About the same time that Ludwig von Mises was writing his Theory of Money and Credit, and Thorstein Veblen was writing his Theory of Business Enterprise, yet a third – and somewhat more obscure – group of social theorists was busily trying to come to grips with the faults and failures of the economic system around them. Like the others, they also thought that things were becoming too centralized, and did not trust to the general benevolence of such arrangements. Unlike the other groups, they had a strong religious bent informing their views. The two principal proponents of this view were lay Catholic writers, G.K. Chesterton and Hillaire Belloc, who even in their day were known more for their political journalism, religious writings, and fiction than their economic opinions. In fact, they were not even economists at all, and appear to have been less concerned with the efficiency of any production scheme than with its being well suited to the lives and dignity of those who participated in it. The group I am speaking of is the Distributists. Today, their views live on in the books of these two prolific writers as well as some few modern adherents to their views.
As G.K. Chesterton frequently laments, distributism is a perfectly awful name for their movement, and, as he says, he would have been happy for it to have been called 'cat' or 'dog' so long as people properly understood what it meant. I must confess to having known about distributism for some time without having the slightest interest in investigating it, thanks to this awful name and the vague notion that it was in opposition to capitalism, which together suggested to me that it was just some variant of socialism and not worth the time to look into.
Actually, that is not even remotely the case, and though I can now see where the movement got the name 'distributism' and could not come up with a better one myself, I still say it is a bad name. Distributism is, in a nutshell, the idea that the concentration of productive capital into the possession of a relatively small number of capitalists has extremely negative effects on society, and as such is a state of affairs which should be vigorously opposed in favor of a state in which capital is well 'distributed' among many owners. In Chesterton's words, 'too much capitalism does not mean too many capitalists, but too few capitalists.'
Even though the two were not economists, it appears not to have stopped them from occasionally foraying into the field when they felt the desire. They would have done better, in my opinion, to have better suppressed the urge. Both these men were brilliant intellects and gifted writers, but where they try to take up this topic in anything approaching specifics, it often isn't pretty. In many places, one finds them advancing fairly elementary fallacies. On the other hand, it seems to me that their instincts were largely right in the broader view of things, especially where Chesterton flatly denies that large corporate enterprises are actually more efficient than smaller ones. But though he observes well enough that this seems to be the case, he has difficulty in defending his opinion.
Like Veblen, both men bewail the evils of monopoly, and both conclude them to arise illegitimately. But unlike Veblen, they are not so convincing in their explanations for how this state of affairs can come to be if the larger corporations are not in fact more efficient than the smaller ones. Belloc comes closest in his Essay on the Restoration of Property, even identifying credit markets as being an important force in the growth of centralized business structures. But both men make many of the same mistakes – principally in assuming that on the whole the regime of financial transactions as presently constituted and which lead to this state of affairs actually reflect economic reality. Both the Austrian school and Veblen put the lie to this assumption, but unfortunately Chesterton and Belloc apear largely unaware of them. They probably would have been hostile towards both points of view in any case, as the one advocates – and even celebrates – an almost utterly free and unfettered market, while the other is coldly and cynically materialistic in its analysis.
Possibly the worst such blunder comes from Belloc, who attempts to make a historical case that capitalism arose from – of all places – the English Reformation. The distributists tend to hold up the latter Medieval age as a sort of ideal, when most people were petty landowners or shopkeepers, such that capital really was well distributed, at least to a large degree. Belloc asserts that this idyllic situation was destroyed by the Reformation, when the monarchy seized church lands and then began distributing them among the nobility. This enormous confiscation of wealth piled up in the hands of a select slice of society, which used its new economic power to its advantage, pushing what were once customary arrangements of prices, payment of rents and other fees into a competitive arrangement which favored the large landholding class. Thus, saith Belloc, was the principle of the competitive market born. It was the product of the spirit of landed nobility lording their advantage over smaller holders of property, with all of the economic and political fallout that ensued.
Now, I have no doubt that this wrongful seizure of lands was a wrenching and evil event in the history of Britain, nor do I doubt that it did in fact cause a major shift in the balance of power. But the argument that this political shift could fundamentally change the way that people viewed what constitutes right and proper economic relationships between one another seems to me absurd. It could be that this event marks a particular point in time when the capitalist market order found opportunity to assert its dominance over medieval custom, but that would only be if such an order pre-existed the event in some fairly widespread and advanced state – in which case the Reformation could not have created it in the first place. I find Veblen's explanation far more satisfying.
