Wednesday, February 27, 2008

"Island Hopping" to Distributism

by Athanasius

In the Second World War, the United States employed a tactic known in our history books as "Island hopping", to defeat the Japanese. Instead of merely throwing all of our military might indiscriminately, we took key Islands in order to create a path straight to the Japanese mainland.

Whenever large tasks are undertaken correctly, they are taken in this manner, by prioritizing and making gains step by step, even if the gains added up do not equal the over all objective, they may in fact lead to it.

Today however, the way men engage in accomplishing tasks suggests that they don't understand this philosophy. Likewise they look at step by step strategies as cumbersome rather than throwing weight at the problem. It would be as if they were to look down on General MacArthur and chide him for making his troops fight to the death with the Japanese over a mile wide strip of island.

The greatest example of that today is in the political process here in the United States. When men try to take on the institutionalized 2-party juggernaut of "Republicrat" and "Democan", they usually aim for the mainland without securing the island path by running presidential candidates who have no recognition and whose message is rarely heard.

"Island hopping" a third party into existence takes time and patience, perhaps as much as ten years to run candidates at a local level before acquiring state and later national recognition, by which one could compete with the big parties. At present any 3rd party candidate running for president will be boxed out every time because of the lack of support and recognition, like a military strike for the main target that goes astray for lack of support and back up.

This is also true when we consider Distributism. There can be no question of walking out with a referendum to establish a distributist society, nor of laws enacted to establish Distributism without the edifice of support first. Thus like MacArthur, we must identify a) The goal and b) the steps to get there.

A. The Distributist society is one in which private productive property is widespread but limited so that the availability of property will always be present.

According to Belloc not every man needs to own his own property, but only a sufficient number to mark the society with a character of ownership. As Chesterton said, if a man chooses not to own, that's his own business, but the opportunity that is not present today for the rest of society will be. Another way to put it, is that we are going to create more Capitalists than the elite over at Wall Street. Laws are in force to keep the large unit from destroying the small, or the small from becoming too large, and in this fashion protecting ownership by the many.

B. The steps to get there are suggested best and most orderly in Hilaire Belloc's book An Essay on the Restoration of Property. Yet these are by no means the only ways to do it, nor is it some be all and end all. Belloc proposed a process by which a restoration might take place in England in his day. He wrote specifically of England because "If it can be done in England, it could be done anywhere." The beautiful thing about Distributism is that it is not limited to what the founders believed or thought, but is eminently adaptable. Thus it is not called Chester-Bellocism, because while their ideas serve as a strong foundation, they are not a fixed and stagnated list of proposals. Even within Distributism, there were disagreements. Arthur Penty believed in government price setting (for most of his life) while Chesterton and Belloc thought it was a rotten idea.

The first step, without which Distributism could never flourish, is to create the desire in men for ownership. If men do not want to own there is little chance of re-establishing ownership. There are many ways in which this could be done, certainly apologetics and spreading more information about Distributism is a start. Before I read Chesterton and Belloc's works I scarcely would have aspired to owning my livelihood. However even that would not be sufficient to sway most men who have now become accustomed to living as proletarians. The first step is to make ownership a thing possible for men to consider it is to remove the blatant bias in our laws and financial system for large entities. We do not have to favor small units necessarily, just make it so a small business could succeed.

Here I mean in the way of government taxes, fees, and endless rounds of paperwork and tax forms, which are easily dealt with by large units with their legions of law firms, and their large bank book, but not by the small business which must pay the same fees as with a smaller budget. Let us say if the government was to remove all inspection fees (but not the inspections!) on small businesses which made less than $60,000 a year (that figure after of course expenses such as salaries and taxes, accounting of losses, etc.); or minimizing the taxes on such businesses. My own Father was self employed for many years, and made somewhere near that amount, but then had to pay half of it to the government between state and federal taxes and fees, even absurd things like "use" taxes for his equipment. When one thinks of 50 cents of every dollar he makes going to Washington, it is little wonder he must think twice about a business. For larger operations, not only does 15 cents of every dollar go for Social Security, but 7 1/2 cents of every dollar he pays his employees must go to the government, while they pay the other 7 1/2 cents.

Perhaps the biggest corruption and scandal of the 20th century is the government thievery we otherwise call "Social Security" which became a big blank check that increasingly demands more and pays less, and now can scarcely meet its obligations. A reform in this obscene and ridiculous theft by the government under the guise of retirement care which allowed small businesses to keep that 15 cents of each dollar would be a huge boon to ownership. This is even before we have considered the points of Belloc's essay.

