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Distributism and Capitalism: Some contrasting features

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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G. K. Chesterton’s younger brother, Cecil, gave what is probably the most succinct definition of distributism, or rather of a distributist in an article he wrote in 1917.

A Distributist is a man who desires that the means of production should, generally speaking, remain private property, but that their ownership should be so distributed that the determining mass of families – ideally every family – should have an efficient share therein. That is Distributism, and nothing else is Distributism. … Distributism is quite as possible in an industrial or commercial as in an agrarian community. …[1]

This is an excellent definition of the formal economic arrangements of distributism, and moreover it points out the fact that distributism does not require that everyone become a farmer and that it will not hinder the progress of technology, as our critics sometimes assert. But while this definition highlights the structural aspect of well- distributed property ownership, which is the heart of distributism, there is more to distributism than that. For if distributism were simply a rearrangement of who owns what, but to be carried on in the same spirit with which capitalism is carried on, then eventually it would lead to the same economic and social ills that capitalism has produced. Rather, distributism requires a very different approach to mankind’s economic activity, an approach that is focused on providing for our legitimate needs but not on inflaming our fallen appetites for more and more consumer goods.

Capitalism, as Pope Pius XI characterized it in his encyclical Quadragesimo Anno, #100, is the separation of ownership from work. In other words, in a capitalist economy some people own the means of production and hire others to work for them. Now, strictly speaking, as Pius XI points out, there need not be anything unjust about such an arrangement, provided that a just wage is paid and the other stipulations of justice are observed. But in actual practice capitalism has rarely if ever observed the demands of justice. And it is not hard to understand why. An owner of capital has at least three strong temptations to exploit the economic process by turning it away from service to the common good toward merely his own enrichment.

First, since he is not directly the producer of a product, not himself a maker, he tends not to be focused on quality products out of pride of workmanship, but rather on producing by means of his workforce something that will sell. Attention to quality is governed by considerations of expenses versus profits, and even by consideration of possible product liability costs versus profits. In the most extreme form of capitalism, the corporation, most shareholders, although legally owners of the firm, have absolutely nothing to do with what it makes or sells, and hence are interested merely in their dividends or in rising share prices. And in one step even further removed, mutual funds, owners often do not even know what companies their funds invest in, and such investments are often short-term and change rapidly. It is true that in some old-fashioned capitalist enterprises the owner is involved in the business and may have some pride of craftsmanship. But as long as the owner is actively involved in the business, then there is still a distributist element in the firm, however small.

Secondly, because he is chiefly and directly interested in sales, not production of a quality product, if something will sell, that is pretty much the only question he considers. By means of advertising capitalists engage in persuasion to convince people to buy their products. In cases of authentic need, people know they need something and will go to seek it. If they are hungry, they will buy food, if they want something to read, they will buy a book. But advertising attempts to convince people that they need things they had no previous idea they needed. It directly stimulates people’s acquisitive appetites, and thus helps create a society preoccupied with consumer goods.

The third temptation which capitalist enterprise puts before an owner is to withhold justice from his workers. Workers are always a negative item in a capitalist balance sheet, and hence a strong temptation to reduce labor costs by holding down wages, laying off workers, moving jobs overseas, or even replacing the workforce with robots, if that is possible. For a capitalist all these choices can seem entirely rational. And they are all rational according to the logic of capitalism. But they all miss the point with regard to the logic of man’s economic activity, which is not about making unlimited profits for those who happen to hold economic power. If all workers could be replaced by robots, the workers might legitimately ask, Hey what about us? How are we supposed to obtain what’s necessary for us and our families if we are replaced by robots? How are we even supposed to buy what you yourself produce in your factories? But the actual trajectory of capitalism has too often seen workers replaced by machines, laid off, or underpaid, so that they cannot procure what they and their families need.

With distributism, however, while certainly social and economic difficulties would exist, the pathologies fostered by capitalism would be eliminated or at least reduced. A small business owner generally takes pride in his work and his customer service, and sees his craft or trade as more than merely a means of moneymaking. He usually derives from his work more than merely an economic return, for, as John Paul II pointed out in his first social encyclical, Laborem Exercens, the “various actions belonging to the work process…must all serve to realize [the worker’s] humanity, to fulfill the calling to be a person that is his by reason of his very humanity” (#6).

In addition, a distributist economy would not be complete without guilds or occupational groups, whose purpose is to orient economic activity toward fulfilling human needs rather than toward selling products of dubious quality or usefulness. And lastly, the employer\employee divide would be largely done away with under distributism. Larger enterprises would be run as worker cooperatives, and so decisions about automation or new equipment which could potentially replace workers would be made with more than an eye on profits alone. Certainly technological development would continue, but we should note that technology can take more than one direction. When capitalists make the decisions and directly or indirectly determine what kinds of technological research is done, then new inventions will often be of the kind which increase profits by making workers unnecessary. But in a distributist society research will focus on other ways to reduce costs or increase efficiency without necessarily reducing the need for workers – who, after all, will now themselves be the owners.

Because of this altered focus of the economic system, and of the society as a whole, many things that are taken for granted in a capitalist system would hardly exist under distributism. A short time ago I pointed out here why this would be the case with unemployment, certainly one of the perennial scourges of capitalism. In the next part of this article I will take up the subject of business cycles, and show how in a distributist economy their presence and importance would be considerably lessened.

There are many supposed facts of economic life that any student of economics, or even any observer of political and economic news, is familiar with, matters such as unemployment, corporate mergers and acquisitions, labor relations, business cycles, and so on. I call these supposed facts, not because they do not exist, but because their existence is contingent upon man-made economic arrangements, such as laws and tax structures or even cultural norms. Contrary to the impression one takes from writings both of professional economists as well as from journalists, these things and events are not natural and necessary facts like the changing of the seasons or the daily rising of the sun. They need not exist, certainly at least not to the extent that they do in a capitalist economy. Let us take one of the items from the above list, business cycles, and consider it more carefully.

What are business cycles? “A business cycle is a swing in total national output, income, and employment, usually lasting for a period of 2 to 10 years, marked by widespread expansion or contraction in most sectors of the economy,” is how the economist Paul Samuelson defines business cycles in his macroeconomics textbook.[2] Although everyone living in a capitalist economy is familiar with such cycles, or their effects, one might wonder why, apart from the special and external factors I will note below, such cycles exist. Consumer demand for necessary and reasonable goods normally will not fluctuate much – demand for food, clothing, housing, books and the like. Nor will the size of the workforce, and hence of the economy’s ability to provide consumer goods, usually experience short-term major decreases or increases. Thus there is no reason to expect the two most important factors in moving an economy, demand and the ability to supply that demand, to change significantly in a short period of time. Of course, external factors, such as famines, natural disasters, wars, migrations, and so on can cause a sudden and large increase or decrease in either demand or the capacity to supply that demand. As such, a distributist economy will be as subject to such external dislocations as is a capitalist economy. They are simply an inescapable part of life on this earth. But there are other factors which are peculiar to capitalism which have caused probably the majority of business cycles, at least the majority of those which have occurred in recent decades.

Capitalism is fueled by an imperative of production for the sake of sales, regardless of consumers’ needs or of their spontaneous desires for the goods or services in question. As such, it always rests upon foundations which are liable to be shaken. Distributism, on the other hand, rests upon the solid foundation of human nature and its natural needs and reasonable desires. But capitalist demand, which is usually artificially stimulated by advertising, is necessarily fickle or fragile. The artificial desire for larger and larger houses or cars, for example, tends to drive up prices of those goods, and can lead to so-called bubbles in which prices rise exponentially. Eventually these bubbles will burst. Such extreme up and down movements of prices can cause numerous related economic dislocations, such as panics or depressions, which are simply instances of severe business cycles.

History is marked by bubbles in which speculative prices were driven up far beyond their intrinsic value…. Speculative bubbles always produce crashes and sometimes lead to economic panics.[3]

In addition, although criminal greed is a characteristic of postlapsarian mankind in general, it is capitalism that has institutionalized such greed, and even praised and rewarded it. So, for example, exploitative or risky financial practices by banks are not always illegal, and even when illegal, those engaging in such practices often go unpunished or lightly punished because of the overall climate of opinion in a capitalist society, which tends to take a benign view of economic misdeeds. In the Middle Ages in Europe usurers were popularly regarded as among the most heinous of sinners, and this popular judgment was based on the teachings of society’s intellectual elite, theologians, canon lawyers, philosophers and so on. The popular climate of opinion in contemporary America, on the other hand, reserves whatever moral animus it still has for other types of misdeeds, and too often among Christians believers it is only sins against the 6th or 9th commandments which are seen as really worthy of condemnation. All this is the result of the pervasive commercial mentality which affects most Americans.

The point of all this is that the natural end of mankind’s economic activity is to supply our necessary and reasonable need for external goods and services. This is why God has given us the capacity to engage in economic activity. Given the fallen state of mankind, however, it is usually necessary to erect laws and institutions to guide our conduct toward its intended end. This distributism seeks to do in the economic realm. Capitalism, on the other hand, not only has done away with the safeguards against economic misdeeds which the Catholic civilization of an earlier age set up, but suffers from an inherent tendency toward economic exploitation and dislocation. And the commercial cultural climate which capitalism has produced fails to understand that any other way of carrying on economic activity is possible or feasible. But this is not the case. Catholics, in particular, who have a developed critique of economic conduct available in the Church’s social teaching, have an especially grave responsibility to form their thinking according to this teaching. Capitalism is not inevitable. There are other real possibilities. It is chiefly a matter of our having the will to bring about the changes that are necessary in our economic activity. But it can be done.

