Weblog Awards, Again

Hello, and good day. The voting for the Weblog Awards is going to end on the 15^th of this month, so I encourage you all to go and vote. As someone who routinely reads American Princess and likes most of the blogs I am up against, I can only say (like Holy Mama) – despite the excellent competition, why do I want to know how badly I am doing? Oh, and thanks to Where I Stand for the nod. I think.

I am an American!

Anchoress brought up a subject that I have touched on before – American Culture. I talk about American culture fairly often, a trait begun by a chance encounter in 1985. A friend of a friend invited me to dinner with a small group. This was a pleasant gesture, since they were all mid-20’s grad students and I was an 18 year-old soldier. We had a nice afternoon of seafood with more people joining the circle as the evening went on, including the boyfriend of the girl who had invited me, a Frenchman in his mid-30’s who taught at the college the others attended. It was only a few minutes after he arrived that I heard his reply to a statement I had not heard,

“Of course, there is no such thing as American culture, let alone cuisine.”

This elicited a chorus of nods and muttered agreement from the students – and my ire. I immediately interrupted,

“What about baseball and football?” I asked.

“You cannot win cricket or soccer, so you play easier games.”

“Baked beans, scrapple, corn bread, and hush puppies are certainly American!” I argued.

“And no civilized person can eat any of them.”

“OK, you made me do it – jazz!” I said.

He shut up. I had met this man before, but that time he had been complaining about Europe – how expensive everything was, how hard it was to get a good job, the cars were small, taxes were high, etc. Yet he was more than willing to criticize the nation that he found warm, welcoming, and fruitful. Infuriatingly, the other Americans with me had just sat there, agreeing with him. Including a woman pursuing a master’s in American History!

Since then, I have been a proponent of the simple fact that America does have a unique culture and it does have unique, if obscure, cuisine. Anchoress points to a very clear element of American culture; cartoons. Looney Tunes, Tom and Jerry, and the like are very much a part of the American psyche. This is largely because of the American media culture; America produces a vast number of feature-length films each year and Hollywood has dominated world cinema since the 1920’s. Some people even claim that it is wrong to call American movies ‘foreign films’ in any English-speaking market, since they are the dominant films in all such areas. American films also dominate most non-English markets. Even in nations with a strong local cinema, like Italy or France, film makers are relying on government subsidies (sometimes large ones) to make films and use quotas to limit the number of American productions that can be seen in theaters or on television, yet are still seeing American movies strip away hundreds of millions of euros in revenue from their local markets. Despite the sneers you sometimes hear that Americans only like explosions, not real film, it appears the rest of the world trusts our opinions; films that do well in America are eagerly anticipated overseas because they trust our taste in movies.

So the various regional identities of America (Northeast, Mid-West, South, California) are tied together with movies and TV; and this obviously viable culture (witness the popularity of not just our films but our TV overseas) means that non-Americans find it rich and valuable, too.

Our music is also a world-wide constant, with everything from jazz, rock, and rap being the obvious choices. But American music like Gospel, the Blues, Country, and even various forms of Folk music are widely heard and often wildly popular overseas. I’ve heard Australian Country (pretty good) and South African Country (also pretty good), French Rap (didn’t care for it) and Hebrew Rap (not too bad), and who can forget the Red Elvises?

Popular fashion is also often dominated by American trends, especially on the street. American clothes, especially American trademarks, are immensely popular everywhere, and the American ‘urban style’ is widely copied in Europe. Nikes, hoodies, and such are everywhere, but so are cowboy boots.

Of course, American cuisine is rich, varied, subtle – and ignored outside America. Heck, its ignored in American commercial cooking – you know, McDonald’s, Applebee’s, Chili’s, etc. The traditional American foods, like sweet potato pie and fritters, are only cooked at home, usually. The mainstream commercial kitchens produce things that, while American, lack the richness and subtlety of things like key lime pie (the real stuff) or seasoned collards with a plate of hoppin’ john. The commercial food of America is burgers, hot dogs, French fries, and milk shakes. Although good, these are rather blunt dishes. They are despised by others… yet, they are also stunningly popular with a new McDonald’s opening all the time – in France. American fast food is coming to dominate French daily casual lunches in urban areas, and American fast food is also beginning to spread in England, Russia, and Brazil and already dominates the casual daily food market of a stunning number of countries. Overall, McDonald’s are present in over 100 countries. Interestingly, Thomas Friedman has pointed out in his Golden Arches Theory of Conflict Prevention that no two nations with McDonald’s have gone to war with each other. Anthropologists have pointed out that the culture imported by McDonald’s in Asia has led to a number of improvements in food service ranging from faster service to cleaner bathrooms.

I will do no more than mention (and link) the world’s favorite soft-drink, Coca-Cola.

So American television, movies, music, clothing, and food are everywhere, found in virtually every nation on Earth, popular in the majority of them, and dominating in many, especially in Western and Asian nations. So it seems that not only does America have a culture, but it has a culture that is being adopted by non-Americans at an amazing rate. Some say at a frightening rate. While many decry the ‘Americanization’ of the globe, there is an element of this spread I haven’t mentioned yet. The spread of the English language.

There are some who call the spread of English language hegemony and liken it to the loss of identity of people who adopt it, regardless of their reasons. The French are well-known (well, to me and other wonks like me, at least) for trying to strictly limit the use of English in an attempt to stop the spread of the language. Despite their sometimes-extreme opposition to English, the language continues to spread.

So far from having no culture, America has a rich, vibrant, varied culture. The world flocks to our movies and televisions, listens to and sings our music, wears our fashions, and speaks our language, all because they find it rich, welcoming, and valuable. So the next time you hear someone, especially an American, say ‘there is no such thing as American culture’, ask them these simple questions,

“Which is your favorite, Coke or Pepsi? Hot dogs or hamburgers?” Rock or rap? Star Wars or Star Trek?”

I’m sure you can think of your own.

Andrew Sullivan is Also a Poor Theologian

Welcome to readers from Hugh Hewitt.

Disclaimer: I haven’t read the book The Conservative Soul yet. I will do so ASAP and give a full review. This is in response to Andrew Sullivan’s interview with Hugh Hewitt (transcript).

Andrew Sullivan is out flogging his book the Conservative Soul, linked above. While doing the usual radio-show circuit, he dropped in with Hugh Hewitt. I know some people don’t like Hugh’s style – a position I flat out don’t understand. Of course, I read Gorgias for pleasure, so I am obviously mental.

Anyway, in the interview Hugh asked very simple, very direct questions. Mr. Sullivan seemed, shall we say, off-put by this and became defensive. Mr. Hewitt has comments on Mr. Sullivan’s understanding on constitutional law here, but my training is in Catholic Theology so I will take a look at what Mr. Sullivan said about the Church.

The first thing that struck me is that Mr. Sullivan is what I sometimes call a ‘Two-er”. He refers to the Second Vatican Council as the ‘Second council’. This is splitting hairs, but the real second council was the First Council of Constantinople in 381 A.D. The Second Vatican Council was actually the 21^st Council. I find that people who base their Catholicism on a rather personal reading of Vatican II refer to it as if it were virtually the only council. There are four other ecumenical councils of the Catholic Church besides the Second Vatican that can be called ‘the second’. This is a strong hint to me that Mr. Sullivan knows very little, if anything, about any council but Nicea and Vatican II.

Of course, a deep understanding of all of the councils is not a requirement. Good catechesis teaches you all you need to know to be a faithful Catholic. So what did Mr. Sullivan say? Here are some examples.

The first is a quote attributed to pg. 46 of The Conservative Soul, a quote that Mr. Sullivan does not reject, “ …to take a very basic issue, like the matter of conscience. For many non-fundamentalistic Christians, conscience is the ultimate arbiter of what they believe. In fact, the right to believe only what one’s own conscience can assent to was at the root of the Reformation…long defined such denominations as the Baptists. The Catholic hierarchy long resisted such an idea until the Second Vatican Council, when it was endorsed, along with religious freedom, and an acceptance of religious pluralism.” [spelling edited]

I have no idea why ‘fundamentalistic’ was used instead of the simpler ‘fundamental’ or even ‘fundamentalist’, but whatever. As for Mr. Sullivan’s claims about what Vatican II taught, my initial response was, literally, “The Hell? Where did he get this?” I re-read it carefully and went back to my cool reference “Documents of the Second Vatican Council” and took a look. Guess what? He doesn’t understand what it says. Indeed, I don’t think he’s read it.