The next step after the desire for ownership has been established is to make it more possible to own property, and that is by actively penalizing the purchase of small institutions by larger ones, penalize mergers, and leave no or a tiny fee for small entities acquiring property from larger ones. The large institution can always shoulder the cost, but the small one cannot, thus you remove that penalty. Thus if a man wants to own a mechanic shop, (and following the earlier suggested, the $60,000 which he must make before he can begin to make $1 of profit to pay for groceries and bills has dwindled to something more reasonable at this time, like $10,000) and a large national chain such as Jiffy Lube (known for its poor service) comes in and buys his shop, they receive a large tax for doing so, something like 60 or 70% of the sale. If a man on the other hand wanted to buy a failing Jiffy Lube (again known for its shoddy service as many thousands can attest who have paid for new air filters several times and yet have the same one!) and make it into a small mechanic business, he has no tax on the sale, or perhaps 5%, and receives fees proportionally smaller for inspection. This process can be applied to the small grocer, the self employed contractor, co-owned or employee owned stores, etc. And particularly small agriculture. Instead of subsidizing farmers, which hurts them in the long run and hurts farmers around the world at present, we should be removing taxes and fees on agricultural output which is under a certain amount and raise on those of an amount to constitute agribusiness.

Ultimately, the next step must deal with Usery, which the Catholic Church has always and everywhere condemned. Hilaire Belloc gives an excellent description of Usery, it is money charged for money, rather than money charged for a productive loan. If a bank loans money, and demands a payment of so much extra of the loan regardless of the use and production from that money, this is what the Church has always condemned. Yet, if money should be given, even by a bank, and a percentage of the profits earned (plus the money back) are demanded, then the Church has nothing to say because one is entitled to the profits his money earned, just as the one who borrows the money is entitled to the profits he earned with the money.

Yet Usery is the source of the power of modern banking institutions, and it is the agent that maintains capital in the hands of but a few. It allows capital to be hoarded by a bunch of investment firms in New York and Geneva, when the community is starving for the substance to even make ends meet. The substantial credit card debt of the majority of our nation should be sufficient to attest to that, and the frankly criminal FICO system which is used as a pretext of denying even jobs to men who have made even a few mistakes. In some places you can not even rent an apartment if you have a "credit score below so much".

This power has to be positively broken in order for ownership to be achieved. The best way is to outlaw usery and limit the amount demanded on loans to the positive profit from it. Whether or not this can even be done in our modern plutocracies which we misname "democracy" is something which remains to be seen. The chief power in our system is in the hands of banks. I personally would not be surprised to discover that all of our elections were rigged by the same, but that is positive conspiracy theory for which I have no evidence. I am not even sure if it is true, it is only a thought.

Next, unrestrained competition needs to be reigned in. This is what Pope Pius XI tells us in Quadragesimo Anno, is the "poison spring from which all evils flow." A larger unit should not have the power to ruin the smaller one by taking losses the small man can never take with the aim of ruining his livelihood and taking the market share at the expense of the small man's family. The truth is, we are not free to do with our property what we please. Thus the state, in the form of the local authority (we'll get to local power over central power next) needs to set laws curbing unjust competition.

Local currencies help local communities establish a local economy, and as such allow local reckoning for goods and abilities to pay through barter or through other means, and keep the power over currency away from banks. Thus they go along way toward curbing unjust competition by giving a local standard for which companies must operate. To do this in our country the Federal Reserve Act must be repealed, and the Federal Reserve must be completely destroyed. It is a corrupt institution which holds more power over our country than all three branches of Government combined.

Lastly, if all of this can be done, the focus has to be on a local, rather than national or heaven forbid "global" economy. Global trade should only be carried out for goods which can not be produced locally. For local economies we need local power restored and centralized authority minimized. This is because a community has the most control over its local authorities and the least control over its central authorities. If a mayor wants to use emminent domain to steal your house and give it to the rich, some protest of 10,000 men is sufficient to detour him, since ignoring the protest would be the end of his political life. Yet, when the Supreme Court says that the government can steal your house and give it to the rich, what can you do?

Thus for local communities you need local bodies, such as can train, take on apprentices, make loans for property out of the overall group possessions, etc. Co-ownership of large machinery and factories for example would be a positive good in that direction, overseen by local authorities. A community will be more outraged and take more action over someone losing his property to unjust competition than a central authority which is more or less accountable to no one. Yet all of this hinges on people wanting the property. As I have mentioned before in my writings, Distributism can not be established by a minority over a majority like Capitalism or Communism, it must be something which comes from society itself as it did at the end of the Roman Empire in the West.

