Friday, July 27, 2007

Starbucks illustrates the weakness of global economy

by Athanasius

A little tidbit in the news caught my attention today, apparently Starbucks is going to raise its prices. The article identified the following as the main reason:
Starbucks Corp will raise U.S. prices on coffee, lattes and other drinks by an average of 9 cents a cup next week to help offset soaring costs for milk and other commodities, a spokesman said on Monday....U.S. milk prices have soared recently amid strong global demand for dairy products and higher production costs.
This is interesting to me. It has been argued by our Capitalist opponents that not only does economic liberalism provide us with more efficiency (which is false) but it provides us with lower prices too. The latter claim is sometimes true. Yet let us look at this situation. Because of the increasingly nationalized and globalized economy, one off set in one place potentially can raise costs in other sectors. Because the costs of milk production are going up (due to national diversion of corn toward worthless bio-fuels and high gas prices) the national market price goes up, and consequently anything made which uses milk by say, restaurants. So, in spite of the efficiency and low prices we are supposed to get with Capitalism, the prices are going up.

Now I will contrast this with a local example. Not far from my small abode, there is a coffee shop, privately owned, which produces brewed coffees, lattes and blended whipped drinks much like Starbucks. Personally I think they are better than Starbucks, but we'll leave that aside, that is scarcely the point. They get local milk from local farmers, coffee from local roasters, and their prices are lower than Starbucks by more than 20 cents for every comparable product. Why? Simply because a local market is not as subject to national trends as a national market is, and is therefore much more efficient, reducing the number of hands and the resources used to ship, and therefore lower the prices. This is why Distributism focuses on creating local markets, because they more effectively control prices and create more efficient markets than Capitalism does.

To buttress this point about local markets, we should also consider the health effects, or defects of large global markets. One need only reference the tainted food coming from China that we keep hearing about in the news. Closer to home, the average McDonald's hamburger has meat from hundreds of cattle all over the country. If an infection of any kind occurred in one of the steers, it could taint a huge amount of meat! On the other hand, if your meat comes from a local butcher, with steers that are identifiable, it is that much easier to identify and contain outbreaks of disease among cattle.

A local market helps to attain more efficiency and more control over costs and ownership, by eliminating the number of hands capital must pass through before it is produced into wealth or consumed, and consequently, spreads ownership far and wide through numerous local economies rather than concentrating all wealth in the hands of a few owners located in diverse locations around the world.

26 comments:

Kevin said...

Ah, Starbucks!!

Starbucks prices are able to go up because they offer a superior product in several ways, not the least of which is the standardization of quality, by which I can pull off a highway in the middle of flyover country, park at a waystation I've never been to before, and buy a cup of steaming hot perfection, ie Starbucks's Gold Coast Blend Coffee. I know exactly what its going to taste like. If it was a privately owned joint, I wouldn't know what to expect. A comfort item like coffee is not something people are often willing to take a risk on. They just want their dern coffee, made the way they are used to.

Another interesting point is that Starbucks is undoubtably a high-end product. There is nobody opening a bunch of stores nationwide trying to offer the exact same product at slightly lower prices to cut in on their business. Why is that? Partly because most people that walk into a Starbucks and order a 4 dollar drink are not particularly interested in saving 20 cents. If people became very interested in getting their coffee for cheaper, competition would pop up. But by and large they are not. If you want to be frugal like me, you could buy starbucks ground coffee and brew it yourself and deeply substancial savings. The fact that so few people do that points again to the fact that the price of coffee is not on a lot of people's radar. The people who are trying to save 20 cents on a cup of coffee don't provide a significant portion of Starbucks's revenue, I'm sure.

So in a way this price hike will again demonstrate the strength of the starbucks brand in particular, and the strength of the economy in general, because most people won't bat an eye.

Athanasius said...

Another interesting point is that Starbucks is undoubtably a high-end product. There is nobody opening a bunch of stores nationwide trying to offer the exact same product at slightly lower prices to cut in on their business. Why is that?

You are entirely missing the point. Why would someone running a business in a local economy based on Distributive justice want to cut into another company's business somewhere else? The point of the local economy and the 3rd way is that more people than the owners of Starbucks who are millions of dollars in debt will have the means to produce coffee, and because they draw from local sources they will not need to raise the prices every time the government diverts its industrial capital to bio-fuels. Local farmers producing milk and grain will be scarcely disturbed by government trends toward bio-fuels which affect Starbuck's source of milk.
Indeed you are right, Starbucks has gotten a bunch of fools (in the past myself included) to spend $4 for coffee they can produce at home with a little skill for less than $2. For a small investment I save quite a bit by making my own coffee which I buy fair trade from Trader Joe's (pronounced cuwoffee as those like myself who are from New England rather than Joisy say it) rather than buying it from Starbucks. Maybe they deserve espresso points for that. But so what? How is that a superior good to more people being economically free, owning their own means of production? To use your own arguments, if in a society with well divided property a significant number of people demanded coffee a certain way in flyover country, they would get it. I also find the temperament you describe unique to yourself, most people will try the coffee before decidedly saying they do not like it. They just want the damn coffee!

There is another interpretation to the one you have provided. Perhaps people do not believe there is a possibility for competition because for someone in an city area where no local market exists to provide capital necessary to produce into lattes can not absorb the costs the way Starbucks can with its open credit, it is impossible to get competition on that scenario, and therefore Starbucks maintains a monopoly with all the powers inherent in monopoly, backed up by big banking. It is more than possible that if people were given a "share in the land" as Pope Leo XIII advocated, the scenario would be completely different.

Kevin said...

I'm going to try to keep you on the original topic. You seem to think, (this from the original post) that capitalism is failing to deliver when Starbucks raises their prices. But in fact there are many local coffee outlets (as you point out) and yet their lower prices doesn't take so much business away from Starbucks that the management is going to shy away from a price hike like the one in the news. This is because they're not really competing directly with Starbucks. Anybody can offer quality coffee at cheaper prices than Starbucks. Starbucks is offering intangibles. Hell, some people probably feel special BECAUSE they spend so much on coffee. In this sense, Starbucks is actually strengthening their brand! But I really fail to see how the price hike demonstrates the weakness of the economy. The whole thing is dependent on lots of people having inordinate amounts of disposable income, isn't it? Doesn't that demonstrate the strength of the economy?

Regarding the price of milk, isn't it the case that milk prices are being raised via the cost of corn to feed the cows, because of all the government subsidies in ethanol development? (Fueled by global warming hysteria) If it was a natural disaster that would be one thing, but here you have the government meddling with the economy in a way most capitalists would tell you it has no business doing, and as a result high-end coffee prices are going up a mere 9 cents, and this is supposed to reflect badly on capitalism? I don't follow you.

Athanasius said...

