance as their own property.

The division of labour has become the division of mind; and means in a new and sinister sense that the right hand does not know what the left hand doeth. In the age of universal education, nobody knows where anything comes from. The process of production has become so indirect, so multitudinous and so anonymous, that to trace anything to its origin is to enter upon a sort of detective story, or the exploration of a concealed crime."

-- G.K. Chesterton, Apr-Sep-Jun 1932

Actually operating…

"Capitalism, as practiced in the real world, goes far beyond the private ownership of productive capital. Capitalism as it actually exists includes different forms of corporate ownership, … investment and financing schemes, interest, the acceptance of greed as an objective good, usury, using capital for profit … [and] to prevent competitors from making profit, monopoly, free trade, involvement of the highest levels of government, and a utilitarian view of the worker. … [T]he economic system actually operating under the name Capitalism is very different than the basic definition of the word [i.e. private ownership of production]…. Since both Distributism and Capitalism operate on the basis of private ownership of productive capital, we need to look beyond this one common root and realize that neither of these economic systems is wholly defined by it."

–– David Cooney, "Is Distributism a Form of Capitalism?"

The heart of the social order…

"The rural family needs to regain its rightful place at the heart of the social order. The moral principles and values which govern it belong to the heritage of humanity, and must take priority over legislation. They are concerned with individual conduct, relations between husband and wife and between generations, and the sense of family solidarity. Investment in the agricultural sector has to allow the family to assume its proper place and function, avoiding the damaging consequences of hedonism and materialism that can place marriage and family life at risk."

-- Benedict XVI, 16 Oct 2006

MESSAGE OF HIS HOLINESS BENEDICT XVI
TO THE DIRECTOR GENERAL
OF THE FOOD AND AGRICULTURE ORGANIZATION (FAO)
FOR THE CELEBRATION OF WORLD FOOD DAY

Neither balance nor blend…

"Distributism does not blend or 'balance' Capitalism and Socialism. Both of these systems result in the concentration of ownership. Socialism does not 'redistribute' wealth, it denies the private ownership of it altogether…. We have been trained to believe that any significant state involvement means Socialism. This is a lie. State managed redistribution of privately owned wealth from the rich to the needy is not Socialism because the the wealth remains privately owned. … Both Capitalism and Socialism require the big state. This is true despite the Libertarian desire to minimize state involvement."

-- David Cooney, 10 Jan. 2011

First and second concern…

"I know that my first care is that of my immortal soul and that, since my soul is for all present practical purposes inseparable from my body, my second care is that of my body.... Hence my decision to purchase a smallholding, work it for myself, and live like a king in my own country."

–– G.C. Heseltine, G.K.'s Weekly.

By reference to moral values…

"Capitalism is not a philosophy. It is simply a method of allocating resources based on voluntary exchange instead of coercion. While some say that such a method promotes greed, history indicates that greed is no less present in any other system of allocating resources. Distributism is completely compatible with capitalism to the extent it is a voluntary expression of the desire to make such market exchanges by reference to appropriate moral values and not just profit. Distributism is most difficult to apply in the context of enterprises that need large amounts of capital to compete successfully. Such businesses tend to organize as public companies whose ownership is distinct from management. Such companies have a very difficult time voluntarily expressing values that are inimical to profit maximization. It is not impossible, since corporations can be organized expressing other goals which would be disclosed to investors, but thus far such efforts have not proven all that successful. Instead, non-pecuniary values are imposed via government regulation, which plainly can be blunt and political instruments. It is also important to realize that non-investor corporate constituencies, especially consumers, do alter behavior by imposing their values thereby affecting corporate profits. Imperfect information and imperfect consumers limit the efficacy of such forces, but truly there is nothing about a free market system that renders it inherently incompatible with Catholic values."