All of these of course are ways that it could be done, not ways that it must be done. Distributism is capable of adapting to new needs and new ideas, it remains the same in as much as it makes its aim for widespread ownership of property.


John M. DeJak said...

Excellent and insightful post, Athanasius!

Jesse said...

You suggest that one of the obstacles to the restoration of property is that not enough people want it.  I think rather the opposite: great advantage working in Distributism’s favor is that people do want property; and the fact that people do want property is the main reason Distributism is preferable to Capitalism. 
Now of course when I say people want property, or in other words, that your average person would prefer to own his own business than to work in some one else’s, I say it with the understand that nevertheless people these days do not try to get property.  But I suggest that this results from certain structural difficulties not from a genuine lack of desire. 
The most obvious of these structural difficulties you have touched on: legal and tax disadvantages, inadequate of access to capital, and the ubiquitous debt most people owe the usurers – mortgages, car payments, credit cards, college payments and so on. In addition, debt and rent payments require a constant stream of income to avoid seizer of one’s belongings.  The rigidity of these payments often puts the cash flow burdens of a would-be businessman well beyond what he can manage.  And so our average guy makes the more conservative choice of a steady income. 

But there is also the social aspect.  Even if one has access to money, a business plan that will turn a profit (despite taxes, regulations, rent and debt payments) and enough cash on hand to cover he relevant cash-flow difficulties, there is still the obstacle of risk.  One must ask, “My business will easily remain solvent 18 months from now, but what about 3 or 4 years out if the economy takes a down turn?  Is this investment worth the risk – not only to my own future security but to my family’s?”  These days people are more inclined to answer this question in the negative.  This, i submit, is what you are really noticing when you say that not enough people want property.  But I think that if you look at it carefully you’ll find that this isn’t a matter to be solved by property apologetics; people are not being unreasonable or close minded by not taken on this risk. 
The reason people are less inclined to take on this sort of risk today is again a structure problem:  it is the deficiency of social capital.  People do not feel comfortable in there own community anymore.  They don’t know their neighbors, their local shop keeps, their banker, their local police officers and fire fighters.  People are in fewer social clubs.  They don’t participle in local government, town meetings and the like.  But most importantly, family structures have broken down.  Your brothers and sisters could live all over the country, your parents might be divorced and living in separate states, you don’t really know your extended family.  Why does any of this matter?  Because when you are comfortable in your community, when you know the people in it, when you have friends and family near by, you can absorb more risk and you feel safer taking more risk on.  You will have more support if things turn ugly.
You have already address the sorts of things that need to be done so as to remedy the material difficulties associated with getting property.  The social capital issue, however, is a funny one: it is a bit of the chicken and the egg, because small business builds social capital and requires it.  Chesterton pointed out that at a certain point the consolidation of property perpetuates further consolidation; but also at a certain point well distributed property perpetuates more distribution, making the Distributive system highly stable as in the middle ages.  The same is true with social capital: if we can build enough social capital in our community, our community will start building social capital for itself.
This is very much in line with your island hopping analogy (which I like a lot).  Here are 7 very small islands to start with:
1)      Community service:  get involved with a local charity, a soup kitchen, a food pantry, or Catholic Works chapter.  If there aren’t any of these, start one!
2)      Socialize with the town: Join the local men’s or women’s club, Knights of Columbus, Elks, Rotary Club, etc.  Or start a club of your own.
3)      Meet the Neighbors:  Invite them over for dinner from time to time.  Offer to care for his lawn or shovel out his driveway when you know he’s going away.  Bring food over if you know the family has been ill.
4)      Buy local:  join a community supported agriculture crop share, shop at the mom and pop stores and learn the owns’ names, join or start a food co-op to buy bulk food staples.
5)      Live Local:  live near where you work.  If you can’t afford to buy your own house, start a housing co-op with some friends.
6)      Go to Church:  Not only do Holy Mother Church and the life-giving Sacraments sustain us individually, but they are also the single most effective way to sustain our community.
7)      Encourage other to do these things!
My claim that people really do want property I’m afraid replaces one obstacle with a much large one: fixing our communities.  But sticking with the island hopping doctrine, at least we have an idea of how to start.

Instauratio Catholica said...

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John W. Heitzenrater II