I do not understand why you fail to see how the price hike demonstrates the weakness of the economy, unless you have ignored the argument.

Goods procured locally are cheaper. Goods procured from far away are more expensive. Goods industrialized in a capitalist manner and shipped from far away are more prone to problems than goods produced from small unites nearby and shipped with little expense. If we got to war with Iran and gas prices rise to 5 or 6 dollars a gallon, prices at starbucks will be unfordable (as with a number of other businesses) because the economy which is funded by credit cards could not handle the strain, particularly in Southern California where the only ones with good paying jobs commute from their homes 1-2 hours one way. Businesses getting their products from local sources have a necessary advantage in that they don't have to pay for that instability. This is why a local economy is superior to a global economy.

Kevin said...

Quoting Athanasius: "Goods procured locally are cheaper. Goods procured from far away are more expensive. Goods industrialized in a capitalist manner and shipped from far away are more prone to problems than goods produced from small unites nearby and shipped with little expense."

As I've shown above, Starbucks coffee is not a competitive commodity. If any old coffee shop offered the exact same product, there would be direct price competition, and that is impossible, because what starbucks is selling is a package of coffee + brand intangibles.

What this means is that the normal calculus of supply and demand with competition between firms is altered. In effect you have a monopoly situation, inasmuch as starbucks has a monopoly on the starbucks reputation and brand. While the cost of shipping the goods etc is still going to impact the price of the coffee, the difference between starbucks and a place that uses the local milk and whatnot has very little to do with the difference in the price they pay for their milk.

Furthermore it is absurd to say that if the price of gasoline doubles then starbucks would be unafordable. You underestimate the cushioning affect of the interconnectedness of the global economy. You also underestimate what people can afford.

Suppose we use an example of oranges. Say there are two grocery stores in town selling oranges. One buys oranges from a local grove. The other ships from Florida. If there is a hurricane that wipes out the Florida groves, the price of oranges is going to go up in both stores, so long as the store managers are rational. But both stores are still going to have oranges. The local one will get them locally as usual, while the other one will just ship them from somewhere else, like California. On the other hand, if the local groves get wiped out, the price of oranges will remain the same, but the local grocer may have trouble obtaining any to sell at all, because they don't have a relationship with the shipping companies. If both grocers were distributist, the people would probably have to do without oranges at this point. Oranges don't arrive by the truckload. They are shipped along with a variety of other goods. The non-distributist grocer takes advantage of economies of scale by ordering all manner of goods to be shipped together. If the deliveries aren't already happening it is going to be prohibitively expensive to order a special delivery of a couple crates of oranges. The infrastructure of the capitalist model insulates the local consumers from the affect of local and non-local supply shortages. This is why the global economy is superior to the local economy.

John said...

I'd like to observe that Starbucks does have competition, especially on the West coast, where coffee shops (and chains) abound. Just a little point, and not truly important.

One point in Kevin's argument does tend to disturb me a little. He's basically saying that a global economy makes people stop caring about coffee. Basically, a person doesn't want coffee when walking into a Starbucks, he wants something associated with a brand. Quality is not determined by looking at the actual quality of a product, but is determined by the label. Don't get me wrong, people can get quite annoyed when they go into Starbucks and get served swill. But for most advocates of Starbucks, no coffee will ever be good enough unless it has the Starbucks logo on it, no matter how good the taste.

I don't think that Athanasius is advocating a total unhinging of any national market. He is (and I agree with him) condemning the unhinging of the local market for the sake of the national one. I think that it does interfere with people's natural tastes and judgment of quality, as noted above. There is a total loss of variety, the spice of life, and the very thing that globalization of the economy claims to provide at a lower cost. The point of Athanasius' post was that it often (looking at the local level) fails at the lower cost. I think Kevin's point is good (the analogy of oranges), that sometimes its cost is raised, but it makes certain goods possible where they might not be on just a local level. So, a larger economy allows me to have oranges if I'm in Wisconsin or Manitoba (it's hard to tell the difference sometimes). I do object to the globalization of the economy when it requires the superseding of the local economy, where a local one will do.

So to take up the analogy of oranges again: why is there a national orange dealer selling fruit in a place that can grow its own oranges? If the storm destroys the local orchard, then prices will go up. It's temporary, but the needs are still met. When the orchard is regrown, why should the national dealer still be involved? It's common sense (a.k.a. subsidiarity).

But the deeper objection to the global economy is that it is both successful and a failure on the scale of variety. It has potential to bring mangoes to Alaska, and ends up bringing them to Bermuda. It has the possibility of letting people experience authentic Louisiana Cajun food nationally, and instead creates a pandemic of low-quality McDonald's.

Now, I think Kevin might here make the argument that people go to McDonald's, and therefore the global economy is giving people what they want. I tend to see things a little differently. I think that the global economy has created the want for what it gives. I might be wandering into a debate about chickens and eggs, but the fact of the matter is that we're raising children from day one that a certain brand is synonymous with quality. It's a fine point, I'll grant you, but there's a world of difference between believing a brand to be reliable for quality and never being able to find quality apart from that brand.

Kevin said...

Re: "He's basically saying that a global economy makes people stop caring about coffee. Basically, a person doesn't want coffee when walking into a Starbucks, he wants something associated with a brand. Quality is not determined by looking at the actual quality of a product, but is determined by the label."

I didn't mean to imply this, so sorry if I was unclear. What I had in mind is that the corporation-wide policies governing the delivery of the starbucks product makes that product very reliably the same from venue to venue. That sameness, coupled with the obviously high quality of the product produces a rational expectation for the consumer that the product will be high quality every time. Over time, a trust is built, and people build an association between the brand and the quality. Every time you buy a cup of coffee, you're taking a tiny risk that it won't be the quality you expect. If you buy from starbucks, you have a wholly rational assesment that the risk of being disappointed is much lower. On top of that, despite the objective quality of the competitor's coffee, your familiarity with a particular starbucks blend (let me plug Gold Coast blend once more!) can develop into a distinct value of its own, thus heightening the aforementioned risk! With dozens of starbucks blends available that I don't like as much as Gold Coast blend, what are the odds I'll find something as good or better at an independant coffee roaster?

These are the brand intangibles that starbucks offers. They're not wholly irrational, though obviously some people will take brand loyalty too far.

Kevin said...

There's quality risk coming into play at the low end too. McDonalds mayn't be the best product, but it is a reliable product. The very worst food I've ever been served came from the same sort of place as the very best - the privately owned establishment. McDonalds may not be very good, but you can assume with good reason that the quality won't fall beneath a given level. It will probably taste exactly the same as last time.

John said...

McDonalds may not be very good, but you can assume with good reason that the quality won't fall beneath a given level. It will probably taste exactly the same as last time.