-- a guy named Mike Petrik, on a blog

Too much capitalism means too few capitalists…

"The modern rulers, who are simply the rich men, are really quite consistent in their attitude to the poor man. … That which wishes, in the words of the comic song, to break up the happy home, is primarily anxious not to break up the much more unhappy factory. Capitalism … is at war with the family, for the same reason which has led to its being at war with the Trade Union. This indeed is the only sense in which it is true that capitalism is connected with individualism. Capitalism believes in collectivism for itself and individualism for its enemies. It desires its victims to be individuals, or (in other words) to be atoms. For the word atom, in its clearest meaning (which is none too clear) might be translated as 'individual.' If there be any bond, if there be any brotherhood, if there be any class loyalty or domestic discipline, by which the poor can help the poor, these emancipators will certainly strive to loosen that bond or lift that discipline in the most liberal fashion. If there be such a brotherhood, these individualists will redistribute it in the form of individuals; or in other words smash it to atoms."

-- G.K. Chesterton, The Superstition of Divorce, II.2

That isn't just bullshit…

Me: "The point of distributism is that capitalism must regulate-itself-or-be-regulated in a way that protects and promotes the very conditions which make capitalism possible. Labor is taken as a given in neoclassical economics, but labor is nothing more than laborers, who are nothing more than the sons and daughters of families. Therefore, the market must first respect families –– the market must not use families, it must consist in families."

My coworker: "Hm. That's the first thing I've heard that… takes away from capitalism… that isn't just bullshit."

Avarice is directly a sin against neighbor…

"External goods [i.e. commodities] have the character of means useful for an end. Hence man's good in them must consist in a certain measure of them; that is, a man must seek to have external riches only in a certain measure, insofar as they are necessary for him in his state of life. In any excess of the measure there will be sin; it is evil if he should wish to get or keep them beyond a right measure. This would be avarice, which is defined as 'the immoderate love of having.' ...

Avarice can be immoderate in external goods in two ways. First, directly in the getting or keeping of these goods, by getting of keeping them more than he should. This is directly a sin against our neighbor, because external goods cannot be simultaneously possessed by many, and therefore, if one man has more than he ought, others have less than they ought.

Secondly, avarice can imply an immoderateness in the internal affection we have for riches, namely, by immoderately loving, desiring, or delighting in them.... Consequently, it is a sin against God."

-- St. Thomas Aquinas ST IIa IIae, q. 88, Art. 4, resp. 1.

A fantasy world of moral and fiscal unreality...

Debt, Finance, and Catholics

Samuel Gregg

Debt and deficits seem to be on everyone’s minds these days. ... Unfortunately, modern Catholic social encyclicals have relatively little to say about financial questions. Even the 2004 Compendium of Catholic Social Doctrine confines itself to very broad statements about finance and foreign debt, and it never really addresses the moral dimension of private and public debt.This absence of sustained contemporary Catholic reflection on financial questions is puzzling. ... Indeed, for many centuries, Catholic bishops and theologians invested considerable energy in understanding the world of money because of the usury question. Catholic thinkers were consequently among the first to identify money’s primary functions, illustrate how money in the conditions of economic freedom could assume the form of capital, demonstrate the moral legitimacy of charging interest on money-as-capital, and assess the moral status of different debts in different contexts. 

... [E]arly-modern Catholic theologians assailed governments who tried to escape their debts by measures such as inflating the currency or borrowing more money to pay for interest payments on existing public debt, or who spent large portions of the taxes they raised on servicing debt or on activities that were either morally evil or simply did not fall within the core functions of constitutionally limited governments. 

... Today one looks in vain for Catholic thinkers studying our debt and deficit problems from standpoints equally well-informed by economics and sound Catholic moral reflection. ... Instead, one finds broad admonitions such as “put the interests of the poor first” in an age of budget-cutting. The desire to watch out for the poor’s well being in an environment of fiscal restraint is laudable. But that’s not a reason to remain silent about the often morally-questionable choices and policies that helped create our personal and public debt dilemmas in the first place.  

One Catholic who has proved willing to engage these issues is none other than Pope Benedict XVI. In his 2010 interview book Light of the World, Benedict pointed to a deeper moral disorder associated with the running-up of high levels of private and public debt. ...  

