Monday, January 15, 2007

The Economic Role of the Medieval Guilds

by Thomas Storck

The editors and contributors to the University Concourse deserve credit for continuing the discussion on the important topic of Catholic social teaching, especially on distributism, the economic system promoted by G. K. Chesteron, Hilaire Belloc, and other Catholic writers of the first part of the twentieth century. In Vol. VI, issue 3 there were two responses to my last article (Vol. VI, issue 2), one by Mr. David Schmiesing and one by Mr. Philip Harold, and I appreciate the opportunity to reply to these now.

Mr. Schmiesing first takes issue with my statement that "the Catholic approach to state power in the economy cannot be reduced to [the] principle of 'less rather than more state intervention.'" He goes on to say that the Catholic notion of subsidiarity by its very definition leads to "less rather than more state intervention." Subsidiarity demands that the primary responsibility for the economy remain in smaller, more localized institutions (including the family), and the state should intervene only at the point where the small institutions cannot deal effectively with a particular issue or task.

To this I would say, yes and no. Subsidiarity places responsibility for actions at their lowest and smallest practically effective level, thus the modern centralizing state is wrong to try to regulate everything directly. But it should be noted that for some things the state is the proper locus of regulation. It would be a violation of subsidiarity, for example, to make each family responsible for prosecution of anyone who had murdered a family member, as was done in some places in antiquity and the Middle Ages. This is properly a governmental responsibility. And one need only glance through the social encyclicals to see that the popes place many economic responsibilities in the hands of the state, some of which I have quoted in my prior articles, and which I will not repeat here. When faced with a concrete choice concerning a question of economic regulation, the proper Catholic response is not to repeat either the slogan "less state power" or the slogan "more state power," but rather to distinguish where is the correct locus of regulation in this particular case. Most often it will be some lower body, but not always. But again I refer my readers to the encyclicals themselves, where they will see that state intervention in the economy is taken for granted. What we must guard against is the appetite of the state for more and more power, so that it comes to think of itself as the only regulator or the primary regulator. But "less rather than more state intervention" is not a sufficient principle for a Catholic approach to regulation of the economy, for there are cases where state regulation is justified, and where this is so, it would equally be a violation of subsidiarity to delegate it to some lower body. We want the right amount and kind of state power, neither less nor more.

It is curious, moreover, that our discussion has become fixed on this question of government regulation. For in a distributist economy there would be little need for state regulation of the economy since that would be largely accomplished by the lower and smaller bodies sometimes known as guilds. The real question here is not government versus private, but unregulated markets versus markets that are responsibly regulated and oriented toward the common good. Americans are usually comfortable discussing state regulation, whether they favor or oppose it, but not too comfortable discussing regulation by the "smaller, more localized institutions" that the principle of subsidiarity speaks of. But if these "lesser and subordinate bodies" (to quote Pius XI) are to have a real function, what function is it and what bodies are we talking about? But to ask this question naturally leads into the next topic, that of the "guilds."

Mr. Schmiesing criticizes my discussion of guilds and says that "it is very reasonable to interpret papal praise for the guilds...not as a call for the recreation of guilds themselves, but rather as a call for the creation and development of non-governmental institutions...that serve the same purposes the guilds once did." But of course, if they are to "serve the same purposes" what we call them is rather unimportant. As Shakespeare wrote, "That which we call a rose/ By any other name would smell as sweet." So Mr. Schmiesing is correct that the name guild is not important and in some ways I admit may be misleading. If I may be permitted to quote from myself, in my recent book, Christendom and the West, I wrote the following (p. 134) about the Catholic social movement of the nineteenth and early twentieth centuries, the medieval guild was taken from its historical place, reduced to its essential economic and social role, and presented to the modern world as the Occupational Group. Now it became a means for helping to solve the grave economic problems of the 1930s, and, more generally, by embodying the principle of economic self-government of both employer and employee, to overcome the disorganized state of economic life created by decades of capitalistic competition, yet without requiring central economic planning by the state.

I only called such institutions "guilds" in previous articles because the correct term, "occupational groups" means nothing to most readers. But if these institutions are to "serve the same purposes the guilds once did," then they must have the same economic nexus and authority as the guilds had. Otherwise they are not serving the same purpose. Therefore Mr. Schmiesing's suggestion that the Knights of Columbus can fulfill some of the tasks performed by the medieval guilds is true only of their subsidiary purposes--their religious and social roles, for example. But the Knights are hardly in a position to fulfill the guilds' central role, which was economic.