Here is part of what Gaudium et Spes (the Pastoral Constitution of the Church in the Modern World) says about conscience:

“In the depths of his conscience, man detects a law which he does not impose upon himself, but which holds him to obedience. Always summoning him to love good and avoid evil, the voice of conscience when necessary speaks to his heart: do this, shun that.” [section 16]

This means that a properly-formed conscience is actually an innate awareness and affinity for God’s laws. In other words, there are objective moral laws and a properly-formed conscience is an innate understanding of these unchanging truths. Section 16 also includes this,

“Hence the more right conscience holds sway, the more persons and groups turn aside from blind choice and strive to be guided by the objective norms of morality. Conscience frequently errs from invincible ignorance without losing its dignity. The same cannot be said for a man who cares but little for truth and goodness, or for a conscience which by degrees grows practically sightless as a result of habitual sin.” [emphasis added]

In short, this tells us that a properly-formed conscience leads us to turn away from our own personal preferences in favor of objective moral truth. However, it also warns us that people who prefer personal choice or people who habitually sin (break the objective moral laws routinely) have a poorly-formed, or even non-existent conscience, making them blind to the truth.

In section 87, while dicussing birth control, Gaudium et Spes states,

“But since the judgment of the parents presupposes a rightly formed conscience, it is of the utmost importance that the way be open for everyone to develop a correct and genuinely human responsibility… … sometimes this [the development of a rightly-formed conscience] requires… …at least a complete moral training.” [emphasis added]

So, without proper moral training, we do not have a rightly-formed conscience, which limits our moral judgment.

Section 50 states,

“…[the faithful] must always be governed according to a conscience dutifully conformed to the divine law itself, and should be submissive toward the Church's teaching office, which authentically interprets that law in the light of the Gospel.”

This tells us that the Church does, indeed, have the ability to interpret what the objective moral laws are, how they relate to our lives and – yes – that when our conscience conflicts with the dogma of the Church, that our conscience is poorly-formed.

Dignitatus Humanae (On Religious Freedom) section 14 says this,

“In the formation of their consciences, the Christian faithful ought carefully to attend to the sacred and certain doctrine of the Church… For the Church is, by the will of Christ, the teacher of the truth. It is her duty to give utterance to, and authoritatively to teach, that truth which is Christ Himself, and also to declare and confirm by her authority those principles of the moral order which have their origins in human nature itself.” [emphasis added]

This shows that the Church teaches truth and that the proper formation of conscience requires that we listen to the Church as the official teacher of truth empowered by Christ Himself.

Section 43 of Gaudium et Spes goes on with this.

“Laymen should also know that it is generally the function of their well-formed Christian conscience to see that the divine law is inscribed in the life of the earthly city; from priests they may look for spiritual light and nourishment…. .. Rather, enlightened by Christian wisdom and giving close attention to the teaching authority of the Church… let the layman take on his own distinctive role.”

This means that the conscience must adhere as closely as possible to the teachings, or doctrines, of the Church and must be expressed in the world. In short, you have to give great weight to things like the doctrine of priestly celibacy, tithing, etc. and you must make your beliefs part or your words and deeds, not just your church-going.

The Catechism of the Catholic Church tells us in section 1778 that

“Conscience is a judgment of reason whereby the human person recognizes the moral quality of a concrete act that he is going to perform, is in the process of performing, or has already completed.”

And in section 1792 the Catechism tells us.

“Ignorance of Christ and his Gospel, bad example given by others, enslavement to one's passions, assertion of a mistaken notion of autonomy of conscience, rejection of the Church's authority and her teaching, lack of conversion and of charity: these can be at the source of errors of judgment in moral conduct.” [emphasis added].

This is, in my opinion, all very, very clear. Mr. Sullivan has it almost completely backward. He states indirectly and not-so-indirectly that as a Catholic one’s conscience is supreme, then the Church. But the Catholic teaching from the Second Vatican Council (which he refers to as evidence that he is right) states very clearly that the conscience must be formed according to the teachings of the Church, not vice-versa. The catechism (written after Vatican II) warns us very directly that rejection of the Church’s authority and teaching can be ‘sources of errors in judgment in moral conduct”, i.e., a poorly-formed conscience. Most importantly, the idea of ‘an autonomy of conscience’, something obviously central to Mr. Sullivan’s interpretation of Christianity, is directly refuted!

All this might explain some more of the interview Mr. Sullivan gave [AS is Andrew Sullivan, HH is Hugh Hewitt],

HH: Let me try this a separate way. If, in fact, a Catholic is in a state of mortal sin, as the Church defines mortal sin, may they receive communion?

AS: I think that’s a very hard…no, they should not, if they sincerely believe that they are in a state of mortal sin, yes.

HH: And if the Church has a teaching about what moral sin is, and it is sufficiently clear, and it’s in the Catechism, and you reject that definition, or a Catholic rejects that definition, does that empower them to receive communion?

AS: I think that’s up to the individual….

Wow. Let’s start at the top on this one.

In section 1849 of the Catechism sin is defined,

“Sin is an offense against reason, truth, and right conscience; it is failure in genuine love for God and neighbor caused by a perverse attachment to certain goods. It wounds the nature of man and injures human solidarity. It has been defined as "an utterance, a deed, or a desire contrary to the eternal law” [emphasis added]

And in 1856 it goes on with this,

“Mortal sin, by attacking the vital principle within us - that is, charity - necessitates a new initiative of God's mercy and a conversion of heart which is normally accomplished within the setting of the sacrament of reconciliation: When the will sets itself upon something that is of its nature incompatible with the charity that orients man toward his ultimate end, then the sin is mortal by its very object . . . whether it contradicts the love of God, such as blasphemy or perjury, or the love of neighbor, such as homicide or adultery. . . . But when the sinner's will is set upon something that of its nature involves a disorder, but is not opposed to the love of God and neighbor, such as thoughtless chatter or immoderate laughter and the like, such sins are venial.” [emphasis added]

And 1857 defines the pre-conditions for a sin to be mortal,

“For a sin to be mortal, three conditions must together be met: "Mortal sin is sin whose object is grave matter and which is also committed with full knowledge and deliberate consent."^”

What this means is that sin is a failure of conscience in the face of desire and will. In other words – mortal sin is something you wanted to do it, you liked doing it, and your conscience didn’t bother you enough to keep you from doing it. For Mr. Sullivan to claim that the determination of who is in mortal sin should be the sole discretion of the sinner is not even wrong.

There is a lot more in the interview that just screams ‘I read the cliff notes of Vatican II’, but I am going to wait until I read the book to continue.

Note to my readers; I am well aware that there are vast numbers of Christians that adhere to the idea that one’s own conscience is the ultimate arbiter between Man and Christ. The thing is, most of them don’t claim to be Catholic. Mr. Sullivan does claim to be Catholic. The trickiest part of claiming to be Catholic, though, is that there is actually a definition. Mr. Sullivan doesn’t seem to match it.

Once More Around the Floor

Blogodidact has been kind enough to keep the conversation going. Once again, I will look at his posts and respond, hoping to add more clarity to my views on Distributionism and to answer his questions. Let’s begin.

Van is concerned about government programs and was originally concerned that my comments about things like tax breaks were endorsements of taxes in the first place. This seems to be cleared up now; personally I support the need for minimal taxes only to allow the government to do what the government only can do – a patent office, the military, foreign diplomacy, etc. I even support the FDA – to a point. Originally, the FDA was just an oversight group to investigate and prosecute fraud in medicines and foods. Fraud is criminal and some medicine manufacturers and food producers were ‘getting by’ through producing in one state and shipping to another, allowing them to defraud consumers. If the FDA had limited itself to assisting local police by investigating interstate fraud, it would be a fine (if very small) group. Its current size, cost, and powers, though, are pretty far gone.

Back to the topic at hand, the desire of Distributionists to eliminate all but absolutely necessary organizations and regulations at every level of government in pursuit of the ideal of subsidiarity seems to be clear, finally. I apologize for any confusion!

My discussion of wage slavery seems to have gotten Van, well, lathered up. My intent was not to upset him (or anyone else). But I am going to take a side trip to both explain what I meant and comment on Van’s response. Walk with me for a minute.

As I have mentioned before, my childhood is memorable for a long phase of deep poverty. I don’t mean ‘one year I got socks for Christmas instead of air jordans and it ruined my childhood’ poor, I mean ‘one year I got a bowl of hot stew for Christmas, and it was the first food I had eaten in 4 days’ poor. In the years since I have fought my way up out of poverty to a upper-middle-class life. This was through hard work, luck, and sheer endurance. I have had some serious setbacks over the years and have done everything from work 40 hours a week while taking an 18 credit course load at college to working two jobs. I’ve scraped grease in a sub-basement and I’ve made $5 million sales presentations on Wall Street. I’ve been paid salary, hourly, and commission-only. I’ve had friends and family help out when I needed it, and I’ve had no one at all to turn to when I needed it. I sympathize and empathize with all that Van wrote of his own struggles.

