As anyone who attended will remember, there was some animated debate at this week's Society meeting on the topic of distributism vs. capitalism. Here, Colm Culleton returns to the fray, putting forward the case for capitalism, and answering points that were made at the meeting.
Your humble blogmaster considers himself a Distributist; but I always admire someone willing to argue an unpopular case (as capitalism certainly is within Chesterton fandom). And, to honour the spirit of the infinitely good-humoured GKC, I ask that any comments be respectful.
So, with that, I'll let Colm speak for himself:
At the last meeting of the Chesterton Society, the question was asked: What exactly is Distributism?, which GKC considered the perfect economic system to counteract the problems of capitalism. The general opinion was that Distributism consisted of every man having 10 (I think) acres of land on which to grow food for his family. I was foolish enough to declare that this idea is similar to Socialism/Communism, which ruined eastern Europe and other countries in recent decades. (If any part of that summary is incorrect, I welcome a correction.)
I was roundly berated for fostering Capitalism, on the grounds that capitalism leads only to monopolies by the very rich. My defence of Capitalism was drowned out then; so now I write this in the hope of being listened to.
The enemies of Capitalism at the meeting were all well dressed, and presumably pleased to have bought their clothes from capitalists. It is likely that they owned cars, which they also bought from capitalists. Several had driven their cars to the meeting (using petrol supplied by a capitalist), or had paid a capitalist taxi-driver to bring them there. The rest had arrived in the capitalist shoes mentioned above. Everybody looked well-fed, from food bought from capitalists. Their hair had been tended to by a capitalist. We were surrounded by books (we were in the Catholic Library), all of which had been bought from capitalists. The group was well educated (except in economics), which suggested that they had paid capitalists for their schooling. Many of them are planning holidays, by negotiating with capitalist travel agents, airlines, and hotels. And, in all cases where the enemies of Capitalism had bought (or will buy) any of the above from capitalists, they had carefully compared the price and quality offered by competing capitalists.
I present the following defence of Capitalism. If you wish to comment, please contact me at benji2@gofree.indigo.ie.
For a trade to take place, BOTH the buyer and the seller must gain an advantage from it. I will not sell unless you give me the price which I want; and you will not buy unless my good is worth the price I put on them. Sure, I would like you to pay more, and you would like to pay less; but BOTH of us are willing, though not necessarily happy, to trade.
The advantage of our trade to you, the buyer, is that you will gain some benefit from what I sell you. The advantage to me, the seller, is that I now have more money than before we traded.
I, the seller, inevitably make you more satisfied by our trade, otherwise you will not trade. But I also make many more people satisfied as well: the men who built and outfitted my factory, the people who made the thing in my factory, my office staff, the people who sold me the raw material to make the thing. I will pay taxes to the state. I don’t want to, so I hire an accountant to reduce them. EVERY ONE of the people who help to make my thing now has more money than if I wasn’t making the thing, and this money permits then to trade with other people, one of whom is inevitably you sooner or later.
The above benefits apply even if there is a monopoly. Monopolies have four brakes. One is government, which can legislate against them. The second is the ever-present threat of a rival appearing. The third, and perhaps most powerful is – us: we can simply stop buying their goods, and they will go out of business. If we continue to buy their goods, it is back to the beginning: we do so only because we gain a continuing advantage from doing so. The fourth brake is their own intelligence: don’t get too greedy, or the above three correctives will be activated.
In short, there is no such thing as A LUMP OF PROSPERITY, whereby the more I have of it, the less you can have of it. The truth is that the magic of free trade makes all of us richer.
What gets up some noses is that some creators of wealth have too much of it; but I say “More power to them”: they are nurturing the circle of trade like every other one of us who buys and sells, only more lavishly. Some millionaires are better than others. American Warren Buffet has so much money that the interest on the interest on the interest on his wealth is enough to bail out Ireland. He has willed only 1 million dollars to each of his children, leaving the enormous residue to charity. Bill Gates pours money into the Third World; and he and Buffet are (successfully) enticing other billionaires to donate as well.
Perhaps a reader will say: “Capitalists can cheat by suborning politicians”. That is true, but that is politics and not economics, and therefore outside the purview of this outline.
There are many more defences of Capitalism, available on request.
