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Distributism and the American political economy.

In light of the excellent recent posts on the question of political economy from Tony and Jeff, it may be well to review some of the observations and principles which form a wise basis for evaluating that tangled question.

Readers unfamiliar with our history should be aware: The pernicious dominance of the financial interest, and its plunge into fraud and usury, has been a frequent subject for conversation around here for many years. When a Distributist commenter pronounces thusly: “Mere financial property, apart from other things, makes its holders more beholden to [the] state than otherwise,” he may perhaps be surprised to discover little disagreement from us.

That situation, however, is not broadly descriptive of America, even after the financial crisis and rescue late in the previous decade.

How many there are in this country, or for that matter across much of what used to be called the West, who hold exclusively or primarily financial assets, eschewing land, machines, luxury items, etc., is unknown to me but it cannot be a very large number.

I'm willing to conjecture that generally speaking wealth in financial assets strongly correlates with wealth in physical possession of land and the means of production. But that should not lead us to neglect the many millions who are indeed the Distributist’s ideal of small property holders: They own, let us say, a house, two cars, an iMac, cellphone and several other devices; perhaps a small hobbyist's beer-brewing operation, or some rifles or shotguns for recreational shooting, or tents and camping equipment, or bicycles, kayaks, golf clubs; antique chess boards, a nice smoker or grill, a collection of Churchill first editions. I could go on.

America is still a middle class country, and a vibrant middle class is what both Distributism and free markets, rightly understood, aim to achieve

It is true that a want of understanding (and among some a conniving and studied ignorance) has made Americans complicit in usury. It is true that our usurers have much to answer for: they should repent and sin in this way no more. As with many other sins, usury once embraced is not so easily extirpated.

But so long as financial assets are created by a contractual agreement to associate in a business venture, either by means of share ownership or lending, they are not inherently disreputable. The mere size of the business, the investment, or the securities that stand for them, tells us little. Even lending at interest is permissible if the creditor’s claims cease with certain staked assets. At any level of actuarial complexity, these ventures and investments require lawyers, accountants, analysts, experts, traders. In a word, they require a sophisticated banking sector.

Again, the pooling of resources, by means of financial securities, is not an inherently disreputable enterprise.

We should aim to reduce the influence of usury over our financial industry. There are some reforms, mostly minor and targeted, that I think could help. Not massive overhauls and “comprehensive” legislation, but careful amelioration by calculated revisions of the law.

Investment banks should return to private partnerships. Some restoration of the old barrier between commercial banking and securities trading remains advisable. Bankruptcy laws should emphasize sounder collateral, while at the same time permitting for individuals the kind of “strategic default” on debt that firms undertake with regularity. The creditor gets the collateral, the borrower gets free of the debt burden. Voilà, non-usurious lending.

After the crisis, we passed the Dodd-Frank financial reform. Most of Dodd-Frank did not help, but rather made things worse. The Consumer Financial Protection Bureau is likely to result in far more mischief and mountebankery than it cures, not least because Congress foolishly untethered it from the normal appropriations process and thus disarmed its own supreme power of the purse.

In the end, the hue and cry against finance has far too often empowered socialists who just keep making everything worse. Many of the trends in prosecution of financial crimes have abetted the putrefaction of our legal system which is now evident to anyone with eyes to see.

I want usury curtailed, but frankly I'm reluctant to give our currently lawless prosecutors any more arbitrary power over us. The Supreme Court let stand a recent appeals court decision reproving prosecutors for their excessive zeal in expanding the already impossibly vague insider-trading doctrine. While it is galling that we so rarely see usurers hauled to the hoosegow, at this point I find it heartening when these adventurous prosecutors get rebuked by a court. Ubiquitous prosecutor misconduct may be a graver problem than usury, and the details financial prosecutions have clearly encouraged this misconduct.

All of which is a roundabout way to stating that I have little patience for vague anti-capitalist diatribes these days. Distributist ideals, while largely benign in and of themselves, yoke themselves far too often to insidious schemes.

In the end, widely distributed property and true economic liberty are more likely to arise and flourish under conditions of middle-class democratic capitalism, than under autocratic redistributionism or paternalistic technocracy.

Comments (132)

I saw a contention in the previous thread that the definition of "Distributism" is not even agreed upon in a meaningful way by its adherents. The implication was that it was a bigger fight over a definition than what exists for other "isms" such as Capitalism and Socialism.

What's your take on that? Based on some cursory Internet readings (haven't the time at the moment to read Chesteron and Belloc), Distributism seems to be very similar to Capitalism on a lot of policies, but I'm getting the impression that this take may be quite wrong.

"In the end, widely distributed property and true economic liberty are more likely to arise and flourish under conditions of middle-class democratic capitalism, than under autocratic redistributionism or paternalistic technocracy."

Yeah, except that modern capitalism is nowadays joined to paternalistic technocracy at the hip. Try separating Big Business from Big Government and maybe you'll have something. But you don't get there via more Big Business.

Note that the victory of SSM is directly related to corporate support of same, be it the direct pushing of the gay agenda by the arts and entertainment industry, or the less direct but still effective activity of the big gay-friendly corporations.

To put it simply, corporate America is not the conservatives' friend. Never has been, never will be. The victory of the 2% would not have been possible with the support of the 1%.


The mere size of the business, the investment, or the securities that stand for them, tells us little.

The point is not the size per se of the corporation but the anonymity it offers to the investors.

Real Ownership is a public reality--a stable and public relation between a person(s) and a thing.

Paul,
You wrote,
"..the many millions who are indeed the Distributist’s ideal of small property holders: They own, let us say, a house, two cars, an iMac, cellphone and several other devices; perhaps a small hobbyist's beer-brewing operation, or some rifles or shotguns for recreational shooting, or tents and camping equipment, or bicycles, kayaks, golf clubs; antique chess boards, a nice smoker or grill, a collection of Churchill first editions. I could go on."
If you are referring to the millions of people in usurious mortgages and other forms of debt held on non-productive property then: no, this is not the Distributist ideal. If you remove the people that have no form of usurious debt in the form of credit cards, equity loans, payment plans, etc., we have a much smaller group. If we then go on to the number with no usurious debt on cars, a much smaller number, again. And finally those home owners with no usurious mortgage (often because they have already spent 20-30 years in the grips of a usurious mortgage) then that number is much smaller - and still not close to the Distributist ideal.
Like another person here recently showed, you are pointing to a few anecdotes while discussing an economic system.

You wrote,
"...a vibrant middle class is what both Distributism and free markets, rightly understood, aim to achieve"
There is one major error and a minor error in this statement.
First, free markets do not have goals - they are an abstraction for the process by which prices are determined. In classical Capitalism/laissez-faire Capitalism the argument is that markets that are as free of government intervention as is practicable are more efficient at setting prices and, therefore, more efficient at matching supply to demand.
The history of economic theory and labor movements in the late 19th and early 20th Century was in reaction to the fact that the free markets of the era had already effectively erased a class of middle-income artisans and replaced them with low-income wage workers: the intervention of various governments and unions to *restrict* the market is what led to the emergence of a middle class in the mid-20th Century.
This requirement of intervention was predicted by Adam Smith.
The minor error is that while Distributism fully anticipates that its economic system will lead to few low-income people (what I think you would call a larger 'middle class') this is a secondary result of the primary goal of creating a moral, just economic system.

You wrote,
"But so long as financial assets are created by a contractual agreement to associate in a business venture, either by means of share ownership or lending, they are not inherently disreputable."
If you mean 'freely entering into a contract' *alone*, this is possibly trivially true. If taken at face value, it is almost certainly false (I do ask you to expand).
For example; investment in mortgaged-secured bonds is participation in usurious lending in that the issuance/purchase of such bonds both facilitates current usury and facilitates future usury. Likewise, investment in the vast majority of bands, credit card and other financial firms, etc. is at least indirect participation in sin because you both facilitate usury and anticipate the generation of profit from usury.
This is just the most obvious problem with this statement.

You wrote,
"Distributist ideals, while largely benign in and of themselves, yoke themselves far too often to insidious schemes."
Indeed! Just last week I encountered a Distributist who was in the process of founding a farmers cooperative (boo!); I know of another who has an ownership and profit-sharing system with his employees (quelle horreur!); and a Distributist I know personally encourages his friends to abandon banks for credit unions (the fiend!).

Paul,
You wrote,
"In the end, widely distributed property and true economic liberty are more likely to arise and flourish under conditions of middle-class democratic capitalism, than under autocratic redistributionism or paternalistic technocracy."
This would require a serious defense, but - what does any of this have to do with Distributism?

Mike, I've read quite a bit of the ChesterBelloc literature on distributism. I have a high opinion of both What's Wrong with the World and

An Outline of Sanity, which are regarded as Chesterton's most prominent tracts on the subject. I've also read Belloc's The Servile State with much profit.

In my judgment there is considerable overlap between these ideas and the praxis of middle-class American capitalism. Property is widely-distributed, even if the concentration at the top (above all in the finance sector) is very worrisome.

I take NM's point about same-sex marriage (along with other items on the social justice wish-list). The whole media, legal establishment, entertainment industry -- in a word the pillars of American liberalism -- all became curiously uninterested in the influence of corporate money on politics during the Indiana dispute back in the spring.

To put it simply, corporate America is not the conservatives' friend.

I have never claimed that it is. I'd be interested in whether NM can document even one example of one of our contributors making such an argument.

Real Ownership is a public reality--a stable and public relation between a person(s) and a thing.

Sure, that's why we call it private property . . . er, wait.

BI will have to elaborate his ideas on anonymity more thoroughly for me to be able to evaluate them. At this point, I'm disinclined to credit his claims. First of all, in the vast majority of cases equity or debt investments are not anonymous (even tightly-held private companies have capital structures that can be and are tested in public courts). Secondly, my own analysis of finance capitalism suggests that the eagerness with which private securities firms have converted themselves into massive publicly-traded conglomerates is part of the problem. More broadly, private firms tend to have more wherewithal to resist the obsession with quarterly results, ever-rising profits, etc, thereby preserving some capacity long-term thinking.

King Richard:

The evidence of wide distribution of private property in America is not merely anecdotal in nature. Nor does the presence of usury in finance vitiate the entire system. Most mortgages and other debt instruments could be reformed in order to eliminate usury by simply confining the creditor's claims to certain staked assets. I'm convinced that sagacious reforms could be accomplished without massive disruption. The basic trade-off would be higher interest rates to compensate for the conversion into non-recourse loans. Mortgages would be a bit more expensive; but borrowers could, if they chose, merely move out and mail the keys to the bank without any further consequences.

In other words, the problem is the usury, not the presence of sophisticated securities markets designed to facilitate the pooling of capital for business purposes.

The "insidious schemes" I had in mind not private ventures of the sort you describes, but welfare policies destructive of individual initiative; "land reform" legislation that beggars whole countries by undermining the security of property and empowering an elite class of reformers; "comprehensive" legislation of any sort that proposes to grant discretionary power of whole sectors of the economy to a similar elite class.

Paul,
You wrote,
"In other words, the problem is the usury..."
Indeed. That is a cornerstone of Distributist theory.
You continued,
"...not the presence of sophisticated securities markets designed to facilitate the pooling of capital for business purposes"
Perhaps: are the financial instruments predicated on, or promote, or facilitate, usury? Are they tied to a system that uses the fiction that collective structures designed to shield investors from risk are persons? Are they based upon, etc., non-productive earnings through the manipulation of non-ontologically real abstractions? Etc. there are many caveats to this statement!

You wrote,
"The "insidious schemes" I had in mind not private ventures of the sort you describes, but welfare policies destructive of individual initiative"
I assumed this; I have no idea what that has to do with Distributism, a system that explicitly rejects any form of "welfare state".
The same is true of the other bugaboos you mention - what have they to do with Distributism?

I feel that you did not actually reply to my points in many ways. You claim a large American middle class of property owners - I point out that the majority of them do not actually own property, they have a usurious contract concerning such property. I point out that the emergence of the middle class was through strong restraints on the market, you do not comment. We could go on to discuss how the repeal of market controls has led to a shrinking of the middle calss, the increase of usurious debt in general, etc. if you care to have an actual discussion.

I do find it fascinating how many times I encounter people who oppose Distributism (an attempt to build a moral, ethical economic system) based upon the belief that many people have plenty of things *now*.

As I think these threads make clear, the trouble with trying to argue with self-styled distributists is that the whole thing is like mist. It has no clear form, so its advocates can render it impossible to criticize. I often think that the only possible ground on which any actual dialogue could take place would be to say to the self-styled distributist, "Please list three extremely concrete policy proposals that you consider to be anti-capitalist, pro-distributist, and let's debate them." Destroying Wal-Mart, perhaps? Completely dismantling the corporate veil? Outlawing so-called factory farming? Changing the tax code for all food distribution corporations that operate in more than one state so that they are not permitted to deduct their gasoline costs as business expenses? It's only when we get down to brass tacks at that level that anything can really happen in conversation.

Lydia,
You wrote,
"Please list three extremely concrete policy proposals that you consider to be anti-capitalist, pro-distributist, and let's debate them."
There is a problem: Distributism is not 'anti-Capitalist' so no policy would necessarily be such.
As for concrete policy proposals, try;
1) All usurious loans are illegal
2) No unions can be mandatory
3) End the 'legal fiction' that corporations are individuals/persons within the law
4) corporations that are not worker-owned/cooperatives would face higher tax rates than their worker owned/cooperative peers
5) Simplification and restructuring of the contracting laws so that self-employed private contractors do not face an increased tax, reporting, and paperwork burden

That is simply off the top of my head.

You wrote,
"...the trouble with trying to argue with self-styled distributists is that the whole thing is like mist"
Well, except for the books, blogs, podcasts, and speeches, I suppose that might be what a casual observer might think.

King Richard:

I agree with (1) and (2), though I would add to the latter further reduction in the disastrous privileges afforded to public sector unions. I'm not even sure public-sector unions should exist; taxpayers don't even have a seat at the table when they "bargain" with politicians for new and better favors.

Number (3) I cannot agree with. Would your reform encompass all forms of corporate organization? Would pastors be personally on the hook when their churches encounter financial troubles? If an incorporated group blog were sued, you'd like to see the individual writers exposed to monetary penalties? Or would your reform target only business enterprises?

The one caveat here is that I do believe the financial sector would be healthier with i-banks confined to private partnerships. Let the rocket science trading commence, but without any public capital exposed.

Numbers (4) and (5) I would consider supporting such ideas as a part of a broader tax reform. The incentive structure of the business world could use some major reforms.

Depending on the definition of "usurious" (that's an issue on which we don't all agree around here), I'd be in agreement with #1. I'm in hearty agreement with #2. I'm utterly opposed to #3. I think it would be a disastrous idea. I'd have to have more info. before endorsing or opposing #4. Right now I don't think I know enough to know if it's a good idea or a bad idea. I don't understand #5. Increased tax and reporting burden vis a vis what? What they would have if they were employees? It seems impossible that the burden would not be somewhat greater. Indeed, some things designed to _help_ self-employed people create more paperwork--e.g., claiming a deduction for providing one's own health insurance as self-employed. Compared to what larger corporations have? (But do individual contractors have a bigger reporting burden than larger corporations, or do the latter just have it done in bulk?)

Paul,
You wrote,
"Number (3) I cannot agree with. Would your reform encompass all forms of corporate organization? "
Please note: I did not say to end the *risk mitigating nature* of corporations! I said 'do not treat them as 'legal persons''. I am referring to the interesting American legal concept that corporations have access tot he provisions of the 14th amendment to 'equal treatment', including access to some (but not all!) of the American Bill of Rights.
As for public sector unions- they should be impossible. The idea is self-contradictory and fraught with peril.

Lydia,
You wrote,
"Depending on the definition of "usurious" (that's an issue on which we don't all agree around here)..."
I find that interesting. The definition used in recent canon law (if omitted in the most recent) agreed with St. Thomas and with Cardinal Hostiensis - charging interest on a (contemporary term) 'full recourse' loan.

King Richard,

Thanks for stopping by and engaging this blog and Paul's post. I want to through my two cents in to object to one historical claim you made:

The history of economic theory and labor movements in the late 19th and early 20th Century was in reaction to the fact that the free markets of the era had already effectively erased a class of middle-income artisans and replaced them with low-income wage workers: the intervention of various governments and unions to *restrict* the market is what led to the emergence of a middle class in the mid-20th Century.

I agree that the left and the labor movement did react to folks working in factory conditions that weren't always the best -- but I disagree that these conditions were often a step down from some imaginary "middle-income artisan" employment they had before they went to work in the factory. Economic historians will tell you all the same thing -- American income has grown from the start at a remarkable pace (roughly 2% a year for the past two centuries -- see for example, Maddison, Angus. Phases of Capitalist Development. Oxford: Oxford University Press, 1982) The history of the labor movement and their success in the 20th century has more to do with politics (especially the politics around WWI) than the average workers' discontent with his lot in life. Unfortunately for your argument, capitalism as practiced in the United States has been very, very successful at increasing living standards and improving life for millions. I'm with Paul and generally applaud our success -- but like you recognize that some of it has come with a price and I'm open to reform proposals that can help people live more virtuously within an overall framework that best serves their economic needs.

Paul Cella,
Anonymity does not mean that the true owner is impossible to find out. It means that the true "owner" i.e. the multitude of investors-- is not acting as an owner. The investor feels no responsibility and exercises no function of the ownership. He merely gets financial reward. In short, he is an investor and not an owner. And thus the corporation is unowned-all there are--investors and managers.

Paul Cella,
Given your views on currency and printing of money by the Govt, your concern for free markets etc seems very ironical. Didn't Communist Manifesto demand State control of the credit and doesn't printing money amounts to total state control of credit?

In other words, where did Bush find 787 billion dollar to fund TARP?

BI:

Bush "found" the TARP money by the standard appropriations process of asking Congress to authorize it and then leaving the details of raising the capital to the Treasury Department. At the time, in September of 2008, since essentially every asset class on earth was losing value precipitously, there was very strong demand for new US bond issuance, which meant that Treasury had no trouble at all borrowing the capital.

King Richard:

What reforms of corporate law and governance would you like to see, specifically? For instance, do you disagree with the Citizens United ruling, or are you going further back to the Dartmouth College case?

The invisible hand of the free market has apparently lowered the thermostat in Hell.

"I have never claimed that it is. I'd be interested in whether NM can document even one example of one of our contributors making such an argument."

Paul, you and the others have not made that argument directly, but the ongoing defense of large-scale capitalism as non-problematic except in its particulars amounts to the same thing. In effect, you're saying, "Big business is great! Except when it isn't."

But my argument would be that when one starts adding up all these "particulars" you get the sense that perhaps the problem isn't so much with certain trees as it is with the whole forest, and it's the healthy trees that are the anomalies, not the diseased ones.

