Friday, November 21, 2008

Distributism vs. Capitalism

Yesterday Syzygus did me the favor of reminding me about distributist resources on the web, which I had forgotten about: following something of a computing reorg here at the house, I lost all my links to this stuff. The article he mentions is a critique of von Mises, who denied that his Austrian economics was compatible with Christianity. It's very interesting reading.

Well, having awareness of distributism raised again, I subscribed to a couple blogs on the topic, and was rewarded today by this article. I commend it to you.

My interest in distributism springs from my earnest determination to think about economics as a Catholic. Capitalism as it's practiced here in the USA is fundamentally flawed, and there's just no way that such a model ought to be blithely accepted by Catholics, it seems to me. Profit as the sole bottom line is a botched way of doing things. It injects horrible distortions into society.

Someday I hope to be able to have time to read and think more about this subject. For now, I'll have to content myself with a few blogs.


Anonymous said...

First, I don't think you'll find the answer in an economics textbook any more than finding the awnswer to Just war theory in a military textbook.

There's really nothing wrong with the Capitalistic system per se. its the people in it who ignore its basic tenets ( having both short term and long term goals) for short term cash.

Its my Jewish business partner that pointed out to me the main fault of the current system- stocks. For example, imagine if the "big 3" had announced in 1980 tbat they were going to make a series of decisions that would adversly affect the business for 25 years but would insure they would be thiving and cometative in 30 years. they woulda been booted out by the stockholders in 15 minutes. See where they are today.

Its not business theory itself...its greed: personal greed holding just economics at bay.

Reginald de Piperno said...

Hi Martin,

I certainly agree that a major problem with our economic system is the stock market, in a variety of ways (two big issues are the fact that profit for stockholders - and nothing else - is the mandate, and the fact that the corporation as an institution is designed to remove liability from employees of the corporation who act on its behalf). And of course I agree that the obsession with greed is fundamental to the problem.

While the social doctrine of the Church unambiguously condemns the welfare state and socialism, though, it also rejects the way that capitalism views property: "The Church's social teaching moreover calls for recognition of the social function of any form of private ownership that clearly refers to its necessary relation to the common good. Man 'should regard the external things that he legitimately possesses not only as his own but also as common in the sense that they should be able to benefit not only him but also others.' ... Individual persons may not use their resources without considering the effects that this use will have, rather they must act in a way that benefits not only themselves and their family but also the common good" (Compendium of the Social Doctrine of the Church, §178; emphasis in original).

In short: what's mine is not just mine, and it is wrong for me to think or act as though it is. But that's exactly the opposite of what Capitalism says. The most that Capitalism offers in the way of any implicit morality is: don't take what belongs to someone else. Beyond that, any limits on it have been imposed by force.

I believe that Capitalism is closer to the social teaching of the Church than socialism is. But I don't think the two are synonymous. Another example is that the Church calls for all workers to be paid a "living wage:" "'Remuneration for labor is to be such that man may be furnished the means to cultivate worthily his own material, social, cultural, and spiritual life and that of his dependents, in view of the function and productiveness of each one, the conditions of the factory or workshop, and the common good.' The simple agreement between employee and employer with regard to the amount of pay to be received is not sufficient for the agreed-upon salary to qualify as a 'just wage,' because a just wage 'must not be below the level of subsistence' of the worker: natural justice precedes and is above the freedom of the contract" [ibid., §302]. I don't have a reference to it right off the top of my head, but I have read someplace in the same work that part of that just wage is the ability not just to feed yourself, but also to be able to save for the future. Now of course it's true that employers aren't responsible for workers who fritter away their pay on junk. But it's also undeniable that most entry-level wages don't come close to doing what the Church requires. I know mine wasn't.

It seems clear (to me at any rate :-) that any effort at properly engaging the Church's social teaching will demand a total restructuring of the way that we do things.

Anyway - enough for now. And please don't take amiss anything I've said here; like I said, I haven't had time to really think or read much about this subject, and the opinions of ignoramuses like me should be taken with not just a grain of salt, but a whole salt mine :-)



Martin said...

1. Amen
2. It is an interesting subject especially as I am a part owner in a business my partners and I discuss employee pay rates freqently. I wish I had time to discuss more but will have to leave this here.

God Bless

Paul Hoffer said...

Hi RdP, I do not whether capitalism is compatible with Catholicism as I have not really studied that aspect of the Church's teachings, but I can tell you that the good ol' USA does not practice it. The amount of government regulation of all aspects of industry and commerce is staggering. The Code of Federal Regulations takes up an entire wall of a good sized library and the Code is merely the outline of how each government agency is to do its job. No to mention executive orders, various directives, the tax code and its regulations, rules, procedures and rulings, court decisions, etc. The amount of work it takes for even a small business to comply saps hundred of hours of productivity and we are only talking about federal regulation; I have not talked about state and local laws, ordinances, zoning and planning regulations, etc. Uncle Screwtape had it right that excessive government regulation was the invention of Satan.

The problem with so much government regulation is that at some point it no only directives human behavior in directions that the government wants people to take (which is not necessarily a good thing- e.g. compelling employers to provide medical coverage for abortion services, benefits for same-sex couples, etc.) at some point it creates in even the most honest person a disincentives to comply (how many people can honestly say that they have never cheated on their tax return, even if it is as miniscule as rounding off the wrong way on a dollar?). It is in this system that greed takes root because greediness is the only way that one can get ahead of others who are similarly burdened with such regulation.

Perhaps one could call this a form of socialism or distributivism (sharing misery as opposed to sharing the wealth)but our system of economics practiced in this country is certainly not capitalism. A person could call a rat a chicken but it still would make a poor soup.

God bless!

Reginald de Piperno said...

Hi Paul,

Thanks for your comments.

I would agree (of course) that we've got a ton of regulations - most of them egregious and pointless. But if socialism demands state ownership of the means of production, then we're not socialist.

What then? It seems to me that the only category that fits is capitalist, though not laissez faire capitalism.

In any case, I think we agree about the infernal birthplace of bureaucracy. :-)

My personal opinion of the matter is that whatever you want to call it, our economic system is not Catholic, and laissez faire capitalism isn't either.

But since I can't properly defend the matter yet, that's all I have to say for now :-)



Paul Hoffer said...

Hi RdP, I would leave with this thought. While possession is a primary criteria for determining ownership, control over a thing is also another criterion. I would suggest that the government's over-reaching control over the economy through extensive and burdensome regulation in effect amounts to government ownership. Think about it--one can't even fix the roof on his house or patch a hole in his driveway without getting a "permit".

With the government's "bailout" and subsequent regulatory control imposed on our banking, insurance and securities' sectors of commerce, it is only going to get worse. If government didn't want to take control over the system, it could have structured its 'bailout' by giving the money to the homeowners adversely affected by the bad loans to give to the banks that were hurt by making loans at the government's insistence. Just something to think about...