"I expect to die in bed, my successor will die in prison and his successor will die a martyr in the public square. His successor will pick up the shards of a ruined society and slowly help rebuild civilization, as the church has done so often in human history." -Cardinal Francis George

Tuesday, January 31, 2012

Capitalists don't like Distributism

The following is a response by Bob to an audio clip about Distributism located here. I will intersperse my not-so brief [comments in red]. Also I read a great article by Ryan Grant titled Distributism in Popular Christmas Films that examines the 2 classic Christmas movies by Dickens and Capra A Christmas Carol and It's a Wonderful Life. I always knew there was something I loved about the way economics is presented in those movies. They manage to avoid the "phoney right-left paradigm" as Grant puts it.

Here is Bob:

...I'd also encourage you to re-listen to what he says, and read my comments at the same time. Of course, learning about Austrian economics might do you good too. [What makes you think I am not familiar with them?] To be honest, everything in this talk was easy to deflect / refute. [I am glad they made it easy for you.]

My comments on Donald Goodman III
Backyard RadTrad Interview

around the 8 minute mark talks about unions protecting the middle class. This is an un-founded assertion, and incorrect under an Austrian mindset. Of course, people should be free to join / create unions, but unions do not inherently protect anyone, and are (in fact) a coercive force themselves. [Yes, a coercive force meant to counteract the coercive force of capitalists]

11:30 - talks about 'paying what the worker is worth'. The idea is to pay a worker enough to keep a family. The idea is nice, but at some point the wage is not worth the employee... the correct thing to do is to lay-off the employee. There is no 'correct' wage, as minimum wage laws prove.  [the wage is not "worth the employee"? this is the capitalist mindset... to treat people as tools or machines -as means to an end. People are not tools. And a system that encourages us to think of them as such (capitalism) is flawed.]

I agree with what they are saying at the 17 min mark about the banks and bail-outs from government. Libertarianism also "doesn't want" this. The root cause (in my opinion) is the federal reserve system (or euro system for our idiot friends overseas) [from a Distributist mindset, the size of these massive institutions makes them de-facto goverments in themselves. They are big enough to make the rules, and they do. Federal Reserve or not, when corporations get massive, they get what they want. ]  - a return to hard currency would help out a lot. [Agreed, but that would not be good for capitalism, which thrives on greed]

I disagree with his remark at 19:50 about the difference between capitalism and socialism. His view on socialism might be correct, but his view on capitalism is jaded by Corporatism (which is what we have in America). This is a common mistake that turns capitalism into a boogy man, even though most people wouldn't recognize true capitalism if it hit them in the face. Socialism = bad, Corporatism = bad, Capitalism = good. He is doing the listener a disservice by not identifying them correctly. [The problem with capitalism is it will naturally concentrate the means of production in the hands of a very, very few people. When this continues to happen, then you get what i think you are calling corporatism, which I take you to mean a sort of 'rule by corporations'. (You must be using a more modern incarnation of that word, because I dont think you can be meaning what the main meaning is)]

at 23:30, he again identifies capitalism incorrectly, calling it "the system where very few own productive property". [Yeah, that's what it is. It may not be the description you would like, but it does fit what happens under capitalism. And yes, even under "unbridled" capitalism. In fact it might be even more concentrated in some situations] Capitalism doesn't care who owns how much, or what. Slapping the straw man! Capitalism is about the unfettered marketplace (something that hasn't been seen in several generations). The invisible hand of the market knows where to best invest capital - weather that is human action, money, property - any kind of capital. Again, who owns what doesn't matter. [But it does matter who owns what. One man or a small group of men "owning" Wall mart stores matters. The fact that they treat their employees like tools matters. The fact that that few men are that powerful matters. Once such a small group is so powerfull that matters to me. It is a unacceptable concentration of the means of production.] At the very least, you own your labor, and can trade that labor for other goods. [If that is the way we view our labor, then that is slavery. What you say here is the capitalist idea though. Instead of viewing our labor as being productive, we view our labor as a commodity to make another man productive. One way is the way of freedom, the other of slavery.]

at 25 min, he talks about tax subsidies for the big stores. He is correct - that is a problem. It isn't a problem with Capitalism, but a problem with Corporatism (where corporations own / influence government). [Which is the natural result of capitalism.] The playing field isn't level. Buying in bulk, however, is not an unfair advantage. Subsidies are.