In my travels through life, I have, naturally, met a lot of people. There are two sorts in particular that apply to the discussion at hand about poverty, job skills, and such. [Warning – broad generalizations follow] The first is one I have met most commonly in two places – academia and the white collar world. They feel that poverty is largely an inescapable trap. They point to studies that show the life-long effects of poverty. They talk about the statistics of childhood poverty and how it is ameliorated by ‘transfer spending’ in places like Sweden. They are passionate about the effects of poverty on families and society. They insist that Something Must Be Done and want to create as many safety nets and programs as possible to eliminate poverty. In my experience, the majority of these people have never been in poverty. Oh, sure, they had ramen 3 times a week in grad school, and their entry-level jobs were only about $25,000 a year when they started their career. But they had mom, dad, and student loans to get them by in college and credit cards until they got that raise and a mortgage. They think paying taxes to make sure a kid doesn’t go to bed hungry is a pretty good deal. They, you know, worry about money – but they have never been unable to sleep for three days wondering how they will feed the kids for another meal with no idea where next week’s rent is coming from.

The other sort I usually find in ‘blue-collar’ jobs and middle management. They’ve struggled, they’ve been poor. They worked hard, they got through, they made it. They want to know why everyone else can’t. After all, they didn’t have mom and dad paying for school, they did it themselves. They are ticked off and know that things would have been a lot easier without the taxes being sucked out of their checks for programs that they either never qualified for, weren’t there to help them, or simply didn’t apply – let alone those programs that are a sheer waste of tax monies. They have largely been successful at all they have tried with no true setbacks – no crippling car accidents, no bolts out of the blue, just the grind of making Horatio Alger a prophet. They are damn decent people who think the best way to eliminate the poor is to get Uncle Sam’s hand out of our pockets and get the Hell out of their way as they Make It.

Want to hear the tough part? Distributionists think they are both almost completely right. The keys to escaping poverty are simple and self-evident – hard work and thrift. From the 19^th Century Papal encyclical Rerum Novarum to Chesterbelloc to Schumacher the keys to self-sufficiency have been stated clearly: hard work and thrift. Distributionism is based on hard work and thrift and will always be so. Subsidiarity is about getting as many hands out of your pocket, as many rules out of your life, and as many people you report to out of your life as possible. But we can’t forget reality, and the reality is that things happen. We are human, not super-human. People make bad decisions; conditions change; accidents happen; people you have never met will always impact on your life. There are many things that can cast a person into poverty, and many of them are beyond our control. From cancer to a drunk driver, fraud to disabled children, life is hard and it always will be.

Blogodidact insists, again, that Capitalism is not about happiness, but is only about commerce, production, etc. At best, he concedes, it is a forecasting tool for predicting bad policy. To a Distributivist this is like claiming that the law is only about punishing criminals or that politics is only about power. To clarify terms, as Van tries, let me clarify two terms. To a Distributionist ‘Capitalism’ means “an economic system with ownership and control of capital in private hands” tied up with the concepts of private property, the rule of law, etc. while ‘laissez-faire Capitalism’ refers to ‘the error of trying to isolate economic activity from other facets of life with the expectation that the pursuit of profit divorced from ethics will somehow lead to ethical situations’. Capitalism is a group of ideas and processes within the economic areas of our lives. It must be conceded that Capitalism is intimately dependent upon our legal ideas of private property and our ethical ideas of the goal of jurisprudence and the nature of human rights. How is it possible to concede that Capitalism is dependent upon legal and ethical concepts, and then claim that it must be pursued independently of ethics?

Chesterton and Belloc both pointed out that the “failure” of Capitalism in the late 19^th and early 20^th Centuries was the attempt to divorce economic activity from ethical considerations – this is what I and many current Distributivists mean when they cite ‘laissez-faire Capitalism’. Chesterton and Belloc called it a failure because people instinctively realize that moral and ethical considerations must be a part of every aspect of human life, including economics. The divorcement of these ideas in laissez-faire Capitalism led to mass discontent and a yearning for more ethics in economics. Into this hole stepped Marx and the later Communists and Socialists. Their focus on ‘justice’ and ‘equality’ is a naked appeal to the ethical impulse in Man, and it obviously worked! No matter how horrific all Communists nations have been/are, no matter how badly the economies of Socialist nations wallow, people are still drawn to them because of the overwhelming desire for ethics within economics. Despite this, Objectivists, many Libertarians, and others of the same school continue to insist that ethical considerations are at best secondary within economics. These same folks also continue to wonder what the appeal of Socialism might be.

Distributionism points out that Socialism/Communism misses the mark by a much wider margin than laissez-faire Capitalism. The attempt to impose perfect justice and perfect equality by mandate leads not to justice, or freedom, or even economic improvement – it only leads to greater and greater centralized governmental and economic power. Eventually all centralized governmental and economic power is abused. Thus, Socialism and Communism lead, inevitably, to the effective servitude of workers to the state/an oligopoly.

Instead, Distributionism advances an ethical solution to the ‘problem’ of laissez-faire Capitalism that is, at its heart… Capitalist. Instead of mandated giving (taxes, fees, etc) and government programs, Distributism proposes private organizations and cooperatives and voluntary organizations. If the Guild of Carpenters is more efficient (i.e., they actually take care of their members, have a solid reputation with customers, provide the training they promise, etc) than the International Carpenters’ Guild – the International Carpenters’ Guild will go away and the Guild of Carpenters will thrive – until an even better professional organization comes along. If the Delaware County Seed Coop has negotiated better prices with a distributor for the last five years and is reducing operating costs for its members better than the Farmer’s Coop of Delaware, guess which will have more members? This goes for consumer coops, industrial coops, etc. All along the line, the goal of Distributionism is twofold – get the government (etc.) out of economics and ethics as much as possible and use the market itself to include ethics in the economy in a vibrant, competitive, voluntary manner.

Let me give you a small, personal example. My family belongs to a small consumer coop that purchases raw milk for its members directly from a dairy. We include distribution costs in our prices and we do not negotiate for reductions based on volume (not enough volume yet!). Our price for organic raw whole milk is lower than the same product at the local store; we know the producer (and the cows, and the dog that guards the cows) and can check quality personally any time. The producer is making about 30% more by eliminating the distributors and other middlemen. We are saving about 10% by doing the same. If another dairy with similar quality, quality controls, access, etc. came along with 15% savings over local stores, we would (naturally) switch suppliers (or coops!). As a matter of fact, we should be able to do so right now… except for a state law that makes it illegal for dairies in this state to sell raw milk for human consumption. Indeed, we could eliminate a great deal of our internal distribution costs if it weren’t for a law that gives the advantage to large corporate farms or corporate-processed supplies over small farmers.

So the coop works now (the supplier makes more profit, we pay lower costs) and would work even better if it weren’t for intrusive laws that favor large firms over small ones. If there were a different, more efficient/cheaper supplier available, the coop would adapt or wither away. That, baby, is Distributionism at its Capitalist best.

Within the industrial realm the preferred ‘tool’ is also a coop. The largest, most famous example is Mondragon in Sapin. Mondragon is the seventh largest corporation in Spain and has operations in over a dozen countries. With sales of almost 12 billion Euros and a workforce of almost 80,000 people (full and part-time) it is a good-sized company. With business offerings ranging from engineering consultants to brake drum manufacturing to fresh beef, they are well diversified. But how are they different from a well-diversified corporation that isn’t a cooperative? After the probationary period (six months to one year, typically), similar to an apprenticeship, workers become full members of the coop; in effect, they become part owners. Members receive shares in the cooperative (like shares in any company), but shares are only open to employees - no outside ownership exists. Every year a portion of the profits is distributed to shareholders. Typically employees receive a salary and one or more shares when they become full members. Raises and promotions may come in the form of wage increases, more shares, or a combination of both. In Mondragon the shareholders in local ventures (auto plants, dairy farms, etc.) elect spokesmen to an cooperative assembly, who then elect a board. This board then manages the corporation.

In short, it looks and acts like a corporation – but all the owners are workers and only the workers are owners. Unions are allowed but superfluous; after all, the guys on the assembly line, their supervisors, and the managers are all also the owners. If they want a pay raise, they don’t need to strike – they just tell their representative who passes it up the chain. They have all the financial data and know if their operation can afford to give them a pay raise and will elect different representatives if they are lied to. More importantly, if their wages aren’t raised any increase in profits is reflected in the payments of their share profits, too. In Mondragon’s case some profits are diverted from share payments (by the decision of the owners/workers) to run a multi-campus university. Members of the coop can attend at no cost or a reduced cost, and non-members can attend at costs lower than average. It is accredited and graduates are encouraged to attempt to join Mondragon, but it is not required. Since the goal is to create real-world skills and the oversight is by people working in business, not life-long academics, the schools have a good reputation amongst businesses.

Mondragon also provides internal health insurance where needed, pensions, etc. They adjust salaries to reflect local taxes and state-provided benefits to provide comparable compensation while keeping profits high. They also invest in research and development and maintain a strategic reserve of capital.