Mr. Schmiesing also makes two points against what I said about the difficulty of many families in our capitalist economy living on the income of the father alone, thus forcing mothers to leave the home to work. He is certainly correct in stating that greed for "bigger homes, fancier cars, Disneyland vacations, fashionable clothing, and restaurant meals" is a factor in the desire for two incomes. But why is there this widespread desire for such things? Even Mr. Schmiesing calls our culture "materialistic." Does he think that our economic system has had nothing to do with making our culture materialistic? Does he think that constant advertising of the newer, the bigger and the flashier is not the result of capitalism's relentless search for ever greater profits? Does he think that, given fallen man's propensity for greed, materialism can be paraded in front of him every day without effect? Surely Mr. Schmiesing would not say the same thing about constant sexual temptation in our culture, but Catholic defenders of the free market are curiously silent about socially-sanctioned appeals to the other great appetite in man--an appetite which Holy Scripture calls "the root of all evils." In fact, since under capitalism, whenever there is a slowdown in consumer spending, we are threatened with a recession, this would seem to say something about the intimate connection between materialism and capitalist prosperity.(1)

Mr. Schmiesing also argues that there is nothing wrong with a mother contributing to her family's economic health by working at home. And with this I agree. In fact, every mother who has time to nurse her own children, make homemade food for her family, craft Christmas and birthday gifts with her children, is contributing to her family's economic well-being by saving them money, even if her efforts are not sanctioned by the capitalist economy's only standard of value, the almighty dollar. Mr. Schmiesing is right that the papal encyclicals "offer the faithful: do not succumb to materialism, recognize the universal destination of all created goods, and understand the dignity of work," and that "their general principles are to [be embodied] in social structures." But they also suggest specific institutions and practices that are necessary if we are to embody these principles "in social structures." Medieval Christendom, the encyclicals themselves, and Catholic writers such as Chesterton offer us many concrete examples that allow us to reduce these general principles to specifics.

I also wish to say a few words in response Mr. Harold's article. I appreciate the basic agreement he has previously expressed with much of what I have written, and I only want to make two objections, or rather, one objection and one clarification. My objection is to his statement that liberal capitalist economists are not so much wrong as limited, and that we simply need to place what they say "in the totality of personal existence." Even though economics is a subsidiary discipline, this does not mean that it can operate without correct first principles. Every subsidiary discipline must draw its first principles from a higher discipline. In the case of economics, it ought to draw its principles from philosophy, that is, from the philosophical principles of social order taught by Aristotle and St. Thomas. Economics, as that subject is commonly understood today, has wrong starting points and thus reaches wrong conclusions. The tradition of economic thought that stems from Adam Smith drew its first principles from the deistic and individualistic social philosophy of the eighteenth century. This has vitiated the entire enterprise. I do not mean by that that modern economic thinkers have never discovered any truths or hit upon any correct principles. I only mean that for Christians a new kind of economics must eventually be formulated, one that draws upon different starting points and is pointed in a different direction.

Then one clarification. Mr. Harold says that we should refocus our discussion beyond the "distribution of property." This is an understandable concern and one that I share. That is, I agree that any discussion of economics by Catholics must begin with questions about the fundamental purpose of economic activity, questions which, by the way, the current discipline of economics ignores. Thus if we ask ourselves why human beings have the capacity and need to produce and consume external goods, we will surely come to see that the production and consumption of external goods is for the sake of our family life, our intellectual life, our spiritual life, and thus must be judged by how well they serve those purposes. If our economy is continually diverting our gaze from these things and immersing us in more and more mounds of material goods, we should ask, to what purpose is this being done? If capitalism's chief claim on our acceptance is that it produces goods, we have to ask, "What does it profit a man if he gain the whole world but suffer the loss of his soul?"

I do not deny that we need external goods; but we need to subordinate the production and distribution of such goods to mankind's ultimate end. Distributism deals with more than the distribution of property. Rather it attempts to place the entire economic apparatus at the true service of man. Mr. Harold's suggestion that we should "discover the true nature, the assumptions and value-complexes, of capitalism and liberal economic theory," is surely on target, for if we do we will see that liberal capitalist theory presupposes a world lacking in final causes (in Aristotle's sense), a world in which each individual economic actor must supply his own purpose to his activity, and that, from the standpoint of this kind of economics, any one purpose is equal to any other. But such a notion is pure empiricism, utterly repugnant to the Catholic philosophical and theological tradition. By all means, let us "discover the true nature, the assumptions and value-complexes, of capitalism and liberal economic theory." If we do we will discover that they are lacking and, if our search is honest, we will end up within the tradition of Catholic social thought, the only proper place for a Catholic to be.

Mr. Storck writes from Greenbelt, Maryland.

1 In the Washington Post of December 31, 2000 (p. H1) there is an article with the headline, "Consumers Have the Power to Avert a Recession," which details how, if consumers continue buying, we may be able to avoid a recession. The article says, "It is clear that consumer spending, after rising strongly for several years, recently reached a plateau overall, as was evident in retailers' lackluster holiday season. Consumer spending has even dropped sharply in some areas, such as in purchases of new cars and trucks." But apparently it is not that consumer spending as such has declined, but merely that its rate of increase has declined. For the article goes on to say, "Consumer spending in the last quarter of 2000 appears to have risen at less than a 2.5 percent annual rate, well below the pace of earlier this year." So it appears that, under capitalism, the desire for "bigger homes, fancier cars, Disneyland vacations, fashionable clothing, and restaurant meals" is not just a virtue, but a necessity, if we are to avoid economic hard times. How much different a true Christian economy would be, one that produced according to man's reasonable needs and was not dependent on ever greater consumer spending on luxuries.

© The University Concourse
Volume VII, Issue 1
April 20, 2002

Interview with Thomas Storck

On Cooperative Ownership

John Médaille Interview in Romania

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