In other words, someone has to pay for all this debt. And clearly many Western Europeans and Americans seem quite happy for their children to pick up the bill. That’s a rather flagrant violation of intergenerational solidarity.  

... This willingness on the part of governments, communities, and individuals to live off debt means that people are “living in untruth.” ...  

In fact, it’s possible to go further and argue such attitudes reflect a mindset of practical atheism: living and acting as if God does not exist, as if the only life is this life, as if the future does not matter. Only people who have no hope — no hope in God, no hope in redemption, no hope for the future — will think and act this way. ... 

For if we choose to live our lives according to a perspective dominated by immediate gratification or pursue economic policies forever focused on the short term (which is, more or less, Keynesianism’s Achilles’ heel), then living off debt is entirely rational. But what does that say about our priorities and conception of human flourishing?  

Taking on debt is not in itself intrinsically evil. In many circumstances, it’s an entirely reasonable decision. Nevertheless, a situation of inexorably increasing debt and a failure to confront its moral and economic causes can slowly corrode our personal sense of responsibility for our freely undertaken obligations and severely tempt us to live in a fantasy world of moral and fiscal unreality. ...

The economic freedom of the family...

Property

 Posted By Hilaire Belloc On June 18, 2011 7:20 PM 

... [D]estitution means nothing else than the absence of property. ... To be paid a sufficient wage is not the same thing as to own; for he who pays the wage controls him who receives it.

The whole meaning of property is the economic freedom which it bestows upon the individual or family possessing it. ... A man who lives in his own house exploits no one. A man possessing his share in the factory in which he works exploits no one. A man possessing national bonds, the proceeds of which are equivalent to the taxes he pays for the meeting of the interest of national bonds, exploits no one. ... Some will have more, some less. ... It is the few taxing the many that [creates a sense of injustice]. All the theoretical injustice of attaching to exploitation one class by another lessens and nearly disappears where property is fully distributed. Where it is only income that is well distributed men are still under the thumb of whoever or whatever pays that income....

Of course, an exact distribution of ownership would be an ideal, and therefore impossible, state of affairs: but a condition of society in which the greater part of citizens owned enough to be economically free is practicable, and possible of attainment. So far from being an imaginary Utopian scheme it has been accepted for centuries throughout societies numbering millions and is to be found peaceably and successfully at work over the greater part of the civilized earth at this moment. Only where men are living under the curse of Industrial Capitalism is well divided property unfamiliar. ... Well distributed property is its own guarantee of survival. ... 

Discovery and invention have, it is true, produced, much larger industrial units of production than our fathers knew—for instance in the way of ships, of land transport, and instruments and materials used for building. But discovery and invention also advantaged certain lesser units. There is no better example of this than the electronic motor and the facile distribution of electric power. These between them could have restored masses of small producers had they been taken advantage of in time.

... Where the nature of the new instruments makes small units impossible there is nothing to prevent those who work wit the large new units holding those units co-operatively as members of a Guild. ... The Guild is essentially an association of free owners who work co-operatively any instruments which is too expensive for separate ownership by a single member. ... 

Let it be remembered that this aim of ours for the restoration of private property among a determining number of the community, the distribution of property among the masses of citizens who should thus be made free, does not contradict state ownership of certain functions. What it contradicts is the false doctrine of general or preponderant state ownership, or what is worst of all universal State ownership. The State exists for the family and the individual; not these for the State.

... Any free and well ordered state includes a proportion of State ownership which is based upon private ownership in the hands of as many citizens and families as possible at any rate, of so many as to make the principle determining character of society. ... The function of distribution should also follow the same lines. Where there must be concentration in a large unit, that unit should be organized as a Guild; but in the vast majority of cases a small unit of distribution—the small store—is sufficient.

Trying this on for size…

"[T]he essence of distributism is a decentralized (often agrarian-based) system of widely distributed property that is a bulwark of liberty precisely because it relieves men from dependence on the state[,] thus checking the power and growth of the state. This is its best selling point. Prescient distributist thinkers such as Dorothy Day and Schumacher understood the poison of the welfare-warfare state, which in the corporatist context is usually based on militarism, jingoism, and anti-semitism."

