I recently found this site while searching for information on the new Bishop of Lake Charles, Lousiana. This bloque has been most interesting and entertaining and when the Distributist section was noticed….I decided to contribute. I want to ask for forgiveness if any information included in this message can be proved innacurate as I am not a theologian or professor of historical Economics.

It appears to me that one of the issues not discussed much today but commented on by both Chesterton and Belloc…is debt. Traditionally, the Church spoke out against usury and Pope Leo the XIII even banned a chattel mortage. Imagine if all Catholic obstained from debt! The “big business” that Chesterbloc lements against which actually is the cause of rapid consumerism could not exist. Even though the “useree” (borrower) is not the siner but the “userer”….one could argue that the useree is contributing to the sin.

Additionally, there needs to be a distinction between Capitalism and Industrial Capitalism. Belloc points out these differences in several of his books. Capitalism (one could argue mercantalism) has existed from antiquity and in the time of Our Lord. There is nothing wrong with Capitlaism. However, industrial capalism does inded “enslave” man to his work which is fuled by the ever present system of materialistic capitalims through debt.

Finnally, I recently noticed a popular female historian in the Latin Mass Magazine (I cannot recal the name but like her writings) mention that both Belloc and Chesterton wrote some “disturbing” comments on the French Revelution that would give the impression that they acutally approved of what happened. If true…this should be disturbing to any Catholilc. I suppose my point is this…that Belloc and Chesterton often write in a manner that can be construed by liberal macroeconomic readers to be anti busines or anti capitalist. Furthermore, the movemenet of Districutism and Chesterbloc often attract followers that are socialist in thier ideas.

As for Property…the real question for me is……who is your “lord”? In mediveal and Renaissance Europe…one had ONE lord. He was usually the NOble down the street on top of the hill. You had to “tribute” to one person…he got his percentage and if you wanted to discuss something with him…one usually could pay him a visit. You maybe did not “own” the land but certainly controled it. NOw in the “industrial age” of the USA….we have several “lords”….the city lord, county lord, state lord and US government Lord. WE have to tithe to all of them! And…..we do not even know who our “lord” is to go discuss issuses and problems with! Finally…..the industrial age man does not own his property either….the bank does.

Belloc makes a excellent point about European society. He states that the change was “organic” and gradual. We went from slaves in the Roman Empire to serfs in the “dark ages” and then to free Peasants of the late middle ages. I would agree that a free peasant of the middle ages may or may not have acutally had “title” to his property…but was a more free individual and certainly controlled his property.

How can the modern man put into practice the lessons of history? It is simple….stay out of debt, own your own business and be a free man. One can follow the traditional teachings of the church and not worry about all of the issues at present.

I welcome any replies to my modest comments. I would also like to see a symposim on Catholic issue of business and Socioeconmic life.

Terra est Gloria Dei pleni

First let me clarify for you that Walmart does not provide its employees stock, but it does match the stock they in put dollar for dollar up to $180,000 worth, which isn’t so bad compared to other companies.

The problem with an entity such as Walmart, is that it exists because people buy junk they don’t need. Walmart is as profitable as it is because most of the stuff it sells comes from sweatshops in Indonesia or East Beijing, and the people making the said junk get paid pennies a day. That is something morally evil and addressed specifically by Pope Leo XIII in Rerum Novarum when he talks about the just wage.

Now the proof of how undistributist an entity like Walmart is is proved in this: If men lived more like Christians, more frugally, bought less, bought less movies, conserved more, saved every penny instead of spent every penny (not in the British sense!) then the economy would plummit and companies like Walmart would go under. Walmart is dependent upon people who come in thinking they will get household cleaners and some food cheaper, and then browse the clothing section, the electronics and furniture section and wind up leaving spending 3-500 dollars more than they intended! Take that away with clear thinking people committed to living the gospel and Walmart collapses, like most of the big corporations and the economy as a whole.

You are most right that Distributism is not synonymous with going back to the land, it is not the same as a higher standard of living. It means that employees earn proportionate to the wealth they help create. For instance, if in a given week I earn for the company so much money through all my machinations, sales sense, setting up displays in certain places, training employees to work more efficiently, I am paid the same as if I had done none of these things. Now suppose instead, I got paid a certain amount based on how many sales I created in a given week (which Walmart employees are not). Then that would be more in line with Distributist thought. But then again, in a Distributist society, companies like Walmart would not exist.

I don’t pretend to possess a subtle grasp of financial matters, but if you look at II-II.78.2.ad5, I think many forms of investment are compatible with St. Thomas’ teaching.