Notes:
1: Shaw and My Neighbour’s Chimney,” The New Witness, May 3, 1917, p. 13.

2: Macroeconomics, 16th ed., 1998, p. 125.

3: Ibid., p. 177.

You can find the original publications here and here.

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Why Unemployment is a Pseudoproblem

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Unemployment a pseudoproblem? By calling it that, I do not mean that unemployment does not exist, or that it is not a very serious concern for the unemployed, their families and for society as a whole. What I mean and will argue here is that unemployment is not something natural to economic life, but is a problem created almost entirely by the capitalist arrangement of our economy, one that would largely disappear under a distributist economy, and that is taken for granted by the academic discipline of economics only because that discipline has long been captive to the ideology of capitalism.

The study of economics, especially in its neoclassical and Austrian forms, developed as a theoretical elaboration of capitalism and industrialism as they came to maturity in Europe in the 18th century and afterwards. Most often economic thought has not only assumed capitalism, but has been a mouthpiece for capitalism, in fact, a sophisticated attempt to provide a justification for the disparity in incomes and for the social dislocations that are such notable characteristics of the capitalist world. In face of this complex structure of thought, it can be helpful to return to the basics of human behavior upon which economic life is based in order to discover a different and more accurate way of conceptualizing mankind’s economic activity.

Let us first look at the three different types of economic unemployment as these are enumerated and acknowledged by economists.[1] First, and of little importance for our discussion, there is voluntary or otherwise short-term unemployment of people between jobs, between school and a job, and so on. This is sometimes referred to by economists as frictional unemployment. If the other two types of unemployment are eliminated or reduced, this type will be of little concern.

Then there is what economists call structural unemployment, which Paul Samuelson describes as

a mismatch between the supply of and the demand for workers. Mismatches can occur because the demand for one kind of labor is rising while the demand for another kind is falling, and supplies do not quickly adjust…. [For example], the demand for coal miners has been depressed for decades because of the lack of geographical mobility of labor and capital: unemployment rates in coal-mining communities remain high today.

Thirdly, there is cyclical unemployment, which Samuelson explains as occurring “when the overall demand for labor is low. As total spending and output fall, unemployment rises virtually everywhere.”[2]

These latter two types of unemployment require separate discussion. First let us look at the question of structural unemployment. It arises chiefly because of new technology or on account of some external cause, such as, in the case of coal miners, heightened concern about air pollution. The former cause, new technology, is the more common occurrence. In an economy dominated by capitalists, people who own the means of production, new technology presents an opportunity for higher profits achieved via lower costs. A new or improved device makes a certain number of workers unnecessary. Since labor is a cost item in a capitalist’s balance sheet, there is rarely any conflict in the capitalist’s mind about what to do: if he can save money by eliminating workers and buying machines he will do so. But in a distributist economy this would not be such an open and shut decision. When workers themselves control the enterprises in which they work, either individually or cooperatively, there are other considerations besides merely increased profits. New technology can and will be adopted, but its adoption will be balanced against other equally important economic and social needs, job and family security, social stability, and the like.

Moreover, we should recognize that technology can develop in many ways, and that replacing men by machines is not the only way to secure improved production. In any case, if we remember that the economy is an important but subordinate part of human social life, we will not regard technological improvements as the summum bonum. Right now, with capitalists mostly calling the shots in the economy, their view usually prevails, and what we like to call economic efficiency wins against any of the human concerns and needs that an economy is supposedly subservient to. If an economy could do without workers altogether and produce more cheaply and quickly solely by means of robots, would this really be a benefit to mankind? Would not the fact that the now unemployed workers could no longer afford to buy any of the robot-produced goods signify that such an economy had entirely inverted means and ends?

What if technological advances across the board make it possible for our consumption needs to be supplied by merely a portion of the labor force? The obvious answer to that is, if it is no longer necessary for everyone to work eight hours to supply mankind’s needs, let everyone work a little or a lot less, enough so that mankind’s needs are taken care of. If this can be done with everyone working six hours instead of eight, well and good. Here, though, we run into one of the shibboleths of neoclassical economics, the so-called “lump of labor fallacy.” Samuelson explains this notion as follows:

Whenever unemployment is high, people often think that the solution lies in spreading existing work more evenly among the labor force. For example, Europe in the 1990s suffered extremely high unemployment, and many labor leaders and politicians suggested that the solution was to reduce the workweek so that the same number of hours would be worked by all the workers. This view – that the amount of work to be done is fixed – is called the lump of labor fallacy.

What is wrong with this idea, according to Samuelson?

[T]he lump of labor argument implies that there is only so much remunerative work to be done…. A careful examination of economic history…shows that an increase in labor supply can be accommodated by higher employment, although that increase may require lower real wages.[3]

What is one to make of this argument? If we examine it, Samuelson appears to mean that if workers are willing to work for lower wages, some capitalist will employ them to produce something that he thinks he can sell, and thus absorb the unemployed workers. This is no doubt often true, but this says nothing about the relationship between the total amount of goods being produced at a certain point in time, the total number of workers existing at that time, and how that work is to be apportioned among them. At the point when the unemployment in question arose, why was it not a reasonable policy to distribute the work more evenly? If the economy hitherto has been producing a sufficient amount of goods to supply consumption needs, and then unemployment increases due to technological changes and a reduced need for human labor, clearly the total quantity of potential workforce effort is now greater than is needed. Thus reducing everyone’s hours seems like an entirely reasonable response. Society possesses the productive capacity to satisfy consumer needs but no longer requires the same amount of labor. Thus both the amount of work, as well as the product of work, can be distributed among the total labor force, taking into account the new technology.

The fact that Samuelson thinks that only by employing workers at lowered wages can this problem be addressed, shows that he is assuming as a fact of nature the position of dominance by capitalists and the corresponding subordinate position of workers. Of course, capitalists are not likely to pay workers the same wage they previously received if they now work fewer hours. But both the productive capacities of the workers remain the same, society’s need for goods and services remains the same (in the short run), and the economy’s capacity to produce has increased. Any mismatch is in the connection between the worker and the means of production. A response that has regard both for the purpose of an economy and its connection with the social fabric as a whole would see reduced work hours as a logical response to the situation.

Next let us look at the question of cyclical unemployment, that type which comes about “when the overall demand for labor is low” because of a business cycle downturn. I am afraid my argument will seem hopelessly naive to most economists. But that does not mean that it is wrong, only that the elaborate superstructure that economists have erected over the past couple centuries tends to obscure some obvious economic facts.
God created human beings with both the capacity for work and the need to consume. In fact, these two characteristics balance one another in that anywhere there are people, there are both producers and consumers. Thus it would seem that everywhere people can do the work which supplies them with the goods they need. The human capacity for work corresponds roughly with our need for the products of that work. The more people, the more workers, the fewer people, the fewer workers. What does this have to do with the question of unemployment? If in general each person is able to perform productive work sufficient to supply at least his own needs, then why should anyone be idled, unable to work? Does not each person create his own demand and at the same time provide the means for supplying that demand?
The reason that any particular person’s capacity for work cannot be the means of his supplying his needs is usually because he is denied access to the means for production, to land or tools, for example. On occasion a harsh environment makes it difficult to take advantage of mankind’s capacity to produce, but in general this is rare. This is not a problem, then, that arises from the nature of human economic activity, it is an organizational problem, one ultimately occasioned by the question of who owns or controls land or tools. The more complicated the relationship between individuals and the means of production, the more likely is some sort of organizational or structural difficulty which impedes people’s ability to work and produce. Capitalism heightens this tendency not only by the complexity of its structure, but by creating a class of owners whose primary and direct interest is not in producing for the needs of mankind, but in convincing people to buy their product, whether needed or not, whether well-made or not.
Hence in capitalism there exist business cycles, those alternating periods of boom and bust which are the causes for the cyclical decrease in the demand for labor, and which come about because of capitalism’s propensity toward overproduction and speculation. Since the tendency in capitalism is simply production for the sake of sales, not production for the sake of reasonable use, the tendency to overproduce is always present because the capitalist class, people one step or more removed from actual production, have little or no interest in production as such. But under a well-functioning distributism, with a healthy structure of intermediate occupational groups (guilds), part of whose aim is to match economic activity with society’s needs, business cycles would either not exist or would be milder and less disruptive.
We can see how the complexity of a capitalist structuring of the economy contributes to the imbalances that create cyclical unemployment if we contrast that with a very simple distributist economy. In such an economy, one in which all workers owned their land and tools and produced whatever was needed for themselves and their families, the immediate connection between work and consumption would be obvious, since each person would be the primary producer of most or all of what he and his family needed, and the one-to-one correspondence between a worker’s need to consume and his ability to produce would be obvious. Of course such an economy is hardly possible outside of a primitive level of culture, and in any case is not desirable. The division of labor, though it can be extended too far, has obvious benefits to humanity, and I know of no distributist who opposes it. Indeed, the medieval urban distributist economy assumed and fostered the division of labor up to a point. But what we should note here is that the more complex the connection or relationship between workers and the means of production, the more possibility that a worker will be hindered in the exercise of his ability to produce. Distributism tries to keep that connection as simple as the division of labor and other necessary factors will allow, while capitalism needlessly elaborates that by shifting emphasis from production for fulfillment of human needs, to production oriented toward sales, toward new products that often have little utility, together with a constant preoccupation with higher profit margins, so that capital seeks not merely a sufficient return, but an ever higher one.
Any society and economy that is structured toward man’s genuine welfare ought to seek to make use of the obvious connection between the human need to consume and the human ability to work and produce.
This must be kept front and center in our economic thinking, and any needless elaborations and complexities which are introduced into the economy must be eliminated or at least watched carefully lest they create conditions, such as unemployment, which are socially or economically harmful. In a distributist economy the natural relationship between production and consumption would be one of the fundamental principles of its economic organization.
But in addition to the three types of economic unemployment that economists note, there is another type which they are reluctant to acknowledge, or at least to regard as a significant problem. This is unemployment caused by trade agreements. Although the trade facilitated by agreements such as NAFTA can be called free only with numerous qualifications, still it is usually in the direction of freer trade that such agreements lead. Such trade pacts are based on the neoclassical doctrine of comparative advantage, which Paul Samuelson calls “one of the deepest truths in all of economics.”[4]
Comparative advantage is based upon a fact, to be sure, that countries excel better at some products than others, and from this it is argued that it is in the interests of all countries to specialize in the products that they can produce most efficiently in order to increase the overall living standard of all countries. While superficially plausible, in fact there are major objections against the theory. In the first place, it treats each country as if it were merely a site for production, ignoring cultural or legal factors. For example, the unique cultural and legal situation of Mexico included Indian villages which held land in common and which in consequence were able to be self-supporting in food. Trade agreements which require land to be freely bought and sold destroy such communities, despite any elegant graphs that economists concoct purporting to prove that everyone will be better off under these agreements. More fundamentally, the theory of comparative advantage assumes that more and more stuff, what is called economic growth, is the summum bonum of human life. Consider Samuelson’s discussion of objections to international trade agreements.