I agree with you about the consumer risk involved. My only preference (and I stress that word) is the ability to find a restaurant that might be better. There's nothing intrinsic about the private establishment that means it will be of higher quality. There's nothing intrinsic to the national chain that means it must needs be poor quality. My objection (again, on a preference level) is that it will always be the same. One can assume that McDonald's will never fall below a certain level of quality. But one can also assume it will go above a certain level, either. According to my view, variety is the spice of life. One should always leave the possibility of finding something better when it comes to consumption of goods (I hope I'm not being heinously hedonistic in that statement, if so, I apologize). Leaving that door open means leaving the door open to something bad as well. It's like the Dr. Seuss book, "Green Eggs and Ham." It goes both ways.

I guess I just don't like having to wade through the sea of McDonald's to get to a place where I can find a great place to eat. A place that's partly my own, and not packaged. I think it's sad that people associate quality with McDonald's just as much as they do with Starbucks. Now, I'm entirely willing to admit that objectively, Starbucks is closer to the mark when it comes to quality, and that people recognize that. What is a poverty (seen from my angle) is that people aren't willing to admit of anything better out there. I know there is. I'm willing to wager that sometimes the fact that a place is different from Starbucks makes the entire coffee experience better. I know it's that way with food, even if the food is only comparable to McDonald's.

But the mere fact that the economy in demand has latched on to a single thing in a single way and treated it as if it could do no better is disturbing. These things become standards of all restaurants. And when driving through flyover country, I can pull off and never find anything different. I can go to another country and never taste the local cuisine. I can go to different areas of my own country and my desire to go to a local restaurant is made more difficult (not impossible, but definitely more difficult) by several orders of magnitude by the sea of brands that block my path.

Variety is the spice of life. Can global and national capitalism truly claim to provide it in that way? I don't mean in the analogy of the oranges, but in the reality of the McDonald's. It seems to me to be a buffer against variety, not the advent of it. Maybe I don't understand what variety is. I'm totally willing to admit to it. But having the same thing in every town no matter where you go doesn't seem to be variety to me.

What do you think?

Kevin said...

John, I agree with pretty much everything you said. One of the ways global capitalism provides variety is in the great number of goods that are available in the areas where variety is in vogue. If you go into a store like Wegmans or Whole Foods, there is a much greater variety of high quality products from all over the world than you could ever have expected to see only 20 years ago or so. If you're into cooking like I am, the variety in your life is multiplied many times by global capitalism.

John said...

Then, what do you make of the lack of variety on the level of retail? I don't see too much difference between McDonald's and Burger King, or Target and K-Mart. Isn't there supposed to be a balance of a sort? Do you think we're where we need to be on that scale right now?

Kevin said...

That's a tricky question. If I can be permitted an overgeneralization, it seems that the retail business has split into two directions. You've got massive specialization and variety at one end, but you pay through the nose for it. At the other end you have an efficient, standardized product that is mass produced at the lowest possible cost, for the coupon clippers. I'm not sure what Wal-Mart goods you are thinking of, but there are certainly specialty stores with a greater variety and quality of clothes, and similarly for furniture, etc. I think there is actually higher quality and variety in those places than the stores of the past that would be considered high end, but there is more of a gulf between them and the Wal-Mart products, because (it seems) the reality is that most people either want one or the other- quality or low cost.

John Connolly said...

Right. It seems there is a separation somewhere. Now distributists, if I may use the term, are really against the difference. They themselves are split over what should be done. Many advocate strict localism, others agrarianism, and others still something else. I think one of the good developments of the industrial revolution is the ability to get that good variety around. The bad part is that people, as you said, have to pay through the nose to get it, or have to get their variety in terms of questionable quality (I won't here condemn Wal-Mart to always being low quality, but I think you'd agree, it tends to be lower on the scale than a place you have to pay through the nose).

The key, I think, is subsidiarity. It's an organizational principle that is ignored or overlooked in the larger shuffle of the national or global economies. Quite basically, I believe the free market isn't organized to be the most efficient it could be for everyone involved. In strictly efficiency-oriented terms (utilitarianism), the big businesses have taken over the territory of the smaller ones. They've taken over the territory that the smaller ones are probably better equipped to handle. I'm fairly convinced this stems from the hostile perception of most businesses to other ones, seeing them as competition, not as friends trying to get the same thing done.

I'll remind you of the example of the oranges again. If the small business owner can provide oranges of tolerable quality (and locally), why do the big businesses insist on selling in the same area? Either they think their goods must be better quality (rare, I think, because as I said before, their quality tends to be lower on the scale, but cheaper), or they want the territory and want to put the local guy out of business.

But if both worked together, things might be much more efficient. Let local business take care of what it can (yes, it is limited, but not crippled). Where it can't, let the bigger national businesses do what they do best: provide that variety.

Let me quote you for a moment: ...there is more of a gulf between them and the Wal-Mart products, because (it seems) the reality is that most people either want one or the other- quality or low cost.

Now, I disagree with the assumption that people either want low quality or low cost. I'm fairly sure that if people could get high quality at low cost, they would go for that. The problem is that when national chains are the only link on the local, they can't provide both. If the larger businesses were less aggressive and gave up their territory in the local aspect, they might be able to work with local businesses to provide better quality goods at lower prices. People don't buy the one over the other (low quality but low priced over high quality and through the nose) because they want to, but because that's all they're offered. And paying through the nose isn't pleasant, nor for many is it affordable.

The disincentive? Profit, plain and simple. When people come together for the good of the whole, they need to sacrifice for the sake of everybody involved. I don't see the large businesses taking profit cuts for the sake of efficiency.

You may agree with my viewpoint here, and you may not. I hope I haven't made any gross assumptions in outlining this view. Maybe you don't think these things are inefficient, but I really think that the national and global economies aren't being used to their full potential because they spend too much time doing what's needed to run the local economies. Every so often, you can see that happening. Like Starbucks being forced to raise coffee prices because the dairy farms not twenty miles from any randomly-chosen Starbucks are selling exclusively to Germany or somewhat. It's a tad inefficient, and totally avoidable.

Maybe you think that the consumer's sacrifice is worth keeping the machinery going. I don't know. But then it seems to me that we're the ones making sacrifices so that the system won't have to change.

Either way, I think this comment did nothing but summarize Athanasius' original post.

Kevin said...

I guess I didn't say what I meant about what people want. I think people either want the cheapest acceptable product, in which case they are served best by the Wal-Marts of the world, or if money is no longer really an issue for a given kind of product, they want to choose from a vast array of choices, and even feel better about the choice they make when they pay a lot for it, because that re-enforces the feeling of having exercized good taste and chosen something of unique and fabulous quality.

For different people this occurs at different levels of product, depending on what they can afford. Some people like to spend a lot on a particular Starbucks drink, which takes about 100 words to order precisely, while they can't afford to exercize that kind of judgement with their furniture.

