Saturday, July 21, 2007

Distributism: More than Just the Farm

By Athanasius

I often find that many people identify Distributism exclusively with going back to the land, rather than a fully Catholic system of Economics that embraces industry as well.

Back to the Land is laudable, and it is overall a good thing. However, it is not for everyone and it is something which is not identical with Distributism. In fact, if I might make a criticism of the Back to the Land movement, there seems to be too much scorn of technology. Technology is neutral and can either be used for good or evil. Too much technology, particularly when it is frivolous is certainly a bad thing and bad to an ordered life. A computer which serves purposes in union with man's end however can be a positive thing, even on a farm. This is what I find admirable about the Amish, they do not reject technology for the sake of being anti-tech, they reject technology that takes away from the simplicity of their lives and the value of their work.

Nevertheless, Distributism makes use of similar ideologies. The emphasis on property being one of them. However, unlike the back to the land ideal, it is not limited to the farm or to traditional trades.

The skeletal model of economics before the Protestant Reformation is often used to help explain Distributism, and consequently makes examples of land and traditional trades, though hat is not the whole story.

Hillaire Belloc in his book "An Essay on the Restoration of Property" for example, makes many notes on how to implement Distributist economics into modern facets of life (modern as the early 1900's when the book was written), utilizing modern inventions. Nevertheless, some Agrarian knowhow is important, since people could cut their grocery bills down a bit by growing certain types of crops right in their backyard, which generally yield enough to feed several families rather than just one.

However, just as medieval economies consisted of more than just farmers, but tradesmen who crafted the tools, built the houses and Churches and merchants, retailers of their time, who sold and traded goods, so the modern society has tradesmen of a different sort, grocers and computer experts, repairmen and those who perform real and legitimate services which are in need. The idea that a man is to be entirely self-sufficient is specifically disavowed by Distributism. It speaks too much of a utopian fantasy to be Distributist, which acknowledges that man is imperfect, and is no less viable for the fact unlike a system like communism. In fact, Belloc wrote:
The family is ideally free when it fully controls all the means necessary for the production of such wealth as it should consume for normal living. But such an ideal is inhuman and therefore, not to be fixedly attained, because man is a social animal. It is not impossible of achievement for a short time, and has been briefly achieved whenever a lonely settler has fixed himself with his family and his stores in an isolated spot. But such complete economic freedom for each family cannot be permanent, because the family increases and divides into further numerous families, forming a larger community. Moreover, even were the isolated free family to endure, it would fall below the requirements of human nature, its isolation stunting and degrading it. For men cannot fulfill themselves save through a diversity of interests and ideas. Multiplicity is essential to life and man to be truly human must be social. (Essay, pg. 26)
Thus the Back to the Land, which as I said before is noble in many of its aims, can not universally satisfy the needs of human nature, because not all men are farmers. Not all men persist in a traditional trade. The needs and desires of man are numerous, and his interests rather diversified.

Now in a Distributist society, as there will necessarily exist farmers, there will also exist tradesmen, there will exist also those in service based jobs, and there will be those in government jobs who get decent salaries, such as the military and those bureaucrats whose work is ordered toward the common good (as opposed to the manifold bureaucracies of today which tend toward the rich and powerful instead of the common good, such as the FDA which foists upon us numerous harmful drugs while trying to regulate natural foods because the growing market for it is threatening multi-million dollar pharmaceutical companies). It is not the case that everyone should start living like medievals, although truthfully, with the exception of the absence of indoor plumbing, I doubt I would mind.