    But this does not mean that every individual, firm, sector, or factor of production will benefit from trade…. Recent studies indicate that unskilled workers in high-income countries have suffered reductions in real wages in the last three decades because of the increased imports of goods from low-wage developing countries….

    The theory of comparative advantage shows that other sectors will gain more than the injured sectors will lose. Moreover, over long periods of time, those displaced from low-wage sectors eventually gravitate to higher-wage jobs…. Nations that disregard comparative advantage pay a heavy price in terms of their living standards and economic growth.[5]

Unfortunately, “over long periods of time” most of those unskilled workers will be dead long before they manage to “gravitate to higher-wage jobs,” and in the meantime the towns and cities in which they live will be devastated, their families often hurt, social problems will develop, and in general the real standard of living – which is not measured in terms of how much stuff we possess – will decline. The overall amount of available commodities might increase, at least for some people, such as economics professors, but at the cost of buying goods produced by poorly-treated workers in “low-wage developing countries.” International trade can be beneficial to all parties, but only if many more factors besides the total quantity of goods produced and sold are considered. Distributism, since it is more than an economic system, would tend to create a society which did not give material goods a greater value than they deserve. As St. John Paul II wrote in his encyclical Centesimus Annus,

It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed toward “having” rather than “being,” which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself. (no. 36)

Mainstream economic thought is based on the idea that human life is not about “being,” but about “having,” about, as Samuelson avers, producing enough stuff so that “the average American could live at the level of the average doctor or big-league baseball player.”[6] This is nothing other than the philosophy of Hell, a point of view opposed to any Christian conception of life. International trade need not create unemployment, but it will do so if it is based on the notion that any increase in the amount of commodities produced, sold or traded, is a good thing, regardless of any effect it has on human life, individual or social.
Unemployment need not exist, or at least, need not be the problem that it so often is in a capitalist economy. If we are willing to rethink economic principles in the light of fundamentals, then we will see that distributism offers a way out of the capitalist orientation of economic activity which diverts it from its natural end of providing for the genuine consumption needs of mankind.
Notes: 
1: Note that I am dealing with unemployment as an economic question only. It is arguable that there exists what might be called cultural unemployment, but this is outside of the scope of this article.

2: Quotations from Paul Samuelson, Macroeconomics, 16th ed., 1998, p. 259.

3: Paul Samuelson, Microeconomics, 17th ed., 2001, pp. 257-58.

4:  Paul Samuelson, Macroeconomics, 16th ed. 1998, p. 388.
5:  Paul Samuelson, Microeconomics, 17th ed. 2001, p. 306.
6:  Ibid., p. 4.
You can find the original publications here and here.

What is the purpose of our economic activity?

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Based on a talk given at
The American Chesterton Society Conference
5 August, 2016
When we look at the economic conduct of mankind and ask ourselves why the human race engages in such activities, I suppose that everyone would admit that we do so in order to produce goods and services for our use. So far, so good. But I submit there are two contrasting ways of looking at this activity and the products that result from it. This contrast can become clear if I juxtapose two quotations that exhibit two very different attitudes toward the economic activity of mankind. The first is from St. Thomas Aquinas, who wrote that “…the appetite of natural riches is not infinite, because according to a set measure they satisfy nature; but the appetite of artificial riches is infinite, because it serves inordinate concupiscence….” (1) St. Thomas was here contrasting real economic goods – “natural riches” – with “artificial riches” – money and other surrogates for real wealth. The former serve us, they “satisfy nature,” and we desire only enough of them as we can reasonably use, for there is only so much stuff which any person can actually use, and if we acquire more than that, we must resort to devices such as renting storage bins in order to keep our extra and unnecessary possessions, something which in St. Thomas’ time happily did not exist. But even in the thirteenth century it was easier to store up money than actual physical things, and today this is incomparably easier, since bank statements and stock certificates take up very little space. But these sorts of goods can serve “inordinate concupiscence,” for there is a constant temptation to acquire and retain more than we really need or that can possibly serve any genuine human need.

My second quote is from the late Paul Samuelson, winner of a Nobel prize in economics, who wrote

An objective observer would have to agree that, even after two centuries of rapid economic growth, production in the United States is simply not high enough to meet everyone’s desires. If you add up all the wants, you quickly find that there are simply not enough goods and services to satisfy even a small fraction of everyone’s consumption desires. Our national output would have to be many times larger before the average American could live at the level of the average doctor or big-league baseball player. (2)

Here we have two opposed conceptions of the purpose of economic activity, one which is focused primarily on what is natural to humanity, which fulfills human needs, and the second which deliberately abstains from any moral consideration of human desires. If someone wants something, that’s all that matters. The economy exists to satisfy any and all desires.

Now I should note that Aquinas is not asserting that it’s only our basic needs for food or shelter or clothing that are natural. The purposes for which we need material goods can be broadly divided into two parts: first, the absolutely necessary goods, sufficient food, water, shelter, to keep the human race alive. But if we stopped there we would be like ants or bees. They also engage in work to provide for themselves these necessities of life. Human beings, however, are rational animals, that is, our capacities surpass the merely material level, and hence for us a proper human life is not limited simply to survival. We need objects of beauty, music, books, even, in some measure, devices and inventions that make life easier or save time and effort. Without these a properly human life is impossible or difficult. But all the same, St. Thomas sets up human nature as the standard against which man’s economic activity must be measured, whereas Samuelson simply takes each and every demand for a good or service as a given.

I trust I don’t need to belabor which of these two attitudes toward economic activity and material things ought to characterize a Christian, whether Catholic, Protestant or Orthodox. Holy Scripture itself is quite clear on this point:

…if we have food and clothing, with these we shall be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and hurtful desires that plunge men into ruin and destruction. For the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs. (I Tim. 6:8-10)

In Centesimus Annus St. John Paul II speaks of “the right to possess the things necessary for one’s personal development and the development of one’s family” (no. 6). And in the same encyclical he writes in another passage (no. 36),

It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed toward “having” rather than “being,” which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself.

Now I realize that it’s not always easy to say how much is “necessary for one’s personal development and the development of one’s family.” In fact, there is apt to be disagreement about what is a reasonable standard that satisfies nature. And to some extent such disagreement is to be expected, for it’s impossible to calculate such a standard with mathematical exactness. But the important thing, and certainly the first thing to do, is to recognize that mankind’s economic activity and the products that result therefrom do have a purpose, to “satisfy nature,” and not to satisfy simply any and every desire prompted by the wish “to spend life in enjoyment as an end in itself,” so that everyone can live in the manner of a major-league baseball player. At some point, any sensible person will have to admit that the needs of nature have been satisfied, and that anything beyond that is simply excess.

Now, If we accept what I have said so far, what logically follows? We can apply the teaching of St. Paul and St. Thomas and St. John Paul not only to individuals and families, but also to societies.  I am aware that many individuals and families do seek in some degree to acquire and use material goods according to these stipulations and warnings. In a society such as ours this is not easy to do, and, as I just said, it’s often very difficult to decide what is a reasonable standard of living that will satisfy nature, especially since American society can make it difficult to live a countercultural life. In this regard I will note only two things.

First, as Benedict XVI wrote in his encyclical Caritas in Veritate (no. 37), “every economic decision has a moral consequence.” Since the kinds of stores we patronize, the kinds of products we buy and use, have consequences that are both economic and environmental, therefore they have both moral and spiritual consequences for each of us. Someone who desires to “live at the level of the average doctor or big-league baseball player” is making decisions which not only have moral consequences but unavoidably shape that person’s soul according to a particular pattern. A lifetime of our economic decisions will determine whether we have shaped ourselves according to the image of Samuelson’s economic man or to the opposite pattern suggested by Holy Scripture and the writings of the saints.

Secondly, just as it’s very difficult for someone raised in a society saturated by pornography and sexual promiscuity to realize what a sane and healthy sexuality is, so it’s hard for us who were raised in a commercial society, a society which more or less makes riches and material goods an idol, to realize what a sane attitude toward work and material goods is. In both cases we have to strive, using all the means of grace available, to form sound judgments. But now I want to turn our attention to the question of society as a whole, that is, about how a society that seeks to orient its productive activity toward satisfying nature might conduct itself.

