In our last
episode, we saw the distributist economist whom we have been calling “Tom
Steele” (“Joe Wide” was, perhaps, sufficiently “broad” in his outlook to remain
silent and be thought a fool rather than to open his mouth and remove all
doubt) give us a piece or two of his mind.
Judging from the amount he shares, he has a great deal of mind to spare. We hope. . . .
It would have
been a better advertisement for distributism, of course, had the distributist
economist given us something more substantive, for example, showing where we
misstated something, rather than to go off on a series of tangents claiming we
hadn’t said anything in over 7,000 words (especially when it can be checked),
but we have yet to receive a critique from Steele or his select group of fans
and confreres that addresses the actual items or areas of disagreement rather
than the personalities of those who disagree.
"There is only ONE reason anything is right: I SAID SO!" |
That is not to
say we have not received some intelligent criticisms and insightful comments
from some distributists (quite a few, actually, and more all the time), or that adherents of other schools of economics are
always polite and respectful . . . or even civil. For example, take a gander at Nobel
Laureate Dr. Milton Friedman’s rather “odd” (we’re being polite) response to an
invitation to debate the ideas of Louis Kelso.
Okay, okay —
this was before Friedman was awarded his Nobel Prize, and (we blush) it was
something of a set-up for Friedman. A
few years before this exchange, Dr. Norman Kurland had been given a seat next
to Friedman at a luncheon following a presentation on military conscription in
which Norm agreed with Friedman (for the record, both were opposed to it).
"By dodging the waiter and ducking through the cloakroom, Friedman exited here." |
When Friedman
showed up and sat down before his yummy rubber chicken, Norm asked Friedman
what he thought of the ideas of Louis Kelso.
Friedman got up from the table and walked away without saying a word,
and never came back. When a (future)
Nobel Laureate sets the bar that low, who are we to expect even the most
admired and prominent distributist economists do any better?
In any event,
here is the rest of the distributist economist’s response to Deacon John. As we warned last Thursday, it starts to get
a little . . . personal, possibly
even a trifle off the topic. Still, as Steele has repeatedly claimed that we silence him and refuse to let him speak
(and then deletes his comments to that effect so that people wonder what the
heck we’re talking about), it is clearly our duty to ensure that free enquiry
is not muzzled, that trigger words and micro- or macro-aggressions do not stifle
freedom of the press, and no thought of Tom Steele, however trivial or irrelevant, remains unexpressed.
Again, Steele’s
words are presented exactly as he
wrote them, with only some names changed to protect Chestertonians and
distributists from terminal embarrassment:
Sorry, Steele, an estimate is a guess, not an absolute certainty. |
As to the
third point, he actually concedes what I am saying: that the purchase price
must be lower the then actual cash flows, or the scheme won’t work. [Untrue. We said
no such thing. We carefully specified
that the purchase price must be lower or equal to the present value of the estimated,
not actual, future cash flows or no one would make the purchase. Demanding that actual cash flows be used requires certain knowledge of future
events. — ed.] Now, the
ideal market price of an income producing asset is always the NPV of all the
future income streams. [Untrue. One, there is no such thing as “the ideal
market price.” This was discussed at
length. Two, it’s not the net present value, but the present
value. Three, the future income stream
is an estimate, as we explained in some detail, not the absolute certainty
Steele assumes. Four, “always”? There is never any other reason for
having a different price? — ed.] But since these concern the future, the
actual price always varies from the ideal price. [“Ideal price” is a Platonic concept that assumes
ideas (such as value) have an existence independent of the human mind. The world, however, is Aristotelian, going
from the particular to the abstract, not from the abstract (the ideal) to the
particular. — ed.] And indeed, all financial speculation [We were not talking about speculation, but
investment. — ed.] depends on
this point, on locating assets which have significant differences between the
actual and ideal market price, and going long if the price is too low and short
if it is too high. [There is no such
thing as an “ideal price” in the sense Steele uses the term. — ed.]
One form of
financial speculation [investment. — ed.] is called a Leveraged Buy Out, and depends on finding
significantly higher values than those reflected by the sales price; this is
the common feature of all LBO’s. And an ESOP, as described by the CESJ
literature, is just an LBO in behalf of the workers. Hence, there must be a big difference between
the actual and ideal market price, and Greaney concedes as much in his reply. [Untrue.
Steele’s comments rely on his own acceptance of the concept of an ideal
price, and confusion between ROI, the discount rate, and the interest rate, all
of which were addressed at some length, and that Steele ignored. — ed.]
