Last week, we took a look at what distributists get right in terms of economics, through the eyes of David Deavel at Intercollegiate Review. Now, Deavel discusses where distributism goes off the rails in that same series. It is a rather long list, rube goldbertbut here are the highlights.

First, Deavel says that simple economics escapes distributists. Despite the fact that economics teaches that actions in the real world have real world consequences, distributists tend to ignore this fact.

They scoff at the notion that there might be predictive laws of economic behavior, such as supply and demand.  But if there are such predictive laws, then it behooves us understand them.  Distributists want third parties, such as governments or guilds, to arbitrarily set wages and prices according to abstract notions of justice.

Say for example, distributists demand an increase in the minimum wage. It’s not a “livable” wage for families, so it must be raised. This, in turn, has consequences: employers can’t hire as many workers, they must increase the price of their products, the types of workers that are hired must change, etc. Sure, now the workers have a “livable” wage, but there are fewer workers with less demand for the product they are making, and some workers can’t find work at all. Not good, as economists would say.

Deavel accuses distributists of something he terms “borrowed infallibility”. Since many distributists are Catholic, Deavel says they “borrow” convenient Church teaching to back up their claims, using papal writings and declaring them infallible (which very few are.)

Want to know who denied that popes offer such a program? Pope John Paul II, who wrote in Centesimus Annus, “It goes without saying that part of the responsibility of Pastors is to give careful consideration to current events in order to discern the new requirements of evangelization. However, such an analysis is not meant to pass definitive judgments since this does not fall per se within the Magisterium’s specific domain.” (#3)

Distributists sometimes claim that their economic views, backed by infallible papal authority, offer a “third way” between socialism and capitalism. Again, John Paul II disagrees, writing in Sollicitudo Rei Socialis “The Church’s social doctrine is not a ‘third way’ between liberal capitalism and Marxist collectivism, nor even a possible alternative to other solutions less radically opposed to one another: rather, it constitutes a category of its own.” (41).

The Catholic Church offers no hard-and-set rule or system of economics – no infallible teaching that any particular school of economics is THE one.

Do distributists harbor a desire for big government as well? Deavel thinks so. He traces this back to Hilaire Belloc, founder of distributist economics. While Belloc did not call for the redistribution of goods by the state, he was open to “tinkering” with the economy in ways that Deavel say point to government interference.

In Belloc’s Essay on the Restoration of Property he advocated not only the re-establishment of guilds, but also the following long list of state interventions in the economy:

  • subsidies for artisans;
  • progressive or “differential” tax schemes applied to wholesalers—whose money would be put into credit unions, which the guilds would use to finance small businesses that could compete with them;
  • rules and taxes that made it hard to sell smaller pieces of real estate or to buy up farmland;
  • rules for leasing property that include an automatic right to purchase by installment; and
  • a series of state-created credit unions.

…When you run the economy through the government, the results are easy to see; we have seen them again and again throughout history: Government agencies will take their share off the top, and funnel wealth into the coffers of the state. The bureaucrats who direct the funds toward one business rather than another will effectively control them—as federal agencies now exert enormous power over Catholic colleges and hospitals, for instance. Worst of all, the continual fiddling with markets, wages, and prices, with no foreseeable end, will result in economic chaos—as government mandates, rather than the choices of consumers, set the costs of goods and services. This is no recipe for freedom.

Deavel reminds the reader that distributism does have good points (see his full discussion of that here), but that at its core, distributism calls for a concentration of economic power in the hands of the government “that interferes in every decision we make as workers and consumers.” This leads to corruption and cronyism. Free market economics (while not immune to corruption) puts the concentration of power in the hands of the consumer, which distributes economic power rather than concentrating it, thereby lessening overall corruption of the entire economic system. Deavel ends with this foreboding reminder:

Our respect for the human dignity of every person teaches us that we should set a very high bar before we use employ the state’s police and prisons to change our neighbor’s behavior. That’s one lesson of the twentieth century we can’t afford to forget.

Read “What Wrong With Distributism” at Intercollegiate Review.

  • Clare Krishan

    “Free market economics (while not immune to corruption) puts the
    concentration of power in the hands of the consumer, which distributes
    economic power rather than concentrating it, thereby lessening overall
    corruption of the entire economic system.”
    Really, says who? I think you perhaps meant to say is *Ideally* free markets ought to protect property rights of consumers. Our current economic regime by any means of analysis is NOT free (consumers of the mediating commodity of most economic consumption, the currency, have ZERO say in what determines its’ purchasing power) with prices aka interest rates set by the Fed we are all operating under a mercantalist — as opposed to communist — command economy, a crony-corporatist form of private socialism of moral-hazard ‘distributism’ : consumers have moral duty to bear mercantile agents’ hazards in both commercial and municipal channels for exchange of goods and services AFTER material gains have been re-distributed UP the feeding chain via inflation via immoral gaming of the monetary regime via a deliberate policy of quantitative easing. Consider the news from Spain:

    “The official bankruptcy report for the airport states: “The loans taken
    out were enough to cover the construction phase but no thought was given to
    the investment needed to make the airport function as a business. The construction itself of the airport provided the first profit for the
    investors because they signed contracts with their own construction

    ie the Big Boys got theirs ‘distributed’ up front, we’re left holding the downsides of this form of Distrubutism as currently being actually practised, globally. I have my issues with Hillaire Belloc, but they pale against those of the Acton Institute “party line”. Defending subsidiarity of property rights is crucial to this debate, yet regretably many of the writers here weren’t schooled in Catholic social teaching — tho’ you did publish an English translation of Rosmini’s “Constitution under Social Justice” – the work that proposes the very ideas that gave Belloc his arguements for right of government to intervene IN DEFENSE OF PROPERTY RIGHTS of the little guy against the corrupting influence of disregard for moral hazard of larger actors with state privileges (such as money producers, printing ex nihilo by FIAT… subjecting the rest of us, not to objective justice but to their own relativistic conceits)

    Try triangulation along Austrian School lines using subjective value theory to defend subsidiarity and you may arrive at a more intelligent — and charitable humility re: your own technical errors — description of the problem, for only then can acting persons begin to seek solutions. Its not as black-n-white, them-n-us as you’d like to paint it. The enemy of my enemy is not always my friend…

    • Clare Krishan

      oops missing citation for quote re: private airport for “sale” with $500 million in liabilities ( price discovery should be interesting… what incentives to hedge the risks will be on offer, what means of *distributism* will be employed to make the banks whole this time?)

    • Jump

      ” I think you perhaps meant to say is *Ideally* free markets ought to protect property rights of consumers.”

      I believe one can safely assume the claim is about “ideally” free markets. This is the only relevant sense in which to assess the morality of free market economics. This is because when we analyze the essential features of something we take into account all and only those features it has come what may. A thing’s essential properties are the only ones that matter if you’re trying to determine its moral status.