G. K. Chesterton
(one of the founding fathers of distributism)

Today at Ethika Politika, in response to a few writers who have offered, in my estimate, less-than-charitable characterizations of capitalism, I ask the question, “Which Capitalism?” (also the title of my article). I ask this in seriousness, because often the free economy that people bemoan bears little resemblance to the one that many Christians support. In particular, I ask, “Which Capitalism?” in reference to the following from Pope John Paul II, who outlines in his encyclical Centesimus Annus (no. 42) two different forms of capitalism as follows:

The first is “an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector” that “is the victorious social system” since the fall of the Soviet Union and that “should be the goal of the countries now making efforts to rebuild their economy and society.” The second is “a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious.”

All three of the authors I take issue with are Roman Catholic and two of them have voiced their support for distributism as an alternative to capitalism. However, I ask with all sincerity, “[S]hould not distributists be asking whether distributism is a form of capitalism, rather than setting it up as an alternative to capitalism?” Given the high praise given by Pope John Paul II to capitalism, rightly understood as the free economy, ought not distributists simply be arguing that they, perhaps, have some valuable insights for supporters of capitalism, rather than opposing distributism to capitalism, uncharitably understood?

The Journal of Markets & Morality, of which I am assistant editor, actually published an article by Charles McDaniel last Spring exploring the insights of the Austrian, post-Keynesian, and distributist schools of economics for better understanding financial crisis (here). He points to G. K. Chesterton’s concept of consolidarity as a helpful insight to explain the loss of freedom that a society may suffer when economic causes and consequences become disconnected. It would seem, perhaps, that distributists (or at least G. K. Chesterton) have some valid insights to offer, but I worry that perhaps contemporary proponents of distributism have not considered the consequences of dissociating themselves from those who support the free economy.

Now, certainly distributists are entitled to prudentially disagree with Pope John Paul II and reject even that capitalism he commended as “the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress,” but I recommend an alternate approach. The fundamental question, I think, is whether or not distributism, to distributists, is a form of capitalism, well understood.

If so, then why not be more open toward fellow Christians who support the free economy and change their rhetoric and outlook? It does not further any discussion to debate only a straw man of one’s opponents. As Carlo Lottieri writes in his Journal of Markets & Morality review of John C. Médaille’s Toward a Truly Free Market,

In the book, we find many critical reproaches against classical liberalism. Unfortunately, Médaille offers us a cardboard image of the market, and he reduces the free economy to its schematic and Chicagoan description. The simplest way to rebut an intellectual opponent is to build a parody of his ideas, thereby showing that they are not useful to explain reality.

It seems to me that, in light of the foregoing, continuing to oppose themselves to capitalism, and offering only uncharitable caricatures, as is often the case, only will serve to antagonize potential allies and unnaturally isolate distributists from the much broader conversation of faith and the free economy. On the other hand, if capitalism truly is, to them, universally and irredeemably flawed, and Christians who support it are naive at best and hypocritical—possibly even heretical—at worst, then I fear that they have already isolated themselves.


  • http://twitter.com/NickolasSteffen Nick Steffen

    Thomas Storck discussed Centesimus Annus on the Distributist Review. His approach examines the content of the encyclical and its implications for any definition of ‘capitalism’ contained within. Its a substantive reply.
    http://distributistreview.com/mag/2009/02/what-does-centesimus-annus-really-teach/

    I believe he followed it up with a two part piece discussing the encyclical in a bit more detail.

    http://distributistreview.com/mag/2010/09/centesimus-annus-part-one/
    http://distributistreview.com/mag/2010/10/centesimus-annus-part-two/

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  • DMReed

    As a distributist, I’ve always thought of distributism as a form of capitalism. Remember the distributist quote from Chesterton: “The problem isn’t too many capitalists, the problem is too few capitalists.” Distributism is inherently capitalism, rightly understood. If there are distributists who set distributism against capitalism, they don’t understand distributism. I guess the only opposition that exists is between laissez faire capitalism and distributism. Example: A distributist would support the privatization of social security into personal savings/retirement accounts, whereas a laissez faire person would oppose this because they would argue that the government has no business intervening in the marketplace to establish such a system; regardless of whether the system involved private accounts or not.

    • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

      Thanks for the comment. I hope your sentiment is widely shared. I wonder, however, what does Chesterton mean by “capitalist” in that sentence? At one time the word (if I’m not mistaken, following Marx, who originated it) simply meant an “owner of the means of production.” Thus, Chesterton may be speaking of followers of an ideology, claiming that there are too few people with a truly capitalist philosophy—perhaps rightly bemoaning crony capitalism—but he also may simply mean that he believes ownership of the means of production is too narrowly concentrated. The interpretive difference, I think, would be very significant.