The following is a description, from Richard Tawney’s seminal book, Religion and the Rise of Capitalism, of the outlook of Medieval Europe toward work and material goods.

Material riches are necessary; they have a secondary importance, since without them men cannot support themselves and help one another; the wise ruler, as St. Thomas said, will consider in founding his State the natural resources of the country. But economic motives are suspect. Because they are powerful appetites, men fear them, but they are not mean enough to applaud them. Like other strong passions, what they need, it is thought, is not a clear field, but repression. There is no place in medieval theory for economic activity which is not related to a moral end, and to found a science of society upon the assumption that the appetite for economic gain is a constant and measurable force, to be accepted, like other natural forces, as an inevitable and self-evident datum would have appeared to the medieval thinker as hardly less irrational or less immoral than to make the premise of social philosophy the unrestrained operation of such necessary human attributes as pugnacity or the sexual instinct.

And he continues with his description of medieval economic ethics:

At every turn, therefore, there are limits, restrictions, warnings, against allowing economic interests to interfere with serious affairs. It is right for a man to seek such wealth as is necessary for a livelihood in his station. To seek more is not enterprise, but avarice, and avarice is a deadly sin. Trade is legitimate; the different resources of different countries show that it was intended by Providence. But it is a dangerous business. A man must be sure that he carries it on for the public benefit, and that the profits which he takes are no more than the wages of his labor. (3)

And another historian wrote along similar lines,

We can, therefore, lay down as the first principle of mediaeval economics that there was a limit to money-making imposed by the purpose for which the money was made. Each worker had to keep in front of himself the aim of his life and consider the acquiring of money as a means only to an end, which at one and the same time justified and limited him. When, therefore, sufficiency had been obtained there could be no reason for continuing further efforts at getting rich,…except in order to help others. (4)

The questions I’d like to consider now concern how a truly Christian society would implement these ideals. Many people, certainly most Americans, would think that adherence to such standards must be something purely voluntary. At most, the Church would seek to persuade people of its desirability via her preaching and catechesis. And certainly that is the first thing to be done, to create a social consciousness that the pursuit of riches beyond what one needs is both criminal and stupid. Criminal because it helps create a society that upholds false ideals and corrupts all of our souls, stupid because it detracts from what life in this world is about, and above all, because it makes more difficult our attainment of eternal life. I am not asserting that it is a sin simply to be rich, but I do assert that riches are almost always a near occasion of sin, and therefore we’d better be pretty sure we have a genuine justification for our riches. And especially do we need a very good justification for seeking more riches if we already have enough so that the demands of nature are satisfied.

But there is more. You’ll notice what Tawney said in the passage I just quoted, “At every turn, therefore, there are limits, restrictions, warnings, against allowing economic interests to interfere with serious affairs.” A Christian society will not be content to simply use moral persuasion in order to correctly orient out attitude toward work and material goods. If nothing else, such a society will make it rather hard for someone to get rich. It will certainly do nothing to facilitate such acquisition of riches, and it will try to structure its laws, tax code and general economic arrangements so that it is easy to earn enough to support one’s family, but hard to do more.

Many are familiar with the taxation scheme suggested by Hilaire Belloc in his 1936 book, The Restoration of Property, according to which any enterprise which exceeded a certain size would be taxed at such a high rate that no one would expand his business beyond a modest size. I know that many people have an instinctive violent reaction against such proposals, but those who do should ask themselves a couple questions. How is this an unjust restriction? How is anyone’s true good harmed by such laws? Until recently we as a society in the United States saw this clearly with regard to that other great human appetite, sexual satisfaction. Within the lifetime of many of us divorce was in most states difficult to obtain, pornography was strictly regulated or even prohibited, homosexual activity illegal. And laws on the books even forbade adultery, even if they were rarely enforced. Even today prostitution is illegal in nearly every state.  We justified these restrictions by saying that such activity was contrary to both the natural law and the revealed law of God, harmful to individuals and to the social order, and that therefore the free choices and desires of individuals could justly be limited in such matters.

If we are serious about conforming our lives to the norms of morality with regard to money and property, the same argument applies: “those who desire to be rich fall into temptation, into a snare, into many senseless and hurtful desires that plunge men into ruin and destruction.” The disordered striving after riches is as hurtful to the common good as is the disordered striving after sexual pleasure.  Both material wealth and sexual pleasure are true goods, but they are goods only in their rightful places. No one’s genuine freedom or legitimate rights are infringed upon if the pursuit of wealth is hindered and directed toward legitimate channels, even by use of state power, just as no one’s genuine freedom or legitimate rights are infringed upon by legal restrictions on disordered sexual behavior.

There is a wonderful quote from G. K. Chesterton in What’s Wrong With the World that juxtaposes so well these two areas of human behavior.

I am well aware that the word “property” has been defiled in our time by the corruption of the great capitalists. One would think, to hear people talk that the Rothchilds and the Rockefellers were on the side of property. But obviously they are the enemies of property; because they are enemies of their own limitations. They do not want their own land; but other people’s…. It is the negation of property that the Duke of Sutherland should have all the farms in one estate; just as it would be the negation of marriage if he had all our wives in one harem. (5)

If it is proper to prevent the Duke of Sutherland from obtaining all of our women as his wives, why is it not proper to prevent him from obtaining all the property as his own?

Let me go one step further, or one level deeper, in our exploration of this topic. Most people who would object to what I just said about the use of social or legal power to restrict our acquisitive appetites, would object, I think, because, usually unknowingly, they hold an idea about social or political authority which is grounded not in classical philosophy or Holy Scripture, but in the Enlightenment of the 18th century, most notably in the writings of John Locke. Government, according to this notion, is merely a necessary evil, necessary because of mankind’s tendencies toward anti-social conduct. “If men were angels,” wrote James Madison in Federalist no. 51, “no government would be necessary.” Implicit in such a notion is the idea that man’s natural state is a-social, and that every restriction we accept as part of living in society is a restriction on our natural freedom, justified usually by the benefits which sociey brings, but still, something essentially unnatural, something which inhibits our natural freedom. Most political discourse in the United States, of both liberals and conservatives, simply assumes such an understanding of freedom and society.

Here again, though, we find Thomas Aquinas teaching a different view. In the Summa Theologiae (I, q 96, art 4) he asks whether there would have been subordination of man to man in the state of innocence, i.e., without Adam’s fall into sin. And he answers his question clearly, saying Yes.  Although there would not have been the domination (dominium) characteristic of the slave (servus), who is “ordered to another,” there would still have been the kind of subjection proper to the free man, when someone directs him to his own good or to the common good. And the primary reason given by Aquinas for this is because man is “naturally a social animal” and “social life cannot exist unless someone presides who aims at the common good.” In other words, according to Aquinas, even if our first parents had never sinned and lost the state of original justice, we still would have required a sort of government, a government that would not have needed to punish anyone, but was still there to coordinate and direct our efforts toward the common good.

I submit that this difference between St. Thomas and Locke manifests the fundamental error of almost all political discourse in the Anglo-Saxon world, especially the United States. But Locke is simply wrong: man is by nature a political animal, our natural state is one of community, with all the necessary restrictions that such community requires and implies. This is not to justify tyranny or to deny that personal political freedom is a good, but it is to insist that such political freedom is far from the highest political virtue.  Justice is more important than freedom, and in fact, any understanding of freedom which regards it as primarily the right to do anything which one pleases, is a disordered understanding. Just as marriage vows do not limit our true sexual freedom, but actually allow for human sexuality to flourish in proper freedom, so society, including government, is not a restriction on man’s legitimate freedom, but the precondition for a true flourishing of such freedom. We do not trade a certain amount of freedom for a certain amount of security, as in the Lockean myth of the social contract, but we are placed by God and nature into society, without which freedom would be a meaningless exercise in randomness.

As a result, then, if a society attempts to channel its economic activity toward the common good, it in no way infringes on real economic freedom. Rather it provides the necessary means by which economic activity can attain its true end: not the goods and services that satisfy everyone’s consumption desires, but the appetite for natural riches which according to a set measure satisfy nature. This is true Christian wisdom, this is the teaching of the Church, the command of Holy Scripture, and the sure way toward our eternal salvation.

Notes:
(1) Summa Theologiae, I-II, q. 2, a. 1 ad 3.

(2) Microeconomics, 17th ed., 2001 p. 4.

(3) Richard H. Tawney, Religion and the Rise of Capitalism, New York, 1926, pp. 31-32.

(4) Bede Jarrett, Social Theories of the Middle Ages, pp. 157-158.

(5) Part I, chapter 6.

Reasoned Voting

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Keeping in mind that this site does not engage in party politics, I still feel prompted to share something in the context of the up-coming election in the U.S. Although most of this will discuss the political climate in the U.S. I also send this out to any readers “across the pond” in the U.K. as they approach the very important vote on whether or not to remain in the E.U. Distributism is based on certain philosophical principles which originate in a scientific view of philosophy. It has become all too common in our political environments to use fear tactics to try and convince people to vote a certain way. These tactics can sound reasonable, but are truly an attempt to get you to abandon reason. Therefore, I want to present certain principles of reason as I think they apply to deciding how to vote.

The philosophical principles of reason which come down to us from the great minds of the past like Aristotle and Saint Thomas Aquinas are those precepts which we must follow when applying reason to anything. The failure to do so will ultimately lead us to accepting absurd things. They are employed by all of our natural sciences. They are employed by all of our ethical reasoning. They are crucial to fulfilling our capabilities as rational beings. Unfortunately, some people throw around some of these principles in an incorrect or incomplete manner. Because we no longer learn true philosophy (even philosophy students seem to spend more time learning about philosophers – both good and bad – than about the actual science of philosophy) many people are ill equipped to see that these are false applications.