“Objection 5. Further, the lender, by transferring his ownership of a sum of money removes the money further from himself than he who entrusts it to a merchant or craftsman. Now it is lawful to receive interest for money entrusted to a merchant or craftsman. Therefore it is also lawful to receive interest for money lent.
Reply to Objection 5. He who lends money transfers the ownership of the money to the borrower. Hence the borrower holds the money at his own risk and is bound to pay it all back: wherefore the lender must not exact more. On the other hand he that entrusts his money to a merchant or craftsman so as to form a kind of society, does not transfer the ownership of his money to them, for it remains his, so that at his risk the merchant speculates with it, or the craftsman uses it for his craft, and consequently he may lawfully demand as something belonging to him, part of the profits derived from his money.”

Part of the problem is that he assumes charity as an obligation in these business transactions, that you cannot loan money hoping to profit from another’s misfortune - for example, banks that approve high interest mortgages for people they expect to default. They can take the down payment and then repossess the property shortly after. Well known Distributist Mr. Storck has put forth a table comparing usury with just lending. His site is a little goofy and outdated(blinking clipart and such), but he makes some important distinctions there.

You’re right, of course, that getting more stuff should not be our primary end in life. However, I think St. Thomas’ injunctions against usury are intended to be applications of justice, based on the assumption that, in any trade transaction, the amount of “stuff” coming out is the same as the amount of “stuff” going in. The problem with usury is that, in lending money, you’re not putting any more “stuff” into the pot; you’re only offering a medium of exchange for other people’s stuff. So if you then get interest on your investment, you’re essentially getting something for nothing, which means (he thinks) you must be taking something from someone else. I think his idea is that you’re taking advantage of another person’s immediate needs to rob them of what’s rightly theirs. Hence usury is (in his mind) straightforwardly unjust.

But the capitalist economist will deny the basic premise about the amount of stuff remaining the same throughout. We borrow money, he will say, and then we use it to fuel a productive economy so that at the end of the day everyone involved has more stuff. Now, it may be that this system will involve other evils (say, spiritual evils that follow from people getting too rich), and one can argue that this makes capitalism disadvantageous on the whole, but it won’t be bad for the reason Aristotle and St. Thomas would have thought. That is to say, the transaction itself won’t be unjust to anyone because nobody has to come out of it worse off.

I had forgotten this aspect of St. Thomas Aquinas. I note that Locke taught that infinite desire for artificial wealth was an indifferent act, since only natural wealth was subject to decay and physical waste.

While St. Thomas faced some disabilities in his understanding of economics, I’m not ready to grant that the foundations of modern economies and economics are ethically unproblematic. The hodgepodge of self-interest, special pleading, and genuine insight that has generated our present order is bound to have significant flaws. Its Lockean indifference towards avarice or pleonexia seems to be one such flaw.

I hope I have not given your brother an unfavorable impression of this blog’s guests. (: My point about usury was that: the claim that it is more profitable is a weak argument at best; and the Distributist model claims, first, to be more conducive to virtue and, only secondly, to be more practical in many ways too.

Is the end of economics that everyone acquire as much stuff as possible at the cheapest cost? I think not. It seems to me that a Christian understanding of economics must include some notion of “the good life” but, in it’s principles, the Capitalist system does not take any such notion into account.

Have you read what St. Thomas says about usury? His objections and replies seem remarkably pragmatic to me.

This is not an unrelated issue. Many perceive a connection between the Industrial Revolution, modern economic practices and the Protestant Reformation. There are books available: Catholicism, Protestantism, and Capitalism, An Essay on the Economic Effects of the Reformation I have not read either of those yet myself.

If I remember correctly, Josef Pieper talks about the Catholic concept of work vs. the Protestant concept in Leisure: The Basis of Culture. There is a fair summary of that book here.
Catholics understand the primacy of contemplation, turning the gaze of the mind toward truth, especially Divine Truths. But contemplation requires leisure, and in order to enjoy leisure, one must possess the necessities of life (food, clothing, shelter) and freedom from immediate earthly concerns. Thus, Catholics perform(or should) work mainly in order to achieve the leisure for higher activities. Most Protestants, on the other hand, do not value contemplation and often confusing leisure with idleness. Instead, they acquire worldly possessions and worldly comfort primarily for their own sake. [SIDE NOTE This is why they have no contemplative religious orders - their apostolic work is always of an active, missionary or humanitarian kind, while for Catholics the heart of apostolic work is a rich, contemplative prayer life.] In Catholic Europe, the work year was punctuated by frequent holy festivities and Sunday was NEVER a day of work. Since the Protestant Reformation, all that has changed.