Jeffrey,
You wrote,
"I disagree that these conditions were often a step down from some imaginary "middle-income artisan" employment they had before they went to work in the factory."
The existence of a middle-income group of home-based artisans prior to the Industrial Revolution in Europe and North America is well-attested, as its its destruction by early Capitalism. The called variously the Domestic System, the Putting-Out System, or Cottage Industry. This transition from self-employed medium-income skilled workers who owned capital-generating property to low-wage unskilled factory workers who did not own capital generating property is actually one of the most important shifts of the Modern era. The loss of security and income was dramatic for the average person even as wealth for the nation increased, which led to things as various as the Swing Riots, the Grain Riots, the Paris Commune, the Luddites, and much more. I suggest Hobsbawm's The Machine Breakers as an introduction to this well-known transition.
The decline in actual income and security was so acute that according to MacMillian, Roger as well as Templeton and Eirich the average European citizen did not have as much access to nutrition as a peasant of 1790 until 1975 - ~200 years of less food, less land, less free time, and less purchasing power. And actual land ownership has still not returned to its previous levels among the middle and lower classes.

You wrote,
"Economic historians will tell you all the same thing -- American income has grown from the start at a remarkable pace (roughly 2% a year for the past two centuries"
This strikes me as being a non sequitur at best. Since you are focusing on America as we mention the 'middle class' let me point out that between about 1970 and about 2010 the American GDP grew - but the number of people within the middle class shrunk and the lower class grew. Currently not only has the decline of the middle class accelerated but both middle class income and overall median income in inflation adjusted dollars has declined. In short - just because GDP or even on-adjusted median income is increasing you cannot assume that this results in increased purchasing power or size of the middle class.
And, going back, the decline of actual wealth and purchasing power of the average person as well as the erasure of the majority of an existing rural middle-income class by early Capitalism is well-documented and certainly capable of coexisting alongside an increasing productivity, GDP, and even median income.

You wrote,
"The history of the labor movement and their success in the 20th century has more to do with politics (especially the politics around WWI) than the average workers' discontent with his lot in life."
Let us look at the first portion,
"The history of the labor movement and their success in the 20th century has more to do with politics (especially the politics around WWI)..."
I would like to see your arguments about the development of, say, the International Workingman's Association or the Paris Commune (in 1864 and 1871, respectively) have to do with WWI. Likewise, I would like to see your rationalization of the impact of WWI on the development of Labour parties in the late 19th Century and the first Labour government before 1900.
I also fail to see how the June Days Uprising of 1848 (or the February Revolution of that same year), etc. While I understand that you may be focusing rather tightly on America rather than the Labour Movement as a whole and I hate to be prejudicial before you have replied to argue that the development of trade unions and their impact on the markets, wages, etc. was somehow predicated by a conflict involving the grand and even great-grand children of the men involved is probably weak, at best. Especially since even in America the Labour movement had fair success in the 19th Century (including the Workingman's Party achieving enough political success to be instrumental in re-writing the constitution of the state of California in 1877)
Further, it has little to do with *my* contention, that a middle-class only grew out of Capitalism AFTER regulation of the markets was put in place, a practice opposite of classical Capitalist theory.
The second half of your statement was,
"...more to do with politics (especially the politics around WWI) than the average workers' discontent with his lot in life.""
This is almost completely unsupportable. From the Northumberland Rebellion of 1740 to the Keelman and Tinmen Riots of the 1820's; from the Swing Riots of 1830 to the Tolpuddle Mrtyrs; from Chartism to the Year of Revolutions; from the Great Railroad Strike of 1877 to the development of the Christian Democratic parties we have 250 years of people facing hunger, violence, exile, and death to complain about poor working conditions, low earnings, loss of capital goods, etc. all while the various groups differed widely from each other in political outlook.
Or do you believe that Rerum Novarum sprang from a vacuum? Or perhaps that His Holiness Leo XIII was influenced by WWI a generation before that conflict began and even before many of the principles were in power?

You wrote,
"Unfortunately for your argument, capitalism as practiced in the United States has been very, very successful at increasing living standards and improving life for millions."
During that period when the impact of the Labour movement placed strong restrictions on free markets such that a middle class could develop from modern Capitalists systems, yes, this was true *as I said* (meaning that it is not 'unfortunate for my argument', but part and parcel of what I wrote) but both prior to these restrictions and for the last 2 generations modern Capitalism has resulted in a *decrease* in actual wealth, earning power, and size of the middle-income segment of society (as is well attested by history and contemporary economic analysis).

So - it is apparent from history that Capitalism does not produce a middle class without serious intervention and even then the middle class may not survive more than a few generations. Capitalism is fueled by the sin of usury and much of the existing/surviving middle class is shackled with usurious debt rather than actual ownership of real property.

Your response appears to be yet another iteration of what I mentioned before,
"...many people have plenty of things *now*"
Yes - meager or no savings; huge volumes of usurious debt; declining actual wages; a collapsing average net worth; and all while the middle class is shrinking.

The greatest increase in human prosperity was in the aftermath of the Black Death; so many people died the ones who were left were much richer. I do not think that is an argument in favor of plague.

"...more to do with politics (especially the politics around WWI) than the average workers' discontent with his lot in life."

In addition to what KR wrote, this also fails to take into consideration the Populist Revolt of the 1870s and 1880s in the U.S.

NM,
As may be evident, I removed a great many references from that comment before posting it. There is a great deal of ground to cover in the 250+ years of popular opposition to Capitalism (longer than the USA has existed) without even mentioning the origins of the Industrial Revolution or issues with theory.

KR -- Right. My point was that even if Jeff S. was thinking primarily of U.S. history, he overlooked the Populist Revolt.

But my argument would be that when one starts adding up all these "particulars" you get the sense that perhaps the problem isn't so much with certain trees as it is with the whole forest, and it's the healthy trees that are the anomalies, not the diseased ones.

The main issue with big business is that you have institutions that not only know how to play politics, but are positioned to use their massive scale to turn regulations and taxes into barriers that they can overcome while smaller competitors find them burdensome. At scale, businesses can engage in extraneous nonsense like having whole groups devoted to "social responsibility" and other entry points for SJWs because those parasites are just a drop in the bucket in terms of expense. There's also just that much more fat to be eaten in most big businesses than smaller enterprises; just compare the ability of Google to do R&D on "cool stuff" to the overall R&D capabilities of a firm 1% its size. They can research stuff that has absolutely no relevance to their immediate business and have no impact on R&D (which is itself a cost of doing business in all businesses)

In cases where high ranking officers take the company down a liberal route like gay marriage, it's not the business itself that is at fault, but the leadership. Our elites in general tend to be corrupt in those ways. Blaming Capitalism for that is just not going to get you anywhere useful. "Microsoft" didn't decide one day to pursue SSM aggressively; its General Counsel, Brad Smith, decided to make that one of his top priorities and no one stopped him. If we are to focus on the legal fiction of corporations, then it's incumbent upon us to name names and condemn accordingly.

"Blaming Capitalism for that is just not going to get you anywhere useful."

Not sure if I'd call it blame, but I think the argument can be made that the tendency towards such abuses is in the DNA of large scale capitalism itself, not just in specific businesses/corporations.

I never said it was specific to any business. I said that the problem is that we have a corrupt ruling class, and that ruling class includes the heads of big business and other large institutions. It doesn't matter what economic "ism" informs the elites when their values are corrupted. If they suddenly embraced Distributism, they'd still be espousing SSM in that context. What we need is a reformation of social values, and that is orthogonal in many respects to the economic "ism" that is formally accepted.

King Richard,

Thanks for your response -- I can always count on a respectful debate with you.

As for the particulars, let's get one big idea out of the way quickly -- yes, I was referring specifically to union membership in the United States which was around 6-7% of the labor force up until 1917. In 1914 one of the most important pieces of pro-labor legislation passed, the Clayton Act, which exempt unions from the Sherman Anti-Trust Act. This helped them organize and coupled with WWI increased membership dramatically. Historian William E. Leuchtenburg*, for instance, points out, "The panoply of procedures developed by the War Labor Board and the War Labor Policies Board provided the basis in later years for a series of enactments culminating in the Wagner National Labor Relations Act of 1935." Under pressure of World War I and the government's interventions, union membership skyrocketed, hitting 12% of the labor force by the end of the war.

*Wm. E. Leuchtenburg, "The New Deal and the Analogue of War," in John Braeman, Robert H. Bremmer, and Everett Walters, eds., Change and Continuity in Twentieth Century in America, (Columbus OH: Ohio State University Press, 1964), p. 87.

As for the rest, when it comes specifically to America, we'll have to continue to agree to disagree. You don't really address the historic data on American income growth except to point to more recent numbers which I would contest anyway. I'll ignore the socialist crank Hobsbawm. As for your other authors, I'll take a look but I've read quite a bit on the growth of the middle-class in England and the bad arguments that various socialists have made against the end of enclosures, the growth of factories, etc. so I remain skeptical.

He may be a bit crazy (well, a lot crazy) but as an economic historian, McCloskey has written a lot to demonstrate how middle-class incomes grew in Britain in parallel with the rise of the industrial revolution. Greg Clark has also written convincingly on the topic, so we have dueling authors at best.

Did some people lose out in the process of change and growth? Of course! Were working conditions always wonderful? Of course not, which is often why workers were protesting -- and right to protest. But the alternate is true as well. Working conditions on rural farms weren't idyllic all the time either -- nor were they perfect for the small-time artisan. The question remains what economic system can best produce goods and services for people's real human needs -- there we just disagree about modern capitalism and its benefits.

True, but this doesn't mean you can discount the nature of the 'ism' altogether. Not all 'isms' are created equal. I believe that at the root of capitalism lies an incorrect understanding of the nature of human freedom. An 'ism' which didn't have that flaw would not encourage/discourage the same values.

In light of this, I think that question can be asked if capitalism itself has not in fact contributed to the corruption of the elites. One would think that a system which glorifies acquisitiveness and turns avarice into "self-interest" might very well result in decadence in other regards. These things aren't hermetically sealed off from one another.

An 'ism' which didn't have that flaw would not encourage/discourage the same values.

All isms suffer from the same core problem: they are an attempt by people with finite understanding to address potentially unbounded problems. Distributism would prove to have its own vices once made the formal economic ideology. We might not even recognize them in advance.

In light of this, I think that question can be asked if capitalism itself has not in fact contributed to the corruption of the elites. One would think that a system which glorifies acquisitiveness and turns avarice into "self-interest" might very well result in decadence in other regards. These things aren't hermetically sealed off from one another.

It can help influence people in other directions, but at some point you have to conclude that human sinfulness itself is the problem. I don't know that Brad Smith is greedy or lustful, but I do know that he holds views on SSM and a level of power at Microsoft that made him well-positioned to push that on the entire company and its home state. At some point, you have to concede that the problem is bigger than just pointing at "Capitalism" and may be rot in modern civilization at a deeper level.

"at some point you have to conclude that human sinfulness itself is the problem."

That's not a conclusion, that's a given. But that alone is not of much help in evaluating the respective systems.

Jeffrey,
You wrote,
"The question remains what economic system can best produce goods and services for people's real human needs"
Actually, it isn't.
As His Holiness Leo XIII wrote,
"...it is more easy to understand that the true worth and nobility of man lie in his moral qualities, that is, in virtue; that virtue is, moreover, the common inheritance of men, equally within the reach of high and low, rich and poor; and that virtue, and virtue alone, wherever found, will be followed by the rewards of everlasting happiness."
The GOAL is an economic system that is sufficient to meet the needs of Man while being moral and ethical. Is laissez-faire Capitalism much more efficient at setting prices, allowing the flow of capital through lending, etc?
Yes. It is.
But unfortunately it does so at the cost of increasing wealth and power into fewer and fewer hands until the State is captured by 'apex Capitalists' or until worker resentment leads to resistance and (very often) violence that tempers Capitalism to some extent for a time which leads to a cyclical pattern of the average person gaining or losing relative wealth all while the entire system is under girded by the mortal sin of usury!
Let me repeat a point I made before - the 'most successful' increase in human prosperity was the Black Death: the fact that it was unmatched in its ability to meet the physical needs of the surviving people of Europe is NOT an endorsement of pandemics. The fact that modern Capitalism has marginal advantages in efficiency over other systems is not a ringing endorsement when the price in in a very real way the mortal souls of millions of human beings.
Let me repeat that: we know, for a fact, that usury is a sin. Advocating a system that promotes, even requires, usury is to participate in sin. Even those people engaged in usury protected by ignorance are still in an habitual state of venial sin. To defend this with
'...yeah, well, but GDP has been growing for decades and some people *do*, eventually, pay off those usurious mortgages' is disingenuous, at best.
In addition to my temporal duties I am also a theologian (I can provide proof of a mandatum, if you like, as well as contacts for my spiritual advisor and the bishop who was my advisor at the time - I offer because this is the internet) and I do not anticipate that at the Final Judgment that I will be asked how efficient a system of economic activity I preferred. As a head of state (it is not an internet name) I do not value growth of GDP over the welfare of citizens.

No. The real question, the question you need to discuss with your fellow man, is this,
"Is living in and participating with a sinful, exploitative economic system that states specifically that virtue has no place if it erodes efficiency acceptable if it produces iPods that are 5% less expensive than if they were produced in a workers co-op?"
or, more briefly,
"How much is my soul worth?"

Looked at that way a loss of 1% of growth per annum is rather cheap, isn't it? The idea that it might take you more time and effort to purchase a house isn't so daunting when you think of it in those terms, is it? The realization in your gut that the people who organized and created the mortgage crises had devoted their lives to amassing wealth through the continual practice of sin makes it much easier to emotionally grasp just how base and venal they were as they collected billions in tax dollars afterwards, doesn't it?

I think the part of the discussion here and in the previous thread that I think of most while I am away is how matter-of-fact and ho-hum many of you are about usury and its central role in Capitalism as you defend Capitalism;
'yes, Capitalism is usurious and we would like to reform that, but Capitalism generates so much wealth'
'Usury is a sin, but we aren't sure of the definition, even as we discuss and defend a system that depends upon it'
Now, those are both loose paraphrases, but I hope you see my point. As someone who rarely comes here this strikes me as a great deal of
'yes, it is obviously sinful, but...'

And the resistance to Distributism is more interesting when you are familiar with the actual practice of Distributism in the contemporary world! Mondragon Corporation is built upon Distributist principles and operate under the same as a federation of worker cooperatives and it competes with Capitalist business extremely well. In 2014 it earned 12 billion euros and employed almost 75,000 people all while providing higher than averages wages if lower than average returns to shareholders. Of course,, since the shareeholders ARE the employees, this seems to be acceptable.
The biggest challenge to Mondragon was over the last 5 years when it had 2 subsidies move away from Distributist principles and have fewer worker-owners, take on usurious loans to grown more rapidly, etc. Both lost money and one failed, causing the leadership to return to Distributist ideas.
So here is a question for you. If I told you the Distributive alternative to contemporary American Capitalism was a system where your place of employment included education (from technical to university to R&D), financial (so that your loans for homes and cars and such were non-usurious), security (so that insurance, pensions, etc. were internal and funded internally *and fully funded*) and that wages were above the average outside the system and included an equity stake in the company at the cost of a loss of between 1%-3% of shareholder dividends, what would your complaints be?
Now, remember, since you are an equity holder that means the secondary benefits (insurance, pensions) are 'portable' either through continuing to participate via payments if you leave (to be self-employed, for example) or by transferring equity to a new employer, or simply 'cashing out' when you leave.

NM,
I would argue that there are two more (technical) errors at the heart of Capitalism (which are similar to those made by Communism)
1) that a certain type of human interaction, commerce, is somehow separate from other forms of human interaction and also thereby outside of moral law
2) that the goal of commerce to is produce material goods as efficiently as possible for the goal of generating profit
I think that these two things are in addition to the error that"freedom" is somehow a higher good [and also reinforce that error]

King,

You have reminded me of Mondragon -- a good Catholic friend here in the Chicagoland area, who considers himself a Distributist, has talked to me about them and spoken favorably about the model. Based on how you describe their system, they sound fantastic.

Look, I know your hobbyhorse seems to be usury -- we here at this blog are sympathetic to your concerns. I myself have a different hobbyhorse -- immigration, and I argue with the same laissez-faire types who make the argument that more immigration will lead to greater overall GDP growth. My answer is always at what cost, especially to the working man and those on the lower-end of the socio-economic ladder? So I appreciate the idea that productivity and growth and not always the measuring stick we use to analyze public policy or the common good.

To bring this back to Paul's OP -- I'm with him in believing that even if we enacted usury reforms tomorrow, Americans and the American capitalist system will do very well for the middle-class; entrepreneurship is respected and admired and flourishes here in America (as does the ability to own property and invest wealth.) This has real-life, important consequences for working people and the middle-class -- we don't live in an economy that is all smoke and mirrors.

In light of this, I think that question can be asked if capitalism itself has not in fact contributed to the corruption of the elites.

I think not only can the question be asked but answered: Yes.

Capitalism itself has corrupted men, not just elites, but poor, bourgeois, blue-collar, middle class and otherwise.

Whether monarchy or feudalism ever corrupted men I leave to be answered by any man who has seen Braveheart. The Book of Revelation seems curiously ill-disposed to credit the imperial system as incapable of corruption. If you want a picture of the biggest meanest corruption into a pure corporate slave-wage system, reflect on the state-socialist enterprises of Russia and Eastern Europe in the prior century.

K. Richard:

I'll leave you and Jeff to your fascinating reading lists and dueling scholars, and add only these points:

This statement -- "the 'most successful' increase in human prosperity was the Black Death," has probably been ignored out of propriety or politeness, because it's facially idiotic, and frankly embarrassing.

All of what we call capital is in the end the fruit of human creativity. Deer do not store up capital in grain, nor bears in dear meat. You'll never see at squirrel setting up a derivative exchange for Georgia acorn futures.

The massive reduction in human minds and spirits and hands and hearts, by the scourge of disease or epidemic, is only "prosperous" if you have drunk deeply at the well of nihilism and materialism. It's like the morbid delusion of population control and forgets that we all have immortal souls.

(I'll throw out a scholar and recommend E. P. Thompson's The Making of the English Working Class: a superb work on political economy. His sympathy for the people describes, most of them unhip Christians with fragmentary learning, shines all the brighter for Thompson's own crankish Marxism. Still, even if we take his picture for gospel, it still does not justify what the Jacobins and their later admirers set up to counter capitalism and bourgeois democracy.)

"The massive reduction in human minds and spirits and hands and hearts, by the scourge of disease or epidemic, is only "prosperous" if you have drunk deeply at the well of nihilism and materialism. It's like the morbid delusion of population control and forgets that we all have immortal souls."

Indeed, but so many have. I am very glad to have an economics professor right now who acknowledges the importance and reality of political economy.

To continue, I want to address your argument Jeffrey S.
"Did some people lose out in the process of change and growth? Of course! Were working conditions always wonderful? Of course not, which is often why workers were protesting -- and right to protest. But the alternate is true as well. Working conditions on rural farms weren't idyllic all the time either -- nor were they perfect for the small-time artisan. The question remains what economic system can best produce goods and services for people's real human needs -- there we just disagree about modern capitalism and its benefits."

I will not disagree, but I believe that we need to include the extent to which the form of the labor itself channels human practices. Namely, family farming requires the family. Individualistic capitalism (much like communism and the welfare state) does not, and that opens up room for social problems.

"Capitalism itself has corrupted men, not just elites, but poor, bourgeois, blue-collar, middle class and otherwise. Whether monarchy or feudalism ever corrupted men..."