When it comes to support of Capitalism the Mondragon Faq has this entry:

“Do you consider co-operativism to be an alternative to the capitalist production system?
We have no pretensions in this area. We simply believe that we have developed a way of making companies more human and participatory. It is an approach that, furthermore, fits in well with the latest and most advanced management models, which tend to place more value on workers themselves as the principal asset and source of competitive advantage of modern companies”

I think this is a great example of how a company based on Distributivist ideals can flourish in the ‘real world’. Mondragon’s diversification and expansion to nations like Turkey and China combined with its 13% growth in sales in 2005 seems to bear this out.

Does this eliminate risk? Hell, no. If there are no profits, shares received no dividends and some workers end up less-well-payed than employees of ‘standard’ corporations. Cooperatives can fail completely, just like other corporations. The difference is that the worker/owners decide for themselves what social safety nets they want, fund them themselves, and do so not like an exclusive union (which wants all it can wring from “Management”) but as part-owners, resulting in sensible plans that give you pensions, health care, and profits all together. If health care gets pricey, the owners look for a more affordable plan – or buy some clinics! Instead of eliminating risks, the goal is to spread out and share the risks voluntarily, keeping compulsion and government regulation out of the picture. The effect of tying ethics to the market is not only providing solutions to the potential ‘disappointment and ruin’ but allowing market forces to make those solutions more efficient and more targeted by keeping the government out of providing them.

Van and I do seem to have friction about corporations. Van seems to at once glamorize them (“[corporations are] an organization that has yet to be improved upon for most practical purposes.”) and point out that they can be (and usually are) terribly inefficient. I particularly like his point that the collaboration of many small firms and individuals seems to be very efficient at making a particular project. Such ‘project management’ ventures are becoming much more common and effective. Yet for all of Van’s admiration for the Really Large Corporation, how much of it is misplaced? After all, a great deal of the success of a particular corporation can rest largely on… where it was incorporated. Need a corporation to dodge taxes? File in Delaware, and then never do business there! Want your shareholders to be anonymous? File in Nevada, which has no disclosure laws! In the end, corporations are legal fictions, an abstract concept in constant flux that is evolving as we speak. LLCs, large sole proprietorships, cooperatives – these and many other structures can do many of the same things, often better. More critically, what we have seen time and again through recent history is that large corporations use their economic might in coercive ways. Van wrote this:

“As long as the Corp gains NO legislative/regulatory political power, and uses no PHYSICAL force; and threatening to no longer do business with a company, or convince other members of their supply chain to not do business with their company DOES NOT qualify as Physical Force – it is negotiation, though hardball, true, it is still a legitimate part of the process of making agreements.”

Really, Van? So when Standard Oil told oil suppliers that they would take the payment Standard Oil offered (below market rate) or no one would ship their oil to a competitor, there was no coercion? When Standard Oil told the railroads that all Standard Oil shipments would get a below-market shipping rate and that Standard Oil’s competitors would pay 20% above the market or the railroads would pay triple for oil and railroad track – if there was any available - there was no coercion? Van asked:

“What is the principled difference between such hardball tactics on the part of Corporations, and your trying to wheel and deal at the local service station by saying “Look I’ll let you put a set of your top tires on both my and my wife’s car, but if I do, I want you to throw in a alignment check and road hazard on all the tires of both cars, for free, other I’m taking my business across the street to Big Bob’s place and you and your mechanics will not see any more of our regular business”?”

Here’s the difference; a large corporation can do this;

“Here’s the deal – you are going to sell my tires with a road hazard kit and an alignment check. You are going to sell my competitor’s tires with an additional 10% markup. If you do, you pay rate on electricity, lubricants, and windshield wipers. If you don’t, you pay triple for lubricants and windshield wipers and quintuple for electricity – unless there is a blackout.”

That is a big difference. What happens with a powerful enough corporation is that you are no longer capable of voting with your feet. In these cases the corporations can eliminate existing competitors and then raise the market entry costs to prevent new competitors, and then cascade into other markets. The coercion comes not from physical violence (or its threat) or governmental regulation, but it is real nonetheless.

I do not think that such behavior is inevitable. Indeed, it has been more rare than you might expect – but we have no way of knowing if that would be the case in the absence of anti-trust laws. So let us assume a simple thing – I am wrong. Large corporations never become coercive, and preventing competition is not bad. Let’s just talk about another – diseconomies of scale.

Now, everyone learns about economies of scale in Econ 101. And Econ 105. And, heck, most of Econ. You don’t hear about diseconomies of scale quite so much. In effect, economies of scale means that as you make more of something, the cheaper it is per unit to make it – so, the larger the firm, the more efficient it is. Diseconomies of scale is the opposite; beyond a certain point the per-unit costs of producing something go up – so, beyond a certain size, the larger the firm, the less efficient it is. The threshold seems to be primarily related to two factors; initial required capital; and ongoing capital requirements. Like Van, I have worked at firms small and large, and Very Large, and I prefer the small ones.

For the record, my opposition to large firms is one of ethics and efficiency. I don’t want more laws to control anybody. The preference for smaller firms, although shared by all Distributists, obviously isn’t an impediment to the creation of something like Mondragon. Indeed, if cooperative-based corporations working as a conglomerate or consortium became the world’s largest corporation, I’d have no problem with that.

If it was still ethical and efficient, that is.

In the end, all is as Van said – same words, different meaning. Most disagreements between Distributists and other Capitalists are like that, it seems. But my thanks to Blogodidact for forcing me to be more clear and more detailed. Good luck with work (I, too, am in IT). And as for the Kant, Hegel, Hume, etc. I suggest 2 beers, hot shower, two beers, read James J. Hill and the Opening of the Northwest.

Hello, Blogodidact!

The excellent Blogodidact and I have been discussing Distributionism back and forth for a little while, a process I hope we can continue. So far Van (as I call him in my head) has revealed to me that I did a lousy job at explaining where I was pointing my suggestions, how I expect Distributionism to work, and whom I expect to take the lead. Learning how badly I explained all of that was rather humbling. So let me take Van’s points from his blog entry here and respond to them. We’ll start with his analysis of my suggestions on promoting Distributionism.

“Tax credits & Gov sponsored job training. For a State to have enough largess in their tax base to spare on social engineering (tax breaks) implies Income Tax, which to my mind is one of the big three (Income Tax, Federal Reserve System, Welfare & regulatory systems) physical realities behind all that has fallen in our nation today.”

I agree with Van; I have serious issues with the income tax, I think the welfare system is a self-perpetuating bureaucracy of dependence, and most regulatory agencies no longer exist for legitimate purposes but rather to expand their own power. Unfortunately, such a world is the one we live in. We have excessive taxes to the point that the government can do such things as, say, the Civilian Marksmanship Program, or 50 different homeless assistance programs that often all fund the same groups – only multiplying the overhead, not the results. Or, as an earlier article of mine showed, even welfare programs that are highly praised by the MSM and both sides of the aisle in Congress like Head Start are so inefficient that their administrative overhead is about 70%, making them criminally wasteful. This shows that the America government, a nation with very low taxes by Western standards, is wasting a tremendous amount of tax money.

Unfortunately, unless there is a massive change that comes as a total surprise to me, we will not be able to change this overnight. Instead, we will need to chip away at the existing structure until it is more just (read: we get to keep our own money) and efficient (read: they don’t waste our money). Therefore, I think that supporters of Distributionism (as well as our allies in the realms of Libertarians, Objectivists, and fiscal Conservatives) should push for serious tax breaks for small business owners, even to make small businesses tax-free. I feel the same way about job training; federal job training has been around for a long time and will not vanish overnight. I say we use this training (which is, after all, our own money) to become self-sufficient.

I have been told by others that ‘working the system’ this way is a capitulation, a tacit acceptance of the current system. I disagree (of course!). My goal is to transform the system by working within it. I want to encourage more entrepreneurs; we live in a society with progressive income taxes; I think a strong political case can be made to reduce or even eliminate taxes on small businesses. I think this is a win-win situation; taxes go down and more entrepreneurs are born.


“ “Microloans to such organizations could be subsidized by government agencies” is just a cloaked method of socialist redistributionism.”

OK, I admit it. This is obviously an encouragement of Socialism…. Well, out of context. What I said was “Microloans to such organizations could be subsidized by government agencies for a strictly limited time to encourage transition”, meaning that for a period of, say, 5 years microloans would be guaranteed in a manner similar to VA home loans or student loans; no tax money spent, just a government payment to private creditors in the case of default, then the debtors owes the government. I ws really unclear about the details of this, so I apologize. I am not talking about the federal government giving people cash, I am suggesting federal guarantee of small loans for a period not to exceed 5 years in lieu of collateral for some types of small business.

This is still egregious to Objectivists and most Libertarians, but again – let’s game the system. I am paying too much in taxes. The government is braying that ‘small businesses are the motors of growth’. OK, let’s see you actually support that while I wear down the taxes you keep collecting.

The next one is larger, so I will break it up a bit.