Industrialism is an important part of this issue but, at present, I don’t have the fortitude to address another large topic. (:

It seems to me that Aristotle, St. Thomas, and perhaps the distributists as well have failed to appreciate one of the fundamental principles of a capitalist economy: that the market can be productive. Raindear’s comment brings this out very nicely: cows give milk, she says, for many years, but the stock market is speculative. She puts these into different category-types in terms of risk: the cow is reliable but the stock market is risky. This isn’t necessarily right. Hardly anything is absolutely certain in life, but under a certain set of circumstances a market can be pretty firmly predicted to be productive. Lots of investments (ones that pay lower interest, of course) can be relied on to bring a return over the course of years, much more safely than a cow can be relied on to keep giving milk for years, and this isn’t necessarily because the increase is illusory.

Aristotelian ideas about justice in trade (which St. Thomas mirrors) simply ignore this fact. To Aristotle, walking away from a trade agreement with more than you came in with is straightforwardly unjust; you must have ripped the other guy off! But it just doesn’t work that way in a capitalist economy because you can actually have more stuff at the end of the day through the transaction so that everyone winds up richer.

Though I agree that souls are ultimately the most important thing, I think we should be a little more circumspect about this; it’s foolish to say, “Well, let the poor suffer and the infants die, then! St. Thomas says usury is bad!”, if St. Thomas’ injunctions against usury were ultimately motivated by a faulty understanding of economics. We expect a Doctor of the Church to have a deep understanding of moral philosophy, but not necessarily of all pragmatic questions like this. So it’s reasonable to suppose that a correction of the pragmatic elements might warrant some modification of how the moral principles are most accurately applied.

1) I think he’d prefer just to be addressed as “Nathan.”

2) He is not Catholic, but he is a practicing Russian Orthodox.

3) Just for general interest about his background: I don’t believe he has done much reading about distributism, but he has been educated as an economist, and presently works for the World Bank.

He also happens to be my big brother. :-)

That is all, carry on!

“That a market is capitalist, or free-marketeer, in general implies nothing about the concentration or not of the ownership of the means of production.”

Perhaps my statement was something of an exaggeration, but I think one could accurately claim that Capitalism tends toward such a state. The US is no exception. The majority of people depend upon an employer for their livelihood. It would be absurd to claim that most people could obtain the necessities of life from their profits in the stock market.

Furthermore, stock ownership as it exists in our present system does not really fit the Distributist definition of productive property anyway. In The Servile State, Belloc defined productive property as “that property which produces wealth, namely, the things needed for man to survive. It includes land, tools, etc.” In other words, productive property produces natural wealth. Stocks only do so indirectly, through an increase in artificial wealth, an increase which is uncertain. A farmer sometimes loses a cow to accident or disease but, in general, you can expect a cow properly cared for to produce milk for many years. As Aristotle says, things in nature happen for the most part. (PhysicsII.8: “But when an event takes place always or for the most part, it is not incidental or by chance. In natural products the sequence is invariable, if there is no impediment. “) The stock market is much more speculative.

I don’t know if you are of the Catholic faith but, from my perspective as a Catholic, your remarks concerning usury were a very weak argument against St. Thomas’ position. The end does not justify the means. If an act is wrong, you cannot perform it, even to preserve human life. The martyrs are an obvious example of this principle, choosing death rather than apostasy. Nor is one ever justified in making an outright lie. We value the afterlife more than the things of this world. If we are poorer and holier, so much the better. For myself, I think that a virtuous lifestyle is generally more conducive to material prosperity. However, the goal of Distributism is living the virtue of charity (friendship with God and goodwill toward men on His account) in the economic and social realms. Any argument against it must prove, not only that it is impractical materially speaking, but also that it is less conducive to the life of virtue than other economic systems.

I would also like to add to the comments of Terry regarding religion and economics. Catholics depend upon the Church for guidance and teaching in matters of Faith and morals. Actions which involve deliberate, or reasoned, human action fall within the realm of ethics, the science of morality. Economic choices are clearly reasoned human actions, therefore they fall under the Church’s teaching authority.

I would also like to add a comment regarding Mr. Smith’s statement that “It’s funny the ideas people come up with when they try to apply religious beliefs in the sphere of economics.”

The Catholic Religion, through the truth She teaches, is meant to inform all aspects of our individual and collective lives, including economics.