The quality of furniture might be better overall if we ditched the Wal-Mart model and went with talented local capentry and upholstery. But the fact is many people have no interest in spending a penny more than necessary on their furniture, so getting rid of Wal-Mart (or the cheapest Ikea products) just doesn't reflect the consumer's priorities.

As for convincing business owners or shareholders to put other priorities over profit, well, good luck.

I don't think it can't be done, but like environmentalism, it is going to be a product of the efficiency of capitalism. The richer the society, the more it can afford to spend money on such secondary goals. As we get richer and richer, we may start to go to local producers out of a renewed sense of their value. The medieval model was just the most efficient agrarianism they were capable of at the time. The industrial revolution sought greater efficiency. The new distributism, if it comes to be, will be a luxury afforded by the fruits of capitalism.

John Connolly said...

Well, I don't exactly see distributism being at odds with capitalism. At its best, it would be capitalism at its best, as some would say, gone right. I doubt there are to many people out there who say that capitalism is totally perfect in all ways at all times. But there are a great number of people who have left off the idea of a developing market, changing it for the better. Most supporters of the unrestricted market think that the market will come to where it needs to be if just left alone. It's a deeper point of economic philosophy, I grant you.

Therefore, if distributism really ever does work, I think it will look much more like modern capitalism than medieval agrarianism. The things that most distributists are concerned about are instances where the economy facilitates (or encourages) some form of injustice. It's incorrect to object to ATM machines, just because they're new. In the same way, it's wrong to object to an idea based on guilds just because they're old. If an idea won't work, then we need to face that fact. If it will, it doesn't necessarily need to be that way. We need ideas that both will work and are dictated by right reason and a keen awareness of social justice.

So far, so good (I think). To quote:

I don't think it can't be done, but like environmentalism, it is going to be a product of the efficiency of capitalism. The richer the society, the more it can afford to spend money on such secondary goals.

I don't think distributism should be a hobby (like a man who decides to have a vegetable garden because he sees growing food as the only "means of production", a term that lost its meaning after the depression). It should be a reform of capitalism, so that it doesn't have a self-contained point of reference. To take an example, the whole schema seems to be utilitarian to a certain extent. You just got through talking about the efficiency of capitalism. When was the last time it was spoken of in different terms?

And yet, I don't have a problem with an economic system trying to be efficient. But the point of reference for this efficiency is only in terms of production of goods (or "generation of wealth", a term capitalists use that tends to be extremely vague. I think it is analogous to any market motion whatsoever, from discussions I've had on the subject). Whatever can produce more efficiently is considered good, because it allows people to buy more and sell more. It allows them to spend more or save more.

But are these numbers enough to judge an economy on? In one way, it's all we have to go on. But everybody knows that the economy is there for the sake of people. It's supposed to be a tool that men use to attain a certain objective. I object to the philosophical leap that is required to get from one to the other:

1. Economy is there for the purpose of human happiness.

2. We gauge the economy in generation of wealth.

3. Generation of wealth = quantification of ability for human happiness.

I grant that this equation is only in terms of providing the means human beings use to attain a certain level of happiness. But that's not the point here. Or at least, not exactly. Such a bridge, though necessary to judge whether or not any economy is doing its job, has a tendency to degenerate into a materialist view of the world. Just because economics deals with the material aspects of people's lives, it doesn't mean that it can stop there. The danger behind that is a loss of respect to the human person, to quantify his meaning or value.

A reasonable distributism tries to correct that sort of mentality, and guard against it. It tries to see business owners as human beings trying to live out their lives in service to God and other men. Small business' owners should be able to compete (in their own markets, of course), and big businesses should not be the de facto rulers due to power. The overall efficiency of a market can be greatly increased from a human standpoint: How efficiently is this market providing vocational fulfillment for all involved? (I know I'll probably get in trouble for this one, as it doesn't have a quantitative answer.)

It's questions like that that can better capitalism. Anything even smacking of agrarianism (anti-urban policies or arguments) I hold are not distributist at all, but agrarianism. People who hold to such (very romantic) beliefs should stop calling themselves distributists. They're muddying the waters. Distributism should be a reform movement of capitalism, plain and simple. It's not an overthrow of what's there, but a correction of what's there and protection against unjust practices. Hope to hear from you on this soon.

Kevin said...

To be sure, the defender of capitalism will often speak of the material ends of economic activity. But that is only to say, he speaks of the economic ends of economic activity. To bracket the discussion in this way doesn't deny that man is greater and broader than his material goals. Man's life is distinguished by reference to values of all kinds: Spiritual, Intellectual, and Material values. If he is wise his goals and purposes are subordinated to one another in the proper order demanded by the natural heirarchy of value.

Now, there are two basic forms of the distributist objection to capitalism, and each requires a different response. Here are the two kinds, including some subcategories of the second.

1) The objection that capitalism doesn't achieve the merely economic purposes of man as well as distributism. The capitalist response to this is to demonstrate the opposite is true: Capitalism achieves the economic purposes of man much better than distributism. An example of this is Athansius's recent post claiming that big business was not in fact more efficient than small business. In fact the original post here about Starbucks was a merely economic objection.

2) The objection that capitalism's pursuit of merely economic goals violates higher values, such as spiritual values, to which the economic pursuits ought to be subordinated to. The capitalist (lets assume a Catholic Christian one like myself) then has to analyze the objection and decide which defense is appropriate:

2A) Often the argument is based on fallacious economic reasoning which needs to be addressed. An example of this is that capitalism is causing the poor to starve. (There are many examples of variations on this claim.) The capitalist agrees that causing the poor to starve is a bad thing, so there's no disagreement on the topic of higher values. The capitalist seeks to demonstrate that in fact the poor benefit from capitalism. Here the merely economic argument does appropriately counter the appeal to higher values because the appeal is predicated on faulty reasoning concerning the lower things.

2B) A second distributist argument might be called the utopian approach, in which the distributist claims that implementing distributist reforms in the economic sphere will achieve solutions to current problems concerning higher values. I am generally skeptical of these claims, because human nature does not change. Usually the distributist is assuming that people's natural faults will go away under distributism. For example, a common distributist claim is that capitalism takes men away from their families by making them work long hours. But working long hours is not actually necessary under capitalism, and there's no reason to believe that men will choose to work fewer hours under distributism, especially if distributism hurts the overall strength of the economy, as I believe it would. In these sorts of discussions, the capitalist is again arguing opposite from the one who seems to be championing higher values, but that doesn't mean the capitalist doesn't believe in those values, or doesn't think that economic pursuits ought to be subordinate to them.