“Choosing the lesser of two evils”

This is a frequent claim used as an election draws near. In the U.S. It has long been used by pundits for the Republican party and has recently been used more by those of the Democrat party. The failure to nominate a candidate their voting base can really support has forced them to use this claim. They essentially say, “we know you think our candidate is bad, but he’s not as bad as their candidate.” This call to choose the “lesser” of two evils is usually followed by the next claim.

“A vote for x is really a vote for y”

This is a double-attack on your reason. Not only is your decision not to vote for their candidate or policy wrong, but you will somehow be guilty for the fact that the other candidate or policy won. In essence, the claim is that by voting other than the way they want, you are actually choosing what (presumably) neither of you want. This is used by both of the major parties in the U.S. as an attack against anyone who considers a third party option. It is based on the premise that the candidate or policy you want has no chance of winning, which leads us to the next claim.

“Don’t let the best be the enemy of the good”

Politics is the art of compromise, so why don’t you just compromise and vote for us? Since your position or candidate has no chance of actually winning, you should back down a little and vote for us. By doing so, you’ll get at least some of what you want instead of “wasting your vote.”

All of these arguments sound reasonable, but are actually not so, and a serious look at the principles of reason will reveal why.

When people use variants of the “lesser of two evils” argument, keep in mind that this is only a partial statement of the actual principle of reason. The actual principle is, “If one cannot avoid doing one of two acts, from both of which will follow an evil effect, one is obligated to choose the lesser of the two evils.”  Note that the premise here, which is fundamental to the entire principle, is that you cannot avoid doing one of the two acts. For this to apply in the context of an election, you would have to be constrained to only choose one of two candidates and have no other option – you must vote and you must vote for one of the only two candidates presented to you. Is this the actual case in our elections? Do you really only have two choices? I am not speaking of the so-called “practical” choices, by which is meant those choices generally accepted as having a chance to win. If there is in fact another option, then you are not limited by the constraint of the principle, so it simply doesn’t apply. Actually, if one were to insist on applying it to the case of an election, a reasoned expansion of this principle would be that, in the case of more than two choices, you must choose the one from which will follow the least evil effect. Don’t forget that, when electing candidates in the U.S., there is usually a blank line where you can write in the name of a better choice than the ones being presented.

This leads us to the next claim. Is it true that choosing something other than the two “practical” choices is equivalent to choosing one of them? The answer is obviously no. They say that the only choices are A and B because C has no chance of winning. Therefore, if you vote for C, you are effectively giving the election to whichever option they don’t want from the choices of A and B. This is nonsense. They are trying to shift the blame to you for the fact that they didn’t present a candidate you would want to support. They are trying to blame you for all the others who also didn’t want to support their view. This seems to be a mangling of the principle which states, “Things that are identical with a third are identical with each other.”Your actual responsibility in an election is to vote for the candidate or position you think should win. What you vote for represents what you choose regardless of the outcome. You are not to blame for the votes of others.

This leaves us with the only argument that actually deserves any consideration. “Don’t let the best become the enemy of the good” is inherently incorrect, but it can actually be applied in a way that doesn’t compromise the principles of reason. However, this argument must be properly understood in the light of those principles to determine if it actually applies to the current choices.

First of all, using the terms employed, the “good” must always be directed toward the “best” or it fails to be good. (“Every agent acts for the sake of an end.”) Therefore, one can accept the merely “good” for now, but only on the condition that is a movement toward the “best.” If this is not the case, then you would be violating the principle which states, “It is never lawful to reject a greater good for a lesser one.” The lesser good can only be accepted as a means to achieving the greater good, and never as an end itself. This is the essence of political compromise. Realizing that achieving the “best” may not currently be politically possible, achieving the “good” at this time with the intention of continuing to work for the “best” may be prudent.

Another consideration for this argument must be kept in mind. At what point does continual compromise from the “best” end up being an acceptance of the merely “good?” If you keep voting for an inadequate candidate on the grounds that “we can’t let the other party win,” what incentive will your party ever have to stop presenting inadequate candidates? If you continue to agree to legislation that falls short of what you really want, what are your chances of ever getting the legislation you really want? The pundits accuse those who choose to make a stand with their vote of wasting it, but the purpose of voting is to try and get the change you want. What vote could be more wasted than when you vote for something you don’t want?

At what point do we wake up to the realization that the political machines of these parties are actively engaged in saying what their base wants to hear just to secure votes, but don’t actually mean those things? How many times to we have to see them fail to even try to accomplish what they tell us they will before we accept the fact that it really isn’t all the fault of the other party? Remember that this sort of compromise is only acceptable if it is both prudential and will actually help to move from the “good” to the “best.”

A final consideration on this kind of compromise is that we have to examine the risks of the other side of the compromise. It is not enough to look at what we’ve gained, we need to look at what we’ve potentially lost through the compromise.“It is never lawful to take a risk with the right of another.” “It is never lawful to do an evil act to accomplish a good end.” “A good intention does not justify the use of an evil means for the end in view.” If your side of the compromise would fall into any of these categories, then the compromise cannot be made. Remember that your vote represents you. Your beliefs and values. “All human acts must tend towards the good of man.”

I am also reminded of something posted by Ryan Grant. There is another claim that says that you have no right to complain if you don’t vote. Of course, this is also nonsense. The officials of government have a moral responsibility in the exercise of their office. This is true even if those officials are not democratically elected. Citizens always have the right to complain about injustices regardless of how those officials came to hold their offices. In some election campaigns, there were movements of people who wanted a ballot option for “none of the above” as a way of indicating their dissatisfaction with all of the candidates. However, if you believe that elections are useless, because of the corruption of the political parties, the media, the voting process, or the ballot counting process, then why should you bother to vote even to say “none of the above?” Justice in government is a human right, not one just for those who engage in the system of voting.

Finally, I would like to point out how ironic it is when I hear Republican pundits heap scorn on those who would even consider a third party candidate. They seem to forget that their party was once the upstart third party in a political climate dominated by two other parties. The “Grand Old Party” is significantly younger than its chief rival. Why is it that they don’t address the growing popularity of third party candidates among their voter base? The Republican party was propelled to electoral victory because the voting public got sick and tired of the fact that neither of the major parties of the time were putting forth candidates and positions that truly reflected their views. Well, the same thing is happening today in both of the major parties. It is common for pundits of both parties to lay the blame for an electoral loss on the votes “stolen” by a third party candidate. The truth is that these votes were not stolen because they didn’t “belong” to any candidate or party. They never “owned” our votes and they shouldn’t take them for granted. If they want our votes, then they should present candidates and positions we want to support. If they want to keep our votes, then those candidates better use their time in office actually trying to accomplish what they were elected to accomplish. In other words, voters need to remember that parties and individual candidates need to earn our votes, and need to keep doing so. If they fail to do this, then why shouldn’t we look elsewhere and be proud of doing so?

In their attempts to convince others to vote for a particular candidate, many people are using arguments that invoke the fundamental principles of reason from the philosophical sciences. Unfortunately, many of these invocations use these arguments in an improper way. I addressed some of the most common in a recent article titled Reasoned Voting. I recently came across another use of a principle of reason in support of voting for a particular candidate which, in the interest clear reasoning, I would like to address in this follow-up to that article. The principle is known as “Double-Effect.”

The main goal of these articles is not to convince or dissuade people about voting for a particular candidate or party. It is to foster a better understanding of the principles being invoked because an improper use of these principles can have bad results.

“A small error in principle can lead to a big error in conclusion.”

Doing something, even something good, for a bad reason is not something we should be willing to accept because that would be acting contrary to our nature as rational beings. Therefore, even if you continue to support a given candidate, it should not be because of a faulty application of the principles of reason.

Where the principle commonly called “the lesser of two evils” is used to decide between two choices, the principle of double-effect only applies to a single choice. It is the method used to determine if a particular choice can or cannot be made. Thus, we have seen questions like “can a Catholic vote for Trump/Hillary?” Some commentators have attempted to answer these types of questions pertaining to the upcoming election using the principle of double-effect, but I believe these attempts are a misapplication of the principle.

The principle of double-effect answers the question of whether or not a specific single act is permissible when it is known that the act will produce not only a good, but also a bad effect. In the context of the political election it is proposed that, because we know a candidate will do both good and bad things, double-effect applies to the question of whether or not we may vote for a specific candidate. However, I believe that this is a misunderstanding of the principle as it applies to the question at hand.

The principle of double-effect addresses the following question.

Given an act that that produces two effects, one good and one bad, can we do the act?

 

To determine whether or not a particular act is permissible, the principle of double-effect applies four conditions to the act and its effects to arrive at an answer. If all of the conditions are met, then the principle of double-effect applies and the act may be done. The conditions which must be met for double-effect to apply are these.

 

The act itself must be good, or at least indifferent.
Both effects must proceed immediately from the act.
Only the good effect may be intended.
There must be due proportion between the good and bad effects.

The first two conditions determine whether or not double-effect applies to a particular act. If not, the act must be examined in light of other principles of reason. The second two conditions answer the question of whether or not an act to which double-effect does apply may or may not be done.

A fairly common example of how the principle is legitimately applied is the question amputating a limb infected with gangrene. Amputating the infected limb will remove the threat to life, but it will also result in the loss of the limb. Can we amputate the limb?

First: The act is amputation of the limb. This act is indifferent because the goodness or badness of it depends on the end toward which it is directed.
Second: Both effects will proceed immediately from the act. The moment the act is performed, both the threat to life and the limb will be removed.
Third: We only desire the good effect. If we could remove the gangrene without doing harm, or with less harm, we would do so.
Fourth: The good of preserving life is greater than the evil of losing a limb.