Compartmentalized religion is largely to blame for the injustices we see in our economic climate today.

Plus, the ban on usury does not ban the use of interest on productive loans, such as business ventures. That is how I understand it.

The most charitable thing that can be said about this is that it is a stereotype; “lie” would also be a not inappropriate characterization (though of course I don’t mean a lie on the part of Raindear personally). That a market is capitalist, or free-marketeer, in general implies nothing about the concentration or not of the ownership of the means of production. In fact, in the US economy, some are a lot wealthier than others, but tens of millions of people own stock.

Private charity could compensate to some extent for the risks inherent in a distributist economy. But what if trouble hits your neighbors too? It’s nice to be able to diversify risks not only across the neighborhood, but across the boundaries of cities and states and nowadays, even internationally.

Raindear mentioned the principle of subsidiarity: “nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization.” But a smaller and simpler organization could not do what, say, Wal-Mart does. They couldn’t do the market research, the global supply-chain management, and the self-insurance that allows them to achieve efficiencies which save poor families thousands of dollars a year. We need complex organizations if we want to be the well-fed, well-clothed, well-educated long-livers that we are and our ancestors were not.

I respect Thomas Aquinas but not on economics. For centuries the Catholic Church banned so-called “usury,” i.e., the practice of lending with interest, which is essential to the financial intermediation that underpins prosperity, security, economic growth and progress, enterprise, full employment, etc. To prohibit interest would make us very poor, and if you think that’s a price worth paying, bear in mind that part of the price paid for being poor is higher rates of infant mortality. Dead babies.

Distributism doesn’t seem totally misguided, and what is sound in it could usefully inform an understanding of the virtues of free-market capitalism. But for the sake of the children, we can’t let it morph into anti-capitalist angst.

On another note, Vin Lewis once pointed out that big corporations actually love govt. regulations. Bill Gates can afford to hire incompetents in order to meet affirmative action quotas. On the contrary, any upstart entrepeneurs would experience this as a severe setback in their attempt to establish themselves and compete with Gates. They simply don’t have enough capital when they start out to meet the govt. regulations. So big corporations can use costly govt. regulations to make the overhead for starting a new business simply too prohibitive. Big corporations also can afford higher taxes and can afford to find and develop all of the necessary loopholes and tax-exempt foundations they need to evade paying their share. Small businesses often can’t do this. So big business and big government can and do work together. Some rightwingers I know used to say that the American economy was a strange fusion of socialism and plutocracy, and I think that is true in large part.

You said: “Distributism seems like half socialism and half capitalism.”

Comparisons between Distributism and Socialism are very common but, in my opinion, rather ignorant. In truth, Socialism and Capitalism are more similar. Both centralize the means of production: Capitalism in the hands of the few wealthy and Socialism in the hands of the few government officials. Distributism maintains that productive property should be really and truly owned by the majority of the population.

In a Distributist community, your neighbors would view it as a responsibility to help you survive. Besides, monoculture is a foolish way of farming which creates many problems. Although severe drought would always pose difficulties, by varying crops and raising various kinds of animals, you minimize the risk of pests, disease, or drought.

“Of course, if my farm booms and produces double its usual yield…” should have continued with “then I’ll only get to keep 16.6% of the extra proceeds, and my shareholders will keep the rest. But if the upside is smaller, so is the downside.”

Distributism seems like half socialism and half capitalism. On the one hand, almost everything, it seems, is owned by individuals: in that sense it is like capitalism. That distributism apparently opposes that misguided job-killer, the minimum wage, is particularly refreshing. On the other hand, “the workers own the means of production”: in that sense, it is like socialism. It sounds appealing.

The problem is that spreading ownership of the means of production across many people, not just the workers, is a way of diversifying risk. If I own my three acres and a plow, then my cow catches disease and no rain falls on my fields, I starve.

But now suppose that at the beginning of the year, I sell five shares in my farm, keeping one for myself, so that I am entitled to only 16.6% of my yield; but I use the money to purchase stock in five other companies. Now, if there’s a drought and my cow dies, it’s unlikely that the five companies I own stock in will also go broke, so I’ll still get some income– “unearned” income, if you like, but I don’t starve, and I don’t have to beg. Of course, if my farm booms and produces double its usual yield. This example illustrates a general phenomenon. All assets, including human capital, have risk attached to them, in varying degrees. By acquiring diversified portfolios of assets, we reduce our risk.