2C) Finally, a distributist might argue that implementing his reforms could achieve some benefit of a higher value, and the capitalist could agree that the stated result would occur, but doesn't find it to be desirable, or worth sacrificing economic freedom to obtain. Here is the only place where there is actual disagreement about higher things, but these arguments are rare. One such case might be Athanasius's preference for private ownership of capital over wage-earning. (I mean a preference for that, but without reference to resulting benefits of such a situation, which could be discussed separately.) Surely you could change the legal situation so that more people would own capital. But if doing so actually results in less productivity overall, the capitalist doesn't find it desireable. Since Athanasius said that he would prefer capital ownership even at the expense of the economic situation, the argument is actually a disagreement over spiritual values, though it is rare and quickly degenerates into one of the other kinds of argument I've noted.

There might be some other kinds, but those are what I could come up with for this post. Hopefully this sheds a little light on why the capitalist position so often sounds like it overemphasises the material at the expense of the material. I think that interpretation is regretable, probably inevitable, but ultimately wrong. Perhaps I could counter such misunderstandings by more often waxing poetic on the glory and greatness of man's exercize of his God-given freedoms, and the soul-crushing spiritual results of well-intentioned tyranny. But my style is more to engage the particular points that my opponent makes.

Kevin said...

To sum up my long previous post, the reason I don't often concentrate on the spiritual values distributism aims at is because I agree with them! I whole heartedly believe that distributism is "well-intentioned". Economics is a notoriously murky sphere, and many a government has experienced the unintended negative results of meddling overconfidantly with its citizens' freedom. Its my hope to show the faults in the distributist agenda, not to dismiss distributists' ultimate values, almost all of which I share.

John Connolly said...

I see, and understand (though I must confess, the capitalist rhetoric does make some things less clear than they can be). Let's take the arguments one at a time:

1) This greatly depends upon your conception of the economic ends of man. Perhaps we could say that capitalism better fulfills the economic ends of economics, but when you introduce man to the argument, such terms as 'efficiency' have to deal in how efficiently the human things are provided. These human things are tools for attaining happiness, not happiness itself. And because of this, the 'efficiency' must be gaged not in quantitative efficiency (as an economic end) but in how efficiently it provides certain aspects of life conducive to happiness and security. Most distributists won't (and indeed, can't) argue that distributism can outproduce capitalism, or that capitalism is truly less efficient in an economic way. They merely state that the aspects of human cost to keep the efficiency of the system going are too high. But that leads into number 2, what the distributist perceives to be the human costs of such an economic system.

2) Most of these arguments are based, sadly, on modern distributists who have trouble sorting sources and keeping historical continuity. The founders of distributist thought wrote in the 1890s. To read them, they mostly address the cruel injustices that took place in their day (read any account of the 1840s coal mines and factories, and one can readily perceive the inhuman treatment of workers, especially immigrant workers). But something that is commonly forgotten is that while the world has not adopted the subsidiaristic and distributive change proposed by these founding thinkers, that the situation hasn't changed at all. This is obviously wrong. The situation changed in large part due to the rise of unions to protect the workers. Today's problem is that now unions are actively persecuting employers, and regardless of whether they're big or small, it is usually unjust. But that's another topic entirely.

The other problem is how certain high-profile "distributists" present distributism as coming from certain distributist thinkers. Agrarian attitudes in the late 1800s match up very well with technophobes and agrarian fantasy-mongers. This should have nothing to do with distributism, but these people make agrarian first-principles for distributism. Basically, if you're not living on your own land, growing your own food, and bartering with your neighbors four miles away, you aren't yet a real distributist.

So:

2A) Capitalism might not be causing the poor to starve, but there seems to be a certain level of poverty beneath which capitalism just can't help somebody. It seems that capitalism tends toward certain things, and these things make life for the poor very difficult, and facilitate ease of exploiting poor people trying to better their situation. These are not iron rules of capitalism. But they are far easier tendencies under the current system than I'd like to see.

2B) Your point here is well taken. No system will ever make or unmake people's vices. Changing a system in order to reform people's spiritual lives is arguing from effects to cause. There are, however, long-standing and deep-set attitudes that people have acquired through capitalism, that seem to be unhealthy (for instance, the equation of quality with a certain brand, which I brought up before). In this way, certain tendencies might be curbed or encouraged in an economic system, and that does make the question have some weight, though not in as absolute a manner as either side might portray. The capitalist can't pretend that the economic system has no bearing on people and their attitudes, just as the distributist can't say that it is the sole and only cause of them.

2C) Now we're getting somewhere! This is exactly where the disagreement happens. Rather, it's where the above disagreements come into the open, each side following the logical conclusions of its first premises. I think that if more people owned capital, it would lead to greater economic freedom for more people on the whole. There is a difference of opinion here as to how one defines economic freedom. Does it mean being able to do whatever you want, or to buy whatever you want? Or is freedom something more than license, as it is when we speak of free will? Since I don't think the economic should be segregated from its human purposes, this connection doesn't seem invalid to me. But we have to be careful of equivocation, since English only has a few words for use, compared to the number of ideas to convey.

The argument does become one of spiritual values, primarily because when we're talking about economics we have to talk about an aspect of human life, and an important one at that.

Surely you could change the legal situation so that more people would own capital. But if doing so actually results in less productivity overall, the capitalist doesn't find it desireable.

I'm twigging on the word "productivity" here. That's where I got off in the first line, saying that the capitalist rhetoric gets in the way and obscures things here. Is this sort of productivity the same thing when we discuss ability to produce GDP? Is it an objectively mathematic quantification of worker and mechanical efficiency? Or is it the system's ability to produce in man something else?

Assuming the most general and common usage of the word, I daresay a subsidiaristic and distributive system of economics will reduce the overall number of items that are produced. The distributist thinks that this is something that we can afford in our plenty, and that it is well worth the sacrifice if we can attain a system where man's spiritual good is taken into account over a blank material quantification, or a system where unethical (or even unjust, to risk involving distributist rhetoric, to my ruination) practices are easy, normal and encouraged.

As for how such a thing should come about, I'm not sure. As you say, the legal situation could be changed, and I don't think that limiting something entails a lack of freedom to it. For man, his freedom comes from his limitations. For example, there is no limit to falsehood. There's an infinity of things we could say that are not true. There are comparably only a few things that are true. Theorists posit an infinity of universes that are not real, in the sense of not being actual to us. They are, in a way, false. compared to how things might work there, our laws of physics and mathematics would only take up a small portion of what could be. The difference is that the things limited to reality are limited because they are true, and the false ones are false because they are not limited. As Catholics, we have to believe that the truth will set us free. And our freedom always comes from our limits. To transcend them is called sin, a theological term for "slavery to self."

So here we are. At the crossroads. I don't think that we should enact a totalitarian regime to "redistribute" anything. In that sense, what springs from a sense of social justice will end in disaster, like communism. But the opposite end of the scale can be bad as well (I don't say just as bad): a market without limits, or a market that is subject only to those limits it puts on itself will have bad effects, in the same way a human being who is not subject to rules or is only subject to rules he dictates will have bad effects on himself and those he comes into contact with.