““I was surprised when Fr. Neuhaus, whom I normally find to have a very informed opinion, dismisses Distributionism as not having anything to which to attach policies or platforms in the political arena. America has; a Small Business Administration that promotes small business; farm co-ops, credit unions, consumer co-ops, and business co-ops like ACE hardware on almost every corner; a history where the Grange movement held strong, if brief, political influence over national politics; a growing concern over the impact of large enterprises like Wal-Mart and Microsoft of the well-being of the average person; and a rather large (and growing) government job training program.” Which I take to mean that having a Small Business Administration, government sponsored jobs training and a growing concern over a growing Wal-Mart, are signs of optimism and hopeful solutions in the making; but I emphatically believe that these are not part of a solution, they are instead part of the problem! Anytime that Government steps out of its role of ensuring that rights are not infringed, upholding law and order, and defending the interests of the Nation, moral and physical disaster is in the making.”

Well, my point was to refute Fr. Neuhaus, not support anything in particular. I was pointing to these various things as proof that topics like small business, large corporation, cooperative business, etc. are proven political topics. I didn’t mean this section to support any particular government program or refute it – just show the political impact of some ideas.

Van goes on:

“I also have my doubts about a wider scope being attributed to an economic policy, than is proper to its function. The Goal of Economics is not happiness, but production; it is philosophy and ethics that point towards happiness. Economics should of course be compatible with, even complimentary to the goals of philosophy - which as Aristotle says, is happiness – but Happiness is not the goal of Economics, producing, distributing and managing wealth, is the goal of Economics. “Their goal is to create a community where the members avoid the excesses of materialism”, but I think that the only defense against materialism is an education which better teaches what is truly valuable in life, and that again is the job of philosophy, not of economics.”

Bingo! Proof that I was opaque. The core concept of Pope Leo, Belloc, Chesterton, Schumacher, Penty, and other Distributivist thinkers is that the separation of economics from ethics and philosophy is a critical error that leads to a decline in ethics, a divorcement of philosophy from practical concerns and, ultimately, economic disruption, all of which will culminate in an unethical, unjust society of poor people ruled by a corrupt oligarchy. Saying that economics is about production only is like saying that the law is about winning court cases, not about justice. Or that politics is about power, not leadership. Yes, stripped of context, economics is about nothing but production, law is about winning and losing decisions, and politics is about power. But this divorcement of ethics and philosophy from the basics of life is exactly what the underlying problem is.

Communism, Socialism, etc. did not spring from a vacuum. They sprang from an understanding, conscious or not, that economics cannot be divorced from ethics and philosophy. Likewise, Capitalism and Democracy are usually mentioned together because people recognize that the freedoms and justice that are part of the best democracies allow Capitalism to exist – and vice versa. The 20th Century was a century of warfare between different concepts of economics/ethics/justice competing one with another. Classical Fascism, Communism, Socialism, and Democracy/Capitalism are all defined not solely by their ethics, nor their philosophy, nor their economics, but by all three as a whole. This is because these things are a whole within a society.

Chesterton, Belloc and the other early leaders of Distributionism rejected Communism and Socialism as inherently unjust. Indeed, they felt that the injustice of such systems was self-evident. Their insight was into why such inherently unjust systems not only had adherents but were actually competing with Capitalism and Democracy. This insight is, like many deep insights, both simple and profound. It is this – laissez-faire/’pure market’ Capitalism rejects ethics and philosophy; this rejection leads to injustice; therefore, laissez-faire Capitalism must be rejected.

Their answer was not abolishment of ownership (Communism), nor state ownership of capital (Socialism), nor strict governmental regulations that supported and controlled Capitalism (Fascism, at least as it was defined by them). Their answer was the engagement of the most important element of economics – the individual. The goal of Distributionism is moderation of Capitalism by many individual Capitalists.

Van again, in the same vein:

““Their goal is to create a community where the members avoid the excesses of materialism”, but I think that the only defense against materialism is an education which better teaches what is truly valuable in life, and that again is the job of philosophy, not of economics.”

But the goal of a society, any society, must be achieved within the realms of economics, and ethics, and philosophy, showing that they cannot be separated.

Van then jumps around a bit (just like I tend to do!), so I will break it up a bit more:

““Deal as directly as possible with the producer/end user” … is of course a wise policy when it saves time and effort to do so, but there are many middlemen that do give significant savings in time and effort, and so are worthwhile. Super markets are an excellent example of middlemen being valuable services provided to consumers. Most Mom & Pop stores are not. Wal-Mart is a time saver, visiting all the mom & Pop stores you would need to in order to quickly pickup the products that can be found at a single Wal-Mart, would be a massive time waster, and the expense would more than likely be higher. I n fairness, Deep Thought does say that if middlemen are adding value, then use them – my reaction may be more to an overall tone I perceive (especially concerning expanding corporations and Wal-Mart) which makes me rise to imaginary bait, than a direct quote by Deep Thought on this. I see Corporate consolidation as usually being a good thing; the reason it is done is to increase productive efficiency and profits; and if it is done poorly, it too will collapse or be broken up, so that eventually the frozen productivity that had been locked up in inefficiency and waste, can be thawed & released from its parts once again, back into the wider economy.”

Whew. OK, I will admit it – I don’t like large corporations. But the reasons aren’t aesthetic, they are ethical and economic. In many markets once a corporation hits a certain threshold of market share it can use its strength within the market to affect the barriers of entry to a market upward, increase the sunk costs of potential competitors, and use predatory pricing to drive out existing competitors. Additionally, high levels of market penetration allow firms to impose artificial switching costs, even artificial transactions costs, to shelter themselves from the ‘free’ in free market. If am opposed to Socialism, I must also oppose such corporate-driven market controls, too. And if a corporation is large enough, it can enter new markets and use its economic resources to do the same to more and more fields of transaction. Think this is loopy? Look at Standard Oil; in the 1880’s began a decades-long practice of coercing shippers to give them discounts and to increase shipping prices for competitors. Soon their control of transportation allowed them to literally dictate oil prices to oil producers in America, demand further discounts on their own shipping costs and ‘rebates’ (i.e., kickbacks) from the artificially-high shipping costs they demanded for their competitors, and other such actions. Using this clout, they also gained very effective control of steel production and, eventually, railroads. This was an especially good idea – by controlling the steel industry, Standard controlled the cost of railroad tracks and cars. By controlling oil, they controlled the cost of fuel and lubricants of the railroads. When they moved into the railroad business it was a foregone conclusion that they would dominate it shortly.

Analysis by economists then and now agree; Standard Oil began as more efficient than its competitors, which allowed it its initial rapid gains. Once it reached its height, however, its efficiency began to drop. In the end it was less efficient than its (few remaining) competitors (or, in some ways, no more efficient than the others). But it retained its dominance for some time because of its power over entry costs, sunk costs, transition costs, etc. and its continued ability to artificially set prices within a number of markets. After the retirement of some of the leaders of the Standard Oil trusts many of these practices were abandoned. By the time laws had been passed and litigation begun the effects of actual competition were seen – Standard Oil’s share of most of its markets had tumbled very badly within 30 years of its founding.

But if its directors had continued the practices of its founders there is little evidence that Standard Oil’s coercive control of at least 3 major markets would not have continued without government interference.

So, I have no problems with a monopoly of efficiency – after all, a more efficient competitor will eventually come along. But I have issues with coercive monopolies. I have yet to meet a Conservative who likes coercive monopolies, but I also rarely find a Conservative who will admit that large firms can establish a coercive monopoly almost as easily as a government can. The result? I prefer small firms to large ones.

I have no problem with Wal-Mart as Wal-Mart. I sop there, I see nothing wrong with them in general. I also have no problem with communities that try to bar them with zoning laws (their own loss, after all. If they want to drive out jobs and low prices, that is their choice). I also think that Wal-Mart has provided more monetary benefit to low-income Americans with low prices than welfare programs have with grants, etc.

But Wal-Mart is not a silver bullet that ‘proves’ that massive consolidation is ‘the answer’. Wal-mart’s size and efficiency has proven amazing in the US and many markets, but it has also failed. Wal-mart’s entry into Germany was a shock to some since they failed to succeed there as was expected. This is because Germany already had a number of players in its robust discount retail market. Some argue that this indicates that Wal-Mart’s success in the US has more to do with barriers to entry and Wal-Mart-imposed transition costs than with real efficiency, but I think we don’t have enough data about that yet. Much more interesting to me are Wal-Mart’s failure in China and South Korea. In both cases Wal-Mart failed due to a number of factors including poor marketing, but also because of their inability to compete with small businesses in the same space. Indeed, as one commentator pointed out - on a global scale, Wal-Mart is a regional business. I would add that the market has shown that Wal-Mart can’t compete with smaller competitors outside of the shelter of American barriers to entry into its market.

And just to carry this side-trip a bit further, Wal-Mart is starting to face real competition in the US, too. Dollar store chains are really eating into Wal-Mart’s market share not just by meeting or beating the pricing but because many consumers are showing a preference for smaller stores closer to where they live instead of very large stores further away. Add in the suspicion of some economists that some of Wal-Mart’s efficiencies of price may be an ‘artifact’ of the transition of manufacturing to the Third World and I suspect that Wal-Mart is much more of a fad than many believe. Not because it is ‘evil’, but because it will lose to smaller, more agile companies relatively soon.