Over the past six years or so, I have casually - albeit with great interest - studied the Catholic social encyclicals, the political writings of Thomas Aquinas and the Distributist writings of Belloc, Chesterton, Fr. Vincent McNabb and Fr. Denis Fahey. I have also found many of the same ideals set forth by Peter Maurin and Dorothy Sayers of the Catholic Workers Movement, or agrarian authors like William Cobbett, Wendell Berry and Andrew Lytle. Although the American economy is not entirely antithetical to the Distributist model, I find the main assertion of your post rather extraordinary.

One of the main principles of Catholic social teaching is that of subsidiarity, that “nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization.” Distributists apply this principle to the economic, as well as political, realm. In short, they advocate both local economy and local community. As Dr. William Fahey says in his Preface to The Church and the Land:”Distributism may be described as a social disposition held by those who emphasize life as lived out in a local community.” While this may not directly imply an agrarian landscape, it is difficult to conceive of a flourishing local economy outside the context of farming(setting aside the phenomena of large cities). In the first place, an economy cannot be local(and therefore self-sufficient) without providing for the most basic of needs, food. Furthermore, farmers are rooted to their land in a unique way. Their work is tied to the seasons and to a place. In any case, regardless of the relation between Distributism and Agrarianism, the US hardly boasts a local economy. Finding goods manufactured here has become nearly impossible.

Although Distributists do not advocate the establishment of a minimum wage, they insist most emphatically upon the real obligation of paying workers a just wage. Unlike the contractual notion of justice expressed by many Capitalists - that any wage is fair so long as the worker agrees to it - Distributists adhere to the principles set forth by Leo XIII: “Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.”(Rerum Novarum, 45) Once again, this is not a striking feature of the American economy. Many retail stores or restaurants offer very low wages and avoid hiring full-time employees in order to escape paying benefits. Even amongst the career employees you reference, in many parts of the country it has become difficult for a family to live comfortably on one income.

I would agree with Mr. Jones that our current stock practices are not evidence of Distributist principles. For the Distributist, ownership must be tied to responsibility. In the words of Mr. Storck: “Stockholders, for example, typically do not care about what the company they are formal owners of actually makes or does, but only whether its stock price is rising or how large a dividend it pays. In fact, on the stock exchange, shares change hands thousands of times a day, that is, different individuals or entities, such as pension funds, are part owners of companies for a few minutes or hours or days, and then the stock is sold to someone else and they become owners of some new entity. Thus this class of capitalists naturally comes to see the economic system as a mechanism by which money, stocks, bonds, futures, and other surrogates for real wealth, can be manipulated in order to enrich themselves, instead of serving society by producing needed goods and services.”

I have one last point of difference with your claim. The American economy is entirely dependent upon artificial wealth and unbridled competition, while Distributists are distrustful of artificial wealth and recommend locally maintained limits upon competition. Both Aristotle and St. Thomas, his disciple, emphasized the danger of artificial wealth(money - proper use is as a medium of exchange), which they distinguish from natural wealth(goods which satisfy a natural need or desire). St. Thomas said: “The desire for natural riches is not infinite: because they suffice for nature in a certain measure. But the desire for artificial wealth is infinite, for it is the servant of disordered concupiscence, which is not curbed, as the Philosopher makes clear (Polit. i, 3).”(I-II.2.1) As usual, his observation proved wise, though I doubt he foresaw the excesses of our materialistic, consumerist society. Although criticisms of artificial wealth have become rather irrelevant (I don’t expect we’ll be returning to barter and trade anytime soon), they are still helpful in formulating economic principles. With regard to competition, the American economy does not place limits on “big business.” If anything, it promotes large corporations like Walmart by government subsidies. In The Restoration of Property, however, Belloc puts forth standards for limiting competition. His recommendations are very reasonable, if you abstract the basic principles from his historical and geographical context.

In any case, for those interested, I would recommend purchasing a book which IHS Press will be publishing soon: Beyond Capitalism & Socialism - A New Statement of An Old Ideal. I am acquainted with several of the contributors and they have many worthwhile things to say. I apologize for such a lengthy and belabored comment.

No, a person must have first-hand decision making control over what he owns. To manage by “proxy” is not to manage at all.

I would also offer as a consideration that the Protestant Work ethic, with all its flaws, is alive and well here and continues to drive the consumerist, self centered mentality that grips our nation.

No, I’m afraid I can’t support your enthusiasm for the state of the American economic system. There are worse I will agree, but to liken what we have with Distributism is, I think, a bit of a stretch.