From this we can see that the principle of double-effect applies to this case, and that the reasonable conclusion is that we may amputate the limb.

Those who attempt to apply this principle as an argument for casting your vote for candidate X seem to do so on the basis of campaign promises. Even though it is likely that X will do some things we consider bad, X has promised to do other things we believe are good. We believe there is due proportion between the good and the bad that X will likely do while in office. Therefore, they conclude, the principle of double-effect shows that we can vote for candidate X. I will explain two reasons why I believe double-effect just doesn’t apply to the question of your vote. Note that I am only addressing the question of whether or not double-effect applies to the question of your vote, there are certainly other factors that do.

Double-effect applies specifically to “an act that produces two effects, one good and one bad.” We are examining the effects of specific individual act, so the act in question must clearly be the cause of those effects. In the case of amputation, both effects are produced by the act of amputation – they are both unavoidable effects of the act and the act is clearly the cause of those effects. Can we say the same thing about your vote? Is your vote the cause of both the good and the bad that candidate X will do while in office? The answer is obviously no. You cast your vote based on various things like campaign promises and position statements, but your vote does not actually cause any of those things to actually occur. Whether candidate X keeps or breaks every campaign promise, whether X does exactly what you expect or the opposite of what you expect can not reasonably be attributed as an effect of your vote. It is an effect of the free will of the candidate while in office.

I know that some will argue that your vote is the cause of the candidate getting elected and therefore, by extension, it is the cause of what the candidate does in office. I maintain that double-effect still doesn’t apply even if we accept the argument. The principle of double-effect states that both effects must proceed immediatelyfrom the act. This is clear in the case of amputation. Both effects are immediate. They happen simultaneously and there is no delay between the act as the cause and its effects. In regard to your vote, none of the effects can be considered to proceed immediately from your vote. Even if we were to say that the effects in question will take place over a period of time, they don’t even start to happen when you cast your vote. The candidate won’t even get sworn in for two months after you cast your vote. X could refuse to be sworn in or die before doing so. Amputation guarantees that both the limb and the disease will be removed. Your vote does not even guarantee that candidate X will win the election. Clearly, double-effect does not apply to the question of your vote.

In the end, as stated in the previous article, you must exercise your prudential judgement. Faced with the fact that the candidate is not ideal, is it prudential to vote for X rather than one of the several other available candidates? Is it prudential to (once again) compromise on what you really want and vote for X as a step toward a greater good to be more fully achieved in the future? There are many factors to consider for this important decision. I hope that these articles will help clarify the good and bad points some are making on the subject. These decisions are unfortunately difficult and complex. The principles of reason exist to assist us in understanding the factors that go into making a good decision. It does not help if our thinking gets muddled by the improper application of these principles, even if those doing it have the best intentions.

Originally posted on June 16, 2016 (part one: see here) and August 18, 2016 (part two: see here).

The Process of Subsidiarity

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Many critics of distributism claim that what we want to achieve would require the expansion of state power and that we really want an all powerful state. What we actually advocate is the decentralization of government power. We want to distribute the various powers of government as close to the local level as can be practically achieved. This is because we promote the principle known as “subsidiarity.” Subsidiarity states that,

“A community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view of the common good.”                                      – Pope St. John Paul II

That sounds great, but how would it work?

Subsidiarity goes beyond the typical “states’ rights” argument put forward by the political conservatives of the United States of America. While some in the USA who argue for states’ rights might regard it as a necessary first step to further decentralization of government authority, others voice a “let the states decide” attitude which seems to indicate that their only real objection to certain government laws is the fact that it is the federal government imposing them. Their statements suggest that the same laws would be fine if imposed at the state level without any further decentralization of authority. Listening to some of their arguments seems to give the impression that they don’t really recognize that the centralization of power, even to the state government, makes government less democratic. The more power gets centralized, the more undemocratic the government becomes. They only seem to be concerned when the exercise of power crosses the line from state to federal authority. In reality, however, it is only at the local level that the average citizen really has a voice. Therefore, the more localized the authority, the more democratic the society.

The sad truth is that so many of us have become too accustomed to the idea that the higher levels of government is where problems really get solved. We pay more attention to state and federal elections than to local ones precisely because the authority which naturally belongs at the local level has been usurped by state and federal governments. “I will write my congressman,” and “I’ll take this all the way to the Supreme Court” became the reaction, and the reality, of how we view the political process. While we in the USA believe ourselves to be a bastion of democracy, we have allowed (and assisted) the gradual stripping of our democratic voice. This has gone beyond the making of our laws and the defending of our rights, but even to how we assist those in need. As a society, we have gotten to the point that we automatically look to higher and higher levels of government to resolve even local issues. It is sad, but it seems that most people believe that the higher the level of government, the broader its scope of authority.

Distributism, on the other hand, argues that the higher the level of government, the narrower its scope of authority. The question is how this can be applied in a practical and workable way. While there may be variations in application due to cultural differences in different regions, a basic outline can be presented as a starting point. The foundation of this outline is to understand the “orders of society” and their relationship to each other.

The “lowest” order of society is the family, not because it is the least important but because it is the most. It is the very foundation of society. Above that are religious, occupational and social groups which are free institutions for the mutual support and benefit of their members. The remaining “orders of society” would refer to the different levels of government starting with the local community and moving up from there, each fulfilling only those functions that, by their nature, cannot be fulfilled by the level immediately below it. From the distributist perspective, local issues should be handled as locally as possible. Even if an issue exists across a larger region, each locality should be left to direct how to handle it within its jurisdictional boundary to the greatest extent possible, even if assistance is needed from higher levels of society. This is a fundamental concept to understand about subsidiarity.

When an issue arises that needs to be addressed, the level of society where that issue arises is the natural point where the issue should be addressed. In cases where it cannot be addressed there, the members of that level would petition the next higher level of the orders of society for assistance. Therefore, if a family is in financial need and needs immediate assistance, they should naturally turn to those societal organizations like church, work association (guild) or other social organizations for assistance. If a particular vocation needs a school to provide training in the skills it needs, it should first look to the members of that vocational guild. If it cannot provide for itself, it can look to other guilds of the same vocation, or even discuss combining resources with other guilds to establish schools to meet their combined needs.

It is only if these first attempts cannot resolve the issue that governmental bodies should get involved, and then only by petition of the immediate lower level. If, for example, a lot of families in the community needed assistance and churches and other local associations found themselves unable to adequately provide that assistance, they could raise the issue to the city or to related organizations in other areas. If a city was not able to address an issue, it could ask nearby cities for assistance or raise the issue to the county. In this way, each level of society would render assistance based on the need asserted by the level immediately below it, and that assistance would not usurp any functions of the lower orders of society even if the higher order needs to coordinate the activities of the lower orders due to the nature of the situation at hand, like a natural disaster.

This process keeps as much authority as possible at the local level and, by doing so, preserves the ability of citizens to effectively curtail the usurpation of authority by higher levels of government. Because the greatest level of influence is the most local level, and because the individual citizen’s vote has its greatest influence at the most local level, this process preserves the greatest level of democracy for all.

Distributism vs. Globalism

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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There has been a tendency over the last several decades toward globalism. This goes beyond the so-called “global economy,” with its free trade deals favoring international banks and corporations. This trend has resulted in the formation of international bureaucracies imposing standards, if not laws, on otherwise sovereign states. While there was always some resistance to this tendency, it has nevertheless progressed to the point that there is now a growing movement of outright rejection. What was initially presented as a path toward peace and harmony is increasingly viewed by common citizens as a growing threat to their freedom and way of life. What is the position of distributism in relation to the idea of globalism?

Globalism is the idea of those who believe they should help direct the development of social, cultural, technological, or economic networks around the world through political influence, and who desire the establishment of international political bodies to govern on an international level. The idea is that, by having multiple people of various cultural and economic backgrounds come together to discuss issues, problems can be resolved effectively and peacefully. Since the resolutions of these bodies can only be effective if they are actually binding, these organizations have to acquire legally recognized legislative authority. This is gladly accepted by the promoters of these organizations who seem to assume that those who run these international legislatures will always see things the same way they do. They hardly ever seem to consider what happens if they don’t. They also don’t seem to care if the policies and laws they desire to establish are actually wanted by the people who will end up being subject to them.

The problem with placing such a wide-ranging authority in the hands of a political body with no political or cultural attachment to the people is that people from different countries have different cultures and customs. They are rightfully proud of them and reject efforts by “those who know better” to toss them aside in the wake of the globalist view of how things should be. They want their own way of doing business, of farming and manufacture, of protecting public health and the environment, of securing civil liberties, of running their schools, of deciding what should be taught in those schools and of deciding how to integrate immigrants into their society. They do not want people who do not share their views of culture and custom to make such decisions for them, and this is precisely what the globalists want to do.

The globalists “negotiate” a one-size-fits-all agreement which actually only appeals to those whose views have a majority representation in the international political organization. In other words, only the globalists really get to decide. This was a significant part of the movement in Great Britain to leave the European Union. The European Union started as a “common market” to work together to help the economies of the separate European countries. It has evolved into an international authority with its own flag, its own anthem, and its legislature makes laws that override the national and local laws of its member states. Even when the decisions of globalist organizations are not legislatively binding, their existence creates a great political pressure for states to comply even if the citizens of the state oppose them. For example, the United Nations not only told Ireland, a sovereign state, that it should change its abortion laws. The politicians in Ireland’s government, led by the U.N. instead of their own people, put it up for a vote. It was resoundingly defeated because the people of Ireland don’t want it. The United Nations even told the Catholic Church to change its religious doctrines according to its view of “child welfare.” There have been cases where globalist organizations have used economic pressure, like denying aide, to try and coerce countries to adopt unwanted policies. By moving the decision-making power further and further away from the people, the political process ultimately becomes less democratic as individual voices become less able to influence decisions that impact their daily lives.