Belloc does, however, provide a more convincing explanation for the rise of medieval custom out of the ancient system of slavery. He says that once the central powers of Western Europe fell – namely, Rome – landholders were put in a position of having to deal with their captive populations without recourse to the apparatus of an organized state. Thus, they were forced to 'come to terms' with those who worked for them in arrangements that were more voluntary and mutually satisfactory to achieve a stable organization. The result was eventually serfdom and a free peasantry. Like Veblen's explanation for the rise of capitalism, the rise of medievalism was a gradual process that centered on new social arrangements and habits of thought that solved a practical problem in a generally mutually satisfactory manner.
In keeping form with the same sort of error which led Belloc to blame the rise of capitalism on the Reformation – one which has a tendency to both lay blame and look for solutions to problems in grand actions of the state, whether they could reasonably be expected to lie there or not – Belloc and Chesterton both seem overly statist in their outlooks, especially when it comes to proposing solutions to the economic dilemmas of capitalism. Perhaps that is due to their Medievalist sympathies, when times tended to be more ordered along such lines, or perhaps it is because they had themselves succumbed somewhat to the newly festering Progressivism of their day. But all that aside, on points where these men excel, and especially for Belloc where he sticks to his strengths and remains systematic and logical, they do succeed in making a highly convincing case for their cause.
Belloc, I think, outlines the dilemma the better of the two. In The Servile State, he notes that the capitalist order is unstable for many of the reasons that Veblen did – the order itself tends to undermine the notions that secure the capitalist mindset in the people who live under it. This happens mainly because by depriving the vast majority of the population of the ownership and management of productive property, the 'mood' of property ownership is lost on society at large. It develops a proletarian outlook, concerned with wages and income rather than with wealth itself. In addition, capitalism's volatile, supposedly intrinsic cyclicality tends both to put the capitalist at risk of his profits and property, and the employee at risk of his livelihood, such that both have an incentive to 'stabilize' arrangements, as it were.
Belloc thought that capitalism as it existed in his day – which he defined as most capital being held in the hands of the few, such that this arrangement of things set a social 'tone' of widespread proletarianism – had three possible fates. Firstly, capital could be held by fewer men such that eventually it was held by none, residing almost wholly in the hands of the state. This is, of course, Socialism. Secondly, capital could be held in more hands, such that the mood of society would be altered and the institution of property preserved indefinitely, as it presumably would have been in medieval times. This is the Distributive State. Third – and in his estimation, most probably – the present arrangement would continue, the general tone of society deprived of notions of property, with social relationships calcifying over time such that both the capitalist and proletarian would be preserved in a new class structure. Welfarist policies – such as payment for unemployment, minimum wages, and the like – could be used to permanently stabilize the economic arrangement into what he called the Servile State. Belloc makes a convincing case that the West was in fact moving towards the Servile State at the time, and no doubt the reader has already perceived that he has largely been proven correct, though today one would call it the Welfare State.
It would be easy for the critic to take a cursory look at these ideas and come away from them with the idea that distributism emerges from a sense of envy and unfairness, similar to what so often motivates Socialism. Perhaps to a small degree this is the case, as one does detect a note of this sort of resentment in both writers. But it would be an injustice to dismiss distributism on these grounds or to deny that there is anything else to it. In one particular respect, it is essential to get a sense of the passion that both men had for the institution of private property in order to understand their point of view. Perhaps the best such illustration comes from Chesterton, who goes so far as to declare that 'property is to man as Christ is to God.' While this statement probably captures the intense passion that the two vested with property as I am not sure many others could, especially coming from such a devout Catholic as Chesterton, by the very nature of its terms I doubt that anyone could fully comprehend it.
Chesterton thought that property was essential in order for a man to fully come into being. By working property himself and shaping it as he saw fit, he mirrors the act of God creating man in His image. He participates in an act of divine, cosmic creation. He expresses his individuality and enjoys liberty and sovereignty over what is his, as a man with no property simply cannot. A man with no property is reduced to a servile and insecure condition, or worse, lives in a state of dependency. While such arrangements may be materially satisfactory – or even superior – or alleviate many unwanted responsibilities from the worker or the dependent, they nevertheless deprive him of the conditions under which a man was meant to live and under which he achieves his highest state of being.
In What's Wrong With the World, Chesterton 'derives' the ideal conditions under which man was meant to exist from 'first principles' observable in the natures and characters of men, women, children, and families. Naturally, he concludes that the small farm or family proprietorship is the ideal condition – otherwise Chesterton would not count himself a Distributist. But that is not the book's real value. It is filled with insightful observations and arguments that really very well support his contention, but more importantly, highlight the importance of having a real contention to begin with. In Chesterton's mind, one of the biggest problems with 'the world' of his day is that people had moved from thinking in terms of doctrine and solid points of fixed policy and philosophy to thinking in terms of bland tendencies and directions. Worse, thinking had become so divergent among the different schools of thought that what appeared a good to one was viewed as an evil by another.
