’Way back in
Ancient Times, about 1922 or so, the irascible George Bernard Shaw (1856-1950)
and the genial Gilbert Keith Chesterton (1874-1936) got into a . . . discussion. Anybody else would have called it a
knockdown, drag-out fight, but Shaw and Chesterton were old friends who managed
to stay that way by not agreeing on anything except that they irritated each
other.
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| "GILBERT! Will. You. Just. Say. HOW?!?!?" |
And what were
they . . . discussing? The fact that Chesterton, who advocated
widespread ownership of productive assets, refused to tell Shaw how he planned to bring about this happy
state of affairs. Shaw kept insisting
that Chesterton wasn’t saying anything, and Chesterton infuriated Shaw by
agreeing with him.
Shaw finally
ended the . . . discussion by
stomping out of the house in frustration.
He had been leaving, anyway, when by chance Chesterton had showed up, so
Shaw didn’t really avoid continuing the fight.
He left because he considered it over and a waste of time to keep trying
to argue with someone who refused to argue and. was. just. so. agreeable. (Shaw afraid to continue a fight? Not likely.)
Shaw did have a
good point, though. What good is it to keep
yammering on about how nice it would be to have widespread capital ownership
when you aren’t prepared to say how to do it?
Why not be reasonable, and do it the Fabian socialist Shaw’s way, i.e., by abolishing private property and putting everyone to work
at a wage system job?
Chesterton,
however, had a better point. If you
don’t know how to do something without committing an injustice, why do it? That’s not to stop anyone else from coming up
with a way to establish and maintain what Chesterton called “the Distributist
State,” but he, Chesterton, was not going to endorse or advocate anything that
went contrary to the natural law, what he called “common sense.”
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| "The 'New Age' Guide to Economics" |
No, not even to
ensure that everybody had an adequate income and was taken care of . . . which
was not what Chesterton was talking about, nor the reason for advocating
“distributism.” Chesterton defined
distributism as a policy of widely distributed private property, with a
preference for small, family-owned farms and businesses. Not that G.K. was into the “Small is
Beautiful” shtick. He added that if
enterprises must be large, the workers should own them on shares. No, really. It's right there.
The Just Third
Way refines Chesterton’s distributism a bit.
Instead of “family owned,” we advocate “family members owning.” We think that’s what Chesterton actually
meant, anyway, but some latter day distributists have taken it to mean a kind
of domestic syndicalism, where the family really does own, and family members as
individuals have no defined rights of property, and can’t take anything with them
if the family disowns them.
That’s rather
like the situation on many Indian reservations, where the casino or oil money
goes to the tribe, not to the tribal members, and someone loses everything,
cutting all ties with the family, tribe, and culture (as well as the money) if he
or she leaves the reservation. Can you
say “incentive to cultural suicide”?
As for the
preference for small, family member-owned farms and businesses . . . sure, why
not? If the market has determined that
the optimal size of an enterprise is “small” (whatever that means; it’s kind of
relative), then let it be small. If
large, let it be large. Smallness or
largeness per se is meaningless. As long as ownership is spread out, and the
owners have their rights of private property, they have control, and the
enterprise is automatically in “human scale,” regardless of its objective size.
The problem is —
how are you going to do it?
Quite easily,
actually. Here’s how.
First, reform the
monetary system and the tax system. Not
one or the other. Both at the same time.
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| "That little old mess-maker . . . ME!" |
Why? Because the way John Maynard Keynes screwed
things up, you’ve got the tax system doing what the central bank is supposed to
be doing, and the central bank doing what the tax system is supposed to be
doing. The tax system is supposed to
raise money to run the government, while the central bank is supposed to make
certain that the private sector has enough money for the needs of commerce,
industry, and agriculture.
Once those
reforms are in place, then immediately give everyone the right to borrow newly
created money to purchase newly issued shares in “blue chip” companies (actually, it's borrowing for a financially feasible project that creates the money; you don't first create money, then lend it; that would be purely inflationary). If dividends are made tax deductible to the
corporation, and full payout of earnings is mandatory on the new shares, the
shares should “pay for themselves” out of their own future earnings (five to
ten years) and thereafter provide dividend income to live on. Allowing a tax deferral on all income used to
purchase the new shares would speed up the process.
In the end, what
you’d have is a society in which most people own enough capital to generate a
basic income, that can be supplemented with wages, instead of the other way
around as at present. You would also
have a money supply backed by private sector assets instead of government debt,
a more fair tax system, a way to provide for retirement income that is better
than Social Security (although you’ll need to keep that as a “safety net”), and
a way to get rid of the national debt.
If that’s not
enough, how about making politicians accountable to the taxpayers? As long as politicians can create money to spend,
the taxpayers who will be stuck with the bill — i.e., future generations — don’t have any say-so. If the politicians can only get their money
from current taxpayers, however, the taxpayers will keep a very close watch on
how much is being spent, and do everything possible to minimize it.
Is that
everything? No, but it’s enough to give
a broad outline. For more, got to the Capital Homesteading
page at CESJ, or get the book, Capital
Homesteading for Every Citizen.
It’s available as a
free download, or from bookstores.
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