As for Distributism’s “10 acres per man”: Who pays for the acres? The man could, but only if he is already earning money in a capitalist economy. The government could pay for them, but only if the man has been paying tax on the money which he has already earned in a capitalist economy.
What about the man who knows nothing about farming? He would soon starve his family to death. He could ask for help from the man in the next farm, except that that other man needs to feed his own family. And, if he does have spare time, the first farmer needs money to pay him, except that the first man has no money since he does not work in a capitalist economy.
What about the man, or his son, who wants to become a teacher?: nobody is building schools or paying teachers, because everyone is farming.
I think I will stop here.
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You can't dissent from something you are not familiar with.
ReplyDeleteI would suggest Colm to read something about Distributism written by Chesterton or Belloc first and then present his criticism.
Agreed Angelo
ReplyDeleteThe argument is seems more simplistic than simple, and rests upon a non-sequitur - the argument seems to be that, because capitalism appears to permeate everything, so therefore everything must be permeated by capitalism. Which is not the case, either factually or logically.
First: Mr. Culleton criticizes what he obviously views as distributist hypocracy, that the distributists had "happily" purchased things from capitalists. I submit he should consider that they probably had little other choice in the matter and that most of the distributists would likely have preferred to purchase these things from enterprises that operated according to distributist principles had they been available.
ReplyDeleteSecond: He then proceeds to lecutre distributists on the idea of trade as though we had never heard of such a thing. Exactly what does he thing we intend if we were able to establish Distributism? Of course we understand trade; we merely wish to engage in it in a system that is more just than Capitalism.
Third: His "four brakes" on Capitalism have proven to be false. Capitalists use their economic power to manipulate government. One of the ways they do this is to get restrictive regulations and taxes applied to inhibit competition. When the production of everyday necessities, like food, medical supplies, and clothing are almost entirely controlled by capitalist monopolies, we really don't have much of a choice about buying them. Even if we did take such an action and managed to bring down a single monopoly, it would be replaced by another leaving us in the same situation. The fourth "brake" is the most amusing. The problem of capitalism is not that "we" are too greedy, it is that "they" are too greedy. They pay as little as possible to their employees, provide as little in the way of benefits as possible, demand arduous hours if they can get away with it, treat their employees as "human resources" instead of people, and then expect us to be happy with our lot of subservience to them.
David W. Cooney
The Distributist Review
http://distributistreview.com/mag
I emailed this comment to Colm, who has responded as below. (I myself have been engaging in an animated email debate with him for the last few weeks, on the same topic.) I'll have to break it into several comments.
ReplyDeleteColm writes:
I still don't know precisely what distributism is. The little I do know suggests that distributists expect to start being distributists as soon as they are given a plot of land, some stock animals, and some cash. I have to ask: Who gives them these things?; and where did the money to those people come from? (I suggest it came through capitalism.) Or, if they themselves have to pay for it, in what sort of economic system did they earn the money?
"Mr Culleton [presumes] that the distributists had happily purchased things from capitalists. I submit that they probably had little other choice. Distributists wish to engage in trade in a system that is more just than Capitalism": It is certainly correct that, at present, distributists don't have another choice. But, of course, this lack of choice is not forced, it exists for the very reason that every person in the world, including distributionists, creates the things which distributists need in order to begin being distributists. In this free society, there is nothing to stop distributists from making the things which distributists need in order to begin to be distributists.
"Capitalists use their economic power to manipulate government": a) Alas, as we have seen recently, capitalists do indeed try to manipulate civil servants (especially members of parliament). But alas for them, those civil servants are also open to competing capitalists; and/or different capitalists bribe different civil servants; and/or bribed civil servants don't produce the goods. Then there are also the unbribed civil servants. Conclusion: bribery has little effect. But that is not the fault of capitalism, but rather the fault of the people who (mis-)use it. We don't decry the gardai because some guards are corrupt.
More follows...
(Continuation of Colm Culleton's reply to David W. Cooney's comment...)