That's not really the question though, for in a certain sense all merely human endeavors are corrupting. But as KR points out, capitalism is at root based on several errors that would seem to make it morally suspect by nature in a way that feudalism and monarchy are not.


Jeffrey,
Actually, my twin hobby horses are virtue and authority, but if you discuss contemporary economics you must either address usury (when discussing Capitalism) or justice (when discussing Communism or Socialism).
I fear that we might be talking past each other once more: yes, Americans like to own things, but do they really when it was purchased with a credit card? And, once again, I feel as if I am saying,
"Contemporary America is mired in usury, which is a sin"
and the reply is,
"But America is rich"
---
+JMJ+
"And when he was gone forth into the way, a certain man running up and kneeling before him, asked him, Good Master, what shall I do that I may receive life everlasting? And Jesus said to him, Why callest thou me good? None is good but one, that is God. Thou knowest the commandments: Do not commit adultery, do not kill, do not steal, bear not false witness, do no fraud, honour thy father and mother. But he answering, said to him: Master, all these things I have observed from my youth. And Jesus looking on him, loved him, and said to him: One thing is wanting unto thee: go, sell whatsoever thou hast, and give to the poor, and thou shalt have treasure in heaven; and come, follow me. Who being struck sad at that saying, went away sorrowful: for he had great possessions. And Jesus looking round about, saith to his disciples: How hardly shall they that have riches, enter into the kingdom of God! And the disciples were astonished at his words. But Jesus again answering, saith to them: Children, how hard is it for them that trust in riches, to enter into the kingdom of God? It is easier for a camel to pass through the eye of a needle, than for a rich man to enter into the kingdom of God."
---
Let us speak of virtue together.

Anonymouse,
You wrote,
"This statement -- "the 'most successful' increase in human prosperity was the Black Death," has probably been ignored out of propriety or politeness, because it's facially idiotic, and frankly embarrassing."
Your concern for my dignity is charitable.
It is actually a point made by the scholar James Burke in his book The Day the Universe Changed as not just a discussion of changes in labor after a natural disaster but also to illustrate the difference between 'having more material goods, being able to demand more wages, and having more political power' versus 'a good thing'.
In actuality, half of the working population of Europe died and the survivors were, indeed, much wealthier, able to demand higher wages and political concessions, etc. Unless you can think of any other event, process, etc. that doubled average wealth of a continent in a decade, I think it is not "facially idiotic" so much as "an unusual fact to make a rhetorical point".

You also wrote,
"The massive reduction in human minds and spirits and hands and hearts, by the scourge of disease or epidemic, is only "prosperous" if you have drunk deeply at the well of nihilism and materialism. It's like the morbid delusion of population control and forgets that we all have immortal souls."
I not only concur, but this was a large element of the point I was attempting to get across: what does it matter to us as men if the GDP rises an average of X% if it is fueled by purposeful despair, usury, and other mass exploitation of workers? Yes, the survivors of the Black Death were more prosperous - but the Black Death was a horror that *anyone* who is not mad would prevent! Yes, under Capitalism there may be marginal gains in certain marketplace inefficiencies, but how can that justify sin?

I am sorry if the point was obscure, appeared flippant, or otherwise offended you.

That's not a conclusion, that's a given. But that alone is not of much help in evaluating the respective systems.

It is not just a given, it's a boundary for judging effect. If you go from greed can beget lust to greed can beget lust which begets all sorts of vile desires, you are running into a point where the question becomes one of how can the system be that corrupting and even survive? Take many elite liberals, for instance. They may be greedy, but you don't see them carousing and hooking up with women and getting caught with prostitutes. If anything, they often have a superficial appearance of temperance and forbearance in how they conduct themselves and their appetites (they may not be truly virtuous, but they are not beholden to vice in a deep way).

This is why I find that the question of Capitalism versus other isms may be the wrong question, as the real question may be whether or not modern society itself is built on incorrect values. Those values, such as egalitarianism more readily explain how corporate elites who are not obviously given over to great greed and lust can support a radical gay agenda.

King Richard,

I posted this in response to a comment that Jeff made in the previous thread. I'm only bringing it up here in the event that you did not see it and to honor Paul's request viz a viz our past issues. Please take it with sincerity, upon reflection on what Jeff said I realized that he was quite correct.

K. Richard:

It can only be, at best, a trick of dubious statistics which presents to us the idea that nations are made more prosperous by the loss of skills, experience, potential, knowledge, etc., that comes with a devastating epidemic. It amazes me that you're still pushing this point. I suppose some manipulation of statistics could show, somehow, that survivors in Liberia and Sierra Leone are better off in 2015 after suffering thousands dead to Ebola in 2014; but sane people reject that kind of nonsense.

So I stand by my conclusion that the statement that "the 'most successful' increase in human prosperity was the Black Death" is facially idiotic.

I think King Richard has a good point. The Black Death broke the back of serfdom in the West and laid the foundation for workers' independence from the aristocracy. It's also worth noting that most of the people that were killed had very little education as we would reckon it, so it was not remotely analogous to a modern industrial state losing 50% of its population.

Look, to actually propose that mass death achieves prosperity is truly nihilistic.

Even on basic economic terms, with respect to an awful plague, this is a dream of despair. Maybe countries should seriously consider infecting some poor people with diseases in order to gain great wealth in common. Small pox as economic stimulus.

To pay little attention to what is lost, by exclusive calculation of what remains, in order to emphasize the gains of the survivors, and make those gains the ground of a statistical improvement in national wealth, is base ignorance. C'mon. Y'all are not this foolish.

Paul Cella,

Bush "found" the TARP money by the standard appropriations process of asking Congress to authorize it and then leaving the details of raising the capital to the Treasury Department.... Treasury had no trouble at all borrowing the capital.

I am aware that certain legal forms were complied with. The question is whether free markets and private property play any role?

The very definition of private property in economic theory is vague. Are nations owned by their Govts, or their citizens?. Does a king own his kingdom?

How does an unowned thing becomes owned?. If I walk on an unowned land, do I not get to own it? If I just look upon it?

Tony talks about a hunter that kills a deer in the wild. Suppose, a girl first tames a wild deer. She certainly mixed her labor into the deer. Does she not get to own that deer?

This is apart from the definition used by 19c writers such as John Ruskin in Unto the Last--private property is the claim an individual makes upon the nation. And thus, if some people become too rich, the others are impoverished in the same degree. Thus, inequality is a social evil and must be countered. Does the Catholic Church say the same?

Look, to actually propose that mass death achieves prosperity is truly nihilistic.

I don't see how, if you limit it to a particular case such as this. If the plague broke serfdom and limited feudalism enough to plant the seeds for Capitalism in the West, then it certainly did lay the foundation for mass prosperity. It's not that mass death caused by pestilence ordinarily leads to that, but that in this instance it broke a system that retarded the ability of the masses to actually build with what they had.

To put it another way, if aliens landed in the 1930s and slaughtered the entire ruling class and security services of the USSR, leading to Communism finding an early grave, one might credit alien-backed slaughters in that particular instance with restoring freedom and prosperity to the USSR's member states while not ordinarily wanting it.

Paul,
And to me the statement that you make,
"...the idea that nations are made more prosperous by the loss of skills, experience, potential, knowledge, etc. [is foolish..."
is very refreshing to hear! Because I agree.
The problem, the *real* problem, with Capitalism is actually the same as the real problem with Communism.
Materialism.
Can a nation that loses 33%+ of its people REALLY be 'richer' just because the survivors have a lot more stuff?
No.
Can a nation that uses usury on a vast scale REALLY be 'richer' just because its citizens have more stuff?
No.
The parallel I am drawing is between the tragedies, not the material things. As I said when bringing up this example the first two times, saying 'but people have more stuff' alone is NOT an endorsement of an economic system OR you will be forced to see the Black Death in a positive light.
I see the Black Death as one of the greatest tragedies in human history. I am glad to see you do, too.

You wrote,
"It can only be, at best, a trick of dubious statistics which presents to us the idea that nations are made more prosperous by the loss of skills, experience, potential, knowledge, etc., that comes with a devastating epidemic."
That was the point I was making, yes.
What do you think of the idea of nations being made 'more prosperous' by the loss of temperance, virtue, prudence, and charity that comes with the sins of usury, envy, and avarice?

Mike,
Please allow me to use a scenario I discuss with beginning students of ethics.
Next week Martians land. Wonderfully advanced creatures, they refuse to reveal much about themselves but they do make an offer: a teleportation system of incredible sophistication.
The Martian teleporter can be deployed worldwide in mere weeks. It requires so little energy to operate that a single solar panel and windmill combination can keep hundreds of stations fully powered. It can move people between any two stations instantaneously and there is absolutely no risk of death, injury, or mistravel. A person can carry up to 100 kg with them, too, so the teleporters can easily and instantly replace all cars, buses, etc. for all of the worlds commuters, travellers, etc. Indeed, as long as a conscious person is with the system (the teleporters requires a self-aware creature be teleported to teleport non-living matter with them) the system can even transport the equivalent of a shipping container, allowing semi trucks and container ships to be replaced.
The instant economic benefits are patently obvious: instant, effectively free transportation will expand shipping alone in unimaginable ways. The price of oil will drop, and reduced energy costs help the poor more while still expanding business profits. And the hideous death toll of traffic accidents will vanish overnight/ The system will even allow users to screen for explosives and weapons so you can really make it so a person cannot take a gun into a school or a bomb into a mall!
The Martian Teleporter will save over a million people a year!
(the total traffic fatalities in 2010 were about 1.24 million)
But the Martians explain that there is a price to be paid - the lottery.
Every conscious being that uses the system, human or martian, has their identity placed into a lottery. At the end of the year 100 names entered into the lottery will be picked and those people will be teleported to the Martian's ship for their annual festival where they will be electrocuted to placate their cultural norms. Vast increases in wealth and saving 1 million+ people in return for the murder of 100!
It is ethical to accept the Martian Teleporter?
.
.
.
.
.
Of course it isn't.
You cannot separate ends from means (nor can you separate motive, when you can know them) during the evaluation of morals and ethics. Deaths by traffic accidents are *accidental*; there is no motive, malice, or even moral decision involved (I am generalizing; those few manslaughters are actually part of my point). Letting Martians use a lottery to kill innocents for the financial gain of the majority is immoral in the same way that killing someone so that 3 others can be saved by organ transplants is immoral.
.
What is the most common justification for the use of artificial birth control?
'If you use it you will be more prosperous'
What is the justification most used for forced abortion and sterilization in China and India?
'This is necessary for our nation/this family to prosper and grow rich'
Go to the various web pages, see how often they words "population control" are accompanied by an argument about 'ending poverty'.
Materialism and mortal sin do seem to travel in a group, don't they?
.
Paul, Mike: my statement 'The Black Death was the greatest increase in human prosperity' is meant to be ridiculous *in order to* point out the ridiculousness of measuring human life by materialism alone, or even in combination with things like 'bargaining power', and draw your attention to the ridiculousness of saying, in effect,
'well, sure, Capitalism is riddled with exploitation, instability, and mortal sin, but boy! The GDP sure has been growing, hasn't it?!'
isn't that just
'if you use it you will be more prosperous'
and
'this is necessary for our nation/this family to prosper and grow rich'
?
Because as a theologian, ethicist, etc. I can't really tell any difference.

Thus, inequality is a social evil and must be countered.

Inequality cannot be intrinsically evil because that would make industriousness into a vice and one on par with sloth. Inequality is natural to the human condition because God did not evenly distribute capability and opportunity among humanity. If The Bell Curve's arguments are true, then entire populations of mankind received less (on average) than others. Is it evil that Ashkenazim have the highest average IQ of any group in the world? It certainly explains why they are the wealthiest; an average of a 110 IQ gives them an inherent advantage over a group with 100 or less.

You cannot separate ends from means (nor can you separate motive, when you can know them) during the evaluation of morals and ethics. Deaths by traffic accidents are *accidental*; there is no motive, malice, or even moral decision involved (I am generalizing; those few manslaughters are actually part of my point).

There's another category: accidents caused by negligence. It is my understanding that the Jews used to prosecute negligent homicide as a form of murder because they felt that a moral man would avoid negligence and thus negligence often resulted from sinful lack of concern for the safety of others.

well, sure, Capitalism is riddled with exploitation, instability, and mortal sin, but boy! The GDP sure has been growing, hasn't it?!'

Capitalism certainly does have its problems, but every human economic system has had them. It is easy to single out Capitalism and attack it because it's the most successful economic system humanity has ever produced. Feudalism was very exploitative and unstable. I would call the difference between serfdom and slavery a rationalization. Communism, Socialism and Fascism likewise suffer from all of the sins of Capitalism, plus their own, with nothing to recommend them in counter-balancing good.

I am open to the argument that Capitalism is susceptible to usury, but not that usury is intrinsically part of the system. There's always been a temptation to usury in any system of government. For example, I bet you'd even find some usurious aspects to the contracts between farm workers and the Soviet state because the state obliged them to produce and sell at artificially low prices to the state.

I don't know that my mortgage contract is usurious because I can't remember to what extent my bank has recourse to assets in the event I default. Same with my car loans. However, if the loans do in fact terminate in the property itself, then those loans are not usurious. To the extent that other banks are allowed to do otherwise, that's a political failing as much as it is anything else.

"This is why I find that the question of Capitalism versus other isms may be the wrong question, as the real question may be whether or not modern society itself is built on incorrect values. Those values, such as egalitarianism more readily explain how corporate elites who are not obviously given over to great greed and lust can support a radical gay agenda."

But you see, there is an underlying issue here that spans all these matters -- lust, greed, egalitarianism, etc. -- and that issue is autonomy. As Richard Weaver said, the modern man has not only become his own pope, he's become his own professor of ethics. So the CEO who may not be given over personally to great greed and lust will still in the vast majority of cases defend the right of others to "live how they want," and furthermore, will claim the right for himself to revise his own decisions at some later date if need be.

Now my belief is that capitalism is dependent upon an implicit acceptance of autonomy of this sort, applied explicitly to personal gain. Avarice has been "emancipated" (E. Skidelsky) and a "passion" (bad) has been converted to an "interest" (good) (A. Hirschman). In other words, yes, egalitarianism is an incorrect value, but both it and capitalism (the "ism," not markets broadly understood!) spring from the same deeper incorrect value.

"What do you think of the idea of nations being made 'more prosperous' by the loss of temperance, virtue, prudence, and charity that comes with the sins of usury, envy, and avarice?"

Yes, and further, what about when that very 'prosperity' increases those sins and others as well?

"To pay little attention to what is lost, by exclusive calculation of what remains, in order to emphasize the gains of the survivors, and make those gains the ground of a statistical improvement in national wealth, is base ignorance. C'mon. Y'all are not this foolish."

But free-marketeers do this all the time! Loss of mom-and-pop's, the death of small towns, various environmental degradations, etc., are all considered as mere figures in the equations related to "creative destruction," such that the vast majority of attention is paid to the creatin', while all the destructin' gets brushed aside. A rising tide supposedly raises all ships, so never mind the ones that it actually sinks!


Mike,
You wrote,
"There's another category: accidents caused by negligence"
Yes; thus I mentioned manslaughter, which often means 'you lacked intent, but you also lacked prudence to the point of culpability'.

You wrote,
"Capitalism certainly does have its problems, but every human economic system has had them..."
I sense another iteration of
'sure, it's is bad, but'

You continued,
"...It is easy to single out Capitalism ..."
Well, in this case because it has been the topic for a few days. Also, people try to justify it here.

you continued,
"...[Capitalism is] the most successful economic system humanity has ever produced."
This statement has two major problems
1) which value of 'success' are you using? I do not think marginal improvements in price setting are counted as 'success' if they require a certain level of unemployment to restrict labor costs; do you? If so, why? I view the dispersal of capital to the maximal number of citizens such that as great a number of citizens are self-sufficient as possible to be 'success'; Capitalism is acknowledged by economists from Rothbard to Keynes, Hoppe to Horvat to concentrate capital into fewer hands and to essentially require a large base of wage earners who are not self-sufficient to maximize profits, minimize labor costs, and make price determination more flexible. Do you disagree with my definition of 'success'? Why or why not? Capitalism by its nature and structure focuses on market value of produced goods; I view 'success' as a systemic focus on use-value; do you disagree? Can you justify that disagreement?
See, if your concept of 'a successful economy' means 'a system that results in the concentration of capital, a focus on market-value over use-value, and a maximization of wage-workers over artisans' then Capitalism *might* be in the running. If your success criteria are 'dispersion of capital accompanying a maximization of self-sufficient workers with an emphasis on use-value over market-value' then no - Capitalism is not 'champ'.
2) As I have mentioned before, 'economics' is just a cover word for 'the artificial separation of commerce from other human interactions and endeavors'. Capitalism has disregards morals as an element in economic decision making and states explicitly that moral outcomes of market forces are accidents of the system, not core. I cannot view any system that rejects morals as an element of decision making and views immoral results as a feature as incapable of being 'a success'; do you disagree? Why?

You wrote,
"I am open to the argument that Capitalism is susceptible to usury, but not that usury is intrinsically part of the system."
Then call your congressman and have it outlawed. Speak to a Libertarian and ask them to champion the outlawing of usury.

NM,
You wrote,
"But you see, there is an underlying issue here that spans all these matters -- lust, greed, egalitarianism, etc. -- and that issue is autonomy. As Richard Weaver said, the modern man has not only become his own pope, he's become his own professor of ethics. So the CEO who may not be given over personally to great greed and lust will still in the vast majority of cases defend the right of others to "live how they want," and furthermore, will claim the right for himself to revise his own decisions at some later date if need be."
Please humor me as I share a personal anecdote.
For some years I acted as an ethical consultant for large businesses. I was briefing a group of executive for one of the 50 largest corporation in the world about the critical nature of ethics to good business when I was interrupted by a senior manager who was obviously rather agitated. His objection was [a paraphrase],
'Business ethics was a one semester elective of my MBA. If it was as important as you say it is Yale would care, too.'
My reply was,
'First, there is no such thing as 'business ethics', there is only 'ethics'. Second, if you took your MBA at Yale then you also only had a one semester elective on marketing: what was this corporations marketing budget last year as a multiplier of your ethics budget?'.

Capitalism is by definition a Liberal concept based upon the idea of personal autonomy in economic decision making; in the end classical Capitalism theory is anarchy applied to commerce.

King Richard,

I think this comment by NM illustrates my problem with much of the critique of capitalism:

But as KR points out, capitalism is at root based on several errors that would seem to make it morally suspect by nature in a way that feudalism and monarchy are not.

Capitalism can be exploitative, but feudalism (if you consider serfdom an obligatory aspect of it) is intrinsically exploitative. Capitalism can be reined in by authorities where someone finds a means to be genuinely exploitative, but the system that proceeded it was based upon coercing the working class into accepting a Christianized version of Roman agricultural slavery (with some benies!)

My perspective on Capitalism is not that it is perfect. Indeed, I think it has some critical flaws that are worthy of condemnation, some of which you mention. That said, I think in the realm of actually existing economic systems, you are likely to find the average 11th century serf wildly enthusiastic about living under 19th century rough American Capitalism where he can own 100% of his labor (taxes notwithstanding) and distribute it as he sees fit among his family and community.

