We’ve noticed an upswing lately in the number of people who claim to be Chestertivists or distributonians (or whatever incarnation they’re in right now), who are starting to give ear to some capitalists, and are evidently forming some kind of synthesis between socialism and capitalism.
At the same time, the level of vitriol directed against other capitalists and non-socialists/non-capitalists remains high, as does the ostensible rejection of socialism. Not to put too fine a point on it, but this is getting confusing . . . or (more accurately) more confusing than usual.
Okay, as we understood it, “distributism” is a policy of small, distributed property with a preference for small, family-owned farms and artisan-type businesses. When an enterprise must be large, the workers should own the business on shares. Both capitalism and socialism are bad, but socialism is worse.
That’s not verbatim, but it’s what Chesterton and Belloc said, more or less. So why are the Chestertivists and the distributonians so enamored of socialism? A quick trip around various “distributist” websites, etc., reveals a fascination with the programs promoted by the Fabian Society, e.g., the works of Arthur Penty — who invented an offshoot of Fabian socialism (itself a combination of an expanded georgist agrarian socialism and theosophy) he called “Guild socialism” — and E.F. Schumacher, whose book, Small is Beautiful (1973) is today listed under “Buddhist Economics” and was originally marketed as “The New Age Guide to Economics.”
Penty, by the way, was the mentor of Richard Orage, whose magazine New Age gave the name to the movement. Chesterton’s foreword to one of Penty’s books is one of the most remarkable things the Apostle of Common Sense ever wrote: he managed to say absolutely nothing about Penty’s ideas other than that they were “important” and “interesting.” Not good or bad, just “important” and “interesting.” It’s one of the few times (if only time) Chesterton ducked an issue.
So what are capitalism and socialism, and why can’t they be combined?
Strictly speaking, capitalism is concentrated private ownership of capital, while socialism is State ownership — keeping in mind that ownership and control (not necessarily legal title) are the same in all codes of law. Capitalism thus distorts natural law, while socialism nullifies it.
Capitalism — strictly speaking — is based on an individualistic rejection of man’s social nature. Socialism is based on a collectivist rejection of man’s individual nature. Rather than the correct, Aristotelian-Thomist understanding of man as “a political animal” — an individual and a social nature — neither capitalism nor socialism have it right.
As far as the propertyless wage worker is concerned, however, there is little difference between capitalism and socialism. The two inevitably merge into what Hilaire Belloc called “the Servile State.”
Of course, to Belloc, the aim of the Servile State was to force people to work at wage system jobs whether or not they wanted to, while today's Servile State, having destroyed small ownership, is desperately trying to “create” enough jobs to redistribute income, but the servile character remains. This may account for today’s distributonians and Chestertivists pushing for the extension of the wage system instead of expanded capital ownership.
In reality, the only alternative to both capitalism and socialism is widespread capital ownership. This, however, cannot be attained until the method of financing new capital formation shifts from past to future savings, as explained by Louis Kelso and Mortimer Adler in The Capitalist Manifesto (1958) and The New Capitalists (1961), based on the work of Harold G. Moulton in The Formation of Capital, his 1935 counter to the Keynesian New Deal.
It’s something to think about.