All that Distributism really means, is that the majority of people rather than the minority are economically free and own their means of production. As Chesterton said, the problem with Capitalism is that it produces too few Capitalists. This is where Libertarians and Distributists part ways. Both groups are opposed to excessive government, big government, high taxes, property taxes, minimum wage, American interventionism abroad (and as such any country's interventionism), government fees and excessive taxes and paperwork and the right of man to private property. When it comes down to it however, we disagree with Libertarians as far as the nature of government comes in, the common good, the subordination of the laws of supply and demand to the laws of morality, and what the worker is entitled to. For example, when it comes to something like the intrinsic evil of pornography, a libertarian would say well, it is unfortunate because it is immoral, but nevertheless demand is there, and as such the supply is made available, so therefore there is nothing the government can do about it. The Distributist will say, if there is a demand, that is because of moral corruption among the people, and therefore the supply needs to be suppressed and destroyed so that the demand can be contained until public morality is restored and education about the evils of pornography can be disseminated. Why? Because pornography is intrinsically evil, and destroys all those it comes in contact with, from abusing women to abusing its audience, as well as destroying the family, the basic social unit of society. This is to say, the state has a right to censorship, as I have spoken of before. Another example of this would be with abortion. Catholic libertarians necessarily will acknowledge that abortion is evil, and many like Dr. Thomas Woods rightly join the ranks of the pro-life movement in calling for the overturning of abortion law in this country. However, if we take core libertarian principles, someone like Dr. Woods is in quite a bind, since there is a demand for abortion, to the tune of 1.3 million per year, and there are doctors who rake in quite a profit who are willing to perform it, therefore according to Libertarian principles the state should not get involved. How many who rightly despise abortion could accept such a position?

From this point we come to why the government has the right to step in to correct certain intrinsic evils that tend to act against the common good. This is a principle which both Pope Leo XIII and Pius XI affirmed in their respective encyclicals, Rerum Novarum and Quadragesimo Anno. If you acknowledge it is right and just for the government to outlaw abortion, to destroy pornography, to end the deplorable, demonic and absolutely inhumane evil of child pornography and child rape, you necessarily acknowledge that the government is to be involved in public morality and the common good. The question is what else constitutes the common good?

Distributists contend, that it is towards the common good to make sure every man is "able" to be economically free, that is to be able to own his own means of production. One of the ways to do that is to make sure that competition is done at an equal level, and that one receives remuneration in proportion to the profit he helps create.

Now competition at an equal level is an important concept to understand. There is nothing wrong with competition in and of itself. It is when competition is done at such an unequal level that a small business owner doesn't stand a chance, that something is wrong. If a man runs his own business, and another competes with him, and both possess the same means and the same capital, there is nothing unequal, and if one makes more money than the other, oh well according to a Distributist scheme. If one man is a better salesman than another, he just has talents superior than the other and perhaps the latter needs to find another line of work. If there are two bakeries in town, one prefers the baking of one rather than the other, or such things as that.
However, if the former is operating with an unfair competition, namely he consolidates a large number of shops, or hires people at an unjust wage in another country to flood the market with cheap goods, then that is something which Distributists consider an unequal competition. That is why we speak of the breaking up of monopoly. There are software developers who can not develop their product because they can not compete with the billions of dollars at Microsoft's disposal. Suppose that were equalized, by breaking up the power inherent in monopoly, you would see an increase in innovation rather than a decrease.

As concerns remuneration according to the wealth one helps create, what is meant is that the employee is entitled morally to that which he helps create. Basically, in a just society, if a man helps create $10,000 of profit in a week, he is entitled to a portion of that profit, rather than just a wage. As such it is possible to run grocery stores, and large entities so long as the employees are paid according to that wealth. Off the top of my head I can think of Trader Joe's grocery stores. The employees there, who perform all functions from cashiering, to ordering and stocking are paid somewhere around $40,000 a year, depending on their job and how much profit they create. The stores are small, but have more or less what you need. Since Trader Joe's doesn't have debt because it only builds new stores when it has the money, it can afford to pay employees according to the wealth they create. That is more Distributist friendly. Something like Starbucks or Walmart, has millions of dollars worth of debt, and operates hoping that eventually profit wise they will catch up to their debt. In the mean time employees gain merely a wage, which lacks any relation to the wealth they help create. (Although it has to be admitted, Starbucks at least produces a quality product)