I don't find the arguments that Capitalism is heinous put forth by some of the regular dissenters here to be credible in light of the fact that historically economies have tended to have the same problems in one degree or another. This is much like how when you get down to it, people can try to impose their particular ideology on government, but government's essential nature leads it to take similar forms regardless of the ideologue's most fervent desires (and the end result is often just a form of tyranny that could easily exist under any ideologue).

which value of 'success' are you using? I do not think marginal improvements in price setting are counted as 'success' if they require a certain level of unemployment to restrict labor costs; do you? If so, why? I view the dispersal of capital to the maximal number of citizens such that as great a number of citizens are self-sufficient as possible to be 'success'; Capitalism is acknowledged by economists from Rothbard to Keynes, Hoppe to Horvat to concentrate capital into fewer hands and to essentially require a large base of wage earners who are not self-sufficient to maximize profits, minimize labor costs, and make price determination more flexible. Do you disagree with my definition of 'success'? Why or why not? Capitalism by its nature and structure focuses on market value of produced goods; I view 'success' as a systemic focus on use-value; do you disagree? Can you justify that disagreement?

I think there are several factors at play here, one of which is that most people cannot by nature reach the level of self-sufficiency discussed here. It is impractical in a large society, especially an industrial one, for people to farm for themselves, build non-trivial objects for themselves, manufacture their own drugs, etc.

Take NYC, Seoul, Mexico City or Tokyo, for instance. I don't see how a city with that population density, under any economic system, could have the things you want. It's further exacerbated by the fact that most people are of lower intelligence and thus don't even the mental hardware to quickly acquire a disparate skill set. Even those of us who do, often just don't have the time.

In a real sense, though, Capitalism has tended to provide incentive for people to drop goods to a point where people can acquire them at much lower prices. That is worth a great deal in its own right, especially for the poor. 100 years ago, I doubt a single hour's wage could buy the equivalent of several items off a dollar menu at McDonald's for a poor family that didn't have time to cook that night.

Why people are less self-sufficient is in no small part their fault and the fault of cultural issues like stable family formation. Most people don't see the value of paying off their house versus buying nice things and taking great vacations. My time preference is longer, so I do. I am in the minority on that. Many of my peers sought out easy college majors that were literally worth less than going to work for 4 years at a fast food restaurant and gaining some proven managerial experience. I didn't have time to get piss drunk and chase loose women in college because I was in a STEM major.

You see this pattern play out across society in general. A former coworker of mine had to disabuse a subordinate when they were in the USMC that going civilian after about 8 years made any sense in light of his job plan being "uhhh I'll work at Home Depot." The man had literally no concept of his own lack of skills and how to compare his current job with one that seemed "easier and better." Again, I think much of this is more a problem with intellect and inherent capabilities that no economic system can overcome.

BTW, you'll find that the buttons above the comment box make HTML commenting easier. Something to consider. You can just select text and click on the button instead of writing the HTML by hand.

K. Richard:

my statement 'The Black Death was the greatest increase in human prosperity' is meant to be ridiculous *in order to* point out the ridiculousness of measuring human life by materialism alone, or even in combination with things like 'bargaining power'

Fair enough, except that I'm not doing that. No one here is. Such vulgar materialism cannot even be fairly attributed to Adam Smith, whose understanding of the depth and subtlety of human social arrangements is evident on every page of his Theory of Moral Sentiments, an unwisely neglected classic of social philosophy. And note well that a more modern classic in the dismal science, Hazlitt's Economics in One Lesson, emphatically rejects as pernicious and illusory the notion that destruction begets prosperity.

So take up that cudgel against our defiantly materialist libertarians, or against the plutocrats who embody Acton's slashing epigram: “There is not a more perilous or immoral habit of mind than the sanctifying of success." Sanctifying success is indeed a common evil of capitalism's more indulgent defenders, but those not represented here.

What do you think of the idea of nations being made 'more prosperous' by the loss of temperance, virtue, prudence, and charity that comes with the sins of usury, envy, and avarice?

I don't think much of it, that's for sure. But as Mike has said several times, the alternatives to capitalism on offer over the past few hundred years have not exactly succeeded in extinguishing usury, envy or avarice. Envy in particular is constantly encouraged by the most prominent critics of capitalism.

As I said in Jeff's thread, the economy is the integration of the wealth of generations. Those prosperous aged who have accumulated capital look for young hotshots in which to invest. They lend to, or purchase shares in these enterprises of the young. Not all of them succeed. But some do, often spectacularly. The investment is financial in nature; but it represents the exchange, over time, of resources, expertise, and capital, between generations. There is no necessity that usury or avarice must undergird this.

NM:

capitalism is at root based on several errors that would seem to make it morally suspect by nature in a way that feudalism and monarchy are not

While I have more respect and sympathy for the medieval order than most men, and recognize that absolutism of the divine right sort is more a modern innovation on the monarchical form than an intrinsic feature of it, yet I still cannot agree with this statement. Feudalism, as Chesterton points out, was at base a military system, a sort of patchwork attempt to tame the worst excesses of the warrior class and discipline their rugged talents for service in the common good. How well this worked varied enormously, and even under the more benign forms, feudal lords were supplied with appallingly unaccountable power.

Moreover, monarchy and feudalism existed in strong tension. This is another point Chesterton makes repeatedly: that very often the King was the popular hero against tyrannical and avaricious local lords. Many millions of serfs loved the King precisely because he opposed, at least sometimes, the lords they despised. Magna Carta arises precisely out of this tension, but it is doubtful that the rising aristocrats who forced King John's hand spared even a moment to reflect on the peasants whose property and labor they wielded with capricious finality.

Lastly, critics of free market prosperity seem to frequently play a double game with regard to material benefits. On the one hand they emphasize the material privation of the "have-nots," as a strictly comparative evaluation vis-a-vis the rich; on the other, they contemn as base materialism any argument that points to the material benefits available even to the poorest in Western nations, and the extraordinary reduction in povery, in absolute terms, over the past few decades. Well, which is it? Are material gains good or bad?

Then call your congressman and have it outlawed. Speak to a Libertarian and ask them to champion the outlawing of usury.

I doubt many even know what it is.

Please humor me as I share a personal anecdote.

I have an anecdote that's a bit similar, but deals with authority instead of ethics. A former employer got caught bribing the brother of a potentate in a system where said potentate either is or acts like an absolute monarch under law. They got quite flustered during the ritual ethics session when I asked them how it is bribery if the man awarding your contract literally has the legal authority to make such a demand from you under law in that country. (It may be unethical, but they were forced to admit that he might actually have the authority to make an unethical demand whereas a civil servant does not)

"Capitalism can be exploitative, but feudalism (if you consider serfdom an obligatory aspect of it) is intrinsically exploitative. Capitalism can be reined in by authorities where someone finds a means to be genuinely exploitative, but the system that proceeded it was based upon coercing the working class into accepting a Christianized version of Roman agricultural slavery (with some benies!)"

Mike, I just finished reading Goodwyn's history of the Populist Revolt, and I've also read some things on the timber industry in the 20s and 30s. I wasn't familiar with the details of either of these things, but one thing that is clear is that the populists and agrarians of the post-Reconstruction era weren't just talking out of their butts when they bewailed "wage slavery." The idea that the Gilded Age industrialists and the railroad and timber barons had instituted "serfdom in all but name" is quite close to the truth. In the logging industry, for instance, it wasn't uncommon for men to have six 12-hour workdays per week, in all weather conditions without exception, in exceedingly dangerous conditions with no insurance and only very limited medical care. Maiming injuries and deaths were ridiculously common. Their wages were a pittance, and they did, in a lot of cases "owe their souls to the company store."

Ditto post-Reconstruction agriculture in the south and midwest. Stuck in the crop-lien system, the farmers were every bit as "owned" by the bankers and furnishing merchants as were the coal miners and loggers by the companies and their stores.

There is no necessity that usury or avarice must undergird this.

My understanding of usury is informed by Zippy's explanations. Based on that, I see nothing inherent in Capitalism that must lead to usury and avarice is universal. I can't remember the movie, but there is a WWII war movie where a Communist says to the effect "we thought if we could make everyone materially equal, they would be happy and greed would disappear but we learned that people would even envy a smile from a woman."

"avarice is universal"

Of course it is, but this doesn't warrant basing an economic system on it, any more that it would warrant basing an agricultural system on gluttony.

King Richard,

I finally had the time to pull the references I wanted -- even though I understand your bigger point was to point to the folly of measuring prosperity independent of morality, your example of the Black Death is actually hyperbolic, as the increases in wages from the population loss, while dramatic, were not a one-off and paled in comparison to the wage increases due to the industrial revolution:

http://www.econ.ucdavis.edu/faculty/gclark/papers/long_march_of_history.pdf

AND

http://www.jstor.org/stable/10.1086/498123

Greg Clark is really a remarkable economic historian -- he has studied English medieval economic history through the industrial revolution all his life and his books about what he's learned have transformed the field. I wouldn't be surprised if someday he wins the Nobel Prize.

Mike,
You wrote,
"Feudalism was very exploitative and unstable"
Giving the question of 'do you really mean Feudalism or are you actually thinking of Manorialism?' a miss and doing as most non-scholars do and simply conflate them, let us first look at stability.
Since we are looking at the broader, economic, concepts of Feudalism/Manorialism I must point out that the system technically lasted 1,500 years, from no later than 450 AD until at least 1970 (when the last feudal rents were paid - in Quebec!). If we are similarly generous with Capitalism it has existed for no more than 250 years, 1/6th as long.
Considering that Feudalism/Manorialism flourished across continents, under a wide range of specific types of government, and over a millenia I would not accept the argument that it is 'unstable' if you wish to compare it to Capitalism, a system broadly rejected since its conceptualization and so heavily modified with other concepts that commentators here argue that I should not invoke actual Capitalist theory to critique actual Capitalist practice!
As for exploitation?
Throughout European history there are a number of peasants' revolts, but most of them were about the *re-establishment* of feudal rights after their lands were conquered by outside kingdoms or groups or about military oppression. The uprisings against Capitalism in the Year of Rebellions ALONE account for 5 times as many uprisings against Capitalism as there were ever uprisings against Feudalism/Manorialism in history. In other words, the people and cultures that fought to *retain* Feudalism fought violently to *oppose* capitalism. It seems the average person, especially those that still had personal exposure to even vestiges of actual Feudalism, felt Capitalism was much more exploitative. Many of the anti-Capitalists rioters of the Keelman and Tinmen uprisings, the various French revolts, especially the February Revolution, and many German protests of the early 1800's *specifically stated* they wanted the 'return of our traditional rights as given to our forefathers', i.e., 'we want feudalism back!'.
I think you will need to support your statement a bit before I find it compelling.

Above someone who was not responding to me said,
"Whether monarchy or feudalism ever corrupted men I leave to be answered by any man who has seen Braveheart"
*sigh*.
Braveheart is fiction. it's relation to actual history is rather tenuous. This sentence is akin to condemning the Catholic Church because of the movie Broken Vows.
The question is not 'can Man be be corrupted?' That answer is a brute fact.
The question is not "...what economic system can best produce goods and services for people's real human needs[?]"
The question is "how do I live my life in virtuous conformity with God's laws?".

Please forgive a digression.
I speak a great deal on education, especially to home schooling Catholic families.
Many of these families, even most, struggle because they have absorbed Liberal concepts from the world around them and are often in the grips of the heresy of Americanism.
They struggle and fight with their children as they push them to get the best possible grades and scores to get in the best possible college where the entire family will struggle (and resort to usurious lending!) to pay for an education when the goal of parents and of children is for the daughters to stay at home raising and home schooling children and for the sons to support a family. When I suggest that the daughters should focus on home making and the sons on vocational training the parents are shocked, offended, and angry.
"What sort of woman would marry my son if he didn't even have a degree?!" is a common reaction.
"What will my daughter do until she finds a husband - stay at home?!" is another.
So I ask them
"If you children, whom you are home schooling, only learned 5 things before they left the house, what would they be?"
The list is so common I usually write it down beforehand;
1) Reading/writing
2) Math
3) basic science
4) History
5) Their faith

Then I ask "What if it was just 3 things?"
1) Reading/Writing
2) Math
3) Faith

And, of course "just one thing?"
1) The faith

The parents get so caught up on what materialists associate with a college degree and education (money, status, prestige) they forget that the primary goal of education is to prepare children to live their faith. The secondary goal is to develop their intellect so that they may contemplate and study God's laws. Job training is something else, although associated with education, and nowhere close to as important as their faith.

Did you know that 90% of all children raised Catholic lapse in their faith after high school?

Let's use this as a reference point about serfdom. I know it's Wikipedia, but bear with me. Much of that strikes me as very nearly like slavery, and many people are quite content to live comfortable under slavery or near-slavery as long as their animal needs are met. A lot of people don't really want freedom, they want a "just master" which is why I'm not entirely sympathetic to the revolting peasants.

Consider the point about the children of a serf being serfs themselves. I can see no legitimate human authority that lays claim to the labor of a man from the moment of conception unto death like that. His lord may treat him well, but then many southern slave owners were decent men toward their slaves. Decency is not rightness.

If most of those things are reasonably accurate, then I don't see that system as better than Capitalism in terms of exploitation. That is perhaps just a matter of values. I value my freedom more than prosperity.

Mike,
I am responding a bit out of order, but the serf is an interesting topic that seems to confuse a great many people. But let's look at something you said.
"I can see no legitimate human authority that lays claim to the labor of a man from the moment of conception unto death like that."
United States citizens are required to file a tax return each and every year that they are an adult or earlier, if they earn wages. Why?
From birth they owe a portion of their labor to their mast- excuse me, the United States, in the form of income tax, as well as other taxes.
Why? because he was born an American.
Even if they traveled away and earn their money overseas, they owe a portion of their labor.
Even if they gain no protection or benefit from the US they owe the US.
This has been much in the news, recently, about how the US is forcing other governments to cooperate to prevent "tax cheats" from avoiding paying the US their taxes.
I am told the typical tax payer's wages are, effectively, the government's until April 25th in the US. Virtually 1/3rd of the year of labor A villein typically only owed one in 6, almost half.
And the villein, the most common type of peasant, owed the labor to pay for the home and land he lived on, enough to not only be self-sufficient, but for excess. The lowest level of pesant, the cottager/crofter/bordar only had a home and enough land to feed and support his own family, with no excess to sell meaning they had to work on someone else's land to earn extra money.
There were very few cottagers.
A villein had the totality of your taxes, rent, and leases was about 20% of your labor and in return you had military, police, and courts, land enough to be self-sufficient and generate excess as well as a number of other things, like a heating fuel, support for livestock, healthcare, aid when sick, etc.
You also had the right to 'buy out' (except in Russia)and provide enough cash (remember that productive land?) to become a freeman who was similar to the villein but had to only provide (lower) rents in goods or money, not labor. The real restrictions on the villein were that he could not dispose of his lands in such a way that it left the manor *unless* there was an agreement between the lords.
As for the 'serf from birth' part that was because the children inherited the land and, thus, the lease. There were a number of ways a young serf could avoid this obligation ranging from becoming a clerk (i.e., learning to read and write a bit) to going to a city to accepting a position in a monastic manor as a farmer or tradesman, etc.
Also, the villein, cottager, etc. all had a lot more time off than you are used to.
The various forms of serf did not exist for very long in most of the world; the system was efficient enough that so many were becoming freemen, were on monastic manors, in cities, etc. that the abolition of serfdom in the mid 14th Century was largely just acknowledging reality.

So - which sounds more exploitative: a villein where you taxes, lease, rents, etc. are only 20% of your labor, you have more time off, and in return you have (on average) 40 acres of land that cannot be taken from you and the right to make a payment so from then on your taxes, etc. are cut in half?
or
A system where even if you flee to another nation 30% of your labor belongs to the government, you have no right to land or support, and the only way to end it is to exile yourself?

Again, this is 'out of order' but Prince Jonathan noticed something.

-The title is Distributism and the American Political economy'.
-Paul speaks poorly of "autocratic redistributionism" and "paternalistic technocracy"
neither of them are Distributism
-Paul and Mike criticize Feudalism
that isn't Distributism
-Paul vaguely invokes Distributism as being associated with 'insidious schemes'
-Lydia vaguely alludes to Distributism not proposing any policies
I note that the general response to my actual posting of a few policies was, overall, 'sure'
-Mike seems to object to Distributism on the grounds that not enough people can be self-sufficient, which seems to indicate he doesn't realize how Distributists mean that term; a worker-owner in an industrial co-op fits well, as Mondragon shows, allowing for large-scale industrial enterprise without wage-slavery and allowing for self-sufficiency.

I am not actually seeing much real responses to my discussions of, oh, Distributism in praxis (Mondragon, et. al.), Distributism in abstract (actual policy proceedings), or even real Distributist theory. I see a fair number of people alluding to schemes, and such, but when I speak directly and frankly about the fact that Distributist industrial enterprise exists *now*, it is out-competing Capitalists enterprise *now*, it is showing that Distributist theory that a Distributist economy would be more prosperous and more stable than Capitalism seems accurate the response is about other things.

So let me repeat two questions I have already asked with slightly different wording:

1) As proven for decades by Mondragon and other activities, Distributist enterprise can, and does, compete very well in the large industrial space as well as in financial, education, retail, and such verticals while still delivering higher compensation, better overall standards, very high-quality goods and services, and ownership to employees while still generating a profit ; all while avoiding usury, distributing capital instead of concentrating it, and avoiding the other pitfalls common to Capitalism while explicitly rejecting Communist concepts. Since this is true why would you support the existing Capitalist systems instead of Distributism?
2) I am unable to identify a Capitalist nation, including mixed economies such as China, where usury is not a key element in the economy. Likewise, all such nations are in the grips of financialization and a number of exploitative practices as they have been historically. Noting the ongoing relationship between Capitalism and usury over time and in practice, how can you justify supporting Capitalism over *any* system that has a chance of maintaining the rights and dignity of people even if said system may not be as efficient at generating wealth?

Actually you have given the feds too much credit. It's now about 39% of your income if you're a higher earner and 60% of your total assets if your renounce your citizenship. That said, the objection I have is the idea that a child is born tied to a piece of land and cannot simply at the age of majority walk off and pursue whatever path he wishes (provided it is not illicit).

This also segues pretty well into the recent discussions about the revolution we were involved with. The colonists were, in many respects, expatriates living under their own government far away from the effective provision of government services by the British government. The British thought nothing of taxing them and regulating them, even though the actual value of the British government's involvement in their affairs was dubious. I consider it another data point in the long and ignoble tradition of governments claiming authority over people who are outside of their effective or actual jurisdiction.

United States citizens are required to file a tax return each and every year that they are an adult or earlier, if they earn wages. Why? From birth they owe a portion of their labor to their mast- excuse me, the United States, in the form of income tax, as well as other taxes. Why? because he was born an American.

I would say that a better characterization would be royal taxation versus feudal rents. The feds make no claim on your freedom of movement. You can move to another state if you wish and subject yourself to its laws. That was not easy for a serf who wished to move without his lord's permission. He could not just say "this lord is a bum, I want to work for that lord."

