THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Wednesday, April 27, 2022

Can Distributism Rebuild Ukraine?


The quick and easy answer to the question as to whether distributism can be used to rebuild Ukraine is yes — if the current keepers of the flame can either be convinced that their understanding of distributism might be a little off (or others can see it for themselves), some of the flaws in distributism as it has often been presented are corrected, and the authentic vision of G.K. Chesterton and Hilaire Belloc is implemented.  To do that, of course, we need to know what distributism really is, not what it was transformed into even before Chesterton’s death.

There is also a slight problem with some distributists and Chestertonians who, baffling as it may seem to people having a modicum of common sense and reason, not to mention shame, seem to be trying to avoid or wash their hands of what is happening in Ukraine and stay above it all, or have taken Putin’s side of the matter in some degree.  Some have even gone so far as to claim that neither the U.S. nor any other country has any business interfering with Putin and his goons on the grounds that no one is perfect and that we are doing “nothing” — the very word — to solve our own problems.  (Of course, others have gone even further and declared Putin has every right to goosestep into Ukraine.)

Now, some might regard the claim that we are doing “nothing” a bit over the top.  Just a bit.  Some might even say it’s insensitive, not to mention insulting to the millions of people who work every day and who are sincerely trying to solve problems, including many distributists (or localists), and even Chestertonians.


Or perhaps they mean no one is doing anything effective?  How do they define “effective” (if, in fact, that is what they mean)?  Are they completely unfamiliar with the work of the Catholic Church and other religious bodies, countless organizations dedicated to improving the spiritual, social, and material betterment of their fellow man, or the accomplishments of a large number of individuals such as Leo XIII, Pius XI, John Paul II, Father William Ferree, Louis Kelso, Mortimer Adler, Martin Luther King, Jr., Dorothy Day, Fulton Sheen, Norman Kurland, Ronald Reagan, or countless others, including G.K. Chesterton and Hilaire Belloc?


For example, Chesterton defined distributism as a policy of well-divided capital ownership in order to distribute power equitably instead of concentrating it, with a preference for small, family-owned farms and businesses.  He did not, however, preclude large enterprises as long as they were joint stock corporations owned by the workers . . . an idea he might have picked up from Judge Peter Stenger Grosscup.  Anent of which, the Employee Stock Ownership Plan (ESOP) invented by Louis Kelso has turned millions of workers into part owners of their companies throughout the world without taking a single cent from the workers in most cases (Kelso insisted that past savings never be used, but expedience takes over in some cases), just as Chesterton advocated, and apparently completely unnoticed by the nothing-sayers.  Neither has the cooperative movement done “nothing” to solve the problem of great disparities of wealth and distribute power more equitably throughout society.  It’s hard to believe they are not familiar with Mondragon in the Basque region of Spain, while the cooperative movement in the United States is very strong.


And what about the interfaith Center for Economic and Social Justice and its advocacy of the Economic Democracy Act for any country in the world that would be forward-looking enough to implement it, including Ukraine and Russia?  (If you want to break Putin’s power and inhibit or prevent someone else like him coming along in the future, as well as make it possible for Russia to pay an indemnity to Ukraine without breaking the bank, spread out capital ownership.)  Since the EDA would empower virtually everyone in whatever country it was implemented in with capital ownership, and the techniques have been proven to work, it is completely baffling as to why anyone would think that “nothing” is being done . . . unless he or she knows of some flaw in the program.  If so, they have been remarkably silent about it, at least to us, and have said . . . nothing.

So, we’re probably safe in saying that some “establishment Chestertonians” (if we may call them that) and affiliated distributists/localists don’t appear too interested in helping Ukraine fend off a genocidal threat from Russia, or in coming up with any ideas — good or bad — about how to rebuild the country after the carnage, much less in figuring out ways to prevent somebody like Putin (or Stalin, or Hitler, or Napoléon, or, or, or) from being able to have such immense power in the future.  Regardless, the question before us remains whether distributism, most simply and accurately stated as a policy of widespread capital ownership, can be used to rebuild Ukraine once Putin and his goons have been tossed out of the country.

We answered that question “yes” at the beginning of this posting, but now let’s break it down into how a policy of widespread capital ownership can be designed and implemented in a manner consistent with natural law and the demands of human dignity.  We won’t go into the technicalities here, of course.  If you’re interested, there are a number of free publications going into some detail in the “free e-books” section of the CESJ website (we recommend Economic Personalism, which is also available in trade paperback), as well as the description of the Economic Democracy Act.  If you’re interested in a specifically “Catholic” presentation of the ideas (actually still a natural law presentation, but it’s from a Catholic publisher and cites various Church teachings in support of the argument, not to make it), obviously we recommend our own The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law from TAN Books, an imprint of Saint Benedict Press.  (Yes, it’s available from Amazon and Barnes and Noble, too, as well as by special order from some bookstores.)