What is critical and essential in Distributism, is not that it is about the farm as much as it is about the family. Capitalism focuses on the individual, while Distributism focuses specifically on the family and man as a social unit. The proof of this is in the following: if today men everywhere were to be more frugal, spend less, conserve electricity, build savings for a rainy day, invest in and own property, spend more time at home with his family instead of working as many hours as he could, and lived a more frugal lifestyle, the American economy would collapse. Again, if people lived a life more in accord with Christian economics and frugality, the economy would collapse. No one would be buying useless junk! How horrible! However, in a Distributist society, if people stopped buying frivolously, lived frugally, and paid for those services which they required, all would be fine, since the survival of the economy is more attuned to the needs of family, local economic growth rather than global and therefore society, instead of feeding the narcissistic wants of the individual, such a collapse is scarcely imaginable since it does not depend on spending but upon the building up of the family. The Distributist perspective is in line with the teachings of seven consecutive Popes, pre and post-Vatican II, from Pope Leo XIII to John Paul II. An application of them into American life today does not involve a rejection of technology, or forcing everyone to adopt farm life, but rather of conforming economics to moral necessity and the strengthening of the family, rather than giving it free reign to service the individual, the banker, or the corporate executive who rewards himself for bankrupting the company with stock options and retirement islands.

15 comments:

Kevin said...

I disagree about the economy collapsing. What you are talking about is a big shift in consumer preference, which would certainly create an upheaval as the market adjusted to meet those new preferences. But this would be temporary. People who formerly produced goods that are no longer wanted would find other kinds of work to do, and the increase in the savings rate would mean that lending interest rates would drop very low, allowing businesses to borrow to easily bridge the gap.

Kevin said...

How on earth are you going to distinguish legally between equal and unequal competition? These kinds of laws are going to be red meat for the lawyers representing various firms. Everybody is going to start suing their competitors for competing unfairly, and the judges are going to be all over the place with interpretation, and its going to become a legal hazard to suceed at all because you just become a big target.

Brian Douglass said...

So glad that this resource has been put together, if it is even a shadow of its namesake, much will come of it.

Speaking for myself, at least, it seems hard to grasp implementing distributism in an industrial setting. Farming is something that I can do alone or with a few others. It is a start. However, it is very tempting to get blinders on and forget that it will work for other areas as well.

Athanasius said...

I disagree about the economy collapsing. What you are talking about is a big shift in consumer preference, which would certainly create an upheaval as the market adjusted to meet those new preferences. But this would be temporary

Let's consider this concretely first. Let us say even 50% of Americans stopped shopping at the big boxmarts, stopped buying frivolous things they can't afford with their credit cards, stopped getting 100% mortgages, etc. They pooled their family savings, drove frugally, conserved energy, ate more frugally, and all of those things, that is hundreds of millions of dollars which leave the economy. How will the big businesses which subsist on Americans using their credit cards to the max survive without those hundreds of millions entering their bank accounts and personal savings as opposed to wasteful spending? There would be an economic collapse of the kind we have not seen since 1929. Would a turn around follow? Possibly. A capitalist turn around to the current status quo would of course be dependent upon low taxes and the absence of the government in the market.

A distributist turn around on the other hand would be dependent upon low taxes on the non-owning populace, and large taxes or tariffs on big businesses.

This goes to your second question. You don't need any laws to equalize competition any more than you need laws to stop illegal immigration. With the latter, if you take away the jobs they come here for, they will go home and stop coming on their own. With the former, if you tax large corporations, it will encourage growth of small businesses. If you exempt companies that function on a co-ownership model and expand ESOPs, you encourage more ownership amongst workers in a company. In that way one wouldn't need messy laws.

Lastly, as far as lawyers go, I think Jurassic Park had the right solution for that. ;) Seriously, lawyers have a hay-day because laws are purposely written to be ambiguous so a court can go re-interpret them however they want. Loopholes are purposely written into tax law so lawyers can benefit their clients with the system, which is why the government and big business generally resists the flat tax, along the line of Steve Forbes' idea. Just write clear laws and lawyers will have less to work with.

Gen Ferrer said...

Unfortunately I have yet to understand which 'other work'?

Do we agree that competition in employment is at an all time high, and there are a limited amount of positions which pay a living wage?

Let's define our terms and do the math. How many positions exist even if we could today make them magically vacant which pay a living wage? How many citizens are there? How many citizens are qualified?