I am actually very sympathetic to Distributism. In fact, I would choose it over the form of Capitalism that is increasingly entrenched in our economy. It's becoming quite clear to me that this civilizational cycle is coming to its end and we need to start anew before the collapse.

For what it's worth, I have a great deal of personal appreciation for some of the arguments you make about involving workers in the running and profiting of the business. My industry is notorious for actively keeping the performance incentives up with management (ex. an engineer who helps win work gets literally no guaranteed performance bonus) The result is that management often can't get workers invested in the business to the extent they should be because it's so well known that you'll bust your ass so someone else can skim off all the fat.

I've read about that Spanish firm and wish it well. In the US privately-held Chick-fil-A and Hobby Lobby share some of the features. Why King Richard should suppose me hostile to enterprises that undertake to run themselves upon Distributist principles is a question that puzzles me.

Usury is not intrinsic to Capitalism but it is perilously predominate in the form of Capitalism under which we live.

But one thing that would certainly damage Mondragon, likely beyond repair, is nationalization.

Socialists propose to confiscate private assets and make them public and state-owned.

They rule the British Labour Party and the US Democratic Party, these folks who would make opposition to Capitalism their principle.

Another thing that will damage privately-held companies that wish to distinguish themselves by a certain defiance of modern trends? The assassination of Free Speech, which is also an open proposal on the Left in the UK and US. They wish to strip Hobby Lobby and Chick-fil-A of the capacity to deploy their capital in defense of what they believe.

Meanwhile, British Labour is on the verge of completely selling out to Islam the entire English working class; and wants to make criticism of Islam illegal to boot.

That's the "pernicious schemes" mentioned in the OP, guys.

If all y'all Distributists want to abjure these ideas, on the British Labour Party and the US Democratic Party, I'd be very glad.

Perversion of the concept of "ownership" is the keystone of the impersonal economics. This leads to confounding of an "owner" with a mere "investor".
The owner cares about the business but the investor merely cares about the money.

It is ironical that the criers for free market do not realize that the mass stock market is entirely and purely a creation of the Big Government. Left to themselves, most men have a distaste for stock market. .

The bankers and financiers have always been in league with the Big Government and this remains equally true now as it was a century ago when Chesterton decried the utopia of usurers. That the stock market is fettered or handicapped by the Big Govt is merely a Randian or Misean romantic fantasy.

Mass stock market, sacred to Randians and Miseans, is absolutely incompatible with economics on personal principles. The danger is not from the socialists as Paul J Cella imagines-a spell of economic downturn may save us from abolishment of mankind--something he entirely forgets--the stock market driven by Big govt is rushing us pell mell towards transhumanism and genocide of the poor people and nations. And in the last reasoning, this is why the stock market must be abolished.

Paul J Cella,
Socialists propose to confiscate private assets and make them public and state-owned.
They do not. You could not name a single enterprise that was nationalized by a decade of Labor rule in UK.

They are not proposing to nationalize stock markets either. Though that is one step a proponent of economics on personal principles ought to welcome.

Secretary Clinton yesterday:
And it’s our job to rein in the excesses of capitalism so that it doesn’t run amok and doesn’t cause the kind of inequities we’re seeing in our economic system.

You admit that the present capitalism is riddled with usury then I do not see why you won't agree with Clinton rather than a Republican cheer-leader for stock market who will never admit that there could be ever be an excess of capitalism.

Indeed, there are several worrying things about the socialists, progressives et al but nationalization is NOT one of them.

Capitalism is the most successful economic system humanity has ever produced

As I see it, there are two scenarios possible for the capitalist nations now in 21c.
1) Achieve transhumanism and abolish humanity.
2) Fail by social disintegration--pls reflect on the wondrous fact that a large fraction of your elite is actively trans-national in sympathy. And it is precisely that fraction of the elite that is crier for capitalism.
This is not to mention other fruits of the capitalist ethos-the sexual revolution, women's rights, choice--all actively tending to disintegrate the capitalist countries.

Is this what success means?

I feel there is an equivocation going on under the term Capitalism that needs to be clarified.
IS by Capitalism is meant a natural system of free enterprise, buying and selling that exists as a default whenever it is not thwarted by Big Govt be it in a feudal form, customary property rights or communism?

Or the specific economic system that evolved in 18c Western Europe is meant with normalization of usury, impersonal stock market, corporatization and ownership of capital in few hands.

King Richard,
Based upon the Mondragon model, I wonder what will be your take on the "Ownership society" model in which the stock ownership in large corporations is diffused among the people. That is, a society in which most people are stock owners-either directly or indirectly through their retirement funds.

OR the point is that a worker should be an owner in HIS corporation and the diffused stock-owning is irrelevant?

Does the number of worker-owner matters? Suppose there are 200,000 worker-owners, then the actual decision-making would fall to a much smaller group. Does it matter?

They do not. You could not name a single enterprise that was nationalized by a decade of Labor rule in UK.

How about the seizure of ownership interest in General Motors and redistribution thereof to various, previously non-owner parties such as the UAW?

We don't have to do BI's Google searches for him, but striving for civil understanding, here are some press reports which should go some way toward disabusing him of the notion that I misspoke, exaggerated or misrepresented things when I said "Socialists propose to confiscate private assets and make them public and state-owned":

"Jeremy Corbyn's Bill Nationalising the Energy Sector," Guardian, Aug. 7, 2015

"Elizabeth Warren Proposes Replacing Payday Lenders With The Post Office," Think Progress, Feb. 3, 2014

"Obama Pushes For-Profit Colleges to the Brink," Politico, July 1, 2015

"Report: EPA Colluded with Environmentalists to Kill Alaska Mine," Daily Caller, Oct. 6, 2015

Equally common is the strident and sanctimonious SJW socialism that fetters, intimidates, harasses and finally extinguishes private businesses that do not embrace every whim of sexual fashion. More than a few American liberal politicians have attempted to drive Chick-Fil-a out of their city.

I just can't find the motivation to address BI's other remarks here when he indignantly pretends these schemes are not being proposed and undertaken.

"IS by Capitalism is meant a natural system of free enterprise, buying and selling that exists as a default whenever it is not thwarted by Big Govt be it in a feudal form, customary property rights or communism?

Or the specific economic system that evolved in 18c Western Europe is meant with normalization of usury, impersonal stock market, corporatization and ownership of capital in few hands?"

My beef's with the latter. Unfortunately its defenders often portray it as some sort of natural outgrowth of the former, which makes it seem like its critics are criticizing the former as well.

"--pls reflect on the wondrous fact that a large fraction of your elite is actively trans-national in sympathy. And it is precisely that fraction of the elite that is crier for capitalism."

The U.S. elites are largely "socially liberal but fiscally conservative." This makes them uniformly anti-traditionalist.

"This is not to mention other fruits of the capitalist ethos - the sexual revolution, women's rights, choice--all actively tending to disintegrate the capitalist countries."

Our old buddy Maximos put it this way: The Right can protest all it wants that it desires capitalism plus traditionalism, but the former subverts the latter. The Left can protest all it wants that it desires cultural liberation plus economic solidarity, but the former subverts the latter.

That's it in a nutshell.

Our old buddy Maximos put it this way: The Right can protest all it wants that it desires capitalism plus traditionalism, but the former subverts the latter.

Maximos also had some interesting views on economics, one of which is that the "haves" have virtually no right to complain if a politician wants to impose a "modest tax increase" to cover the poor. This was in the context of discussing Obamacare. Curiously, this so-called conservative was more concerned about providing socialized medicine to the working class than ensuring that middle class men could still support a family on a single income. His response was, in effect, that if the cost of Obamacare made that not possible for you, then you didn't deserve to be able to live that lifestyle.

And as has been shown time and again by actual events, Lydia, Tony and I were right and both Jeff Culbreath and Maximos staggeringly incorrect about the implications of providing more than a modest assurance of coverage for the whole of society. So whatever he got right about Capitalism should be understood primarily in the context of a broken clock being right twice a day.

"whatever he got right about Capitalism should be understood primarily in the context of a broken clock being right twice a day."

Au contraire, it represents the odd misidentification of a tree by someone with an otherwise excellent grasp of the nature of the forest.


Rather than get caught up in old disputes concerning former contributors who are no longer around to defend themselves, perhaps it would be better to look at some of the specific policies under consideration now, for the purpose of restraining the destructive aspects of capitalism.

Would our Distributists agree with Jeremy Corbyn on the nationalization of various industries? Should for-profit colleges be suffocated by hostile regulation? Is collusion between EPA regulators and outside pressure groups, in a common design to subvert capital projects of independent firms, all to the good? Was the Sixth Circuit appeals court wrong to halt the implementation of the EPA's expansive new interpretation of the "waters of the United States" rule? Were French authorities wise and just when, over the summer, they intervened aggressively to protect established taxi firms and harass and prosecute Uber?

Such lists of question could, of course, be expanded at great length.

Au contraire, it represents the odd misidentification of a tree by someone with an otherwise excellent grasp of the nature of the forest.

Coupled with this comment, it most certainly is not an "odd misidentification." What it shows is that Maximos genuinely did have a great deal less concern for the sustainability of a middle class than he did for providing services to "the needy." Even his comment about buying large homes shows how disconnected his view on what the middle class does is from the reality of middle class living in modern America because there is no good answer on middle class housing.

NM's response on Uber would be quite telling because Uber's whole purpose is to enable ordinary people to make extra income on their terms as taxi drivers. From a Distributist perspective, they should be one of the hottest companies coming out of Silicon Valley these days.

What's the argument against them? That they hurt incumbents? That they might become a monopoly in their own right? That part is easily dealt with by market forces. The barriers to starting an uber competitor are primarily building the IT infrastructure, building a network of drivers and advertising. It's not rocket science. It's the sort of thing that most Computer Science students could replicate in a semester or two these days for their alma mater's hometown market.

This would seem to indicate that it's more important to ensure that some folks have more than they need than that others should not have to go without.

In fact, the very notion of "enough" seems to be ruled out-of-court.

And we're right back to autonomy again.

The "freedom" to acquire wealth trumps any right of the poor to have their basic needs met.

Btw, Paul, I'm not a Distributist, although I do like many of their ideas. I consider myself a Kirk/Weaver traditionalist conservative of the agrarian mold.