Distributists, on the other hand, would not only promote a country’s sovereign right to direct its own affairs, we also promote that right for political regions and local communities within a country in accordance with the principle of subsidiarity.

“A community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view of the common good.”

This view provides a foundation for people to preserve their culture and customs and to direct their own lives, and does so while still making room for national assistance when and where needed. It is not an “isolationist” position. It is a view that does not exclude the idea of international cooperation in addressing wider issues, but it does not include relinquishing of sovereignty to permanent international organizations as part of the process.

The world is filled with various cultures and customs, and the people from those cultures who share those customs either love them or will change them on their own. There isn’t a one-size-fits-all way of life and of doing things. The purveyors of globalism, even if they don’t start out to do so, ultimately trample on the rights of the people they claim to be helping. The people who say we should “celebrate diversity” are the ones who end up trying to force everyone to be the same. The people who shout the loudest about tolerance end up being the most intolerant of all. They believe they are going to do good, but they end up establishing the very kind of repressive government they claim to hate, using the very tactics they villify. In the end, even though they want peace, they will cause rebellion because the people they claim to be helping will resent them for being oppressive overlords.

Futures Markets and the Absurdity of Capitalism

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Capitalism is often celebrated by its supporters as the only economic system that can really deliver the goods, the only way of arranging our economic activity that has or that can lift mankind out of its supposedly otherwise inevitable poverty. And it is the case, one must admit, that capitalism does act as a remarkable spur to the manufacture of stuff, all kinds of stuff, sometimes useful, but just as equally useless or even harmful – anything, in fact, that the producer thinks can be marketed. But production of goods, even useless goods, is not the hallmark of capitalism. Rather capitalism, understood as the separation of ownership and work, has as its unique attribute not production, but selling, even, as we are about to see, selling of things that really do not exist.

The human race has always grown or otherwise gathered food, and there has probably always existed some kinds of exchange. But the growing or obtaining of food and the exchange of one desired object for another was always seen as a subordinate part of the life of the human race. Obtaining food was for the sake of living, exchange was for the sake of living better. But with capitalism this common-sense relationship of means and ends is very often perverted. Now all production is for the sake of exchange, social life becomes subordinated to the processes of production and exchange, and they in turn become subordinated to more exotic economic practices. This is because the capitalist imperative is always more sales, more profit, more speculative ways of making money, without any inherent limit or even a notion of what all this activity is for, except for the enrichment of those who own or control the economic processes. Capitalism as the separation of ownership from work creates a class of individuals who are removed from the production of useful objects and who regard the objects produced as primarily commodities to be sold, rather than useful goods to be consumed. Hence the imperative for more sales, ever increasing profits and market share, regardless of demand, because there is no natural limit, no end for which one is striving and with which, when obtained, one is satisfied. Let us look at the interesting example of the futures market in grain and see what we can learn from it as to the nature of the capitalist approach to organizing an economy.

In his book, Nature’s Metropolis: Chicago and the Great West, William Cronon discusses among other topics how the grain trade gave rise to the futures’ market in agricultural products. This account shows the absurdity of economic activity divorced from any rational end, and eventually even from a real product, the purposeless kind of economics fostered by capitalism. As long as something makes money for those who own or control it, capitalism cares nothing for whether the activity actually contributes anything toward meeting mankind’s real needs for goods and services.

Originally, as has generally been the case with mankind, grain grown on the prairies of Illinois and neighboring states was a means of feeding the farmer, his family and his near neighbors. But as it became an item to be shipped and sold, and eventually turned into a commodity future at the Chicago Board of Trade, we can see the transformation of a human and natural object into the abstraction of a commodity, something regarded as merely a means of profit.

A certain amount of grain trading and shipping existed from the early 19th century using water transportation. But this was slow and awkward and did not reach every place. Before there could be a transformation in the understanding of grain, there had to be a more efficient means of transportation. This was provided by the railroads, which were built mostly to facilitate the capitalist imperative to totally commercialize every aspect of life. If people had thought of grain as primarily a food to be consumed pretty much where it was grown, then the huge railroad network of the Mid-West would probably never have come into existence, since the existing modest means of transportation would have sufficed. Thus to extend and fully implement the capitalist transformation of wheat from a food into a commodity, the railway system first had to exist. The building of the railroad network transformed not only food exchange, but the environment, both natural and cultural of the region and the nation. Capitalism, then, both building upon and transforming the human vice of greed, powerfully shaped the entire culture and violently captured such pre-capitalist aspects of society as food production and local exchange and bent them to its purposes.

The existence of the railroad network enabled farmers to conceive of themselves not as growers of food for consumption but as producers of a commodity. Grain was shipped via the railroads to Chicago where it was held in large grain elevators for eventual shipment to the East coast. Originally the ownership of any particular sack of grain was retained by the farmer who harvested it. But naturally sacks of grain differed from each other significantly in quality. The storage of these sacks in grain elevators created a problem: “elevator operators began objecting to keeping small quantities of different owners’ grain in separate bins that were only partially filled…. To avoid that…, they sought to mix grain in common bins.” To do this required some system of grain standardization or grading. After such a system was created it became possible for the elevator owners to contract for sale of a certain quantity of a certain grade of wheat, with no reference to any particular sack of wheat actually existing anywhere. But because of the ever-changing price of grain, sellers and buyers soon realized that they could essentially bet against the future price by contracting in the present for sale or purchase of a definite quantity of grain at some future date, hoping that the price would increase or decrease to their benefit by the time of the actual sale. Ultimately this created the final absurdity:

…futures contracts [which] were essentially interchangeable and could be bought and sold quite independently of the physical grain… Moreover, the seller…did not necessarily even have to deliver grain on the day it fell due. As long as the buyer was willing, the two could settle their transaction by simply exchanging the difference between the grain’s contracted price and its market price when the contract expired. [They] could complete their transaction without any grain ever changing hands…. The futures market was a market not in grain but in the price of grain…one bought and sold not wheat or corn or oats but the prices of those goods as they would exist at a future time. Speculators made and lost money by selling each other legally binding forecasts of how much grain prices would rise or fall.

Grain went from being a means for feeding the population of farmers and others who lived nearby, to being centrally stored in bins in Chicago and shipped throughout the Northeast United States and into Canada, into being merely a symbol, but nevertheless a symbol that enabled speculators to engage in exchange. The contracts themselves have become a commodity to be bought and sold, but the contracts now have no necessary connection with any object of real economic value.

Despite its claim to be the only economic system that can produce sufficient goods to satisfy mankind’s needs, capitalism is really not interested in production at all, except as that can serve sales. It is interested in moneymaking, to be sure, but moneymaking by nearly any means that one can concoct. It might seem obvious, for example, that the financial sector would be a modest adjunct of the more primary economic activities of production or even exchange, sometimes necessary, often helpful, but always subordinate. But frequently someone can make more money by a merger or buyout, which often results in a decrease in real economic activity, than by actual production.

It should be obvious that mankind’s economic activity exists to serve our need for external goods and services. Thus economic activity must always be subordinate to the genuine needs and interests of humanity. But when economic activity is seen as basically a means of getting rich by almost any method, it is apt to become entirely divorced from meeting our real economic needs. The economy becomes essentially a private playground for those with enough skill or money to manipulate it in their favor. Pope Pius XI wrote with regard to such types of economic manipulation, “A stern insistence on the moral law, enforced with vigor by civil authority, could have dispelled or perhaps averted these enormous evils” (Quadragesimo Anno, no. 133). But this is too rarely the case in a capitalist, commercial society, where indeed as Karl Polanyi noted, “society itself becomes an `adjunct’ of the market.”

You can learn more about this issue here.

Distributism and Large-Scale Industry

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

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Thomas Storck’s recent article about the antagonistic relationship between owners and workers prevalent in capitalist enterprises included the following statement. “The activity of the Mondragon cooperatives in Spain proves that there is no reason why large-scale and highly technical industrial operations cannot be worker owned.” This sentence prompted a reader to respond with a request.

“Please provide a follow up article showing how this system works for Mondragon, their profit, employee take home, growth, etc…”

This response to that request will address two things. I will first provide the information requested, then I will address the case of Mondragon and how it does, and does not, relate to distributism.

Mondragon started as a technical college, founded by Father José María Arizmendiarrieta in 1943. Its first cooperative was established with 5 workers making paraffin heaters in 1955. Today, Mondragon is a cooperative federation comprised of over 250 companies and 74,000 workers operating in the finance, industrial, retail and knowledge sectors. Mondragon’s sales in 2014 were €10,985 million (US $12.48 billion). They put €145 million (US $164 million)  in research and invested €345 million (US $392 million). They have 15 technology centers, 1,676 researchers and have filed 479 patent families.

I don’t have specific information on employee take-home, but each company agrees to set its own wage ratio within an agreed upon range of 3:1 to 9:1. The average is 5:1, meaning that the highest paid person in a given company typically makes no more than five times what the lowest paid person in the same company does. The result of this is that the workers doing non-management jobs at Mondragon typically make 13% more than similar local jobs outside of its structure. Most workers make well above the minimum wage since they are employed in jobs requiring high levels of skill and technical training, Mondragon’s managers do earn less than those outside of its structure, but this is because they agree that Mondragon’s model is better than the typical corporate model.