Even if the answer was 5:2 how can we possibly shift to 'other work'? This was the same explanation given when labour was shifted overseas, e.g. that more people would move to the service sector.

What country do you usually get when you call most service departments?

Hint: It is not in the U.S. for U.S. based service companies.

On your second point: To suggest something can not happen whilst the same consequences you suggest are already in existance is a sleight of hand. Lawsuits exist everyday. Prosections against CEOs and CFOs backdating stocks, governments who choose not to breakup monopolies because either there are kickbacks involved or because they simply look the other way, corruption of companies who actually REFER their employees to State Aid (therefore socialising nations) because they refuse to offer healthcare...

I could go on not to the 'potential' problems to something untried, but to the real problems of today which are actually happening.

But the point is simply this: it is not a legal hazard to succeed. This is completely against the Distributist creed. Everyone has a right to make more than their neighbour.

However, there have always existed laws which curbed the right of the individual over society. Up until recently, "Eminent Domain" did not allow companies to basically evict landowners for the sake of private business. Monopolies have never been allowed in the United States for example. To argue that laws cannot restrict the success of a business when it infringes on the needs of the local community and its economics is unjustified.

Kevin said...

Quoting Ath:
"Let us say even 50% of Americans stopped shopping at the big boxmarts, stopped buying frivolous things .... pooled their family savings, ... and all of those things, that is hundreds of millions of dollars which leave the economy."

Let me stop you right there. They are not sticking that money under the mattress. They are investing it, or putting it in the bank which then invests it. What does that mean? Either it means they are buying stocks at inflated prices (due to all the extra investing) hence giving profit to people that bought earlier, or the money is being lent out a very low rates (due to all the extra lending) to businesses who will spend the money on infrastructure and whatnot.

I don't deny that there is a brief time lag here while the money is in transit, but to claim that the money is leaving the economy is absurd.

Kevin said...

Quoting Ath:
"You don't need any laws to equalize competition ... if you tax large corporations, it will encourage growth of small businesses. If you exempt companies that function on a co-ownership model and expand ESOPs, you encourage more ownership amongst workers in a company."

Let me get this straight. You are NOT going to make unequal competition illegal in any sense, despite your statements that it is immoral and unjust. You are ONLY going to burden it with taxation, and that burden can be lifted by the company having a cooperative ownership plan?

This seems to fall short of your previous ideas. If a large corporation has an ESOP plan, you have no problem with them driving all the little businesses into bankrupcy? If a large corporation without an ESOP is so efficiently run that they can afford to pay the onerous taxes while still bankrupting small businesses, you will take no more action??

Just to be clear, what are you going to tax? Most businesses would consider it more than worthwhile to run at zero profit or even at a loss for a time if it means gaining significant market share.

Kevin said...

Quoting G.F.

"Do we agree that competition in employment is at an all time high, and there are a limited amount of positions which pay a living wage?"

No on both counts. What is your metric for measuring competition in employment? What do you mean by "all time"? Where did you get your data set? What are your standards of a living wage? Why should you think, no matter what the standard, that there are a limited number of positions that pay that wage? Don't distributists want most people to be small business owners? That's not a position that you take over from somebody else when they get fired, promoted, or retire.

Kevin said...

Quoting GF:
"To suggest something can not happen whilst the same consequences you suggest are already in existance is a sleight of hand. Lawsuits exist everyday. Prosections against CEOs..."

I'm not sure what I said "can not" happen. Do you think that because there are very many lawsuits today, new laws couldn't possibly greatly exacerbate the problem?

Kevin said...

Quoting GF:
"But the point is simply this: it is not a legal hazard to succeed. This is completely against the Distributist creed. Everyone has a right to make more than their neighbour."

Athanasius has said things like this in the past, but this seems to skirt over the issue of the affects of your success. Businesses get destroyed by other peoples' success all the time. If you continue succeeding, you're going to wreck distributism. At what point you've crossed the line is a very very murky question, and that is the question you are going to have judges interpret, and its going to be a big problem to get a uniform application of that sort of law. That is the point I was trying to raise.