Given this, I find that this challenge of yours...

~~~critics of free market prosperity seem to frequently play a double game with regard to material benefits. On the one hand they emphasize the material privation of the "have-nots," as a strictly comparative evaluation vis-a-vis the rich; on the other, they contemn as base materialism any argument that points to the material benefits available even to the poorest in Western nations, and the extraordinary reduction in poverty, in absolute terms, over the past few decades. Well, which is it? Are material gains good or bad?~~~

presents too stark of a division. Is it not possible to be concerned about the material well-being of the have-nots, while simultaneously decrying the materialism and consumerism of the haves? Material gains are good or bad in context, right?




I don't know enough about Uber to comment. Sorry.

"Such lists of question could, of course, be expanded at great length."

As could instances of capitalist problems:

Would the market alone ever have caught and fixed the VW emissions issue? Would it ever have cleaned up Pittsburgh or Weirton, WV? Ended child labor? Provided reclamation of strip-mined areas? Ended the crop-lien system? Shielded the Pinto's gas tank? (well, we know the answer to that one!)


Paul,
I find these statements,
"If all y'all Distributists want to abjure these ideas... ...Socialists propose to confiscate private assets and make them public and state-owned...."
and
"Would our Distributists agree with Jeremy Corbyn on the nationalization of various industries? Should for-profit colleges be suffocated by hostile regulation? Is collusion between EPA regulators and outside pressure groups, in a common design to subvert capital projects of independent firms, all to the good? Was the Sixth Circuit appeals court wrong to halt the implementation of the EPA's expansive new interpretation of the "waters of the United States" rule? Were French authorities wise and just when, over the summer, they intervened aggressively to protect established taxi firms and harass and prosecute Uber?"
To either indicate I do not understand your questions
OR
The unwitting admission on your part of a profound ignorance of Distributist theory. Distributism is directly opposed to such concepts and this is a very clear element. Subsidiarity, solidarity, and private property are core concepts of Distributism. Saying
"If all y'all Distributists want to abjure these ideas..."
Means you don't understand the very basic,fundamental concepts of Distributism. We *DID* abjure them, it's called 'Distributist Theory'.

I do not note a single direct answer to my direct questions.

All,

An interesting piece that caught my eye today, relevant to our discussion:

https://www.aei.org/publication/do-democrats-really-believe-americans-are-worse-off-today-than-they-were-in-the-1970s-cmon/

No doubt King Richard would ask of this prosperity -- at what cost (i.e. how much usurious debt do these Americans have?) And that is a valid and germane question. But it is still important to keep pointing out that life in America remains prosperous for most.

The point of my questions was to focus on some specific anti-Capitalist policies that are actually on offer right now rather than permanently deal in slippery abstractions. Some of these policies are full-blown orthodox socialism: nationalizations and the like. Others are more in the vein of aggressive regulation, coercive curtailment of discrete operations of private enterprise, etc. The examples I gave of Free Speech restriction have a bit more attenuated connections, but I have found that, after the Citizens United and Hobby Lobby rulings by the US Supreme Court, this desire to drastically impede unpopular opinions backed by corporate capital is very high on the anti-Capitalist wish list.

King Richard affirms that none of these things are Distributist in character and that I should assume that Distributists repudiate them. This brings some relief, but I must confess that it is rather meager. One of K. Richard's sometime allies, for instance, invited us to agree with Senator Clinton, a curious figure of admiration but one that is unfortunately revealing of why so many of us have our doubts about Distributism, precisely along the lines that I laid out in the OP: "Distributist ideals, while largely benign in and of themselves, yoke themselves far too often to insidious schemes."

The unwitting admission on your part of a profound ignorance of Distributist theory. Distributism is directly opposed to such concepts and this is a very clear element.

I said in the OP that my read of Distributism is that it overlaps considerably with middle class democratic capitalism; and I implied repeatedly that the kind of technocratic and corporatist legislation being presented today, as antidotes to the distempers of Capitalism, is profoundly hostile to Distributist ideas.

So again, these questions I have asked are designed to draw out the concrete lineaments of how Distributists wish to see Capitalism restrained, and how they regard specific proposes to accomplish restraint of Capitalism.

Paul,
Fascinating. You see restrictions of free speech as 'anti-Capitalist'? I do not know if the phrase 'more attenuated connections' is adequate.
What is your opinion of the blasphemy laws of Malta?

You wrote,
"King Richard affirms that none of these things are Distributist in character and that I should assume that Distributists repudiate them. This brings some relief, but I must confess that it is rather meager."
Not nearly so meager as the unsupported assertion that even though every Capitalist system in the past was based upon/reliant upon usury and despite every current Capitalist system being based upon/reliant upon usury that it might somehow be possible to eliminate usury from Capitalism. Presumably by the actions of a central state to regulate the markets via "anti-Capitalist" restriction?

I see agitation against the two Supreme Court decisions I mention as a common feature of anti-Capitalist polemics, yes. Politicians and pundits mix these theme constantly.

A related aspect is the "legal fiction" criticism, which you yourself mentioned. To me, that legal fiction is a vital part of civil liberty, supplying important safeguards for people who wish to pool their talents and resources for public argument and conversation.

Virtually all the Democratic candidates for President* favor various legislative revisions of the First Amendment to prevent corporate capital from funding political speech. They are somewhat cagey about whether, when they refer to corporations, they mean only business enterprises, or whether they would act more decisively against the freedom of speech of all civil association; but since they've also begun floating the idea of stripping tax-exempt status from recalcitrant traditionalist churches and non-profits, I think we would be wise assume they'll not scruple to target non-business corporations as well.

______
* Probably some of the Republicans, for that matter. Certainly the 2008 GOP candidate agreed with these goals.

"I implied repeatedly that the kind of technocratic and corporatist legislation being presented today, as antidotes to the distempers of Capitalism, is profoundly hostile to Distributist ideas."

Correct. So for convenience, let's call this statist technocratic corporatist monstrosity "state capitalism." This is a leviathan with two heads, obviously, as the term indicates. Right and Left both err in seeing as benign the particular head which they happen to favor. Thus the Right targets its attacks on the "state" part, while the Left concentrates its efforts on the "capitalist" part. But the truth is, it's the whole critter that's deadly, not just the one head or the other.

Therefore, the Distributist or traditionalist conservative is in the tricky position of attacking both heads, one at one time, one at another, because of his recognition of the threatening nature of the whole beast.

This would seem to indicate that it's more important to ensure that some folks have more than they need than that others should not have to go without.

In fact, the very notion of "enough" seems to be ruled out-of-court.

And we're right back to autonomy again.

The "freedom" to acquire wealth trumps any right of the poor to have their basic needs met.

Every middle class man has a moral duty to put his family's well-being before the poor. That means putting them in a safe, reasonably comfortable home in a good neighborhood, with good neighbors and schools. This is moral philosophy 101. Your basic moral duties are first and foremost to the people closest to you, not people on the other side of town you don't even know.

But you're right. A man who works 50-60 hours a week to support his family should accept a tiny home, used cars of questionable value and donate much of his after tax surplus to help the poor. He's a damn greedy bastard to want to have a home, cars, clothes and basic property in his home that is commensurate with middle class living. The Japanese can raise families in 900ft^2 apartments in Tokyo, so why can't he raise his in a 1200ft^2 townhouse in "walk-with-tv-in-hand" distance of the ghetto.

See? As soon as "enough" is mentioned steam begins to come out of ears.

"Every middle class man has a moral duty to put his family's well-being before the poor. That means putting them in a safe, reasonably comfortable home in a good neighborhood, with good neighbors and schools. This is moral philosophy 101. Your basic moral duties are first and foremost to the people closest to you, not people on the other side of town you don't even know."

Absolutely. But we're not talking primarily about the middle class here. Or at least I'm not. I'm talking about the general consumerist inability to distinguish between wants and needs, and the related incapacity to think in terms of "enough."

Absolutely. But we're not talking primarily about the middle class here. Or at least I'm not.

Maximos, however, was including the middle class in his criticism. That's why I said his arguments were rubbish. He often wanted to have his cake and eat it too on both demanding comprehensive care for the poor through the state and then lamenting when the middle class gets cannibalized.

I brought up that one statement by Max because it represented a good summary of what I was getting at, not because I wanted to endorse his entire corpus. His views on the middle class do not negate the accuracy of that summary.

Hence my saying that he was a broken clock.

Sorry, but that doesn't follow. A thesis cannot be wrong in all its details and still be a correct thesis overall.

Since this was posted on the ninth (and since the previous discussion began even earlier) I have (as previously noted) not seen any of the critics of Distributism/champions of Capitalism actually criticize Distributism in any concrete way.
Vague references to political and economic systems that have nothing to do with Distributism?
Yes.
Unsupportable statements about Distributists?
Yes.
Critiques of systems unassociated with Distributism?
Yes.
But no actual, meaningful criticism of Distributism itself.
And despite repeated requests these critics of Distributism/champions of Capitalism so far simply avoid answering simple, direct questions, even when repeated in different language. Instead, just more sophistry.
I must admit my great amusement of hearing one day just how *very serious* the writers of this blog take discussions of economics and a stern warning to be *very careful* in my terminology only to be told within the week that those self-same individuals cannot agree on a definition of 'usury'.
But that amusement is not enough for me to continue to engage a group of people who cannot answer simple, direct questions, ESPECIALLY people who claim to be Catholic who cannot or will not answer questions concerning their own support of a system that is historically and presently engaged in systemic mortal sin.
Perhaps I mistake you; perhaps you think 'average GDP growth of 2%' is an argument to support an exploitative system that is part & parcel with mortal sin.
In either case, I wish you well.

Reading Zippy's posts on usury was an education for me, in part because he highlighted that even most people who talk about usury a lot don't understand what it is. For instance, a lot of people think charging interest is usury, but a moderate rate of interest on a loan that terminates in the property is not usury. That is to say, if my bank charges me 5% interest and is fully satisfied to take only my house in the event of my default, there is no sin there.

Now certainly, there is a lot of usury in the system. Credit cards are a great example. Student loans another. Neither are taken out against fixed collateral with full termination in the collateral. Yet, I think Paul's points that there is nothing intrinsic about Capitalism that made this a necessary outcome still stands, especially in light of his arguments about how banking should be structured (and one upon a time, was structured).

It was a political decision to create various classes of corporations for businesses. It was another to allow bankers to engage in their business that way. A banker acting in a partnership has inherently far more to lose by immoral behavior than one shielded by a corporate entity. Also, he is forced to be more aware of the fact that he is acting personally, not as a legal fiction which helps impose some moral dimension there.

The events of 2008 would have been utterly ruinous for bankers acting in partnerships. They'd probably have never played those games with mortgage-backed securities and other schemes because the loss would have destroyed them completely and swiftly. Furthermore, let's be honest. If society were accustomed to bankers acting in partnerships 2008 probably would have seen a rash of terribly violent murders of bankers across the industrialized world because there would be not even a fig leaf of a corporate veil protecting them and their identities from their millions of victims.

So yes, usury may be a core facet of our current system, but how we got here was not inherently a given. Even under a formally distributist system, it's likely bankers would agitate for laws that enable them to engage in usury.

Fascinating. You see restrictions of free speech as 'anti-Capitalist'? I do not know if the phrase 'more attenuated connections' is adequate.

Here is one of the connections: Bedarz, a promoter of Distributionism, rails against the "anonymity" of corporations: they get treated like persons but they are not persons.

Nancy Pelosi and her rabid confreres, opposed to free speech in Citizens United, are promoting a constitutional amendment taking away the rights of corporations to be treated as "persons" all across the board. The whole business is detailed at this discussion:

http://whatswrongwiththeworld.net/2012/04/only_people_have_rights.html

Dismayingly, if not positively disgustingly, the Pelosians don't bother to distinguish between non-profit corporations (such as charitable enterprises), and for-profit corporations. Most significantly, they don't distinguish the non-profit entities formed by a concert of effort specifically to generate a bigger megaphone, such as ACLU, the Anti-Defamation League, or (heh) the Democratic Party. And what is their claim for this? They aren't "natural persons".

We the people who ordain and establish this Constitution intend the rights protected by this Constitution to be the rights of natural persons.

The connection is modest but real.

Here is a passage from Chesterton:

The truth is that I generalize because there are so many practical plans. I myself know four or five schemes that have been drawn up, more or less drastically, for the diffusion of capital. The most cautious, from a capitalist standpoint, is the gradual extension of profit-sharing. A more stringently democratic form of the same thing is the management of every business (if it be a small business) by a guild or group clubbing their contributions and dividing their results. Some Distributists dislike the idea of the workman having shares only where he has work; they think he would be more independent if his little capital were invested elsewhere; but they all agree that he ought to have the capital to invest. Others continue to call themselves Distributists because they would give every citizen a dividend out of much larger national systems of production.

As the Acton Institute suggests (perhaps just a bit snidely), you may be a Distributionist if:

7. You really miss guilds: If you’ve mythologized the quaint, confraternal aspects of medieval guilds, and don’t mind overlooking how controlling they were; if you love the idea of long apprenticeships and don’t mind sweeping grants of patent and absolute trade secrecy, you may be a distributist! 8. You dislike intellectual property: If you view Article I, Section 8 of the Constitution as a tool for enriching the plutocracy (except of course when monopolies are given to guilds) and identify more with the Swedish-internet-pirate school of thought, you may be a distributist!

Here is a Distributionist's attempt to distinguish that from Capitalism. First he defines Capitalism, from Pope Pius XI, and then Distributism:

We will turn, then, to the encyclical of Pope Pius XI, Quadragesimo Anno (1931), in which capitalism is defined or characterized as "that economic system in which were provided by different people the capital and labor jointly needed for production"
For distributism is nothing more than an economic system in which private property is well distributed, in which "as many people as possible" are in fact owners.

And this begs these questions: what of factory workers who own 401(k) accounts invested in mutual funds? Or factory workers in employee-owned businesses, such as United Airlines? Or factory workers who own plenty of property, just not the property on which they work productively? Each of which, oddly enough, Bedarz asked.

Correct. So for convenience, let's call this statist technocratic corporatist monstrosity "state capitalism." This is a leviathan with two heads, obviously, as the term indicates.

NM, I agree. State capitalism produces a lot of the evil in our current system. The big business in bed with the politicians damage one area of society after another. But to the sentiment entailed in this (said sarcastically):

The "freedom" to acquire wealth trumps any right of the poor to have their basic needs met.

I do not agree. The "freedom" to acquire wealth just is the prior, foundational right of all (including the poor) to meet their needs through action. There cannot possibly be a "right" to acquire wealth precisely by inaction. (Your use of the passive voice "have their needs met" presents an infinitude of problems.) Furthermore, the freedom of a man to acquire wealth is the necessary pre-requisite to any POSSIBLE duty to give of his wealth to help meet the needs of the poor out of benificence. Hence the truth in the freedom to acquire wealth is a more fundamental order of truth than the truth that we owe a duty of charity to the poor.

Advocating a system that promotes, even requires, usury is to participate in sin.

This is perfectly true, Richard. Capitalism, as defined by Pius Xi and referenced by the Chesterbelloc blog above, does not so "require". It is surely the case that a capitalist system could be envisioned that does not allow usury. We have had a capitalist (-ish) system for a century that does not allow the monopoly, even though at the time Chesterton wrote that was one of his main targets for polemic. We could certainly get rid of usury by law without dismantling capitalism. It would, surely, end up looking quite a bit different than what we have now, because people would have to come up with collateral for student loans and such, and do without credit card debt. And although (ultimately) somewhat less interest would be paid, many non-recourse loans would be at higher interest rates, so the difference would not necessarily be that severe.

1) All usurious loans are illegal 2) No unions can be mandatory 3) End the 'legal fiction' that corporations are individuals/persons within the law 4) corporations that are not worker-owned/cooperatives would face higher tax rates than their worker owned/cooperative peers 5) Simplification and restructuring of the contracting laws so that self-employed private contractors do not face an increased tax, reporting, and paperwork burden

Others have commented on these, I may as well also:

Item 1 is a requirement of social morality, no matter what the system: the ancient Jews were required to abide by it, and Christians in all societies after Christ. Including feudalism, etc. So it is hardly specifically distributist.

Item 2 is a basic matter of justice, and should be true in ALL economic forms of society. I don't see it being specifically distributist, but I will grant that it would help undo the state-capitalism structures we grew. Especially the government employee unions, as Lydia rightly castigates.

Item 3. The "legal fiction" that corporations are "persons" within the law is a BASIC FEATURE of Catholic social teaching. Here is what I mean: in order for "the law" to treat any associative body as anything OTHER than "well, there's Bob, and over there we have Bill, ..." requires "the law" to have a concept for, and to RECOGNIZE their voluntary choice to associate together in a specific way as meaning something for society. There could be no such thing as a legal "partnership" or a "club" or a "company" or a "political party" or ANY of the trillion and one intermediate entities between the individual and the state that Catholic social teaching calls for. Indeed, without legal recognition of groupings, there could not even be a legal recognition of MARRIAGE as being something other than Bill, and over there Sue, just individuals. There would be no recognition of Bill's (joint) right to custody of Sue's kids, for example, he would just be an individual.

But as soon as you have the state recognizing associative entities, you have LAWS that speak to these associative bodies as if they were the direct subjects on which the law acts. So, for example, in tax law a "person" means an "individual" (i.e. a human being) or a partnership or a trust or an estate or an S corporation or a C corporation. When the tax law taxes "persons" for receiving income, it is taxing ALL of these entities, calling ALL of them "persons".

As I established in the prior post on corporations, "the law" treating "corporations" as having the rights of persons is for the sake of human persons whose rights to act associatively mean that the law treats their associations as subjects in their own right. It is not a distinctive feature of "corporations" that this takes place, it is fundamental feature of civilized society with intermediate entities. It is, thus, for the rights of HUMAN BEINGS that they can "speak freely" via association that said association is "granted" (i.e. recognized) free speech rights by law. This principle applies across the board to all associative bodies.

There can be a fair complaint that current for-profit corporations enjoy certain privileges that are unwise. That case can be made - indeed I have made it myself. But many times those privileges are also enjoyed by other entities, such as partnerships, LLCs, and do ill there too. You need a narrower laser focus.

I have sympathy for Item 4, but I am afraid that it is probably impossible to manage decently. Just one question: what percentage of ownership?

There is, also, a fundamentally difficult problem in having all ownership tied up in the very workers who work the physical plant: they have all their eggs in one basket. This situation is actively opposed by those interested in the best fiduciary practices for retirement plans: if employees put all their retirement money into the stock of the company, and the company goes bust...(a la United), there goes their back-up, their savings, their nest egg. Indeed, ALL investment professionals extol the need for diversification. If the workers' entire investment strategy is "plow the money back into the company" and don't put a dime of it elsewhere, they are aiming for bad experience when the company has a downturn. On the other hand, if the worker puts half his money into some other enterprises...that means that OTHER enterprise is not entirely worker owned. There is a _fundamental_ tension here, and it cannot be solved in any neat and tidy way: we need people to be able to invest in that which they do not work. (The same result comes from the retiree who no longer works at ANYTHING).

Item 5 (simplification) can and should be done in the current system, and it would indeed encourage small businesses. I have had 2 occasions where I wanted to run a small operation (part time) and could not get past the start-up hurdles mainly because of regulatory nonsense.

Paul J Cella,

the strident and sanctimonious SJW socialism

and that socialism includes all the big corporations that too engage in pro-sex revolution warfare?

One Corbyn or Warren does not change the point that you fundamentally misunderstand the current situation. The Left is no longer about nationalization but about wrecking the traditional society through cultural means. And it has been so for the past 30 years.

Tony:

Bedarz, a promoter of Distributionism, rails against the "anonymity" of corporations: they get treated like persons but they are not persons.

I have never ever maintained that corporations should not be persons. What I do claim is that a society in which ownership consists of 401(k) investments is NOT an ownership society in the sense of Distributism.

The point rests on key differences between an owner and an investor. The owner cares about the business; investor cares only about the return on investment.

Thus, a society dominated by investors, such as the present capitalist societies, certain key functions of the ownership are lacking such as due stewardship. An investor is lacking in the perfection of an owner and thus investor-dominated society is lacking the perfection of an owner-dominated society.

This is THE difference between Distributism (as I see it) and ownership society concept of conservatives. Ownership society is BETTER than proletariat capitalism but Distributism is STILL better,

Right now politics is being played in the Congress to revive the EX-IM Bank.
140 Democrats and 42 Republicans have joined this motion. The Chambers of Commerce are behind them. Big corporates --Boeing for example-are behind them too.

This is not exactly socialism but crony capitalism.

By the capitalist ideology of Profit First and Foremost, there is no reason not to be a crony capitalist.

Would Tony, Mike T and Paul Cella agree or disagree that a corporation exists to make profit for its owners/investors?
If yes, how would they say that crony capitalism is a malformation of ethical capitalism? Esp if being cronies to politicians, a corporation could make good profits for its investors?

Mike T,
I know little about GM takeover but I suspect a case of crony capitalism as well-GM was not nationalized, was it?

Paul J Cella,
Would any Republican candidate currently running for President agree with you that capitalism as existing has certain ethical problems (such as usury)?
They all think that the regulations are only problem with existing capitalism and there is nothing that removing regulations can not fix.

So, I see nothing objectionable in noting that you do agree with Secretary Clinton that there is something in existing capitalism that needs to be fixed.

This is not to say that you would agree with Her exactly what is wrong, much less how to fix that wrong.

"The Left is no longer about nationalization but about wrecking the traditional society through cultural means. And it has been so for the past 30 years."

Exactly. Political/economic leftism has become a mere sidebar to socio-cultural leftism, with the goal, of course, remaining largely the same. For an excellent treatment of this, see Augusto Del Noce's The Crisis of Modernity, recently translated from the Italian. Del Noce sees the process going on for a lot longer than thirty years, however.

~~~I do not agree. The "freedom" to acquire wealth just is the prior, foundational right of all (including the poor) to meet their needs through action. There cannot possibly be a "right" to acquire wealth precisely by inaction. (Your use of the passive voice "have their needs met" presents an infinitude of problems.)~~~

