Last week we had such a positive response to the “G.K. Chesterton v. Modernism and Socialism“ posting that we decided to do another one. This is not shameless pandering just to get more readers. Okay, so it’s shameless, but it’s not pandering. First, we’re not acting as a go-between in an illicit sexual intrigue, and second, we’re not catering to the lower tastes and desires of others or exploiting their weaknesses . . . unless, of course, you consider a taste for things Chesterton a lower taste, desire, or weakness. There you might have us.
|Small, faimly-owned farms.
Anyway, a week or so ago we happened to get a question on “distributism,” the somewhat vague proposal by G.K. Chesterton and Hilaire Belloc advocating widespread capital ownership, with a preference for small, family-owned farms and artisan businesses, but allowing for worker ownership of larger enterprises through a share in corporate equity. Why the query came to us instead of to someone in the Chesterton or distributist establishment is not a question we are prepared to answer, but we gave it a shot, anyway. The Seeker After Knowledge asked,
I’m new to Distributism, although I have read Chesterton’s Orthodoxy and The Everlasting Man. I have some questions. Namely: How would distributism benefit the U.S.? How does distributism create wealth? Does it create wealth? Should it create wealth? How does distributism increase the strength of the U.S. Dollar, which I believe is one of the most important (if not THE MOST Important) responsibilities of the US Government (or am I wrong)? What kind of legislative candidates can we get who can support and encourage distributism as a public policy? If you can provide a book or an economist (I think we can eliminate Hayek and the Austrian School) for me to I’d appreciate it.
First we advised the SAK that we speak from a particular orientation, that of the interfaith Center for Economic and Social Justice, a natural law perspective. The SAK indicated he was Catholic, so we noted that we are not specifically Catholic . . . although Catholic social teaching is necessarily grounded on the Aristotelian- Thomist understanding of the natural law, as is CESJ’s Just Third Way. With that caveat —
How would distributism benefit the U.S.?
Not to be flip, but the same as anywhere else. Economic democracy is the foundation of political democracy, as Frederick Jackson Turner noted. When people own capital, they have control over their own lives; “power naturally and necessarily follows property.” In purely economic terms, broad-based capital ownership generates the mass purchasing power essential to sustain sound economic growth as advancing technology displaces labor from the production process.
Distributism and wealth?
No system creates wealth. People create wealth by means of their labor and capital. Distributism would make it possible for people to own capital, thereby making it possible for people to produce wealth by both labor and capital.
|Sound money doesn't necessarily mean gold and silver, but assets.
We have found most distributists take the assumptions of the current financial system for granted. Since it is based on erroneous assumptions, it doesn’t really address this question. We think there should be a reform of the financial system so that the commercial and central banks create money as intended. The currency would be backed by private sector assets, not government debt, and be created in ways that create new owners instead of concentrating wealth.
This would entail primarily a shift from past savings to future savings to finance new capital formation. And, yes, the role of government is to set and maintain standards, including for the currency. It does this by enforcing private sector contracts (contracts and money are, for all intents and purposes, the same thing), not by manipulating the currency, by issuing debt, or unilaterally altering contracts, as John Maynard Keynes advocated.
Those who come closest are probably those who back the expanded ownership movement, best represented by the ESOP Association. The ESOP Association, however, is only interested in ESOPs, not in coops or in extending capital ownership beyond the ESOP into other mechanisms. We promote “Capital Homesteading,” a proposal that would empower every child, woman, and man to purchase capital on credit, and pay for it out of the future earnings of the capital itself. Some politicians have expressed interest in the concept, but none have (yet) been willing to sponsor any legislation or do a study.
Now, there we can help . . . if someone wants free books, that is. If someone wants to pay for them (and some aren’t available for free), we have Fulton Sheen’s Freedom Under God, CESJ’s latest book, Easter Witness (the last chapter outlines a program), and a bunch of others. We recommend the Preface and Chapter Five of The Capitalist Manifesto (it’s not really about capitalism, but it’s a clever title), The New Capitalists, Introduction to Social Justice (a pamphlet) and, of course, Capital Homesteading for Every Citizen.