28 min - your ability to grow (and expand) is limited by 'what does the guild say'!!! Guild, meet invisible hand of the market. Invisible hand, slap guild in face. [The invisible hand you mention is not all that invisible. It is a very few men controlling a very lot of the world. A guild just gives people a share of that power proportional to what one man can properly control. One man cannot properly control Monsanto, nor should he]. This guy just loves bureaucracy and additional layers of authority (I guess that is expected of Catholics).  [Cheap shot] Lets say your an innovative tailor - do you have to pass your innovation to other tailors so they can become more productive too? He then advocates the state control the 'important' industries? I could spend hours on the danger of that, and how it kills innovation, destroys jobs, and is an all round horrible idea. [So who controls the roads and airwaves in your ideal then? Somebody is going to control them. And with large enough and important enough things, the ones who control them ARE the government! See it in action in our current 'corporatism' right? I agree if that is what you mean by corporatism. Once they have that much control, whether they are a corporation or a government doesnt matter. They are the one in charge. Distributism just levels out that control.]

at 34 min mark, he uses the anti-competitive practice of binding iphone to AT&T. I agree - morally wrong (done for money). However, that isn't a problem with capitalism. That is a problem with collusion. All phones should be able to be used on all networks (its my phone and my contract = property rights / contract issue). This is not a capitalism issue.

39 min mark - wage and price controls - excellent. This guy is doing a horrible job selling distributism to anyone who has studied Austrian economics. I'm guessing his market is the discontented masses who haven't studied economics at all. [imagine if every beef farmer in the counry was part of a beef guild Bob. Lets ay they vote to set the price of a # of ground beef for the next week/month/whatever. What happens next? Instead of beef being about price, it is about quality. So obviously there are immediately no more growth hormones being used, no more corn being shoved down half dead cows throats, and no more feed lots. Huge factory farms are no longer even desired because there are no more huge profit margins selling shitty meat to people. Instead quality is what becomes the reason I go to store A rather than B. Makes sense to me. The capitalist ideal is lower price=good. The Distributist ideal is Higher quality=good. You can see this in action when you buy your grass fed beef. You are getting a taste of Distributism: supporting a craftsman who is getting paid what his product is truly worth (grass fed beef farmers) rather than supporting a destructive capitalist system at wal-mart where wage slaves are used all the way from the farm to the cash register. ]

distributism (as described in this podcast) doesn't have room for innovation. Take farming - larger tractors mean less people needed.[You are assuming that is inovative. It is not. Why is this a good idea? focus is off of quality and on profits and seeing people as tools] That frees up people to do other things - like inventing. Innovation happens because it isn't all 'at the local level'. Distributism also implies that there are certain percentages of people (determined by the guilds) who do certain things. If you want to do something else - go get permission. The invisible hand dictates that there is no 'right number' - rather the right number is the number that the market will bear. Permission isn't needed, just the will to change.
--end thought

44 min - distributism can't deal with the internet at all. It fails in the global economy too. Even basic questions of jurisdiction are avoided.

52 min - he just got done bashing on Tom Woods, then talks about commission being taken away. That's theft (breach of contract). [A mortgage is a contract too. Theft by contract. Why does a contract make treating people like animals ok?] He then complains that there weren't unions to back him up. I don't get it, the cure is worse than the problem. The solution is to stop stealing from your workers, not to hamper the work place with a union. Go to small claims and get your contract enforced! [The solution is not to think of peoe as "your" or "my" workers to be doled out goddies if they behave.]

Again just to clarify, Distributism is not Catholic dogma. There are many Catholic economic and social principals which it puts to the forefront however. Which is why I like it. The focus on the family being the highest unit in society and having the means to production in the hands of the family rather than the family BEING the means of production is what I like.


  1. Thank you for being fair with my comments :)

    A couple of nit-picks: Capitalism doesn't care if currency is hard or not. Banks do, because paper currency is easier to loan out. The debt crisis is a predictable, direct result of dropping hard currencies for paper. Again, not a problem with Capitalism, but a problem with government (the 1913 federal reserve act).

    Corporatism definition: where corporations collude with government to their own benefit. Examples: passing anti-flavored cigarette laws that exempt menthol (large manufacturers make menthol, small make other flavors, small go out of business). Air line industry passing off security to TSA (security is expensive, tax payers pay for it instead of airlines). Making Raw Milk illegal - benefits regular (crap) milk producers, hurts consumers and suppliers of competing products.

    Those things (above) do not happen under a pure definition of capitalism.

    As far as meat goes, there is room for both shitty meat and grass fed meat in a capitalistic society. What there isn't room for is regulations and subsidies that favor shitty meat producers over grass fed. For example, subsidies on corn drive the price down, which makes it 'cheaper' for shitty meat producers, and more expensive for grass fed (by comparison). The problem isn't capitalism, its government (yet again).