Let’s go on with Van:

““All men have a right to private property, just compensation for their goods and labor, and to enter into business agreements of their own free will” Unfortunately I do not see that this will protect property rights and ensure fairness, but instead only serve as a mandate for those people in power, to demand that their constituency have property, then some property, then some minimum amount of property, then an increased amount of property - and agitate to get government programs established to distribute it. Property Rights are not to be violated, but they aren’t to be awarded either, they flow from the nature of being human, they are not bestowed or granted.”

Wow. I was misunderstood. This is not meant to mean ‘everyone gets 40 acres and a mule’, but rather ‘confiscation of land by the government is a violation of a person’s rights’. This is not for land redistribution schemes, but against Socialism and Communism. This was taken from Rerum Novarum, a response to the Communist Manifesto and related work in addition to being a statement of rights and principles.

And more:

““, a man who produces goods or commodities must be paid a just amount for those items.” No, he must be paid what someone is willing to spend and which he is willing to accept – nothing more. More means waste, regulations, and agencies and bureaucratic regulatory law.”

This is a statement of ethics, not regulation. This is against the concept of ‘from each according to his ability, to each according to his need’. It is also a moral and ethical guideline for employers and workmen. As with ‘the right to freely enter into contracts’ it means there cannot be any coercion in the setting or payment of wages or in the pricing of goods.

Here Van gets into some interesting territory:

“Deep Thought makes a reference to “Wage Slavery”, and that is a term that just gets my hackles up. It has its most common origins as a Marxist concept, intended to obscure the fact that the employer/employee relationship is freely kept and for mutual benefit. A so called “living Wage” cannot be the goal of a business. A desirable product at the most appropriate cost is all that can be expected. If the people working at such jobs need more, they must find other sources of income, or put another way, if they are only able to produce ¾ of what they need as income from their job, then they need to seek the remaining ¼ elsewhere and probably should be looking for ways – new skills, education, to make possible a change of their main productive skill.”

My definition of ‘wage slavery’ is less like Marx and more like Belloc. Let me quote Robert Nisbit and his comments on this;

“Hilaire Belloc defines the servile state as "that arrangement of society in which so considerable a number of families and individuals are constrained by positive law to labor for the advantage of other families and individuals as to stamp the whole community with the mark of such labor." "Given the debasement of the language of politics in our time, there are of course many who describe this condition as progress, or as a higher freedom and democracy or as humanitarianism. But the harsh fact remains: a steadily enlarging number of families and individuals in the United States, and other Western countries, are in the position of being constrained by law, beginning with the progressive income tax but extending to numerous other areas of legal requirement, to labor, not for themselves, but, in Belloc's words, 'for the advantage of other families and individuals,' those who do not work and who enjoy what is called welfare in one or other of its by now diverse forms."”

That is one way to describe part of what I mean by wage slavery. Here is a more personal one.

“Through a combination of governmental regulations/laws and predatory practices we have a resulting group of people who do not have the skills or education to be employed in a self-sufficient manner, resulting in them being constrained to labor for an amount too small to support themselves and lacking the time, resources, or opportunity to avail themselves of the means to exit this condition.”

Face it – public schools suck. They are more and more divorced from providing a practical education while they continue to tighten their focus on indoctrination. The result is a populace less and less able to actually become entrepreneurs, forcing them into a spiral of jobs that pay too little for them to live one, resulting in debt resulting in…. Well, you get the idea. The end result is an entire class of people who cannot do that most basic of things – be self-sufficient. Communists recognized this, called those people the Proletariat, and said the answer was to destroy the government and share everything equally. Somehow. The Socialists say the answer is to take things from those who have it and give it to those who don’t. Fascists said the answer was to use government regulations to prevent it from happening. Objectivists say that, well, that’s what happens to the non-demi-gods. Libertarians say get rid of all those regulations and things will sort themselves out, eventually.

Distributivists say work together, voluntarily, to get people out of that trap while also getting rid of the lousy laws that started the whole mess. This is just a piece of the puzzle, of course. I’ll talk about more of it as we go and in the near future.

But I must say, Van is a bit, uh, blithe about the whole idea of ‘if your job only earns you ¾ of what you need to live, get another job for the additional ¼ and look for the skills to get you out of it’. Ya’ think? Of course, where they are to find the time for further education while working at least 1 ½ jobs can be a bit of a puzzler, I suspect.

Another topic from Van:

“Deep Thought supports the creation of Guilds, he raises most of the objections I would raise at such organizations, but I don’t see that they are as easily solved and dismissed as he thinks possible. One key concern of mine, is that If the workers of Guilds are allowed to set prices, that means that prices will be artificially high, such as Detroit's automakers were in the 70’s, and then soon some one, such as Japan, will come along and see that costs are indeed too high, and they will take that opportunity to do better work for less cost, and once that happens those workers and Guilds are going to be seen as Fat fast, and then cut off ASAP.”

The key to Guilds are that they directly involve workers AND supervisors AND owners. Indeed, the ‘classic’ guild is really a consortium of tradesmen/owners that are self-employed. Larger shops also include representatives for employees, all of whom usually are independent contractors, capable of being independent, or are in training to be independent. Even when it is comprised of large shops with many employees and few owners, remember – the owners and managers are part of it, too.

Usually Distributivists admit that Guild are not a universal solution (I am one of them), but are primarily for the trades and professions. However, I have less general objection to unions than Blogodidact. My specific complaint is with mandatory unions. If the UAW, Teamsters, etc. were not mandatory unions, they would have A) never had the power that they had and B) ceased to exist when they began abusing their powers. I’ve worked in mandatory union shops and I can testify – they are hellish. I have also worked in voluntary union shops and they were much, much better. When you can join any union, no union, or drop out of a union when you wish it means that the unions are forced to do what they are designed to do – help workers. If they do a lousy job, people leave them. If they try to wring concessions from management that makes the business less competitive, they are going to go away pretty quickly when the other unions and the independents oppose them.

Therefore, I see Guilds as also being voluntary out of necessity. I stated the historic results of mandatory Guilds – they were worse than unions in the long term. Where they do work, Guilds work like a combination consortium and brand; they allow many small businesses to pool resources to gain the economies of scale and provide a familiar guarantee of quality to consumers. Mutual agreements on pricing and quality within the Guilds will therefore be aimed at being competitive out of sheer necessity.

Van then hits two points quickly, which I will combine:

“A lender may charge reasonable fees for a loan or for exchanging money. A lender may charge a reasonable penalty for a late payment.”

And

“…argue that interest rates should be extremely low (on the order of 1-2% at most) and, especially for home loans, others argue that no interest is acceptable at all, only fees.”

And then comments:

“…Deep Thought promotes Distributionism as more of an ethical practice, which if emulated (aside from the concerns above) would be for the most part a positive step, certainly an improvement over the state of our current mixed economy.”

Exactly. The comments on things like interest rates, types of loans, cooperatives, etc. are guidelines for Distributionists to follow voluntarily. This is about Distributionists working with each other to build a better way of life by remembering that economics and ethics and philosophy can’t be separated.

Van then goes on and, well, confuses me a little bit. He writes this:

““Laissez-faire Capitalism is an argument that “Selfish, unjust actions lead to altruistic, just results… eventually.” This is typical of conservative views, which I think undermines us in so many ways. Being able to do what you see fit because it is right to be able to – that will produce the most wealth and value in the end, but that is a non-essential side effect, and ignores the fact that it will inevitably bring disappointment and ruin to many people as well. It is that ignored last part, which those demagogues lurking out there, looking for an in, will inevitably use in an attempt to cast the first part as 'an unmet promise', a tool, to put governmental power into their hands to “do good’.”

Which is dead on, and the main focus of Distributivist thinkers. But he follows it immediately with this:

““…It goes on to point to the continued failings of unfettered Capitalism and the need to always remember the inherent worth of the individual and the need for solidarity.” What failures are they? When?”

Uh…. The ones you just mentioned. Van just wrote that laissez-faire Capitalism “…ignores the fact that it will inevitably bring disappointment and ruin to many people, as well” and that this empowers demagogues to take advantage of that to undermine the rights and freedoms of people. That is what Belloc was discussing in the Servile State, Chesterton in What’s Wrong with the World, etc.