ReplyDelete"One of the ways capitalists manipulate govts is getting restrictive regulations and taxes applied to inhibit competition": It is true that capitalist firms do use their money to try to skew the market-place to their own advantage. Of course, their competitors are using money to skew the market-place THEIR way. The result is stalemate, sooner or later, as we have seen in our politics recently. One area: I myself have seen no noticeable change in the relative success of Tesco, Dunne's, Supervalue, Lidl, Aldi, or the hundreds of independent grocers. And Superquinn will presumably continue selling under Musgrave-delegated management. . As regards Superquinn: if they did try to bribe politicians as suggested by this distributist (but not by me: I have long patronised them), their choice of politicians was inept, suggesting hat they were not suitable for running a grocery chain either. The fact is that, If you look carefully, you will see that pretty well every "monopoly" is matched by at least one other "monopoly". Off-hand, I can't think of one area of commerce which is supplied by one company alone; and I ask a distributionist to send me some names. (It appears to me that the distributists would do the country a real service if they could provide competitors for civil services - I mean the back-room civil services - which I describe as a group of people who are paid to do only what they decide to do, and even when they do something, they do it with other people's money.)
"The production of everyday necessities, like food, medical supplies, and clothing are almost entirely controlled by capitalist monopolies": Surely some mistake here. As I said above, I myself can not think of a single company which has a monopoly; and I welcome being enlightened. No need to include the food-cartel, if there is one: as I showed above, our food is sold to us via a whole plethora of capitalists.
Capitalism companies pay as little as possible to their employees, provide as little in the way of benefits as possible, demand arduous hours if they can get away with it, treat their employees as "human resources"
Of course they do. They have to, since they exist in a competitive economy, and their product won't sell - especially to distributionists - if they charge too much. But, alas for Mr Cooney's accusation, the companies can't be too cruel, otherwise they won't get the right employees to do the job properly, so they won't be able to sell their (now less-attractive) product. If you look around, you will find that all companies in a similar environment pay similar salaries. In all cases, the employees would dearly love to get more; the employers would dearly love to pay less. Which side are we customers on? - and I include distributionists. The truth is that we customers would dearly love the employers to pay LESS, because that would mean we would also pay less. The fact is that the freedom provided by capitalism is used by all of us in search of advantage for ourselves. And, if there are any distributionists who can make employers pay more, that will raise the price of the product out of the reach of the poor.
(continues below..)
(Final part of Colm Culleton's reply..)
ReplyDelete"Capitalists expect us to be happy with our lot of subservience to them": We are all "subservient" to them only in the sense that we all buy from then. And the money we use was created by the capitalism which Mr Cooney wants destroyed. I wish him luck in trying to sell this idea to the poorer people in the world, who are working all out to create capitalist nations. The truth is that capitalism, alone of all economic systems, has made us all rich(er),and - by God! - we are all ready to spend it, including every distributionist I know. If Distributionists don't like being "subservient" to items for sale, they can easily avoid it: stop buying. To paraphrase Churchill about democracy: Capitalism is the worst form of economic theory ever devised, except for every other economic theory.
If Mr Mooney is still unconvinced, I offer him a copy of a short essay on this matter, which is far far more cogent and far more comprehensive, and indeed far more amusing, than my own poor efforts. My e-mail address is with the Chairman of the Irish Chesterton Society.
Off my own bat, I offer this insight: Every one of us, including Mr Cooney, is a capitalist, and loving it (without realising this in the case of Mr Mooney). Not only are we enjoying buying from capitalist shops, all of us own shares in the companies which Mr Cooney excoriates. Many of us (perhaps including even Mr Cooney) own shares directly. Plus, every one of us, this time definitively INcluding Mr Cooney, are shareholders through our pension funds, and through the companies which insure us.
I have been asked by Colm to add this:
ReplyDeleteThe fact is that employees keep getting higher and higher wages gradually, and managers and share-holders keep getting richer too, also gradually. Those who think it impossible are misled by "The Fallacy of the Lump of Prosperity", which states that there is only so much wealth to go around, so that, if I am getting richer, it must mean that you are getting poorer. Not so. The fact is that workers (at all levels) actually create wealth, thereby making everybody richer (a bit at a time). Look at the statistics. There are many more people in the world now than ever before, and - hey presto! - we are all (a bit) richer than our predecessors; and our descendants will be (a bit) richer than us. Provided, of course, that economies remain free. Look at today's dictatorships and near-dictatorships. Cuba is so poor under communism that Cubans are willing to risk their lives to get to America. Many Africans also live in dictatorships, and they are willing to risk their lives to get to Europe.
I still have never had distributism explained to me, and I hereby invite an explanation from its experts. Let's say that, to-morrow, Ireland changes over to distributism. What would happen?