-- Anonymous, on a blog I can't recall

A false idea of freedom…

"Hell consists in man's being unwilling to receive anything, in his desire to be self-sufficient ... to stand entirely on his own feet.... Hell is wanting-only-to-be-oneself."

-- Joseph Ratzinger, Introduction to Christianity (Ignatius, 1990 [1968]), p. 239.

"[N]othing ... is greater to one than one's self is."

-- Walt Whitman, "Song of Myself" (1855), no. 48.

"The wise and virtuous man is at all times willing that his own private interest should be sacrificed to the public interest of his own particular order or society. He is at all times willing, too, that the interest of this order or society should be sacrificed to the greater interest of the state or sovereignty, of which it is only a subordinate part. He should, therefore, be equally willing that all those inferior interests should be sacrificed to the greater interest of the universe, to the interest of that great society of all sensible and intelligent beings, of which God himself is the immediate administrator and director."

-- Adam Smith, The Theory of Moral Sentiments (1759), VI, ii, 46.

"Even as one's liberty is not lessened by one being unable to sin, so, too, the necessity resulting from a will firmly fixed to good does not lessen the liberty, as instanced in God and the blessed. Such is the necessity implied by a vow, bearing a certain resemblance to the confirmation of the blessed."

-- Aquinas, ST II-II, q. 88, art. 4, resp. 1.

"[I]n democracies of the more extreme type there has arisen a false idea of freedom which is contradictory to the true interests of the state. ... In such democracies every one lives as he pleases, or in the words of Euripides, 'according to his fancy.' But this is all wrong; men should not think it slavery to live according to the rule of the constitution; for it is their salvation."

-- Aristotle, Politics, Book V, ix.

It's illegal to prosper…

"[M]y observation is that it is typically illegal for low income people to do the things they used to do to increase the quality of food in their diets. You can’t raise pigs and chickens in your back yard anymore. OK, maybe we’re seeing some small evolution in some areas on chickens, but not a lot. Nobody is keeping a milk cow in cities and selling the milk and cream to their neighbors. And everywhere, there is a war on the territory presently occupied by low income people. … [P]oor people also can’t build their own housing anymore. That’s against the law too."

The Six Hands of Community Food Security « BobWaldrop.net

All striving against nature is in vain…

"[I]t is impossible to reduce civil society to one dead level. Socialists may in that intent do their utmost, but all striving against nature is in vain. There naturally exist among mankind manifold differences … in capacity, skill, health, strength; and unequal fortune is a necessary result of unequal condition. Such inequality is far from being disadvantageous either to individuals or to the community. Social and public life can only be maintained by means of various kinds of capacity for business and the playing of many parts; and each man, as a rule, chooses the part which suits his own peculiar domestic condition."

–– Pope Leo XIII, De Rerum Novarum (1891), §17.

The limits of human action…

"The only way in which one can increase one’s share of wealth on the market is by increasing one’s marginal productivity. … Economics cannot tell the ethician [sic] or the theologian what to do and what not to do. All it can do is to set forth the limits of the possibility of human action. If good intentions are to bear good fruit, they must take account of these limitations."

James A. Sadowsky "The Christian Response to Poverty"

Making our ultimate end immediate…

"The missing element [in our age] is the philosophical and moral foundation that society needs overall, including in its economy. … [N]either making the greatest profit, nor getting the best deal, is the most important thing. Until we … put our ultimate end as the primary factor in all of our actions our society will continue to decline no matter how prosperous it may become. Unfortunately, the prevailing economic model separates morality from economics, and the most well known alternative [viz. socialism] seeks to correct the injustices … with even greater injustices."

-- David Cooney, "The Missing Element", The Distributist Review

You keep using that word, but I don't think "free" means what you think it means…

"Vulgar libertarian apologists for capitalism use the term 'free market' in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate … [argument] that the rich can’t get rich at the expense of the poor, because 'that’s not how the free market works'--implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of 'free market principles.'"

–– Kevin Carson, Studies in Mutualist Political Economy, p. 142