John Connolly said...

An addendum: The rules I speak of aren't the mathematical ones that economists are proud of adhering to, but the moral ones they say are impossible for economics to adhere to.

To add this addendum to my last example, I don't mean the man who only follows self-imposed limits will not be subject to the law of gravity. He will always be subject to that as long as he stands on the earth. But it does no good to the man if he can move about in the gravity with ease, and still is unhappy due to his slavery to himself and his own will.

Kevin said...

Ok, it seems you've mostly agreed with me, except for a few points.

"the 'efficiency' must be gaged not in quantitative efficiency (as an economic end) but in how efficiently it provides certain aspects of life conducive to happiness and security." (bold face added by me)

This I didn't follow. You seem to be using circular logic.

...

"Capitalism might not be causing the poor to starve, but there seems to be a certain level of poverty beneath which capitalism just can't help somebody."

Huh? Capitalism isn't really tasked with helping anyone. Capitalism grants people the freedom to help their fellow men, or not. If Capitalism is making some people super rich, well you can expect some of them will turn to philanthropy.

"It seems that capitalism tends toward certain things, and these things make life for the poor very difficult, and facilitate ease of exploiting poor people trying to better their situation."

What certain things? Since Capitalism just grants people their economic freedom, wouldn't it be better to say that human beings tend towards certain things? The life of the poor has always been very difficult. Thanks to the rising capitalist tide lifting all boats, there are precious few truly poor left in America. If capitalism "facilitates" the "ease" of exploitation, whose rights are being violated and which rights are those? Lets talk specifics!

"These are not iron rules of capitalism. But they are far easier tendencies under the current system than I'd like to see.
"

Your point seems to be that capitalism doesn't do enough to prevent X from happening. What is X? Is it something the government ought to be involved in, or is it just another example of human sinfulness? Whose rights are being violated?

...

"There are, however, long-standing and deep-set attitudes that people have acquired through capitalism, that seem to be unhealthy "

Uh, this is hardly a reason to impoverish the economy by restricting economic freedoms. I can think of some unhealthy attitudes that seem common among distributists, and they haven't even implemented their plans yet!

...

"I think that if more people owned capital, it would lead to greater economic freedom for more people on the whole."

My understanding is that distributist wish to limit economic freedom in order to cause more people to own capital. But you are saying you want people to own capital so that there would be more economic freedom. What is going on here? You next sentence answers my question:

"There is a difference of opinion here as to how one defines economic freedom. Does it mean being able to do whatever you want, or to buy whatever you want? Or is freedom something more than license, as it is when we speak of free will?"

My understanding of Christianity is that the dispute isn't over what feedom's definition is. I'll grant you, its often expressed that way as a sort of rhetorical excess. The "deeper meaning" is simply the fact that freedom has a certain moral purpose. If you choose something immoral, you are misusing your freedom. The Christian then says freedom is more than just license. I think that's imprecise, because "license" connotates a certain moral situation, that everything is morally permitted. "Freedom" in its basic use implies no moral situation necessarily. The Christian ought to say, "license is more that just freeom." Freedom is merely the ability to choose. The concept of license adds to that a moral endorsement of any and all choices. If you redefine freedom to include only moral choices, you get yourself in a dangerous place linguistically, because you no longer have a word for what used to be called freedom. If you want to add a concept to that it is better to add a word too, like "moral freedom" or something.

"I don't think the economic should be segregated from its human purposes, this connection doesn't seem invalid to me."

Do you think they are exactly the same thing? One may not exist without the other, but they are formally distinct.

"But we have to be careful of equivocation, since English only has a few words for use, compared to the number of ideas to convey."

I don't think I've equivocated on freedom, in fact that's exactly what I think distributists are doing, as I tried to outline above. Equivocation is when you have one word, W, with two definitions, D1 and D2, and you think that anything that is D1 is D2 and vice versa.

"The argument does become one of spiritual values, primarily because when we're talking about economics we have to talk about an aspect of human life, and an important one at that."

I agree, but I don't think that means economics is spiritual. Man is both economic and spiritual, but that is two different things that man is. A dog can be brown and four-legged, but that doesn't mean brownness and four-leggedness are the same, or even connected.

...

"I'm twigging on the word "productivity" here. That's where I got off in the first line, saying that the capitalist rhetoric gets in the way and obscures things here. Is this sort of productivity the same thing when we discuss ability to produce GDP? Is it an objectively mathematic quantification of worker and mechanical efficiency? Or is it the system's ability to produce in man something else?"

The first one.

"Assuming the most general and common usage of the word, I daresay a subsidiaristic and distributive system of economics will reduce the overall number of items that are produced. The distributist thinks that this is something that we can afford in our plenty, and that it is well worth the sacrifice if we can attain a system where man's spiritual good is taken into account over a blank material quantification, or a system where unethical (or even unjust, to risk involving distributist rhetoric, to my ruination) practices are easy, normal and encouraged."

I fail to see what spiritual values would be served. Its the poor who would be most impacted by an overall downturn in the economy. I don't think man's spiritual good would actually be served by distributism, although I grant the good intention. That's what we need to discuss. I'm not sure what unethical practices you have in mind to be easy, normal, and encouraged under capitalism. What are they? How is distributism going to combat them sucessfully?

...

"I don't think that limiting something entails a lack of freedom to it. For man, his freedom comes from his limitations. For example, there is no limit to falsehood."

Not sure what you are responding to here.

...

"Theorists posit an infinity of universes that are not real, in the sense of not being actual to us. They are, in a way, false. compared to how things might work there, our laws of physics and mathematics would only take up a small portion of what could be."

I couldn't let this go without comment. Physics, maybe. But our Math is true everywhere, because it all boils down to logic.

...

"As Catholics, we have to believe that the truth will set us free. And our freedom always comes from our limits. To transcend them is called sin, a theological term for "slavery to self.""

Our freedom comes from our will. I'm not sure what you mean by our limits. Moral limits (laws) don't make an unfree being free, any more than their absence would make us unfree.

...

"what springs from a sense of social justice will end in disaster, like communism. But the opposite end of the scale can be bad as well (I don't say just as bad): a market without limits, or a market that is subject only to those limits it puts on itself will have bad effects, in the same way a human being who is not subject to rules or is only subject to rules he dictates will have bad effects on himself and those he comes into contact with."

There are plenty of laws governing economic activity in capitalism. I think you've mischaracterized it here. There are laws against theft of other people's property. There are laws against certain kinds of lying for economic gain. There are laws against unfair advantages like insider trading. Contract law stipulates that a contract in which only one side has any obligation to the other is not a valid contract. There are laws against harassing or enslaving those who are in debt to you. There are laws against slavery generally. I could go on and on. If there is some particular law that you think would be beneficial, lets discuss that.