    Technology and innovation are always good (outside those technologies used to kill / harm one another). Better tractors, cheaper energy (again, assuming no subsidies / level playing field), new ideas, things that save time or money or resources - they are always good in a capitalistic society. Distributism (at least from what I understand) can't say that. Farming with horse drawn plows is neutral to farming with tractors - and may be undesirable (depending on the will of the guild).

    Mortgages (in their current form) are bad. They are a by-product of the federal reserve system. Not the fault of capitalism. The idea of lending (satisfying immediate need with future payment) is not in-it-self evil. The main question is what is the 'worth' of a house, and how long should it take to pay that off, and how much interest should be made.

    As far as unions go, see exhibit A - the auto industry. There is several thousand dollars of 'legacy costs' built into each car going to pay the pensions of people who retired. Not only that, but their wage (as negotiated by the union) was upwards of 75$/hour. Car's are expensive because of unions. These schmucks are milking the rest of us, and it's largely the fault of the unions.


    Thank's again for being willing to tackle these issues head on.

  2. "...Air line industry passing off security to TSA (security is expensive, tax payers pay for it instead of airlines). Making Raw Milk illegal - benefits regular (crap) milk producers, hurts consumers and suppliers of competing products.

    Those things (above) do not happen under a pure definition of capitalism"

    I think they do happen. The subsidies and tricks that big corporations get is a result of being at the top of the heap, but the capitalist system itself, even without all the tricks, is still a heap. Pephaps walmart wouldnt be quite as big without all the freebies and perks it gives itself through government bribes, but even without the bribes, it would still be a behemoth company eating up productive property that should be owned by individual families. It seems to me Corporatism is just a symptom of the disease of Capitalism. Sort of like the late stages of leprosy or something.
    I realize you disagre, but I am just missing why. Capitalism still has as its natural result a massing of productive property in the hands of a few men. It seems axiomatic to me that WILL be the result of even unhindered, unadulterated Capitalism. The resulting Corporatism is of course a given at that point, but it cant be truly said to be a seperate thing. It is a late form of the disease, like AIDS is to HIV.

    "The idea of lending (satisfying immediate need with future payment) is not in-it-self evil. The main question is what is the 'worth' of a house, and how long should it take to pay that off, and how much interest should be made."

    Here again we just have a fundamental disagrement I think. Yes lending is great. But usury is always wrong. It is a basic evil like theft or adultery. So the question can never be "how much interest should be made". People are not objects to "make" money from.

    "Car's are expensive because of unions. These schmucks are milking the rest of us, and it's largely the fault of the unions."

    I 100% agree with 50% of that. I dont like the unions of today. What we have however is 2 problems, not just unions. The unions are the 'socialist' mentality if you will, and the auto corporations are the Capitalist mentality. They both share the same goal: concentrate productive property in the hands of a few individuals and juice the system for all its worth with no regard for the individual family. They are two sides of the same coin. Just like the Democrat Republican coin. Capitalists and socialists both want power out of the hands of people. It is just one side wants power to go to the state and the other wants it to go to corporations. The unions are just pulling the same dirty tricks that corporations do Bob. At least there are more theives to share the power per square foot in the union on the factory floor than in the board room of GM. The whole "left-Right" paradigm is the problem.

    Press Ctrl and hit the scroll wheel back a bit. The third way out of the mess is Distributism.

  3. At the beginning of this post I referenced Distributism in Popular Christmas Films but it wasnt highlighted.

    Here it is again. Very entertaining and very clear explanation of distributism.

    Distributism in Popular Christmas Films

  4. http://distributistreview.com/mag/2012/01/a-final-christmas-reflection-distributism-in-popular-christmas-films/

  5. I guess I'm confused as to how exactly distributionism (Dist for short cause I don't want to type it over and over) is supposed to work. It seems like Capitalism lite.

    So productive property needs to be distributed amongst the many. I'm with you so far. Lets say your successful. Once a certain undefined limit is reached, then someone (the guilds? or government? or church? who?) says that you can't expand further or produce more - right? Furthermore, you aren't allowed to set your own price for goods - right?

    If my understanding is correct (please instruct me if it isn't) then what motivation is there for success? There seems to be a hard cap on how well someone can do. I just don't get it. Why would anyone want to be a part of that system?

  6. "what motivation is there for success? There seems to be a hard cap on how well someone can do. I just don't get it. Why would anyone want to be a part of that system?"

    What is your definition for someone "doing well" and "success"?

    It seems to me you have a capitalist definition, which is "more power, more money". What does not change though is how much a man needs. Men are men. Always have been always will. One man can only effectively use so much property and money. After that he by necesity must master other men to do his bidding. This kind of greed is like pornography, you know it when you see it, and it is truly evil.