Now, in this thread Athanasius has backed off of this kind of legislation, but in the past he has asserted that if you cause even one of your competitors to go out of business, that is unjust competition. Where do you stand? How do you see these laws being enforced?

Kevin said...

Quoting GF:
"To argue that laws cannot restrict the success of a business when it infringes on the needs of the local community and its economics is unjustified."

Its not this simple. I think both of our positions lie somewhere in the spectrum of what "needs" of the local community are important enough to justify government interference. I'm not an anarchist, after all.

Athanasius said...

Let me stop you right there. They are not sticking that money under the mattress. They are investing it, or putting it in the bank which then invests it. What does that mean? Either it means they are buying stocks at inflated prices (due to all the extra investing) hence giving profit to people that bought earlier, or the money is being lent out a very low rates (due to all the extra lending) to businesses who will spend the money on infrastructure and whatnot.

Let me stop you right there, this is as absurd as what you claim my answer is. Banks will not be going to Walmart and Target, they will not be out in shops and malls and retailers buying. They will invest only in those stocks they will view as profitable, namely of the service industries which are necessary for frugal living people. When they see trends like that economists will warn that the economy is slowing down and we are heading for a recession. If all the big retailers went under our GDP would plummet. When that happens the banks will invest their money elsewhere, like in Mexico or in Asia where slave labor and unrestrained competition has created de facto slavery and huge profits for the companies and governments involved. So yes, the money will leave the economy, as it already is with the illegal immigrants wiring untold millions to Mexico and beyond every year.

Kevin said...

Quoting Athanasius:
"Banks will not be going to Walmart and Target, they will not be out in shops and malls and retailers buying. They will invest only in those stocks they will view as profitable, namely of the service industries which are necessary for frugal living people."

If they go the stocks route, they are putting money in the hands of whomever they bought the stocks from, who in turn is either spending, or investing, and on and on. Spending aside, at each stage a certain amount is going to go the second route: bonds, ie lending money to businesses. Of course businesses don't just sit on cash, they spend it on labor, goods to resell, and infrastructure, and the people that receive payment from them then go and either spend the money or save, which puts the money back in the hands of the bank, who invests it, which means it is used to purchase something again, and so on and on and on. Nobody is just sitting on money! That would be foolish.

Now the issue of it leaving the coutry is another topic altogether, and in fact is a red herring, but for starters the money is not leaving the economy any more than when it leaves the state or the town. Indeed the foreign investors are probably buying stock in American companies and buying bonds from American companies, sending the money right back to the States.

Industries that produce goods people don't want will of course suffer, but other industries will benefit (investing advisors will make a killing).

Ultimately if the practice of producing the same amount while consuming less is uniform, what will happen is that prices on goods will drop accross the board, perhaps causing a little actual deflation, but again this is temporary and the economy will achieve a new and different equillibrium based on the new consumer preferences.

Kevin said...

Mexico has slave labor??

Gen Ferrer said...

Hi Kevin,

Let me see if I can answer some of your questions.

1. How do I measure competition in the workforce? Shorter amount of positions versus larger inhabitants.

2. In my County, the qualifications required for professions is increasing while the same salaries for those positions are decreasing. The income per capita makes the average home selling price unaffordable.

3. On the issue of what distributists wants, I believe it is irrelevant as we are specifically arguing about wages and employment. Not Distributism. It is simply a criticism of the present system.

4. I infered that future lawsuits would be such an obstacle as to make you an opponent of its possible establishment. I still do believe laws could be created to target this problem, and I hold that even current laws stand to be misinterpreted in a Capitalist system.

5. I believe Athansius was using his common sense, at least in the way we define 'outcompeting our competitors'. The difference mainly existing in your interpretation of it as simply being the people's preference. whilst we would say the pool of association used specifically for underselling mainstream small business through the use of wealth.
(this would be a rough definition)

6. Kevin, I agree it isn't so simple (concerning interference) and I hope this is the start of a sincere dialogue. It isn't always easy to communicate everything or choose the proper verbage via these comment boxes :)