John Connolly said...

Okay, there's now a lot on my plate. I'll do my best to get through it all, though I can basically promise you that I'll forget something along the line.

I think there are three big questions you bring up to me here:

1) What do I mean by 'freedom' as opposed to 'license'?

2) What so bad about capitalism that justifies something as radical as distributism?

3) Based on the answer of 2, what does distributism think it can do concretely to change the situation?

Both 1 and 2 need to be addressed before three even has a hope of being brought up. I think we need to discuss 1 and 2 first, and see if it's even necessary to talk about 3. In essence, I'll have to keep you (technically) on the defense for capitalism for a while longer, before you can really go on the attack on distributism.

First, by way of a parenthesis, I don't think my logic about the use of the term efficiency was circular, as my points were the differences between material efficiency (how efficiently the system works in terms of itself) and human efficiency (how efficiently it serves people). You see the quantitative efficiency as being one in the same as how an economy should serve the people. I don't. However, I have much ground to cover, and this is a small point of rhetorical definition, worthy of another post (I think I may address it soon on my own blog).

1) Freedom. *Sigh* A concept so slippery in today's age, especially in the post-September 11th world. Freedom isn't the ability to do whatever you want to do, without repercussions. This is the definition that liberals use when they say freedom. If that truly is freedom (the right of self-determination), then liberals are right: prisons, moral laws, and inhibitions are nothing more than a reduction of people's ability to enact their right of self-determination, and therefore are reductions in freedom. This "freedom" is what Catholics have traditionally called license. It removes restrictions to enable people to do whatever they want. It is not purely societal, but can be (and often is) individual. It's not just a moral situation in society (though it can be that), but is also a personal rejection of true freedom. Thus the term licentiousness, which means (in a strict sense) the wish to do whatever you want, moral or immoral, whether good or bad for you.

For the Catholic, freedom has always meant freedom in God. All the good things of freedom are dependent on your will being subordinated to Him. Natural Law, Moral Law and love of God are the keys to true freedom.

So I have made my distinction. These are how I use those terms. Within that framework, an action or policy is either conducive to freedom (which will be conducive to true peace and happiness) or license (which will create unrest, unhappiness, a loss of the sense of duty and sin, and a lack of moral, religious and emotional maturity).

I think you're falling into equivocation, because these terms get all mixed. License is something more than freedom, so it's freedom + X, where the X = some social rejection of the moral law. Freedom seems the freedom to choose between freedom or license... or maybe it's the reverse? Freedom of will means that human beings are self- determining, to a large extent. His actions are his own. But not both ends of the scale are equal. A man can damn himself, but only God can save him. To do anything evil, a man need look to himself alone and act. To do anything good, he must interact on some certain level with grace.

Freedom is found in choosing God, in using our free will properly. Our self-determination comes from God. License is an abuse of free will. We try to self-determine our ends and ourselves without reference to God or providence.

However, where the "free market" is concerned, the term freedom, even the term "economic freedom" seems to connote something much more similar to license. The whole purpose of economics, if I am to understand you rightly, is to provide as much means as possible to let people choose whatever they want whenever they want. It's the problem of libertarianism: an implicit faith in human nature. It's a convenient stance, I suppose. There can never be any faults with the system, only faults in human nature. But such a system can be faulted, just for that reason. Human nature is not complete and whole any longer. Since the fall, human beings are crippled. A system that would, for example, put a former cocaine addict in a crack house every day of his working career might well be defended, saying if the man went back to substance abuse it showed a failing in human nature. That would be true. But it would also be criminal on the part of those who put him there.

At the end of your last comment, you listed a number of rules and laws that govern the economy, and protect certain elements from extortion or being cheated. each one you mentioned (even the slavery ones) were forced on the economy from without, usually with large amounts of protest. The one you mentioned that that's probably not the case for is the contract law, which comes from Hobbes, through Locke.

Hang on, now. I know you're probably sharpening the ol' fisking blades about now. I'm not exactly comparing capitalism to a crack house. I'm pretty sure it's more like an opium den (:P), but that's going to be addressed in number 2. so without further ado, here it comes.

2) What's wrong with capitalism? In purely material terms, almost nothing. There are fewer poor people than there were 100 years ago, and I daresay than even 50 years ago. But to take from a comment you made over at The Distributist Review, there is a gradient aspect of a capitalist world. Not everybody can be rich. We almost need the poor people. But moving on.

In a spiritual sense, those attitudes I spoke of are dangerous, and the main problem with capitalist thought. The proof is in the pudding: capitalism leads to consumerism, just as socialism leads to governmental bankruptcy of various kinds. What capitalism does is this: instead of trying to correct failings of human nature, it uses them instead. Thus, the whole system is built supposing (and cultivating) consumerist policies. If all people only bought what they needed to live a good life, then GDP would be reduced. Certain psychological phenomena set in on a cultural level in most people (I have yet to find a good study on this, but I'm sure it would be quite interesting). For instance, what I like to call (having worked in retail) the BOGOH syndrome.

The BOGOH (buy one get one at half price) syndrome works, and works like this. Somebody walks into a store, intending to get an item. That's what the store is there for, be it large or small. A sale is enacted that gives a discount (not always half off, now it's usually a third off) on multiple purchases of the same thing. The person, not wanting to miss out on paying less to get more, buys more than they need of the item to get the deal. This is usually done outside of areas where buying a bit more might be legitimate (like groceries or diapers), but in some ridiculous areas, such as shoes, power tools, and video games.

The philosophy that more = better has permeated our society. The system has aided in making people gluttonous in many ways, because there's money to be made in gluttony. Yes, excess is a human fault. But why should the system aid in these human faults?

Next point: capitalism has divorced the ends of work in the workplace. Everything is seen as a struggle. The corporation tries to get as much as it can from the worker, and the worker tries to get as much as he can from the corporation. People don't work towards a common goal anymore, and they certainly don't work "together" in the classic sense.

Moving on: what started this whole comment thread. More faith in businesses than even in religion in general. This is why people are more willing to believe FoxNews sound-bites than their own senses. Blindness, deafness, and thoughtlessness are here, and like it or not, businesses do better that way. This system isn't helping matters. In fact, it's hindering. At what point does a corporation working off of capitalist theory draw the line for the sake of people's psychological and spiritual well-being? Short answer: it doesn't. Because in this world the material ends of man have trumped (no pun intended) the spiritual goods. So yes, men still have the choice to choose to not be the way most of them are. But the system will make them struggle little harder for it. To avoid gluttony, you have to be very careful about what you eat, as well as what you see and hear. Somebody cannot attain custody of the eyes to preserve purity, but must have that custody of the eyes before leaving home. In fact, they must now also have custody of the ears. They have to have these custodies even before they leave home. To avoid sloth, they have to sacrifice what is now viewed as the necessities of life. They have to be independent of the system.