Van then concludes:

“There is, admittedly, a harshness associated with capitalism, a harshness which I am in the process of experiencing a taste of it myself at the moment – our CIO has been sacked, our projects restructured, and I’ve got to learn and become proficient in a new programming language lickety-split, or I’ll be out the door as well.It is harsh, life is harsh – Black & White is harsh and it is only through the painfully slow process of earning and saving your wealth that we are able to soften the edges a bit and provide some cushion and comfort for ourselves. As I see it, any attempt at artificially creating that cushioning through the power of governments ability to rob Peter to pay for collective Paul, or even worse, to force Peter or Paul to act against what their own judgment tells them they should do - will be doing no one any favors in the end. If we want our Ends to be Just, our means must be Just, anything else is necessarily using the Ends to justify the Means, and that will most certainly be a bitter end for all.” [emphasis mine –DT]

This is great stuff. Great stuff. This is the point of Distributionism. Capitalism is the best economic system we have figured out so far, but when its ends are divorced from its means, when its processes of production are isolated from ethics and philosophy, then you have laissez-faire Capitalism. Laissez-faire Capitalism has long term good results that have short-term victims. The goal of Distributionism is to use the voluntary actions of individuals to ameliorate these negative effects in a manner that not only remains Capitalist, but has competitive advantages.

Van and I seem to share a problem – we can’t be brief! But I hope that now he and I will do a bit less talking past each other and more actual discussion on this topic.

I’ll add more detail next time to exactly how I propose to make Distributionism work and why.

note: fixed a bad link

A Reply

Blogodidact, whom I normally read regularly (see my blogroll) seems to have really missed what I was talking about in my Primer of Distributionism. BD seems, somehow, to believe that Distributionism (and/or I) think money is the root of all evil, or that I believe that there is a finite amount of wealth so it must be taken from those who have it to get some for those who don’t. He also seems to think that I have some idea about ‘too much’ money, or profit, or something. All I can say is – either I wrote very badly or he jumped to conclusions. Also, I can definitively say he has missed just a few of my blog posts from the past.

The Catholic Church, Distributivist theorists, and I all agree – money is not the root of all evil. Indeed, I know that BD did not read Rerum Novarum where he would have seen that the Catholic Church officially promotes the ownership of private property as a Good Thing. It also promotes hard work, thriftiness, and being able to quit when you darn well please. The Catholic Church, Distributivists, and I also speak about the great boon of private property is that it generates more wealth than public property or collective property. This is a dead giveaway that none of the people on that list think that economics is a zero-sum game.

Just to be clear, we are all certain that economics is not a zero-sum game.

I did mention ‘too much money’ once – in the context that there is no such thing and that the Catholic Church and Distributivists oppose the redistribution of money, land, or other capital! I do not know how I placed such a clear statement into my work and BD missed it.

BD also spends quite a bit of time taking me to task for opposing the moneylender and the middleman. I hope he can go back to my writings and see what I really said – avoid high interest rates (that’s just good business) and prefer actual partial ownership over ‘pure’ lending. If you share the risks you are both more likely to make ‘good’ loans (i.e., profit-earning), you are less likely to invest in a lousy idea (always embarrassing). And as a businessman myself, I can tell you this – avoiding middlemen is good business! They usually add overhead, complications, time, and (often) make resolving problems more difficult. If your value-added reseller is adding enough value to overcome their cost, bully for you! But I bet they aren’t.

Let me sum up a bit: the goal of Distributionism is to encourage actual investment over ‘pure’ loans; to avoid high interest rates on loans you acquire; avoid middlemen when possible to reduce costs; to prefer cooperative ventures (like credit unions) where you are a part-owner of the services you use over ‘pure’ third party services (like banks); prefer professional associations like guilds over unions; oppose all mandatory membership associations; minimize the power of central governments; and state governments; and county governments; and local governments; prefer suppliers and vendors that you have a personal relationship with over impersonal ones; build more personal relationships with businesses. This is all just sound business, folks!

Just to be clear again, I stand by my assertion that you should avoid high interest rates on loans.

BD wrote this,
“Property that is private property is cared for, is improved, and also serves to establish value and regard amongst (rational) individuals in a society. Respect for your own property, requires a reciprocal respect for others property, else how could anyone manage to keep property private, unless all agreed to respect another’s claim to their own property? A society whose economy is based on money requires a society that understands and respects the rule of law”

This is almost a better paraphrase of Catholic social teaching on private property than the one I wrote – so why is he using it in an attempt to refute what I wrote? Beats me.

His emphasis on avoiding government regulation and his charges that Distributionism wants such laws lead me to a simple conclusion – he skimmed what I wrote. Otherwise, how do I understand that I spent so much time explaining subsidiarity (that you should avoid as much government regulation as possible) and he didn’t get it?

As I said again and again, Distributionism isn’t about getting rid of Capitalism, it is about making as many Capitalists as possible. It rejects redistribution of wealth in favor of distribution if capitalists – in hopes of a world so chock-a-block full of Capitalists there is no room for silliness like Socialism anymore.

A World of Artisans: Distributionism as an Economic Third Way

This is the fourth in a series of articles about Distributionism. You can read the earlier pieces here, here and here.

I will attempt to draw the various ideas together to show not just how to encourage Distributionism, but what I think a Distributivist society would look like and some of the effects I think it would have on other societies. To make this as clear as possible I will attempt to do this in a single post, so I apologize in advance for its length.

In the views of Distributivist thinkers (and in my own opinion) Fascism, Communism, Socialism, and laissez-faire Capitalism all result from the same mistake. And that mistake is to misapprehend the goal of economic activity. For laissez-faire Capitalists, the error is thinking that the goal is to maximize profits with the goal of accumulating the greatest possible capital; for Communists the goal is transformation of Mankind into a new sort of person with a different nature; for Fascists the goal is social order and stability; for Socialists the goal is perfect equality of outcome (which they mistake for justice). Belloc and Chesterton point out where these errors can lead, and history has shown them to be pretty accurate. In every case the essential needs of Man are in at least some ways neglected, leading to unhappiness, abuse, and, eventually, tyranny.

The real answer is surprising in its simplicity; the goal of economic activity is the same as the goal of society. The goal is happiness. In ‘The Outline of Sanity ‘Chesterton wrote,
“There is no obligation on us to be richer, or busier, or more efficient, or more productive, or more progressive, or in any way worldlier or wealthier, if it does not make us happier”

We seek happiness in society through friendship, family, the development of character, and the improvement of our fellow man. We seek happiness through economics by acquiring the essentials of stability, the leisure of self-improvement and beauty, and the improvement of our fellow man. As the principle of solidarity points out, society and economics cannot be divorced from one another. This means that we must engage in economics with our neighbors and cannot forget that we are as dependent upon them as they are upon us. The principle of subsidiarity points out that, just as the most important element of society is the smallest and closest (the family), so our economics should look to smaller, closer ventures to maximize happiness.

There can be no true happiness in the absence of security. The first goal of society is security (from outside invaders, from crime, from abuses of rights) and the first goal of economics should be security (from hunger, homelessness, and exploitation). But just as a society that does not need to fear crime is not necessarily fair or open, a society where all are fed is not necessarily just or free. Security is the foundation, not the end, and this must always be kept in mind.

Many Distributionists argue that concentration of capital into the hands of too few people leads to a decline in liberty that can lead to a state resembling slavery for those who lack capital. The proposed solution is to strive to distribute capital as much as possible (hence Distributionism) so that most, if not all, families are capable of self-sufficiency. This leaves a wide range of possibilities; farmers that have enough land to provide for themselves both directly and through the sale of ‘excess’ produce; skilled tradesmen with their own tools and enough skill that they can be either self-employed or find employment both readily available and their jobs portable (such as a carpenter or computer programmer); factory workers who are part-owners of their factory with sufficient equity that they are involved in issues of capital expenditures and share the reqards and risks of production; retail employee/owners who make cooperative purchases of stock, participate in sales, and either lease or co-own their facility.

As you can see, the ideas of self-sufficiency, solidarity, subsidiarity, an aversion to wage slavery, and social justice tend to point along a particular path, one that rejects Communism, Socialism, and Fascism and is opposed to corporate consolidation and monopolies. The result, where as many people as possible are professionals that own all the tools required for their work and deal as directly as possible with each other, could be called a world of artisans.

A world of artisans would nullify the tendencies of industrial and post-industrial nations to slip into authoritarianism, regardless of their ‘flavor’. The economic displacement of both industrialization and the transformation to post-industrialism creates feelings of fear and insecurity amongst many people who are incapable of self-sufficiency do to a lack of personal capital; they need wages to live and are incapable of generating them without access to someone else’s capital. Changes in the structure are coming that means that they are unsure of continuing access to capital. A simple example is a worker at an auto-plant. He cannot make cars himself; he owns none of the tools, materials, or facilities to make cars himself; his skills are specialized to the point that no other employment but car-making affords him the potential of a living wage. As plants are closed or moved, he is (naturally) afraid of losing his home, even of losing his life to hunger.

Capitalist economies will always lead to some level of insecurity; it is their nature. The feelings of fear created by those lacking capital will be utilized by those who desire change. They may be Machiavellian, they may be benign, but someone will harness the insecurities to effect change. If the desire is to do away with the insecurities of Capitalism altogether, the goal of change will be Communism. If the goal is to use the power of the central government to take capital from one group and give it to another to ameliorate insecurity, the goal is Socialism. If the goal is to make Capitalism more efficient in the desire to accelerate economic growth and reduce insecurity through expansion, the goal is laissez-faire Capitalism in its ‘purest’ form. If the goal is to stabilize society while maintaining Capitalism (and the largest Capitalists), the goal is Fascism.