"Hi. I'm CESJ Counselor Francis Bacon, Earl of Oxford." |
I am not the
first former member of their Board of Advisors who gave them advice they didn’t
like and so were excommunicated. [Untrue. Steele left of his own accord after accusing
the president and Director of Research of CESJ of lying and after refusing to
state what the alleged lies were and present his evidence. Thinking that he might come back after apologizing,
he was retained on the Board of Counselors for many years after this until it
became obvious he was disparaging CESJ at every opportunity. — ed.] Indeed, their two
biggest authors were kicked out: Stuart Speiser [Untrue. Stuart Speiser has never been a member of
CESJ, much less a member of the Board of Counselors. — ed.] (Ethical Economics and the Faith Community:
How We Can Have Work and Ownership For All) and Rodney Shakespeare [Untrue. Rodney
Shakespeare is still on the Board of Counselors. — ed.] (Binary Economics: The New Paradigm). Both men tell tales about
trying to get along with Kurland/Greaney, [Untrue. Norman Kurland met with Stuart Speiser and
disagreed with some of what he said, none of which he expressed to
Speiser. The interaction, according to
Kurland, was amicable. Kurland did not
endorse Speiser’s book because there were things in it with which he
disagreed. Michael Greaney has never met
Speiser nor interacted or communicated with him in any way. Shakespeare has made a number of assertions,
but has, in common with Steele, failed to substantiate his claims or been
proven wrong, e.g., his announcement
that he had been “kicked off” the CESJ Board of Counselors. — ed.] but they are not men who tolerate any honest discussion; they
have a “my way or the highway” approach to things. Moreover, there are any
number of organizations working on expanding worker ownership, but CESJ will
work with none of them, and none of them have found it possible to work with
the CESJ. [Untrue. Norman Kurland helped start the National
Center for Employee Ownership in Berkeley, California, and enjoys a good
relationship with the retired director, Corey Rosen, who is a member of
CESJ. He has spoken at the annual ESOP
Association conference and has attended Mid-Atlantic Chapter meetings,
participating in the discussions.
Michael Greaney attends the conference every year, and Dawn Brohawn most
years. Dawn Brohawn edited their
compendium, Journey to an Ownership
Culture. CESJ worked closely with
the Northeast Ohio Employee Ownership Center on a number of projects, notably
the worker buyout effort of Ogleby Norton, and received a grant from them. We also work with the National Cooperative
Business Association, an organization with global outreach. — ed.] It has all the earmarks of a personality cult.
CESJ highly recommends Stack's program. |
Deacon, I
think it admirable that you are interested in expanding worker ownership. I am with you solidly on this point. But I can
recommend other sources. Jack Stack’s A Stake in the Outcome is a must read. If
you don’t know Jack Stack, see this PBS story on him [A piece by Stack is in Curing World Poverty (1994), a CESJ publication, and we
recommend his program to people interested in Justice-Based Management. — ed.] .https://archive.org/details/WETA_20100428_230000_PBS_NewsHour/start/1620/end/1680
Another
approach is given by Ricardo Semler of Semco in The Seven-day Weekend. You can
see Semler here: https://www.youtube.com/watch?v=vLtpdtGJ3Dw
By the way,
these two books are also the best books on management I have ever read. Both
are by people who have actually accomplished greater ownership and productivity
for their employees/owners and their communities. And if you haven’t learned of
their great work thru CESJ, you have to ask yourself, “why?”
[Why? Because you haven't read CESJ's materials? — ed.]
[Why? Because you haven't read CESJ's materials? — ed.]
I have no
objection to ESOPs; they are part of my books and the class I teach. I don’t
think they are the best way, but in the USA they are practically the only legal
framework available, [Steele appears to
be unaware of the cooperative movement; cooperatives in the United States far
outnumber ESOPs. Their drawback is that
they often require participants to put up savings or take reductions in pay to
buy in, and sometimes do not give voting rights in proportion to ownership
stakes, the latter a flaw in most ESOPs as well. — ed.] so you go
with what you got. But the current law makes them too easily a tax-doge [sic] on one
hand and a way to cheat employees out of an actual pension fund on the other. [Untrue.
Most ESOPs, defined contribution plans, are installed in companies that
otherwise would have no retirement plan at all, not being able to afford the
standard defined benefit plan, many of which have gone bankrupt in recent
years, leaving participants with reduced benefits or nothing at all. — ed.] So I would be very careful about putting all your social
justice eggs in this one basket. [The expanded ownership movement is individual
justice, not social justice. Working on
the institutions to permit or expand worker and citizen ownership is social
justice. — ed.]
"I'm a socialist? Did I miss another memo?" |
The bottom
line? Neither the original statements by
Steele and Wide, nor Steele’s response to our analysis of his claims really
address the fundamental issue: to what extent does any principle, belief,
system, or application of any theory of economics protect or enhance the
sovereignty and dignity of the human person under God?
Specifically, Steele
avoids the key importance of private property in capital (the very heart of
distributism!), claiming in a rather spiteful message to Deacon John that he,
Steele, is a socialist after the manner of Pope Benedict XVI(! . . . something
that no doubt surprises the pope emeritus!), and re-defining private property
and the natural law in such a way as to put Collective Man at the center and
relegate God to second place, as Venerable Fulton Sheen explained in his first
two books, God and Intelligence in Modern
Philosophy (1925) — introduction by G.K. Chesterton — and Religion Without God (1928).
By constantly
nitpicking about technicalities concerning which they lack adequate knowledge
or expertise, engaging in ad hominem
attacks, inventing accusations that prove to be without foundation, and raising
straw men arguments, Steele and a number of other prominent distributist
economists and apologists do distributism no favors. While it is admittedly not fair, many people
will judge distributism and even Chesterton and Belloc on the basis of such
antics, concluding that if what supporters like Steele advocate is
distributism, they want no part of it.
#30#