Wednesday, October 12, 2011

Lord Acton vs. the Chesterbelloc


Note: "Chesterbelloc" was a term coined by George Bernard Shaw, who dabbled in Socialist politics, to describe distributism as a "fantastical beast" ... not to mention poke fun at both his friend G. K. Chesterton and Hilaire Belloc.

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So I ran late with what was supposed to be yesterday’s post. I hadn’t intended on following it up with another post on distributism.

However, the springboard for “yesterday’s” post was Richard Aleman’s story in The Distributist Review on handing out flyers at Occupy Wall Street. Kenneth Spence of the Acton Institute Power Blog picked up on the flyer and produced a flip, dismissive riff off of Jeff Foxworthy and Dave Letterman titled “10 Signs You May Be a Distributist”.

In two more serious articles (“Distributist Fantasies” and “Distributists Ignore the Lessons of History”), Spence shows more quietly that what he assumes about distributism is more extensive than what he actually knows. The articles are serious only so far as he doesn’t attempt to be funny; his analyses are as shallow and offhand as his satire. In fact, he pretty much writes off distributism as misguided nostalgia backed by papal encyclicals.

But there are a couple of other lines of attack worth exploring as well. For capitalists, at their core, are conservatives, only willing to change so long as they can see a payoff for doing so and only so far as it benefits them personally. It’s not enough merely to make a forensic case for change: one must make a business case for it. My purpose here isn’t to make the business case for distributism but only to answer some objections.


Objection 1: Distributism requires theft of property from the rich, which would result in revolution.

This is a straw man. Nothing that any distributist has proposed involves the taking of property. In fact, this is one of the reasons I said in my previous post that distributism isn’t an overnight fix. The laws and incentives needed to gradually shift ownership from the few to the many without a tactic such as abusing eminent domain — a tactic many businessmen have no problem with so long as it pays them — would necessarily be time-consuming and expensive.[*] While I applaud Mr. Spence for his classical knowledge, it’s inappropriately applied here.

Objection 2: Capitalism is not responsible for the depersonalization of the individual.

Spence makes this argument through a couple of straw men, first bringing up agrarianism but failing to tie it in, then misrepresenting the argument put forth by John C. Médaille in “On Truth and Trade: Economics and the Catholic Vision of the Good Life — Easter and Economics”. But more to the point, the materialism that Spence argues (correctly) is the true depersonalizing force in modern economics is not, for the businessman, a philosophy that went away then came back in vogue. Rather, it’s a general attitude that capitalism encourages — nay, embraces — in the successful investor and corporate executive. The economist merely adopts as a philosophical assumption for his science what the businessman adopted before him as a practical tool for success.

Objection 3: It’s been shown to work with only one corporation (Mondragon); therefore it can’t possibly work on a national scale in America.

The conclusion doesn’t follow from the premiss. In fact, it’s a little amusing, considering how many products get rolled out after a couple of local test markets, or small consumer focus groups, or that interesting phenomenon the “beta test”. Mondragon is not the only cooperative on the planet nor the only model for a cooperative; however, it is the largest industrial example to validate the concept, as Emilia-Romagna is the largest example that validates the economic model as sustainable. To be sure, implementing the small-scale models on a national scale would impose its own challenges, but to recognize that fact is not to prove it can’t be done or shouldn’t be attempted.

Objection 4: Distributism can’t work in an industrial society.

Emilia-Romagna is hardly more agrarian than is the United States. Much of Spence’s opposition consists of treating distributism as if it were only appropriate and applicable to the Hanseatic League: “Well, that was all fine and dandy back in the fourteenth century, but it’s seven hundred years later and you can’t put the clock back.” But Mondragon, along with thousands of other examples, show that the concept is adaptable to the industrial society; capitalism pays it a left-handed compliment when corporations offer profit-sharing and employee stock-purchase plans. Distributists simply take profit-sharing and employee stock-owning to its logical end — the employee-owned, employee-managed corporation.

Both Spence and my older brother, an executive with a major lender, have argued that the current economic crisis is merely a loss of faith in the system. Once we regain that faith, everything will right itself and we’ll go on creating the highest standard of living on the planet.

But there’s a reason why investment commercials include the warning that “Prior performance does not guarantee future results”. If this were merely a matter of probability, it would be called a gambler’s fallacy: “the fallacy of assuming that short-term deviations from probability will be corrected in the short term.” Since it’s not, it’s the assumption common to people who lose money on the stock market that the future will at some point resemble the recent past.

More to the point, it’s the assumption that, because the past operation produced good results x, y and z, the system not only works but has no inherent flaw that will cause it to stop working at some point in the future. (Let’s call it the “Challenger fallacy”.) The question is, has the system stopped working because the people have lost faith, or have the people lost faith because the system no longer works?

Distributism poses an honest, sustainable and applicable economic theory that challenges the mechanistic presuppositions of modern economics. To dismiss it with sneers, straw men and chronological snobbery isn’t any more serious than to diss it with heavy-handed satire.


[*] State and local governments have recently begun to use their power of eminent domain to condemn properties to aid their redevelopment efforts, which directly benefits real-estate developers and industrial corporations through government-subsidized land purchase.