And what of the poor who do not have the capability or wherewithal to "meet their needs through action"? One can make a distinction between the "deserving" and "non-deserving" poor, and it is primarily the former that I'm referring to, hence my use of the passive voice.

~~~Furthermore, the freedom of a man to acquire wealth is the necessary pre-requisite to any POSSIBLE duty to give of his wealth to help meet the needs of the poor out of benificence. Hence the truth in the freedom to acquire wealth is a more fundamental order of truth than the truth that we owe a duty of charity to the poor.~~~

I agree, if all you're saying is the obvious fact that a man has to have money before he can give any away. But it seems to me that in the classical/Christian understanding of wealth-getting, the poor man's needs take precedence over the wealthy man's wants. This is why the Fathers were able to make statements to the effect that if one wastes food he's taking it from the mouths of the hungry, or that if one has two coats one is robbing from the poor. It's not the asinine Sirico-esque explanation that the Fathers were, in their economic naivete, believers in zero-sum economics, and "we moderns know better now!"

"By the capitalist ideology of Profit First and Foremost, there is no reason not to be a crony capitalist."

Crony capitalism seems to me to be a bugaboo used by the Right to shift all the negatives of capitalism onto. Any degradations caused by capitalism can thus be waived away and blamed on the "crony" side of the thing. The fact is, however, that once capitalism gets to a certain size, so to speak, it almost inevitably becomes cronyist for the very reason BI mentions: the use of political associations to increase profits. And as he asks, why would the Right object to this, provided it's not illegal, given that the purpose of a corporation is to increase the profits for its owners/shareholders? Hell, Wal*Mart does it all the time, and that franchise is held up as the apotheosis of the American capitalist spirit!


But it seems to me that in the classical/Christian understanding of wealth-getting, the poor man's needs take precedence over the wealthy man's wants

And herein is the problem for public policy. If a poor man is sexually promiscuous (which many young, poor men are) and gets a disease, is it incumbent upon the rich man to sacrifice his wealth?

Fundamentally, I'd say yes, if we're working within a Christian context. Exactly how that works out policy-wise is another matter.

Or we could just let him sicken and die.

The point rests on key differences between an owner and an investor. The owner cares about the business; investor cares only about the return on investment.

Bedarz, Let me pose to you an alternate scenario. Sam is a man of means, a man with wealth to spare for investment, is looking where to put it. He investigates one after another after another of proposed start-up ventures, winnows down the possibles to 10 plausibles. Then he learns about the people involved (inventor / entrepreneur), gets to know them just a bit, gets a feel for their personal habits, mental space, etc, and winnows it down to 3 probables. Part of this process includes his estimation of the moral fabric of the guy in charge, e.g. his readiness to pay a fair wage, his honesty, his desire to make new wealth rather than shift others' wealth to his coffers. He further extends his social dealings with the 3, and submits his investigations and thinking to a trusted friend or three, and listens to their thoughts, and decides to invest in 2 of the ventures. His investment arrangement is detailed, with clear avenues of oversight, and part of his w. He expects to continue to know the people involved, and to be on watch as the enterprise progresses.

Then he starts all over again with another set of proposed opportunities. Over time he is associated with 10 to 15 ventures. He does not expect each and every one of them to be successful, he knows better:

Ecclesiastes 11:2 Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.

Now, are you serious about maintaining that "the investor doesn't care about the business"? Specifically under the formal notion "investor" maybe not, but then under the formal notion "radiologist" all the radiologist cares about is correctly reading the X-ray, he doesn't care about the patient. But as a HUMAN radiologist, better, as a Christian radiologist, he cares about the welfare of the patient, including both the eternal and temporal welfare of the patient. So also, a CHRISTIAN investor cares that the people he invests with are using that invested wealth morally, are engaged in a moral enterprise and doing so in a just and honest manner: he cares about the eternal and temporal welfare of the people he has dealings with.

The Distributist would probably suggest that the scenario I posed is one of a distributist haven, a picture perfect example. But I disagree: there is nothing about the picture that tells us whether the businesses being invested in are small or large. More particularly, there is nothing about it that tells us whether the inventor / entrepreneur is doing the labor himself or hiring 100 other people and paying them wages. If the latter, neither will the investor work his own property, nor with the workers work their own property.

Would Tony, Mike T and Paul Cella agree or disagree that a corporation exists to make profit for its owners/investors?

That's too narrow. In a fully Christian society, a Christian for-profit corporation exists to:
1. make new wealth - a (beneficial) new product or new service,
2. offer that new beneficial product or service to customers who have a real use for it,
3. at a price (to the corporation) that is higher the marginal cost of making the product or service, and also less than the marginal benefit level of the product to the buyer,
4. thereby receive a just return for such offering which represents profits,
5. which gross return will be shared equitably between workers and investors.

It presumes that the return being shared is a just return for something of real benefit to people. It rests on the hope that there is an overlap between the marginal cost to the producer and the marginal benefit to the customer. It rests on the assumption that there is an equitable sharing of gross return between workers and investors.

"In a fully Christian society, a Christian for-profit corporation exists to:"

There is no such thing as a fully Christian society. Given human sinfulness there is nothing in capitalism that forces any sort of moral qualifications onto 1 & 2, hence the market's famous amorality. If 1 & 2 are therefore inherently tainted by sin, 3 4 & 5 are also, and thus there is nothing inherent in capitalism that predisposes it to moral outcomes.

Frankly, I'm a little surprised at this attempt at analysis. Capitalist critiques of socialism often take this same, "well, in a perfect world..." tack. It works on neither side.

Would Tony, Mike T and Paul Cella agree or disagree that a corporation exists to make profit for its owners/investors?

A corporation may be chartered for any of a number of purposes. Only a publicly-traded business corporation (admittedly a large category) exists primarily to deliver returns to shareholders, and requires this explicitly in its mandates to executives and managers.

Privately-held companies can and do include a very broad range of goals in their corporate charter. Many corporations include specific environmental sustainability mandates in their governing documents. Some religious firms make direct reference to their theological concerns.

In my estimation it is enervating to let the term "corporation" stand exclusively for public commercial firms. The term derives from the Latin word for body, as in a body of men who have dedicated a portion of their assets and talents to some shared purpose. Many non-profits in the event turn huge profits (consider the University of Alabama and its football program); their tax status requires them to retain or reinvest those earnings but it certainly does not forbid them from earning them.

As Tony argued eloquently, corporations are the legal basis upon which civil association is grounded. They are the mediating institutions that comprise civil society. The attack on these institutions, particular those that decline to embrace the cultural fashions of the day, has grown ever more fearsome over the past decade. This is a dangerous trend and the complacent reduction of corporate terminology to exclude everything but the business corp abets it.

The Left is no longer about nationalization but about wrecking the traditional society through cultural means.

False dichotomy. The Left is about both. I provided several examples in a prior comment. I'll agree that the cultural angle is the strongest emphasis these days, but the urge to nationalize, expropriate, extirpate has not yet vanished from the earth.

Finally, I regret that King Richard has taken his leave. Naturally, I do not share his conclusions regarding how his objections and questions were addressed. When he offered five very specific proposals, he received mostly agreement; but overall the concrete details of Distributism as an alternative to Capitalism remained quite vague.

There is no such thing as a fully Christian society. Given human sinfulness there is nothing in capitalism that forces any sort of moral qualifications onto 1 & 2, hence the market's famous amorality. If 1 & 2 are therefore inherently tainted by sin, 3 4 & 5 are also, and thus there is nothing inherent in capitalism that predisposes it to moral outcomes.

I agree with this in part, and disagree with it in the main.

There is, indeed, nothing in capitalism that inherently inclines it toward well-ordered behavior. It is open to good behavior or evil behavior. It is neutral in that regard.

But the question I was answering was "what does a (for profit) corporation exist for?" And in answer, I distinguish:

Merely on account of being a corporation, AND NOTHING ELSE, it exists to pool resources. Merely on account of being a for-profit corporation, AND NOTHING ELSE, it exists to pool resources to return a profit (or mitigate a loss - more on that later).

But (for profit) corporations do not form themselves out of thin air. PEOPLE form corporations. Therefore, corporations exist for the purposes under which people form them. And many times a person who forms a corporation does so with a more specific, more determinate intention than "make a profit". Usually it is specified by at least the particulars of the particular business line: to make a profit designing clothes, by putting in vending machines, by making tires. But that's just the start of "more specific" intentions. If a person who is a Christian through and through forms a corporation, he is not going to form it strictly and SOLELY to "return a profit". A corporation formed to bilk seniors out of their savings by selling them "investment services" they don't need at ridiculous prices will turn a profit, but will not be a corporation formed by a Christian investor because it's "purpose" consists in moving (already existing) wealth from someone else's account to mine, not in _generating_ new wealth. On the other side of the coin: did you wonder that now days every movie that comes out has apparently 3 or 4 titles like "an X film", or "a Universal Studios / Y film" where X and Y are unique, have never been seen for any other movie? A corporation formed by a movie studio specifically to make one movie ONLY is formed to limit the losses: if it goes bankrupt because the movie is a bust, the creditors lose their money and cannot go after the other assets of the investors, but if the movie is a great hit the investors rake in a nice profit. This is not a purpose that a Christian investor will have in forming a corporation, but it is a possible purpose of incorporating considered simply as such. Thus "incorporating" is open to good or evil purposes, just as "pooling resources" is open to good or evil purposes.

My point is that the morality (and intention) is found in the human beings who design to pursue this or that goal through this or that method, and when you account for the human beings and THEIR purposes, you can distinguish the purposes of a Christian investor from others. A Christian society (as opposed to simply a Christian investor) will probably constrain for-profit incorporation to preclude the above example of forming a for-profit corporation for single short-term operation expressly to limit losses and leave creditors hanging if it "doesn't work out".

Just as a Christian has to bring his honest and worthy intention _to_ the marketplace in trying to make a good sale (including the Christian farmer and the Christian cobbler, not just traders and investors) because "honest intention" is not present automatically in the mere intention to sell his product ("to sell" admits of "to sell for an exorbitant, unjust price"), so also the Christian investor has to bring his moral intention TO the act of incorporating for profit, it is not simply present in incorporating as a matter of course. But this is true for all economic activity, it is not special to capitalist incorporating. (And, note, this truth does not save disordered economic forms like socialism: it is inherently impossible to bring "good intention" and make a moral act of taking property away from legitimate owners merely because the state as owner might be less inclined to certain forms of ill behavior with it. (Just as with morality in general: a moral act requires a good intention, but a good intention does not make an act with an inherently disordered object a good act. Good intention is just one of the requisites for a morally good act.)

Like most conservatives, I am in favor of small businesses being a major part of the economy: they are well in keeping with subsidiarity, for example. What I am not in favor of is laws that constrain the formation of large business solely for the reason of being big, as a positive legal constraint or penalty. (Acts that encourage or promote, rather than require, I don't have a problem with per se.) And similarly I cannot see a rational basis for castigating incorporation solely because that process can be used with evil intention.

But the presence of moral corporations, even in majority, cannot create a moral system. The system is by nature amoral; it honors no principle other than the generation of profit. It has no inherent means to distinguish between licit and illicit lines of trade, or licit and illicit means of promoting those trades. This is a flaw that allows unscrupulous firms to get a leg up on competition by externalizing their costs in ways that go against the common good, while still maintaining legality. It should be clear that it is in this regard that size becomes important and bigness often becomes problematic.

A writer friend put it this way, and I think he's correct: "Conservatives are only slowly waking up to the fact that large corporations are the enemies of much that they hold dear, considerably more dangerous today than utopian socialism: it is to the corporation’s advantage, at least in the short term, that citizens should be replaced by consumers, the more malleable, suggestible, and passive the better. Moreover, corporate capitalism as we know it is, in the long run, inimical to the widespread possession of meaningful private property, as distributists have been arguing for decades. 'Liberty under God' must include taming the corporate as well as the individual appetite, and as far as I know the neo-conservatives have had little or nothing to say about this."

K Richard complains that

I do not note a single direct answer to my direct questions.

And

Vague references to political and economic systems that have nothing to do with Distributism? Yes. Unsupportable statements about Distributists? Yes. Critiques of systems unassociated with Distributism? Yes. But no actual, meaningful criticism of Distributism itself.

I don't believe these are fair accusations: he gave 5 points that distributists would favor, and we pointed out that at least 2 of them are not special to distributism, and gave very specific arguments against at least 2 others. But to be more complete, let's see some of the proposals and commentary that "official" distributists offer, such as the Chesterbelloc blog:

The reinstatement of the Guild System for small-scale production, cooperatives for larger scale, creation of CLTs (Community Land Trusts), agricultural apprenticeship programs, Micro-credit loans and local currencies, are just a part of our intended goals.

We have already mentioned real concerns with "the Guild system" including its monopolistic trappings, its preference for keeping special knowledge under wraps forever, and its tendency to trap individuals into a profession. We have repeatedly professed favor for several alternative forms of micro-credit (including non-profit lending societies) to take the place of usurious loans, and we fail to see how they are special to distributism. I haven't heard about CLTs, but if there are new forms of associating your wealth with that of others that harbor good avenues of wealth management, have at it: associating with is inherently opposed to "keeping it yourself" simply, so I find it difficult to see why it is a model of distributism. Corporations have existed for many hundreds of years as one option (but never the only option), and many of the specific perversities of corporations we find today are rather new, most only in the last 100 years, some only the last 30.

Now let's go on to commentary, at the same link:

We should be clear that there are things the individual can do. First off, one should start by consuming what one needs instead of what one desires. He or she can decide to cease shopping at Costco or Sam’s Club, opting instead to purchase goods at the small shop. This may mean a higher price, but it also means greater value, quality, and investment in community. Due to this cost, the individual will practice thrift or what Solzhenitsyn called “self-restraint.” He or she will utilize discernment when expending earnings and limit resources rather than exhausting them, because judgment will be regulated and more acute.

Can there be anything more silly or poverty-stricken than this?

The problem with asking people to "consuming what one needs instead of what one desires" is that it CANNOT be settled. Not in principle (abstractly), not in the concrete, nor anywhere in between. St. Francis left every stitch of property behind, he didn't need anything. Is that our model? Stop consuming, period? After all, the "one thing necessary" is to go to heaven, absolutely every earthly good will pass away and will not come to heaven with us. You can go to heaven being destitute of ALL goods of this world, so NOTHING is necessary.

"What one needs" is a phrase that needs a referent (or a series of them): for what purpose? Toward what goal? With what objective? Considering what options? Under what constraints?

No man "needs" to become a doctor. Every man who becomes a doctor uses up VAST amounts of resources in doing so, resources that could be sold and given to the poor. His medical education consumes hundred$ of thousand$. Since he doesn't "need" to be a doctor, he shouldn't consume those resources. Except: by becoming a doctor, he may (probably will) return back to society more wealth than he consumes by becoming a doctor. It is an investment. Nobody needs to invest.

"What one needs" never includes anything over and above the barest minimum. In this day of refrigeration, NOBODY NEEDS wine. Or beer. Ever. So, the distributist will be against wine and beer, and against bars. And against smoking, too. Like G.K. Chesterton was against drinking beer and cigars...wait, what?

Interestingly, even people on almost the lowest rung of the economic ladder, (those who are just above the $1 per day cut-off point for the UN's measure of lowest poverty) set aside more than 5% of their income for celebrations. Which is, by definition, not necessary simply speaking. They could do without. The Puritans showed us that.

Let us listen rather to Leo XIII:

46. If a workman's wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income.

The point here is that being sensible and thrifty and modest are not opposed to "consuming", nor are they opposed to consuming even a little more than what is necessary. Being "comfortable" is not necessary, but it reasonable. And by "putting by some little savings and thus secure a modest source of income" Leo clearly does not mean, specifically, working at his own property or his own shop, it is more general and more capitalist: investing to secure a modest income not reliant SOLELY on his wages or direct profits from his own labor.

He or she can decide to cease shopping at Costco or Sam’s Club, opting instead to purchase goods at the small shop. This may mean a higher price, but it also means greater value, quality, and investment in community.

Wait, I thought we were supposed to not consume what we don't need. Spending more at a more expensive "small" shop is consuming more - more resources. As for "greater value" and "quality", that's just goofy. If I can buy an IDENTICAL product for $100 at Costco and in the local sports shop for $125, the "greater value" cannot possibly be in the product, it can only be in the support of the local shop rather than Costco. But...it is a presumption rather than an argument, that this expending more resources to get the very same product ends up producing more value all things considered: absent (shifted) hidden costs, we have every right to assume that pricing is a proper way to measure value. If, on the other hand, the claim is that the product made locally by the local craftsman is better made than the similar product made for the national chain (which is, by the way, made SOMEWHERE locally) - this is very often not the case, because economies of scale _prevent_ the local hand-craftsman from using a $1million dollar tool to produce the same level of quality as can be generated with the expensive tool: he simply cannot produce high quality reliably without that expensive machinery. The certainty I get from knowing just what the quality actually is, has an economic value even if the quality is modest: I would (sometimes) rather go to a Chick-fil-A rather than a "local" diner to order a chicken sandwich, because I know exactly what I am going to get from the former, and the latter might be better but it might not. (Anyway, are franchises "local" or "national"?)

He or she will utilize discernment when expending earnings and limit resources rather than exhausting them, because judgment will be regulated and more acute.

But this is just what the careful homemaker does in shopping for food at 3 different grocery stores to catch the sales at all 3, reducing her spending by 30%, even when all 3 are national chains. She has limited resources, she uses them wisely in buying the best quality available at the lowest price. Her judgment is acute to changes in price, changes in size or quality, drop-off in longevity, etc. And it has nothing at all to do with supporting the small over the large.

Once again, we find that often enough the methods and goals that distributists aim for are either goals they have in common with others (including some capitalists) or they are pure sentimentality without a rational foothold in the good of man.

Hello, all,
I have not quite waited another 24 hours before returning one last time, so I am being a bit precipitous. I do notice Paul and Tony congratulating them on how well they have addressed Distributism by finally actually pointing to something a Distributist or other Catholic actually wrote. I am a bit surprised Tony doesn't know what a CLT is; considering how prominent they are in contemporary Distributist theory (and the fact that google exists) I assumed that anyone who claimed familiarity with Distributism would know at least what they are.
The five proposals I made were well received (of course, it was in response to the ludicrous statement that Distributists don't make policy recommendations) and the only real objection ('I think corporations should be treated as people') failed to ask for more details, even when I stated that there was a misunderstanding of meaning.
And, most interesting, all of this discussion of how very well I was answered fails to contain a single direct answer to the 2 simple, direct questions I stated more than once and referenced again. Indeed, when Tony writes,
"I don't believe these are fair accusations..."
I must conclude one of
-he didn't actually read the entire thread
-he doesn't understand what a question is
-he cannot answer the questions
-he does not wish to address the questions.

And may I gently remind all readers - my 5 suggested policies were not questions; they were statements.

My contact information is freely available. If you wish to contact me, please do so directly. I have no intention of returning, even out of morbid curiosity, and I ask, in humility, for your prayers as I wish you all well.

The answers are (and have been) embedded in what we have said. But to be more clear:

Since this is true why would you support the existing Capitalist systems instead of Distributism?

To the extent Distributism does or may support this core aspect of capitalism:

Pope Pius XI, Quadragesimo Anno (1931), in which capitalism is defined or characterized as "that economic system in which were provided by different people the capital and labor jointly needed for production"

I support BOTH and don't find a need to choose one over the other. A capitalist who is happy to see capital distributed widely will be BOTH a distributist and a capitalist, he is not a "bad capitalist". Why would you insist that it is non-capitalist to prefer capital ownership distributed widely, given Pius's definition?

Noting the ongoing relationship between Capitalism and usury over time and in practice, how can you justify supporting Capitalism over *any* system that has a chance of maintaining the rights and dignity of people even if said system may not be as efficient at generating wealth?

I believe this is a false dichotomy. Why must you ask the question this way? The question is poorly formed and misleads.

Noting the ongoing relationship between Christianity and SINNERS since the very beginning, how can you justify supporting Christianity over "any" religion that has a chance of maintaining the rights and dignity of people?

I do not support any arrangement of capitalism that embraces as an essential element usury or which by design ignores the rights and dignity of people. I believe that it is possible for there to be a condition of capitalism that does not have these features inherent. Since from the time of Leo XIII and Pius XI and JPII it has been maintained that there is a kind, form, condition, or sense of "capitalism" that does not demand usury, that does not demand ignoring the humans who constitute the end of the system, that does not by design defeat charity, why would you insist on phrasing a question that pre-supposes this?


"Can there be anything more silly or poverty-stricken than this?"

Well, yeah. How about belief in an amoral economic system that automatically produces moral results?

In any case, your string of rhetorical questions simply indicates that you have no notion of the ascetical or "simple life," and how it may be applied to getting and spending. But don't feel bad. Neither do 99% of the rest of Americans. The U.S., being a largely Protestant endeavor, has instituted values almost diametrically opposed to anything remotely resembling the ascetical.

Again, bringing up the very concept of "enough" to some people causes steam to come out of ears!

And the mention of Solzhenitsyn is apposite, as it is his very critique of the West's materialism that caused him to lose the cache he had on the Right.

It's funny -- how is it possible to complain about materialism, consumerism, and the crassness of modern American culture, yet pooh-pooh the idea that corporate capitalism has played a major role in it all? Booth Tarkington, certainly no leftist, saw this as early as 1915!

"The problem with asking people to 'consuming what one needs instead of what one desires' is that it CANNOT be settled. Not in principle (abstractly), not in the concrete, nor anywhere in between."

Wrong. The inability to distinguish between needs and wants is something one should outgrow. Signs of it in an adult are indications of a continuing adolescence, which says an awful lot about the success of Big Business in producing homo oeconomicus infantalis.

"No man 'needs' to become a doctor."

Ever hear of a "calling"? If a man feels the calling to be a doctor, he, in a sense "needs" to become one. "Need" understood in this sense does not have to imply compulsion.

It's funny -- how is it possible to complain about materialism, consumerism, and the crassness of modern American culture, yet pooh-pooh the idea that corporate capitalism has played a major role in it all?

Nobody has pooh-poohed that, Marmot. What's going on is that, while we share a considerable amount of the Distributist critique of Capitalism, we're much more wary of the actual policies being offered by critics of Capitalism. Both Tony and I have mentioned the assault on corporate Free Speech as a good example of that. Someone pounds the table and shouts, "how can a corporation be a legal person?" without thinking through the whole structure of civil society, and how destructive of liberty it would be to confine constitutional rights strictly to isolated individuals, as if Tony and I individually have free speech rights, but if we combine together in the corporate form, we lose those rights. That's pernicious stuff.

Asceticism is not an option open to a man with a wife and children. Nor is it is applicable principle to the economy as a whole. Religious orders commonly depend on accumulated capital supplied by the church (although the medieval monasteries were oftentimes functional economies in their own right: brewing beer, raising crops, selling products and the like.)

It is certainly true that all Christians owe to God a careful accounting of how they use their resources. The taste for luxury and excess is amply demonstrated across virtually every level of American life. We should repent of our gluttony, greed, and miserliness.

On the other hand, Americans are still an impressively generous people. Donations of time, energy and capital are noteworthy across all walks of life. And poorer states, generally speaking, give more, proportionately, than rich ones.

Most large companies maintain not insignificant budgets for charitable work. My own employer set aside an entire day (yesterday, as it happens) for volunteer work: employees could spend a whole or a part of their PAID working day giving their labor over to various charitable causes.

I think the "steam out of the ears" you speak of relates to the fact that you're hurling polemics at people who on the whole live moderately and carefully evaluate their expenditures. There's a touch of indignation when some pseudonymous commenter implies that we've given our lives over to avarice when he actually knows nothing about us. Do you know what it costs to send four children through private education in Atlanta? That money has to come from somewhere.

That said, I do agree that Americans as a whole need to restrain their taste for luxury and their general sense of entitlement.

"The problem with asking people to 'consuming what one needs instead of what one desires' is that it CANNOT be settled. Not in principle (abstractly), not in the concrete, nor anywhere in between."

Wrong. The inability to distinguish between needs and wants is something one should outgrow. Signs of it in an adult are indications of a continuing adolescence, which says an awful lot about the success of Big Business in producing homo oeconomicus infantalis.

Come on, NM, I didn't say that the question cannot be settled and then just leave it at that. I went to say:

"What one needs" is a phrase that needs a referent (or a series of them): for what purpose? Toward what goal? With what objective? Considering what options? Under what constraints?

Appropriate, virtuous restraint / self-control will be found at a different line for a Trappist monk and for a soldier in boot camp: the one will not eat meat, the other will eat meat frequently - both acting rightly. And yet for nearly every young man in the US today, it is a CHOICE as to whether to become a monk or a soldier. And so it becomes a "need" subject to relative options. Subject to conditions, options, goals. It cannot be answered in the abstract, without those options, conditions, and goals considered.

"No man 'needs' to become a doctor."

Ever hear of a "calling"? If a man feels the calling to be a doctor, he, in a sense "needs" to become one. "Need" understood in this sense does not have to imply compulsion.

One man's "calling" to become a doctor is another man's "luxury" or "option" or "desire". I am not belittling the fact that men do really feel drawn to certain professions, certain objectives, certain endeavors. I do object, mildly, to using the word "calling" (without clarification) as if it were on the same level as a person's vocation, either married, religious, or single. A person doesn't get to treat his calling to be a doctor or to be a entrepreneurial sports team owner or whatever as on the same plane. But even if he did: the stories of the saints are replete with men and women who felt called to belong to a strict religious order, only to find out that they can't physically hack it and have the order tell them point blank: "no, you don't belong here. This isn't what God is calling you to." Your circumstances can dictate whether you can follow up on something you feel called to: many are those who feel called to be musicians, few can make the grade. They have to shuffle off and find something else. Plenty of people who think they have a place in medicine or law, when they try to (try but fail to get in to medical school or get in and flunk out), find out that no, they DON'T have a place there, they can't do it, so no, they don't have that calling after all. Heck, I feel called to be a philanthropist, but my circumstances prevent it.

Under another aspect: each man needs health. And to have health, you need good healthy food. Sometimes we humans are more aware of this, sometimes less: having a diet with enough protein wasn't always possible or well understood, even when there was enough food of some sort or other. Some people need, also, supplements - either their food isn't complete enough, or their bodies won't extract the nutrients they need from good food, because of one condition or another. Sometimes we are more aware of this problem, sometimes less: vitamin C for sailors, iron for me (my body won't metabolize it properly). If my child is unhealthy, but I don't know why, and I spend $5,000 tracking down vitamin and mineral deficiencies, am I pursuing a "need" or a "desire"? Obviously, the answer cannot be simple. If I am a doctor trying to convince ship captains of the 1400s to carry oranges to prevent scurvy, or a doctor of the 1890s trying to convince nurses to wash their hands, am I "over-complicating" their lives? Obviously, the answer cannot be to just let people lead "simple" lives and shut up about the complications.

But the perception of "need" is not, finally, what I was getting at. At the sharp end of the stick, when it comes to the point of deciding at this moment to eat or not to eat a meal, the right question is not "do I need this food" but rather "is eating this a good act for me here and now". Sometimes, like on high feast days, the RIGHT AND WORTHY thing to do is to eat food that you do not physically need, nor emotionally, nor psychologically (whatever that might mean). Sometimes, like in the middle of a starving and besieged city, the RIGHT AND WORTHY thing to _do_ is to not eat that food in front of me that I physically need, but to give it to someone else and let myself go without, though I will sicken and die for doing so. At the sharp end of the stick in THIS circumstance with THESE conditions impinging on me, "need" becomes just one of the many elements under consideration of prudence, and what we must answer about the act to be chosen is "good" or "not good", not merely "need" or "don't need". And when we make that prudent choice, the consideration of "need" is always "with respect to" all the conditions that apply, including goals set, which are subject to choices made, which are subject to resources available: a poor man cannot worthily and prudently decide to "build a hospital" no matter how much he needs one, but a rich man can prudently so decide, even though he doesn't "need" to do so.

In any case, your string of rhetorical questions simply indicates that you have no notion of the ascetical or "simple life," and how it may be applied to getting and spending.

I will admit to the _plausibility_ that I have some element, some portion, of the common American failings regarding asceticism, IF you will admit that this (along with your "homo oeconomicus infantalis" attribution) was was a RASH and overblown comment, given that you don't know me or anything about my personal life. Did you know, for example, that members of my immediate family have taken (and lived) vows of poverty, and others were missionaries in 3rd world countries?

In any case, I take issue with marrying up "asceticism" with "the simple life" without lots and lots of qualifiers and clarifiers. To a Christian, the object of asceticism is not simply "to live the simple life" as such. There are two main objects to ascetical practices, (a) to learn self-mastery, self-discipline, so as to be master over your own desires and your own self; and (b) to walk in Jesus' footsteps, making up for what is lacking in the afflictions of Christ. Neither one has as primary object to rest in "the simple life". There is no asceticism in heaven, though there is the simple life. Even in the temporal order, asceticism is not an end in itself, it is always a means to a good outside itself. This is an issue in which the Jansenists erred.

The end of man (simply as such) in the temporal order is neither asceticism nor "the simple life", but "the good life". Because of what the (temporal) good life primarily consists in, though, it must needs entail a certain degree of simplicity: the highest acts of man in the temporal order are the worship and contemplation of God. Such contemplation must involve withdrawing oneself from the consideration of worldly goods, and thus the happy man must be ABLE to be withdrawn from the complexities of life to the simple He Who Is. He cannot be so tied down by things that he is unable to ascend to God.

Yet while still in this life, man has a body and must attend to that body, its place, its relations, and his duties to others around him. The GOOD life, therefore, consists not merely in simplicity, but in a due balance between simplicity and complexity. Since the physical is more the contributor of complexity, while the higher good is the spiritual, and since from original sin we are more drawn to the goods of the body than of the spirit, it is fair enough as a short-cut to think of "the good life" as "the simple life" for that must be the more conscious part of our aim, but in principle the good life involves both the simple and the complex. And for those like businessmen (unlike religious contemplatives) whose calling is to be "in the world" and to make the calling for others toward being religious contemplatives even possible (as Paul suggests), THEIR role will involve more complexity than others. That is to say, for them "the good life" will consist in attending more to complex matters - and thus to live more complexly - than it will be for some. Doctors must study the very, very complex human body, they cannot merely brush away complexity and say "it's all just flesh, eat well, get your sleep, you'll be fine."

Thus, again, resolving what a man should do, how he should act, what is right and good for him in the here and now in his own state and circumstances, cannot be answered merely by knowing either "need" and "what is the more simple". These are, always, only part and only approximations toward what he must know in acting well. And this is what I was getting at. Homo oeconomicus virtutis does not answer every economical question by "do the more simple", that would be infantile.