Thus, modern reformers might all generally agree on the evil of a bad situation and agree that reform was necessary, but each have no real idea of what the good situation was which he was striving for and in utter disagreement even in the direction which society ought to aim. He only thinks in terms of directions and tendencies, defining himself against others, and even so, for such longings as he harbors there can naturally be no satisfactions. How far is one to go? One winds up in a world of pullers and tuggers, none of them with any fixed goal in mind – or even any notion that as reformers, they ought to have such a thing – and all in perpetual disagreement. The goal of almost any modern negotiation is 'as much as one can get.' As such, Chesterton thought the first order of business should be to clear the air of all this social tinkering, and rather than ask what it was that ailed a society, what it ought to look like in health.
In this argument, Chesterton anticipates the modern world of myriad special interests vying for government largess and Veblen's army of meddlers deliberately operating at cross purposes – and in the process making the lives of those forced to tolerate their incessant proddings, tinkerings, and material extractions miserable. It is not that society needs to be drug about by the nose by armies of practical men who know 'the system', 'how it works,' and 'how to fix it,' each according to his own vague opinions. It is that 'the system' is so clearly and fundamentally broken in critical places that it needs men to quit thinking about where it needs to go, and instead on what it needs to be. This dragging it about in every direction with its problems intact is not making things any better, it is creating more problems. What society needs is an 'unpractical man.'
Chesterton's 'solution' as sketched out above should look quite familiar at this point – it is Veblen's Artisan Economy of the late Medieval and early Enlightenment. It is the stable, economically decentralized state of the Austrians. While Chesterton and Belloc's arguments for how to achieve it and what causes the economy to unnaturally depart from it are not always good, nevertheless, in their broader strokes they have identified almost the same state.
One especially hopeful aspect about their arguments and speculations is that both Belloc and Chesterton appear to have assumed that people in such an economy would, on average, be materially worse off than under the present order of things. They continually refer to people under such idealized systems as 'peasants,' and celebrate them in their proud poverty even in their other, unrelated works of fiction. Yet even so, they thought that it was better to be a peasant and relatively poor than a proletarian and materially better off, such were the benefits of the security and dignity of ownership of private property. But if we believe Veblen and the Austrians, it is just as probable that under such a system, the 'peasant' will not only enjoy the spiritual benefits of his own property, but will be materially the better for it as well.
I remain agnostic on this point, until I see such a system in action. It is one thing to hypothesize about an observable system which really does exist and for which there is actual data -- however misleading the data may be. It is another and more difficult problem to hypothesize about the hypothetical. That said, it seems to me that the answer would boil down to two major effects. First, I am quite sure that an idealized, decentralized system which managed to avoid the pitfalls outlined by these three sets of theorists would suffer from far less economic parasitism and the inefficiency associated with artificial centralization. On the other hand, I am not so sure how that effect would weigh against a situation in which most people were not under constant compulsion to work diligently by an employer, did not have their work carefully organized by such an entity, and true consumer sovereignty was allowed to assert itself.
It could very well be that people would both produce and consume less, either out of inability to achieve higher efficiency of production, or simply given the free choice to do so. Perhaps they would simply find life satisfactory with less effort, and leave it at that. It might be that it is the structure of the modern capitalist order that creates the incentive to live a lifestyle that is simultaneously heavily materialist and frenetically productive. These artificial incentives might be structured such that the alternative appears so much less appealing that people who otherwise would opt for the less productive lifestyle nevertheless live highly productive lives. Or it could be the reverse – that once the parasitism and inefficiency were removed, the reward to effort would be so much greater that most people would rapidly become productive dynamos. I don't know.
Whatever the case, to me the issue is moot. It might be an interesting question to think about, but it is not the crux of the matter. The critical thing is that the order be structured such that financial and economic outcomes faithfully reflect the exchange of value for value, that economically illegitimate transfers of wealth are minimized, that consumer sovereignty be firmly upheld so that economies serve the needs of people rather than the other way around, and in general, common principles of liberty and justice prevail over human affairs. Chesterton and Belloc, for all their flaws, appear to me to have identified many important aspects of the problem and a coherent and detailed idea of what any proposed solution should look like.
As far as the question of material productivity is concerned, I would rather find out what happens by doing it, and accept whatever answer I find, come what may.