Sunday, January 27, 2008

The Justice of Distributism

by Thomas Storck



The basic assumption of bourgeois civilization was that the best interests of the world, the state and the community could be served by allowing each individual to work out his economic destiny as he saw fit. This is known as the principle of laissez faire. As far as possible individual life is unregulated by the state, whose function is purely negative, like that of a policeman. The less the state does, the better. It was not long until the evil of this principle manifested itself. If every individual is to be allowed to work out his economic destiny as he see fit, it will not be long until wealth is concentrated in the hands of the few and the vast majority are reduced, as Hilaire Belloc showed, to a slave state - Fulton J. Sheen[i]


In the spring 2002 issue of The Latin Mass, Mr. John Clark published an article called "Distributism as Economic Theory." I believe that his arguments and conclusions are not consonant with either the teaching of the Church or the thought of Hilaire Belloc, and I offer this article to clarify what the Church says on this matter, as well as to do justice to the memory of a great Catholic, Hilaire Belloc.

Mr. Clark rightly begins by defining his key term, "Capitalism." Clark's definition of capitalism runs thus: "Capitalism is an economic system in which private property is seen as a morally defensible right. Corollaries to this right include the right to free competition in the marketplace and the right to trade both domestically and internationally. Furthermore, the profit motive is seen by capitalism as morally defensible, and therefore there should be no legal limit as to the amount of money that one can legally earn" (p. 30).

Quadragesimo Anno

Clark contrasts this with Belloc's own definition of capitalism as "a state of society in which a minority control the means of production, leaving the mass of citizens dispossessed."[ii] Although I think Clark's definition is erroneous, Belloc's definition also suffers from the problem that it describes the nearly inevitable effects of capitalism rather than the distinguishing note of the system. For a better definition, then, I will turn to the 1931 encyclical of Pope Pius XI, Quadragesimo Anno. In section 100, the Pope refers to "that economic system in which were provided by different people the capital and labor jointly needed for production."[iii] In other words, the distinguishing mark of capitalism is that some men own the means of production and hire other men to work for them. These latter are the "mass of citizens" that Belloc claims do not share in the ownership of the means of production.

Let us examine the deductions which Clark makes from his definiton of capitalism. "Capitalism is an economic system in which private property is seen as a morally defensible right." As we saw above, this is not the distinguishing mark of capitalism, but it nonetheless makes a correct point: private property is a morally defensible right. But what Clark claims follows from this is false: "Corollaries to this right include the right to free competition in the marketplace and the right to trade both domestically and internationally." Though we are accustomed to regarding free use of private property as inherent in our right to it, this is not the case. In the Catholic Middle Ages private property was upheld, but not the right of free competition. As we will see, traditional papal teaching on property by no means upholds the notion that one can do whatever one likes with one's property.

Property Rights

Clark next turns explicitly to the question of property rights. He says, "Although distributism claims to be the champion of private property, it is actually antithetical to it" (p. 31). Clark tries to substantiate this claim by focusing on the legal method that Belloc suggested in The Restoration of Property ought to be used to bring about the existence of a distributist society. In brief, Belloc's suggested method of achieving more widely distributed property was to institute a system of highly graduated taxation so that those who owned concentrations of property, for example, a chain of stores, would sell off their excess property.

"There must be a differential tax on chain-shops, that is, on the system whereby one man or corporation controls a great number of different shops of the same kind. To control two such may involve but a small tax, to control three a larger one in proportion; and so on, with the curve rising steeply until the ownership of, say, a dozen in the territory over which the government has power becomes economically impossible."[iv]

Clark and Belloc

Now, is there anything morally wrong with such a scheme? Let us consider the various charges which Clark brings against it. First of all, he quotes various Renaissance Catholic theologians on the evils of unjust taxation and on what he calls "state redistribution" of property. Unjust taxation is, of course, ipso facto unjust. But the question here is whether Belloc's plan is unjust or not. To quote writers who inveigh against unjust taxation without first establishing whether Belloc's proposed taxation is unjust, is to be guilty of what in logic is called a petitio principii, that is, begging the question.