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  • Mark

    I am a distributist but I whole-heartedly support free-market capitalism because what distributists don’t seem to realize is that free-market capitalists are their greatest ally but they insist on demonizing them because they are historically and economically illiterate. A free, laissez-faire, market (not the fascist “free market” that neoconservatives talk about) would distribute property widely with minimal state intervention. That said, I’m still in favor of some prudent and strictly enforced laws to protect workers’ rights, but only if unions are unable to secure them on their own. I don’t support 36 hour shifts and missing fingers.

  • qkgk

    Pope JPII had never endorsed capitalism, he simply was not sure how to define it, his successor is more precise, and BXVI actually made it clear that capitalism and free economy part ways, since the latter resembles marxism rather than any positive account of freedem in the economic domain. Here’s two excerpts from 2007 to ignite some fresh thoughs on the subject (and please do not start by saying: “This is what the pope really meant” and whatnot):

    “This was precisely the great error of the dominant tendencies of the last century, a most destructive error, as we can see from the results of both Marxist and capitalist systems. They falsify the notion of reality by detaching it from the foundational and decisive reality which is God. Anyone who excludes God from his horizons falsifies the notion of “reality” and, in consequence, can only end up in blind alleys or with recipes for destruction.”

    and

    “Both capitalism and Marxism promised to point out the path for the creation of just structures, and they declared that these, once established, would function by themselves; they declared that not only would they have no need of any prior individual morality, but that they would promote a communal morality. And this ideological promise has been proved false. The facts have clearly demonstrated it.”

    source:http://www.vatican.va/holy_father/benedict_xvi/speeches/2007/may/documents/hf_ben-xvi_spe_20070513_conference-aparecida_en.html

    • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

      I guess I see those statements (which I read in context through your link) as less precise than Pope John Paul II rather than more precise. The fundamental question that I raised at Ethika Politika comes to mind: which capitalism? It is at least clear that what Pope Benedict XVI has in mind is an atheistic (it “excludes God”) and amoral (it claimed “no need of any prior
      individual morality”) form of capitalism, hardly equivalent to capitalism as the free economy, as defined by Pope John Paul II. This, to me, simply underscores the importance of the question rather than answers it.

  • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

    That’s a very interesting quote. Thanks! What’s the source for that?

    Interestingly, though, I feel like it better answers my question to DMReed below. My point here is that we need to define our terms well and in using them we need to be sensitive to other uses, especially when critiquing someone who may use the term with an entirely different meaning. Chesterton seems sensitive to the fact that there are many uses of the term “capitalism” and makes clear that he does not object to some of them. I think Pope John Paul II does the same thing. I’m not so sure about Pope Benedict XVI, at least in the source you linked to, and I am certainly not too sure—if that awkward phrasing makes any sense—about many distributist writers.

    • qkgkk

      It’s from The Outline of Sanity. Capitalism as Proletarianism is the way Distributists use it, and in my humble view so does the BXVI in continuity with his Predecessors. Hence, capitalism -as defined by GKC – and free markets seem to be antithetical, unless one is willing to accept only the negative understanding of freedom (re: St. Augustine’s conception of feedom, mentioned for instance in William Cavanaugh’s works) Here’s some interesting empirical data from New Scientist, as a homework I’d suggest that anyone interested could try matching those companies from the list with the ones involved in the LIBOR scandal, and see how many do overlap. http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

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  • http://www.acton.org/ John Couretas

    More economic jabberwocky from Chesterton. He is not suggesting that the “proles” fared just as well under Bolshevism as they did under Western capitalism, or what we might call the free market, is he? Or are you, QK? Seriously?

  • Michael

    A problem with distributism which occurs to me, although I admit that my familiarity with this economic theory is limited to reading posts at the Acton blog, is that it presumes that the only thing holding ordinary people back from being “capitalists” is the ownership of more money/capital. I’m afraid that this is demonstrably not so.

    First of all, it has been demonstrated that the average human being is much more sensitive to avoiding losses than to making gains even when the risk of loss is identical to the potential for the equivalent amount of gain. This human trait is called “loss aversion.”

    Second, there seems to me to be no question that human nature has made most of us critics by nature. We would rather blame somebody, anybody other than ourselves, for our failures. Theodore Roosevelt sagaciously said this about critics:

    “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”

    Third, building capital requires creating more value than we consume for a period of time. For that half of the US population making $43,000 a year or more, building capital a bit at the time is clearly possible. Building capital is, however, uncomfortable and most of us would prefer to consume what we generate as we generate it. We don’t like to sweat or do without when we can afford not to sweat or do without. Hence most of us never acquire enough capital to invest in our own potential enterprises. This aversion to discomfort dovetails neatly into the fact that most of us know ourselves well enough to know of our trait of “loss aversion” described above. We just tend to ask ourselves, “why suffer” when we know that we are unlikely to become capitalists anyway.

    Most of us are just not cut out for the capitalist life, and I am not speaking theoretically.