~~~I think the "steam out of the ears" you speak of relates to the fact that you're hurling polemics at people who on the whole live moderately and carefully evaluate their expenditures. There's a touch of indignation when some pseudonymous commenter implies that we've given our lives over to avarice when he actually knows nothing about us. Do you know what it costs to send four children through private education in Atlanta? That money has to come from somewhere.~~~

Apologies to both you and Tony. I can see how that complaint could easily be taken personally, but such was not my intent. I have no knowledge how either of you live personally. But it does strike me as odd that someone with a handle on Catholic social teaching could fire off such a flurry of rhetorical questions which seem to indicate otherwise, and that's what ruffled my feathers. No offense intended.

As for the "homo oeconomicus infantalis" comment, that was not aimed at you at all. My point was that American consumerist capitalism has, to my mind, been very adept at creating a nation of economic adolescents. I was in no way implying that you are one of them.

Basically, I'm arguing for an application of the philosophy of the Desert Fathers to Christians' understanding of getting and spending. In a nutshell, that's all it really is.

On a larger scale, my point is that I believe that the system itself is gamed towards avarice, as it were, and that defense of the system is thus at odds with any personal protestations against its negative ramifications. If one bewails "a taste for luxury and excess" and "gluttony, greed, and miserliness," how is it possible to defend a system which plays a very large part in producing and/or exacerbating them?

On a larger scale, my point is that I believe that the system itself is gamed towards avarice, as it were, and that defense of the system is thus at odds with any personal protestations against its negative ramifications. If one bewails "a taste for luxury and excess" and "gluttony, greed, and miserliness," how is it possible to defend a system which plays a very large part in producing and/or exacerbating them?

By there being a confusion in the term "the system".

On the one hand, it is easily and fairly applied to "what we have right now", which is indeed characterized by strong inducements to avarice and consumerism. Commercial advertising on TV is a "a strong inducement to avarice and consumerism", just for one example.

On the other hand, it can be used to refer to "capitalism" generically, of which "what we have now" is merely one particular breed or instantiation, but there could be another breed that DOES NOT have such embedded inducements to avarice and consumerism - or at least not many of them. In this sense, "the system" of capitalism does not inherently call for the PARTICULAR inducements to avarice that we have today.

Let me give an example. Due to a number of outpourings of greed early in the industrial revolution, we ended up with a number of entities forming trusts and monopolies of one sort or another, which led to the development of our anti-trust laws. I am ALL IN FAVOR of society having ways to dis-incentivize the immoral behavior of using trusts to unjustly line the pockets of the few who control the whole supply of a needed good. Laws doing so may be necessary. But it is not inescapable that these particular laws are the only or best way to do it, and it is possible that these particular laws themselves prevent some kinds of GOOD behavior.

Suppose we're in the 1930s, and I run a gas station, in competition with 3 other stations in the vicinity. We all close for Sunday, because it's Sunday, the Lord's day. But one station owner is hurting for money, in danger of going under, and he figures if he is open only 6 hours on Sunday, he will be open without competition and he will readily make enough to stay afloat. In addition, he and the other stations have heard repeatedly from neighbors that they need to be open on Sundays for "necessary services" - doctors and nurses have to report to the hospital on Sundays, etc., and sometimes travelers must travel on Sundays and they need gas. So he does this. That leads the others, in order to remain on a "level playing field" with him, to feel they must also open on Sunday, and some are inclined that if they are going to open at all, they will open all day. Thus leading a pricing / commercially competitive 'war' ostensibly aimed at each other but in effect aimed at Sunday, the day of rest - at undermining one more chink in the armor of Christian society, damaging the owners' and employees' ability to give God the day, damaging respect among my neighbors for the Lord's day as a day set aside. I come along to the other three, and say "hey, guys, let's admit that to a certain extent gas stations are a 'necessary service' and there is some justification to be open on Sunday, but there is no need for ALL of us to do so. Let's agree that ONLY ONE station will be open on any Sunday, and we will rotate through all 4 of us on an equal basis so nobody is open more often, so our employees have to give up a free Sunday only once a month, etc. And we will each put up a sign on the days we are closed telling customers which station is open."

According to the anti-trust laws, I have just engaged in illegal collusion regarding competitive commercial services. So I can't do it, or anything similar. So, a reasonable and plausible barrier against letting crass commercialism overtake other important social values has been taken away, by the anti-trust laws.

Please, I am not saying we need to get rid of the anti-trust laws. I am saying that there have been ways in which our legal and social environment have been structured that constitute inducements toward materialism and consumerism; ways that are CONTINGENT, ways that either might not have happened or might be changed or mitigated by new approaches - even if these approaches are not sweeping, revolutionary changes. A law that explicitly forbade usury on HOME loans would be a very significant, but not fundamental change in the nature of our economic system: since 2008 the presumptive expectation is that banks' claims generally end at the property line, so the actual practice regarding home loans would not change all that much. The possible ( and much to be hoped for) failure of broadcast TV paid commercial programming (moving most content to the internet and/or direct pay-per-view instead of commercial ads), even without any law mandating it, would significantly erode the mind-numbing control Madison Avenue has on buying habits and consumerism.

~~~In this sense, "the system" of capitalism does not inherently call for the PARTICULAR inducements to avarice that we have today.~~~

True enough. But given your example about the tendency in early industrial capitalism to form trusts due to avarice, isn't it at least worth considering that "the system" itself leans that way? Maybe not towards monopoly as such, but towards other inducements to avarice?

For instance, it's safe to say that the consumerism we experience today is greatly related to the rise of mass advertising, and would be impossible without it. Yet, isn't it the same avarice which drove the trend towards monopolies that led the push toward mass advertising? If you've read any histories of advertising you know that's definitely the case.

I would agree that capitalism as a "system does not inherently call for the PARTICULAR inducements to avarice that we have today." But SOME inducements to avarice are always present, and present in a major way, are they not? The tendency towards avaricious behavior in industrial/finance capitalism thus seems to me to be a feature rather than a bug. In other words if it's not monopolies, it's mass advertising. If it wasn't mass advertising, it would be something else.

But SOME inducements to avarice are always present, and present in a major way, are they not? The tendency towards avaricious behavior in industrial/finance capitalism thus seems to me to be a feature rather than a bug. In other words if it's not monopolies, it's mass advertising. If it wasn't mass advertising, it would be something else.

I think the "tendency toward avaricious behavior" is in fallen human nature, which will try to pervert or corrupt everything and twist it toward the self. It did that for feudalism, it did that for guilds, it did that for mercantilism.

There cannot possibly be a "system" that is proof against this inclination to sin. For, the human condition was designed by God to allow for free choice, and free choice he must give us in order to get freely offered love. Any "system" that precludes being twisted away from the good is either a system that (a) doesn't HAVE good, or (b) doesn't have free choice. And any system that has good, and free choice, will, with our fallen nature, harbor inclinations to avarice, because our fallen inclination just is a distortion with respect to "the good".

What there can be, though, is a "system" (for want of a better word, but I don't think it is a good word) that promotes good behavior MORE than it offers space to ill choices. In politics, the system of checks and balances between elements of the government is that - but it comes at a cost: it precludes a truly outstanding monarchy with full monarchical powers, i.e. a decades long run of government unified by a single (correct) vision of the good, by a wise, virtuous man. In economics, there will need to be other trade-offs. I thin that the market economy that Leo XIII, Pius XI and JPII were talking about, which I believe is RIGHTLY called "restrained capitalism", or "humane capitalism", or something like that, is roughly the kind of economic system to best do that.

Fundamentally, I'd say yes, if we're working within a Christian context. Exactly how that works out policy-wise is another matter.

Think about what this is saying, for a moment. A poor man goes out and has sex with several women over the course of a few months and gets a disease. If he has a right to care for that disease, which he only got via fornication, then that means that the rich who don't want to treat him are wronging him.

Now pray tell, NM, how do you arrive at the notion that if you do evil and suffer for it, that others who have more are obligated to take away that suffering lest they be called greedy?

I am not speaking in terms of higher calling here, but basic social contract. How is it that an evil man is wronged when the consequences of his choices are not ameliorated?

Tony,

Sam is a man of means, a man with wealth to spare for investment, is looking where to put it

Sam is an exceptional investor. He invests directly and his investment is stable, by your example.
However, my points relate to the Ownership Society as envisaged by conservatives in which the ownership of giant corporations is diffused through mutual funds, pension funds etc into a mass of salarymen (of which I am one). The salaryman neither knows nor cares what corporations he owns. HE is not Sam and your Sam does not at all concerns the "Ownership Society".

My consistent point has been that the Ownership Society conceived in this precise manner is insufficient as a Distributist model. Sure, the financial assets are distributed but ownership, in the proper sense of the word, is not. Indeed, the ownership does not exist for the managers that run the corporations and pension funds are not the owners of the said corporations as well. Thus, the financial capitalism as exists now is destructive of true ownership.

Mike and Nice Marmot, I took the issue raised in this:

And herein is the problem for public policy. If a poor man is sexually promiscuous (which many young, poor men are) and gets a disease, is it incumbent upon the rich man to sacrifice his wealth?

and put up a new post to deal with it. In broader terms, but with this quote as part of the discussion.

~~~I think the "tendency toward avaricious behavior" is in fallen human nature, which will try to pervert or corrupt everything and twist it toward the self. It did that for feudalism, it did that for guilds, it did that for mercantilism.~~~

Yes, absolutely. There is a sort of baseline selfishness present in fallen humanity that often displays itself as greed and avarice. But the question is whether a given system tends to help or hinder the furtherance of that root selfishness. Capitalism, in its transformation of avarice into a good, "self-interest," does not hinder selfishness but instead makes a virtue out of it. When you combine that with a religious view that radically separates works from salvation, and couple it with the rise of the nation state, and later, an unChristian view of human autonomy, you end up with an institutionalized system which is morally faulty at its very root.

I think that one can certainly push for a "humane" capitalism. In fact, that may actually be the best we can hope for given capitalism's current triumph. But I believe that to be effective any movements towards that would have to work under the presumption of the inherent moral flaws in the system itself, not the least of which is that, at root, it makes the grievous error of miscasting one of the deadly sins as a good.

"the financial capitalism as exists now is destructive of true ownership."

Indeed. Distributists and agrarians have been saying this for almost a hundred years. It leads to even-increasing centralization of economic power, which is one form of centralization that for some reason many so-called conservatives don't seem to fear, or even mind.


My consistent point has been that the Ownership Society conceived in this precise manner is insufficient as a Distributist model. Sure, the financial assets are distributed but ownership, in the proper sense of the word, is not. Indeed, the ownership does not exist for the managers that run the corporations and pension funds are not the owners of the said corporations as well. Thus, the financial capitalism as exists now is destructive of true ownership.

Bedarz, I think your thesis runs counter to Leo XIII:

46. If a workman's wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income.

I find nothing in here implying that the thrifty workman is investing in his OWN productive activity. I would say the implication runs the other way: the "secure a modest source of income" would SEEM to reference income independent of his labor. For hard times, when he is ill, injured, or retired.

Whatever it true (which I grant) that a man tends to work better when his own property is at stake, this truth has offsets which I mentioned: having all your eggs in one basket is not sound fiduciary planning.

However, I am willing to compromise, I want to see if you are willing to meet me half way: would you allow that a STABLE society, in which half of a man's investment is in the property he works, and half of it is diversified among a number of other small-to-medium businesses, is a fair enough approximation to distributism? I would happily settle for such a condition.

half of it is diversified among a number of other small-to-medium businesses,

Diversified how? Anonymously through stock market? In that case, even though the workman may receive some returns, the financiers are empowered further.

I am not against diversification and investment. But it may be ideally done locally at small scale.

But it may be ideally done locally at small scale.

I grant that it can.

I am not confident that you can generate a clear rationale for laws that would broadly allow shares (or portions, or percentages) of an entity to be available for sale, but that would PROHIBIT the kind of sale to second, third, and 20th persons who eventually are removed from the entity by any relationship but that of merely partial owner.

I take it that you would by law prohibit all public corporations. Businesses would be either: sole proprietorships, partnerships, or closely-held corporations. Is that right?

What about non-profit corporations? Would you also prohibit those? They, too, can command large assets. Like, you know, a monastery? Is that also damaging to the "ownership society".

Or would you just prohibit for-profit public corporations? See, the problem I am thinking of is this: traditionally, the value tied up in sole proprietorships, partnerships, or closely-held corporations, is very hard to GET AT, to turn liquid. But if one of the reasons for a man to put part of his assets aside in investment is "for a rainy day" when he is ill or disabled, he must needs be able to liquidate at least a portion of his investment without waiting 5 or 10 years. So we have him caught between a rock and a hard place: as a good steward, he doesn't let his savings sit around growing mold, he takes his 5 talents and invests it. But he doesn't know "when the master is going to return": if the master returns suddenly and he cannot liquidate ANY of the investment for 5 more years, that's not going to go over well, the master wants to see RESULTS. I.e. he doesn't know when he will suffer an injury.

I do think we would be better off with mostly small businesses, and with mostly investors knowing something about the business personally. I think this is implied in subsidiarity - more or less loosely. I just don't feel confident there are good ways to legally force such a result.

legally force such a result

The State actively forces people to participate in stock market.
1) By giving tax rebates to market investments.
2) By printing money, it obliges people to enter into market speculation or watch their savings wiped out.

So, there is probably little need for the State to prohibit anything. It merely needs to stop some things it does.

1) By giving tax rebates to market investments.

It gives tax rebates to all investments. If you buy a run down house, fix it up and flip it for a 100% profit you'll pay the same capital gains you would if you invested in the stock market. The stock market is simply the easiest way to invest in something for the average person.

Mike T,
Is the average man really interested in the stock market or is he obliged to be so?

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