Nor does his quote from Pedro de Navarra help - "Taxes can be tyrannical...if one is taxed more heavily than others..." (p. 32.) - for this writer was doubtless talking about two persons in the same circumstances being taxed at different rates.[v] More importantly, we must note that the context of all the quotes from these Renaissance theologians was their objections against the absolute monarchies of the time instituting excessive taxation for the support of the king and his court. But in fact, the very aim of Belloc's taxation was that no one would ever have to pay the tax at all! The entire aim of the taxation scheme to institute distributism was that people would not accumulate property in such amounts that they would have to pay the highly progressive taxes that accompanied the ownership of large amounts of certain kinds of property. The denunications of the theologians that Clark instances are simply beside the point.[vi]

Moreover, Belloc himself was against high taxation: "High taxation is incompatible with the general institution of property. The one kills the other. Where property is well distributed resistance to big taxation is so fierce and efficacious that big taxation breaks down."[vii]

This difference in attitude toward taxation flows from the different ways property is regarded in a distributist and in a capitalist society. In the former, property and all external goods are considered necessary precisely because they are necessary for the welfare and support of the family. It is the decent support of the family that is sought, not the maximization of income. Thus property will be so intimately connected with a man and his family, that he will have a fiercely protective attitude toward it and resist high taxation.[viii] But under capitalism, property is viewed simply as something with a money value, which is to be sold if a good price comes along. And although capitalists no doubt dislike paying taxes also, if one is thinking solely of money values, it often makes good business sense simply to write off high taxes as necessary costs of doing business.[ix]

Redistribution of Property?

Next let us consider Clark's charge of government "redistribution" of property. "`Redistribution of the means of production' is an economic fallacy" (p. 32) Clark avers. But distributism, as sketched by Belloc, has absolutely nothing to do with government acquiring, distributing or redistributing any property at all. Private owners, aware of the coming institution of a distributist system of taxation, would be free to sell off their property to any other private owner they chose. The government would not be involved in such transactions at all. One may support or oppose such a system, but to call it "redistribution" by the government makes no sense at all.

In order to evaluate the justice or injustice of Belloc's proposals, we must next look at Clark's statements about property rights and the question of property ownership.

Clark quotes from Thomas Aquinas's Commentary on the Politics of Aristotle: "It is a good thing that each one shall enlarge his possessions more, applying himself to them more carefully as being his own" (p. 33). Thomas is here summarizing and expanding upon Aristotle's refutation of Plato's argument for the community of goods, i.e., for ownership of all property in common, such as Plato advocated in his Republic. The full sentence as translated from the Latin says, "Another good is that each one will multiply his possession more, applying himself to it more carefully since it is his own."[x] Thomas, following Aristotle, is simply pointing out that, generally, one will take more care of his own property than of common property. However, one cannot deduce from this any notion that the unlimited enlargement of a man's possessions is good either for himself or for society. Elsewhere Aquinas makes this clear. In the same Commentary he writes, "Political economy, however, which is concerned with the using of money for a definite purpose, does not seek unlimited wealth, but wealth such as shall help towards its purpose, and this purpose is the good estate of the home."[xi] And in the Summa Theologiae, he says, "...the appetite of natural riches is not infinite, because according to a set measure they satisfy nature; but the appetite of artificial riches is infinite, because it serves inordinate concupiscence ...."[xii] Moreover, such quotations could be multiplied from Catholic theologians. For example, although Clark claims that St. Antoninus "viewed the profit motive as both moral and financially essential" (p. 33), in fact that saint wrote: "If any merchant exercises his art, not for some honest end, as the government of the family, the profit of the country or other like one, but principally out of great greed, he gains an infamous profit."[xiii]

What does this have to do with Belloc's distributism? Simply that, if the purpose of riches is the support of a man and his family, then no one has any right to more than is necessary for the decent support of his family. If we ask ourselves why God has created man so that he must engage in the activity of producing external goods, the answer is obvious: economic activity is meant to serve the more important aspects of life, our spiritual, family, social, intellectual and cultural lives; it is not an end in itself. Therefore it is not necessarily a tyrannical act if our political arrangements determine our use of property so that we seek the amount of worldy riches necessary for a decent human life, but not more. As St. Thomas pointed out further in his De Regno, the aim of men living together in society is not riches but virtue.[xiv] And he pointedly says, "If abundance of riches were the ultimate end, an economist would be ruler of the people."[xv]

Pius XI v. Tony Honore

But what of man's natural right to private property? Would not such a notion of the state conflict with it? Mr. Clark derives his notion of private property from Tony Honore, professor of law at Oxford University (p. 31), who is not a Catholic theologian. But Pope Pius XI, in his encyclical Quadragesimo Anno thought otherwise. He rejects both "individualism" and "collectivism" but clearly states that ownership has a "twofold aspect...which is individual or social accordingly as it regards individuals or concerns the common good." Therefore, "Provided that the natural and divine law be observed, the public authority, in view of the common good, may specify more accurately what is licit and what is illicit for property owners in the use of their possessions."[xvi] We do not have a right to do whatever we may please with our property. Thus distributism does not violate "the fundamental right of private property as traditionally taught by the Church" as Clark charges (p. 31). Rather it attempts to establish man's right to private property on a firm foundation, private property as the necessary means of support for the individual and his family.