I am aware that some will argue with my definitions, above. These are my own very broadly-brushed opinions, nit an in-depth analysis of political methods other than Distributionism.
Distributionism argues that Communism and Socialism are wrong (and lead to oppression) because they make the mistake of blaming Capitalism. They further argue that Fascisms and ‘invisible handers’ are similarly wrong for blaming people. You cannot reject economics, nor reject people – you must integrate them. This is done by making as many people as possible independent economic actors – in other words, capitalists.

But how do we get there?

As I mentioned in Part II, the shift to Distributionism cannot be coerced or via ‘negative’ means. You cannot seize land from those that have ‘too much’ and give it to those who have ‘too little’; who would decide? Who would enforce such decisions? Both obviously require – a massive, powerful central government, the very antithesis of Distributivist thought. Likewise, imposing higher taxes on people earning ‘too much’ and giving this money to those earning ‘too little’ result in the same formula – injustice enacted by remote, faceless entities. In addition to leading to resentment (from all sides as to what is ‘just’), alienation (of different groups from one another), dependency (of those who gain with no effort), and lawlessness (by those wishing to either avoid being taxed or who wish to profit unjustly) the power of the central government will continue to expand at the expense of local leadership, the family, and the individual.

The path must be positive. Some steps are relatively obvious and even partially in place. Small businesses should be encouraged with tax breaks and loans. Similarly, cooperatives, credit unions, and similar solidarity groups should also receive tax breaks. Microloans to such organizations could be subsidized by government agencies for a strictly limited time to encourage transition. The removal of farm subsidies and their replacement with tax incentives would go a long way toward creating Distributionist farms. Local, regional, state, etc. funding for training, especially in trades and professions, would encourage the creation of more artisans. Laws that encourage guilds should also be created.

And here we come to another key element in early Distributionist thought; the guild. Similar to unions, similar to professional associations, and similar to consortiums, guilds are still unique. The European guilds of the medieval period are, as noted in the link, the source of most modern concepts of intellectual property, business ethics, trade, and social security. The were formed by members of the same or closely-related trades or professions, generally as independent, self-employed artisans and professionals working together for their own greater good. They set standards of education for their members (and prospective members), codes of conduct, quality standards for products, even rules for contents, size of products, etc. Virtually all of them also organized funds and systems to care for the widows and orphans of members, for members no longer able to work due to disability, and the retired/elderly members of the guild.

Historically a number of guilds negotiated exclusive contracts with cities, preventing non-guild members from practicing their professions there. This eventually led to their concentration in such cities and, ultimately, their downfall as they became isolated and hidebound fraternal institutions. Their counterparts outside the cities often refused to join organizations they saw as urban and both were more able to change quickly and, interestingly, were easier prey for large capital concerns who wished to consolidate. Distributionist thought is to learn from history and employ the best of guilds while rejecting their tendencies to become focused on defending exclusive territories and protecting trade secrets. Under this model Guilds are to have an almost dual nature; internal and external. Internally they act like fraternal societies and professional boards/consortiums. They ensure training and performance standards, enforce ethics, provide insurance services for members, manage pensions and trusts, engage in cooperative enterprises with other guilds, etc. Externally, they are almost like a brand. Consumers that deal with members of, for example, the baker’s guild know that they can trust the contents of the baker’s goods, his level of training, the standards of cleanliness of the bakery, his business ethics, etc.

Guilds differ from unions in a very important element – all levels of the profession or trade are in the same organization. While unions tend to pit employee against employer, guilds force them to work together. Since guild members have the skills, tools, and other capital needed to make them ‘portable’ (they can work for themselves or another master of their profession with ease) there is less insecurity on the part of wage earners. Employers within the guild ‘worked their way up’ through the guild and are very clearly aligned with their workers in the joint venture of success for all members of the guild. Since many guilds historically had rules on the election of guild members to local leadership councils and guild assemblies, the voice of the employed has as much weight as the voice of employers in large decisions, as well. The preferred management of Guilds is at the level of individual self-employed worker, then small shops, then a neighborhood, etc. The involvement of workers ensures such things as a living wage, decent social benefits, and a voice in larger decisions. The non-exclusive nature of a guild means that guilds that become corrupt, exclusive, coercive, etc. will simply have their members melt away/ It is almost like the Wobblies, but with the managers and owners involved, too!

More seriously, the Guild system is a microcosm of Distributionism; the line between employer and employee is virtually eliminated since the employee has the means to become self-employed or an employer himself; the organization is founded on the principles of solidarity, subsidiarity, and justice. The goal of guilds is not to erase Capitalism (which was the goal of many early trade unionists), but to embrace it, to take the best of Capitalism and share it through the free actions of voluntary members. At the same time, guilds share the risks and dangers of Capitalism and ameliorate them through acting with and for each other. Their goal is to create a community where the members avoid the excesses of materialism through close association with their peers, a focus on the needs of their community, and a desire to contribute to the society that makes their success possible. These voluntary organizations succeeded not by rejecting Capitalism, but by sharing the Capitalism, the risks and insecurities as much as, or even more than, the rewards. This is an emulation of civilization itself; the protection of society by sharing risks and hardship is the cornerstone of the advance from barbarism. The voluntary sharing of the benefits of security is the cornerstone of a just civilization.

I can almost hear you now,
“Hold it!” you say, “Deep, you aren’t describing Distributionism as a ‘Third Way’, are you?”

No, I’m not. Mainly because I don’t think that it is a third way. Communism has always been a pipe-dream of people whose arguments begin and end with ‘once we change Man’s essential nature…”; Socialism is an argument that concludes “…and thus we will give Man more freedom by carefully controlling him.”; Fascism is an argument that “We know what is best for you!”; Laissez-faire Capitalism is an argument that “Selfish, unjust actions lead to altruistic, just results… eventually.” Distributionism rejects Communism, Socialism, and Fascism as unjust and immoral in their very conceptualization. It also rejects laissez-faire Capitalism as a wrong-headed attempt to separate ends from means. So, in the end, it is not a Third Way, it is simply the acknowledgement that Capitalism is the best known economic system, and that very minor, voluntary controls can prevent Capitalism from becoming a tool for injustice.

Since Distributivist writers and thinkers spend a lot of time explaining what is wrong with the world, and what Distributionism is against, it has been argued that Distributionism is no more than a reaction, a denial, a ‘no’. In short, it is impractical, even evil. The arguments against Distributionism range from ‘it prohibits international trade’ to ‘it cannot compete with huge multinationals’ to ‘it has no political platform for politicians to use in advocating it’. I find the concept that Distributivist are against international trade when virtually all of them point to the Mondragon Cooperative Corporation as an example not only of international trade, but successful competition with huge multinationals. Or that small firms cannot compete with large ones when small ‘mom and pop’ shops have successfully limited WalMart in China and carved out serious market share in America in recent years. I must also confess that I was surprised when Fr. Neuhaus, whom I normally find to have a very informed opinion, dismisses Distributionism as not having anything to which to attach policies or platforms in the political arena. America has; a Small Business Administration that promotes small business; farm co-ops, credit unions, consumer co-ops, and business co-ops like ACE hardware on almost every corner; a history where the Grange movement held strong, if brief, political influence over national politics; a growing concern over the impact of large enterprises like Wal-Mart and Microsoft of the well-being of the average person; and a rather large (and growing) government job training program. With all respect to Fr. Neuhaus, but I suspect his obliviousness to possible political planks supporting Distributionism may have more to do with his own ignorance of Distributionism, politics and American business than any weakness of Distributionist thought.

Indeed, it would be a rather simple matter to craft political positions that would have a broad appeal and promote Distributionism in a non-coercive manner. As I mentioned earlier, tax breaks for small businesses would be well-received by many. Pointing out that the vast majority of new jobs in America are generated by small businesses would go a long way to making it more popular. Tax incentives for co-ops would face similar approval across a broad segment of society, and it would be a simple matter to increase support for credit unions and similar activities. Reduction of levies and tariffs for small business and co-ops would also help. An increase in awareness of the value of trades would be of great benefit, too.

That seems pretty simple, really; the engine of job growth in America (and the world) is small business; tradesmen are critical for small business; co-ops of all sorts are efficient, competitive organizations that provide solid business benefits to their participants. I am not sure what Fr. Neuhaus and his fellow detractors are missing, but these seem easy sells as political positions. Conservatives can focus on tax relief for business owners and job creation, Liberals can focus on job creation and tax relief for students, blue collar workers, and mom & pop shops. Both can appeal to farmers and rural voters by supporting co-ops.

Seems like a win-win to me.


Next time: more on Distributionism, but on a more personal level.