To sum up: capitalism has become nothing more than one long exercise of trading a free society for a very comfortable prison. Consumerism and the couch-potato culture are hand in hand, helping each other to continue. The economic system should have no business (in both senses of the word) in cultivating vices. Yet that's what happens. Sex sells. And in the long run, these comfortable attitudes signify the quite literal meaning of that phrase: prostitution.

Now, you may very well say that these consumerist problems aren't true capitalism, and that it doesn't mean a problem in capitalism, but it just means we need a reform of it. At that point, our purposes would meet and jump in one. To quote myself from August 7:

[Distributism] should be a reform of capitalism, so that it doesn't have a self-contained point of reference.

This is what I mean. When capitalism is measured in terms of GDP and output, it doesn't really tell us what's going on for humanity, which is the whole point of economics. It gives us a number. It can tell us if there are people unemployed, what the average income is, how many factories are making how many chairs or ashtrays per year. But these things are all there for a purpose, and a human purpose. It's not just to generate wealth (though one of the basic elements is that). If it's just to generate wealth (a self-contained end), then any thing that generates wealth will be good, and anything that hinders it will be bad. But to look around, good and bad for wealth generation don't always equal good or bad for human beings. If we were to extol any industry that follows certain rules (the basic ones you put down at the end of your last post) and does as much as it can to generate wealth without reference to the human element, then we might settle on the pornography industry as a likely candidate. The fact that such an industry exists and is such a bulwark of enterprise doesn't have nothing to do with the system. Is it sinful? Yes. Is it a human sin? Yes. Does the system allow them leeway (in the name of freedom) to destroy the innocence of thousands of people?

Add to the attitude problems the reliance on debt as an institution, the corruptibility of high-ranking business officials (who often have nobody to answer to) and the influx of immigrants to support the economy, and things look dim. Add in the difficulty people have in owning and running a small business, and things look positively grim. These are all things that the market is balanced toward or away from. It gets in the way of certain important and legitimate human desires. It's nothing so paltry as mere "quality of goods" or "means of production". If I want to own and run my own business, I have to run it like a battering ram or it will fail, and I will fail with it. we have to run to "get ahead", and will inevitably run without rest until we die. Or we can rest in the disgusting pile that is the consumeristic haze. Either I can fail to fulfill a vocation to run a local business (or run it like a big national business) or I can allow my moral senses to be slowly taken away from me. Yay. What a choice.

It's no wonder so many people turn toward agrarianism in their fear. The proof is in that bitter, bitter pudding. But I'm not quite willing to throw out the baby with the bathwater yet. There is, after all, still a baby in there.

Those two choices I elaborated on just above aren't the only ones there. I can live a good Christian life without fleeing to the farms. It's just a tremendously spectacular tightrope act. In all truth, I'd make much better progress in a monastery, even if not called to be a monk. At least there, you can have respite from the constant barrage of filth that pours from every TV, radio, billboard, commercial, and newspaper. At least there, I'm not enticed toward an unconscious greed at all hours of the day and night. At least there, whatever work I do is for God as much as it's for survival, and all who work work together toward attaining the same purpose: holiness and communion with God.

Hold off, I'm almost done. Deep breath, and in I plunge:

3) Distributism advocates a subsidiaristic form of economics. The "means of production" that distributists are always harping on is already provided for in the legal system, won by the unions long ago. But it can focus on things that are needed to balance capitalism. Once again, I think I'm obliged to stress that distributists come in all shapes and kinds. But here's what I'd like to see happen.

a) National businesses and local businesses work together, and not for mutual destruction of the competition. This means that a national chain will serve the local level only when the local businesses cannot provide what the national chain can.

b) The reduction of corporate monopolies, such as Microsoft. These are bad for business, and everybody has an interest in preventing something like that (one corporation essentially owning an industry) from happening.

c) A return to objective value systems. I don't mean we should leave the law of supply and demand behind completely, but to use it as the sole determination for price at sale seems to put an edge to everything, and I get a sense that to follow that law only means that in times of dire need inflation occurs. Attached to this would be a return to a precious metals standard for our currency in an effort to protect an objective value for our exchange goods.

d) An overall reduction of the amount of debt people are obliged to undergo. While it keeps the banking industry healthy, I don't see how it aids any other industry. Debt of various kinds (from credit cards to mortgages) usually tends to act as a substitute for people owning their own capital. If people are really economically free (in the basic sense, of even being able to choose), they need to be able to own things. It's a difficult point to be able to say that you own all that you own when more than the the monetary value of all your possessions is owed to another entity.

So there you have it, more or less. I'm sure I've left much out, and much of this is in need of revision. I don't speak for distributists, just myself. And on that note, fisk away. I'm sure that the above observations need it, so as to more precisely focus my formulations.

Kevin said...

"First, by way of a parenthesis, I don't think my logic about the use of the term efficiency was circular, as my points were the differences between material efficiency (how efficiently the system works in terms of itself) and human efficiency (how efficiently it serves people)."

Look, you can't define efficiency as efficiency and call it a day. Both of these definitions you offer fail to answer the question, "what is efficiency?" Imagine if I didn't know what the word meant!

"You see the quantitative efficiency as being one in the same as how an economy should serve the people."

You'll have to show me where I said that because I don't know where this is coming from. I think efficiency is best measured by the total cost of delivering a product to the consumer, i.e. the price minus the profit portion. If it is costing more to produce whatever the product is, that is less efficient. If you think some things are more important than efficiency, fine, so do I. But that's no reason to start adding spiritual meanings to the word.

Kevin said...

"freedom has always meant freedom in God."

There you go again, saying the definition of X is X.

This is a bad habit that you have.

:)

Kevin said...

I'm STILL not done reading your latest comment, by I have to respond:

Capitalism was never intended to fix moral problems or tell anyone what is moral or what to do!

People don't become libertarians because they trust their neighbors. They become libertarians because they don't trust their mayor.

Kevin said...

John, I'm going to suggest that we are so far off topic that we should give Athanasius a break and stop making him moderate our general discussion on distributism. Most of the overall debate has taken place off of my blog, but I have in mind a series of small posts that you might be interested in responding to. I'll email you or something when I put that up. Meanwhile, this discussion is interfering with my work! Give me a couple days, and I'll get back to you one way or another.

John Connolly said...

That's true. I was already considering switching it over to my blog. I don't have comment moderation enabled (meaning we won't have to wait 24 hours before we can respond), and there are several people who read there that would be interested in sounding off on these things.

Take as much time as you need. These aren't little things. The questions involved tend to be quite hefty. The further this sort of conversation goes, the more general and broad the topic tends to get. It's the meeting of philosophies.

For now, I agree that we should allow this verbose thread to close.