So, what do we think should be done?

President Zelenskyy has three goals.  One, the most immediate, short-term goal is financing the war effort.  Two, the mid-term goal is how to finance rebuilding Ukraine and pay off the war debt.  Three, the long-term goal is to prevent Russia — or anyone else — from trying to pull the same stunt again.

Financing the War Effort

This hasn’t been mentioned very much, as the primary effort has been to obtain sufficient armaments by any legitimate means necessary.  In this, the Russians themselves have been very generous, supplying a great deal of abandoned and captured equipment and supplies, most recently a huge cache of supplies with an estimated value of $200 million.

Still, it cannot be denied that in addition to donated, captured, and loaned equipment and supplies, it would make both Ukrainians and the countries lending money and material to Ukraine had a reasonable expectation of being able to pay for what they’re getting.  By announcing that the Economic Democracy Act will be implemented at the earliest opportunity, not only will people take heart in the ability of Ukraine to win the war (which it is doing, despite the caution of the major media who don’t want to predict a victory of which they’re not absolutely certain), Russia will be disheartened, and countries making loans to Ukraine will breathe a sigh of relief.  Don’t forget that U.S. President Abraham Lincoln pushed through the 1862 Homestead Act — called the greatest economic initiative in history — in the middle of the bloodiest war in U.S. history.  (He also made the mistake of entrusting the financing of the war to Salmon P. Chase, but that’s another story.)

Financing Rebuilding Ukraine

Zelenskyy has mentioned financing the rebuilding in some of his daily speeches, and with the International Monetary Fund, although (as we might expect) the war effort itself is his primary interest at the moment.  The problem, of course, is not just the sheer magnitude of the destruction Putin and his thugs have caused, but the world’s credit is pretty much tapped out, first by decades of welfare state socialism, capitalist economic development, a global pandemic, and plain old Keynesian monetary insanity.

Frankly, the only realistic program of financing the rebuilding of Ukraine and future economic growth is in a way that, one, builds economic (and thus political) power into each and every Ukrainian without taking anything from anybody else.  Two, it can — and must — be done using traditional methods of corporate finance, that is, in a way that the rebuilding pays for itself out of its own future profits.

This is described in a number of the books we’ve already referenced here, most notably Kelso and Adler’s The Capitalist Manifesto (1958) and The New Capitalists (1961) — and the hopefully upcoming Own or Be Owned — and it does work . . . or millions of American workers would never have been able to buy — on credit — a share in the company that employs them.  And for the money?  Commercial and central banking were invented to create money specifically for capital projects that generate their own repayment.  Why not create new money, then, in non-inflationary ways that also creates new owners of capital instead of making the rich richer?

This would also, incidentally, provide Ukraine with an elastic, stable, and asset-backed reserve currency that could serve as a model for other countries.  It would also, over time, eliminate the national debt, except for short-term borrowings from existing accumulations to meet temporary shortfalls in tax collections.  By making people productive, Ukraine would also generate all the funds necessary to run the country and come back stronger than before.  Don’t forget that France came back after the Franco-Prussian War by producing their collective head off and paid off an indemnity specifically intended to destroy France economically — and thus politically — forever in less than three years.

Incidentally, a big part of the rebuilding program could be a global Manhattan Project-type effort to develop fusion power as soon as possible and get it commercially available.  This story suggests that it’s right around the corner.

Prevent Future Russian Aggression

Are Russians inherently evil, as some have suggested, evidently assuming that people always get the leaders they deserve?  (So, depending on which side you take — if any — what did you do to deserve Trump or Biden?)  Or do they just have a horrible system led by the biggest thief in all of human history and surrounded and supported by an incredible number of greedy and unprincipled lickspittles who will do anything for money and power?

That’s a tough call, although in common with other Aristotelian-Thomists we are forced to say that all human beings have an analogously complete capacity to become more fully human . . . which necessarily implies the same capacity to become less fully human, as well.  No, while it would be easy to label all Russians as equally vicious, it’s ultimately up to the individual what he or she becomes, although heredity and environment both play important roles.

The most we can do, however, is to recommend systemic changes that would inhibit people from making bad choices and encourage them to make good ones.  We can’t force people to be virtuous, although we can sometimes prevent them from doing vicious things (although they may well remain vicious).

That is why the indemnity imposed on Russia must include system reforms in Russia itself.  In practical terms, this would enable Russia to pay the indemnity but without unduly harming the Russian economy or the people themselves.  (The goon government of Putin is another matter.)  We did learn something after World War II . . . caused in large measure by the reparations imposed on Germany and Austria after World War I.

So, a large measure of the reparations due Ukraine must take the form of the Economic Democracy Act . . . after stripping Putin & Co. of their ill-gotten gains, whatever the war crimes tribunals decide to do with the criminals themselves.  The idea is not to destroy Russia, but help lead it to a better form of existence, one that respects the dignity of every person.