Only 103 of Mondragon’s 260 companies are cooperatives. This in itself does not make it incompatible with distributism. I don’t have any details about the other 157 companies, like whether they are small, independently owned businesses. The ideal of distributism is that everyone own the capital used to earn his living, but we accept that this ideal may never be fully achieved. Some people may just prefer prefer to be employees, or may have to work as employees for some time before they can become owners. Distributism does not require that every shop be a worker owned cooperative, but those that are not would tend to be small local shops, and I don’t know the extent to which this is the case for those Mondragon companies that are not cooperatives.

The original cooperative established with five members back in 1955 grew to become Fagor Electrodomestics, the largest company in Mondragon’s federation. The Fagor brand is currently present in 100 countries, employs more than 12,000 people in 17 countries and operates 16 factories in 3 continents. Due to mismanagement, it had to declare bankruptcy in October 2013. The economic articles from capitalist pundits seemed to hardly contain their glee at what they perceived as the fall of the greatest example that methods other than their own could work. The Economist declared that “one of the group’s key principles—of solidarity among its 110 constituent co-ops—has found its limit.” Actually, what had reached its limit was the federation’s willingness to extend another loan to prop up Fagor when it had no plans which would resolve its problems.

Before crowing so loudly, capitalist economists should have waited to see the reality of this commitment and how it compares to what happens when the typical capitalist enterprise goes bankrupt. The reality of Mondragon’s commitment to worker solidarity is revealed by what the federation actually did regarding the workers of Fagor. Mondragon’s social mutual, Lagun Aro, proposed a 1.5% raise in contributions from all members at the next General Assembly so it could provide needed unemployment benefits to displaced Fagor worker-owners. They received 80 percent of their salary while Mondragon identified new positions for these workers. Compare this to the layoffs we’ve all seen reported when large capitalist employers go bankrupt or have to restructure to avoid bankruptcy.

This clearly shows the dynamic vibrancy and resilience of the cooperative model even when operating with large-scale, multi-national, highly technical industrial operations. This is why various cooperative organizations, the p2p economic movement and distributists all can validly point to Mondragon as an example of how well the cooperative model truly works.

When it comes to distributism, however, my opinion is that we need to be more carefully nuanced when using Mondragon as an example. It has grown to a size and scale of operation beyond that which distributists actually promote and which goes against the preference for local or even regional economics to the international model touted today. We are not in any way against international trade, but individual corporations employing thousands in multiple countries seems to me to go against our economic model, and Fagor is an example of why. The description of how Mondragon handled the bankruptcy of Fagor should not be taken as a claim that it wasn’t an issue for the federation. The mismanagement of Fagor not only impacted its thousands of employees, but the entire Mondragon organization. The fact that it was able to come up with a solution that maintained its commitment to worker solidarity does not mean that this was an easy solution or that it did not put significant strain on the people or the finances of Mondragon as a whole.

In the past, Fagor might have been held by some to be the shining example of Mondragon’s success because it was the largest company with the most employees, but that is looking at the organization from a strictly capitalist perspective. What happened in the wake of Fagor’s bankruptcy shows that the many smaller cooperatives and the overall commitment to worker solidarity are the mark of Mondragon’s success. They helped to support Fagor with the loans it received before the final straw that resulted in its bankruptcy. They supported the workers displaced when Fagor failed. Democratically based worker solidarity is at the very heart of the cooperative movement, and also at the very heart of the guild structure distributists promote.

It is clear that the cooperative model works and this is why distributists propose this model for large scale operations, particularly those which only make sense at a more regional rather than local level. Of course, cooperatives also work at a local level and we promote that as well. 

I hope this article fulfills the request of our reader.

You can learn more about this issue here.

The Planned Dependent Community

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

“”Walmart didn’t kill the once-vibrant cluster of shops next to a railroad and a creek in the faded old coal town of Kimball, W. Va. — the disappearance of the mines had pretty well taken care of that already. But now that Walmart’s leaving, too, as one of 154 U.S. stores the company closed in January, the town might be snuffed out for good.”

This quote is from a Washington Post article on the circumstances some small towns were facing when Walmart recently decided to close 269 stores and lay off more than 16,000 employees. This prompted one reader of ours to ask how we can reach these types of communities. How can we present the idea of distributism to the people living in these situations as solution to their economic problems?”

You can learn more about this issue here.

Owners vs. Workers: An Eternal Law of Nature?

This article is part of my posts on the economic system of distributism.  This is from practicaldistributism.blogspot.com which you can find here:

“A few years ago (November 2, 2013) The Economist magazine, that reliable organ of neo-liberalism that makes few bones about its idolization of material growth as the summum bonum of human existence and its consequent dismissal of anything, such as family life or cultural traditions, that might get in the way of such material growth, ran some articles about labor’s diminishing share of national income.

Over the past 30 years, the workers’ take from the [economic] pie has shrunk across the globe. In America, their wages used to make up almost 70% of GDP; now the figure is 64%, according to the OECD. Some of the biggest declines have been egalitarian societies such as Norway (where labour’s share has fallen from 64% in 1980 to 55% now) and Sweden (down from 74% in 1980 to 65% now). A drop has also occurred in many emerging markets, particularly in Asia.

Even these figures of 70% to 65% for the U.S. are misleading, for as the magazine notes in another article in the same issue, “among wage-earners the rich have done vastly better than the rest; the share of income earned by the top 1% of workers has increased since the 1990s even as the overall labour share has fallen.” So that, “the share of national income going to the bottom 99% of workers has fallen from 60% before the 1980s to 50%.” That is to say, the workers whose job title is CEO are gobbling up not just more money but a greater percentage of it.

All this is bad, opines The Economist, it’s politically dangerous “and it is producing a lot of predictably polarised debate.” Perhaps The Economist is concerned that such instability might derail the engine of wealth redistribution for the rich that doubtless is working well for so many of its readers. So what’s the cause and what can be done? The Economist calmly discusses certain explanations that have been offered – the “weakness of unions” for example – and rejects them, and suggests that “the likeliest culprit is technology” although “[s]ome economists also emphasize the role of globalization….” As for the remedy, well, let’s be sure that we “strengthen workers without ham-stringing firms. Growth, rather than employment protection is the priority.” Of course, “education and training” – that’s needed too. And don’t forget, a “cut in corporate tax rates” and “pension reform” [read: privatizing pensions and turning them over to the good people on Wall St.] and “more privatisation” generally. To its credit, The Economist does note that “income from capital…is often more heavily taxed” than labor income, and suggests that this difference be narrowed.

So here you have it, the world according to The Economist. What can a distributist say in response? In the first place, the fact that since about 1980 it’s been precisely the kind of neo-liberal policies which this magazine generally champions that have suspiciously coincided with the decline in labor’s share of income – this is never so much as suggested as a possible cause. Lower the corporate tax rate, lower taxes on the rich – these are still the neo-liberal catchwords and constitute nearly the entire economic program of many American politicians, despite the fact that doing so has produced exactly this kind of income inequality and been in part responsible for numerous broader social problems. Apparently it’s all because the rates haven’t been lowered enough. Eliminate corporate taxes, make the rich pay the same percentage of their income in taxation as the middle class – the flat tax – and, according to them, voilà, all our problems will be solved.

While no distributist I have ever heard of favors perfect equality of income or wealth, it is a fact that too great disparities of either not only lead to social problems, but are probable signs of injustice. The best way of eliminating such disparities is not via government transfer payments, necessary as those sometimes are, but through better access to well-paying jobs and the possibility of ownership of productive property.

Actually, for a distributist these two points, good jobs and property ownership, are not two separate issues, but the same thing – or at least should be. The defining note of capitalism is that some people will own the means of production and will hire others to work for them. (See Pius XI’s encyclical Quadragesimo Anno, no. 100.) Even if such a division can in theory be just, a distributist wants to ask, Why must this be so? Why must there be this divide between owners and workers? Why cannot workers and owners be the same persons, either individually or collectively?

Under the capitalist model labor is always an expense for the owner. Even if an owner has the best of intentions to pay just wages (and one can wonder how often this is the case), there is always subtle pressure to reduce labor costs. Especially in an economic downturn, this is often considered the obvious thing to do. But consider an alternative model. A firm that is owned cooperatively by its workers will naturally face the same difficulties in a recession that other firms face. But instead of looking upon its workers as a expense to be lessened, the workers are themselves the owners, the ones who will decide the fate of the company, which is also the fate of themselves, their families, their children’s futures, and their communities. Whatever hard choices such a firm must make will be made with an entirely different set of priorities from a firm in which workers are simply an expense to be eliminated as much as possible.

There is no eternal law written in the nature of things that mandates the structural opposition of owners and workers. There is absolutely no reason why policies cannot be devised to promote widely dispersed ownership of productive property. It is doubtless true that not everyone is capable of managing even a small business well, but surely everyone is capable of being part of a cooperatively-owned enterprise. Today’s laws often favor concentrations of ownership in corporate hands. But there is no reason why these laws cannot be changed to promote producer-owned cooperatives and other types of small businesses. The activity of the Mondragon cooperatives in Spain proves that there is no reason why large-scale and highly technical industrial operations cannot be worker owned. Can an economy in which cooperatives and small businesses predominate be achieved overnight? Certainly not, but over time there is no reason why such an economy cannot be created. The obstacles to distributism are neither theoretical nor practical – they rather consist in the stubborn conservatism of those afraid to risk any change or, even worse, in the vested opposition of those who stand to lose their opportunities to exploit both their employees and their customers for their own gain. These are the chief reasons why more progress has never been made toward an economically just society.

There is no better way of ending than by quoting Leo XIII in Rerum Novarum, “The law, therefore, should favor ownership, and its policy should be to induce as many people as possible to become owners” (no. 46).”

You can learn more about this issue here.

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