  7. So, your argument is that my desires for success, technology, an easier life = greed = evil? Lets rise above this.

    I'm not sure that is the position of distributism, which claims to be 'the best' system for 'all of society' - which I assume means the system with the least pain and suffering and most wealth for the most people.

    Let me see if I can put my argument in a different way. The capitalistic system allows many (including myself) to live a decent middle class life. It also has the 'hope' that more effort = more reward = better life.

    The Dist claims to allow 'more' people than Cap to live a middle class life (arguably a better situation than capitalism) but removes the hope for an easier life based on technology / effort / dumb luck due to constraints by guilds.

    One man can only effectively use so much property and money. After that he by necesity must master other men to do his bidding.
    Work for hire is not against the dist system. In fact, in a guild system, the apprentices an journeymen do work for the master - without the master gaining from the deal, why would he hire journeymen? You are calling a thing evil that is not evil.

    Also, wealth is not a 0 sum game, what one has is not necessarily taken from another. To believe otherwise is Socialist. My having a car does not deprive someone else from having a car.

    I recognize that corporatism has done horrible things, including slave labor (mostly in other countries). Much of that blame falls on the governments of those countries (including America) for allowing themselves to be bought, and placing Corporate interests above the interests of people. A large chunk of that problem can be solved by getting rid of the 'personhood' of corporations. I don't understand how a dist system can avoid the pitfalls of corporatism without succumbing to the pitfalls of socialism (price / wage fixing, artificial ceilings, hampering innovation).

    As of yet, I haven't seen an answer from you (or http://distributistreview.com) that addresses these issues adequately.

  8. I've been reading more, and I've been struck by something.

    It seems that both you (or the dists) and I (an unusual blend of anarcho-capitalist, libertarian, and voluntarianist) complain about the same things. In fact, in my life, we choose 'local' co-op type organizations because of quality and the failures of mega-corporation.

    The interesting thing is, we have different solutions for the same problems. The dist way wants more authority (in the form of guilds), where as I want less authority. I see government as the problem, and regulation as the thing that keeps the field uneven. For a dist, government and regulation are a necessary (and desired) part - as something to keep the guilds honest. In my opinion, Subsidiary blinds the dist to the real problems.

    I'll give you a real example from our life. My wife is trying to sell mattresses - home made, all natural, 3 ingredient (wool, latex, cotton) something to sleep on. In order to do it 'legally', we would have to burn a couple of thousand dollars of our inventory in order to pass regulatory fire safety tests. We can't afford that - it is a barrier to entry into a market dominated by chemical fire retardants.

    I refuse to believe that there is something morally wrong with our mattresses, or our desire to sell them, or other peoples desire to buy them. The moral problem is the states requirement that I burn them (to pass a test), or add chemicals to them (if they fail the test). Do some research though, and you'll soon discover that 90% of all mattresses contain carcinogenic chemicals in them. Why? Regulation.

    If this were a dist utopia, the barrier to entry would be a guild (with regulations) instead of a government with regulations. I don't see much difference.

    I don't think my fight is with capitalism. My fight is with corporatism, and more specifically with government (or guild) regulations. I think if dist's were to assess the situation honestly, they would come to the same conclusion.

  9. Oh, and if you want to buy a chemical free mattress on the black market - let me know :)

  10. Distributism is nothing but a form of socialism. It originated in the radical leftist political ferment that was brewing in the late 19th and early 20th century. The only reason why anyone still pays any attention to this idiocy is because of the Chesterbelloc factor. Neither of these men had any training in economics, so I fail to see why they should be listened to on this matter. If you want to read about what distributism really is, go to the Tradition In Action website, and read their postings on it.

  11. Steve,

    There should be some clarification there. Tradition In Action supports Catholic Social Teaching, which Distributism tries to work in practice, but what Tradition In Action opposes, and rightly so (since it's contrary to Church teaching), is the idea one is not allowed to make a profit or even have social classes.

    Certain people can make it seem like Distributism is against social class and making a profit (thinking profit only works in Capitalism), when they're either not being careful with their words or confused.

    The Church has condemned in general Socialism and Capitalism (CCC#2425), while affirming certain truths in them. Making a profit is the sign of a healthy business, but profit is never to be made by exploitation.

    While Distributism is not synonymous with Catholic Social Teaching, I've not really seen any evidence it's principles are contrary to CST.

  12. Nice blog. Welcome to the Catholic Blog Directory. I'd like to invite you to participate in Sunday Snippets--a Catholic Carnival, a weekly gathering in which Catholic Bloggers share their best posts with each other. This week's host post is at http://rannthisthat.blogspot.com/2012/02/id-like-to-welcome-everyone-to-sunday.html