Distribution of Income

Clark quotes St. Thomas' De Regno on the matter of distribution of income to the effect that "an architect who plans a building is...paid a higher wage than is the builder who does the manual labor under his direction" (p. 32).[xvii] No one disputes this. Belloc is not arguing for equality of property or equality of incomes. But the Catholic tradition by no means sanctions just any distribution of income. Pius XI, for example, in the encyclical already quoted, makes this remark about Catholics at the close of the nineteenth century and their opinions on the need for social reform: "Such also was the opinion of many Catholics, priests and laymen, who with admirable charity had long devoted themselves to relieving the undeserved misery of the laboring classes, and who could not persuade themselves that so vast and unfair a distinction in the distribution of temporal goods was really in harmony with the designs of an all-wise Creator."[xviii]

No distributist desires equality of income or property. However, consider these figures on "the ratio of the pay a CEO makes versus that earned by a factory worker. In the late 1960s, it was 25 to 1 and as recently as 1980 it was 42 to 1. By 1999 it had risen to a whopping 419 to 1."[xix] One may perhaps be allowed the opinion that a 25 to 1 ratio was quite sufficient to safeguard the incentives that entrepreneurs apparently require.

The philosophy of property that capitalism contains and promotes is not the philosopohy of property that traditional Catholicism promotes. Property as the support for a man and his family, yes; but not the unlimited acquisition of property, so that a society is kept in turmoil by economic dislocations, plant closings, and so that individuals themselves are corrupted by what Holy Scripture calls the "root of all evils" (I Timothy 6:10). Traditional Catholics, when they consider economic questions ought to consult the encyclicals and other writings of the Popes, especially Leo XIII, Pius XI and Pius XII, and the works of St. Thomas. There they will find a rich teaching on the proper place of material wealth, and it will not be a teaching consonant with capitalism, whose founders and theorists were eighteenth century Deists openly in revolt against the traditional Christian conception of society.[xx]

________________

[i]. Communism and the Conscience of the West (Indianapolis : Bobbs-Merrill, c. 1948) pp. 16-17.

[ii]. Quoted by Clark on page 30, but taken from Hilaire Belloc, The Restoration of Property (New York : Sheed & Ward, 1946) p. 19.

[iii]. The original Latin speaks of the economic system "qua generatim ad commune rei oeconomicae exercitium ab aliis res, ab aliis opera praestaretur." Acta Apostolicae Sedis, vol. 23, no. 6, June 1931, pp. 209-210. All citations from Quadragesimo Anno are taken from the Paulist translation as published in Seven Great Encyclicals and elsewhere.

[iv]. The Restoration of Property, p. 69.

[v]. Clark takes his quote from Alejandro Chafuen's book, Christians for Freedom : Late-Scholastic Economics (San Francisco : Ignatius, c. 1986). This source does not shed any further light on the context of the quote, but it is surely absurd to suggest that de Navarra believed that it was unjust for a rich man to be taxed more heavily than a pauper.

[vi]. Moreover, Clark presumes that these Renaissance theologians have some specially weighty authority in theology. But this is not the case. In comparison with papal teaching or with the teaching of St. Thomas Aquinas, these Renaissance theologians have no more authority than any other group of theologians. In no way can their opinions be equated with what Clark calls "the traditional teaching of the Church" (p. 30).

[vii]. The Restoration of Property, p. 119.

[viii]. Pope John Paul II, in Centesimus Annus, speaks of the purpose of private property as "one's personal development and the development of one's family" (no. 6).

[ix]. I should point out here that no one in a distributist society would be forced to become an owner of productive property. Doubtless some would remain in the position of employee. But the employer/employee relationship would no longer be the usual economic mode of society. The characteristic mark of a distributist society would be widespread ownership of productive property, even if not everyone chose to own such property.[x]. "Aluid bonum est quod unusquisque magis multiplicabit possessionem suam insistens ei sollicitius tamquam propriae." Commentary on the Politics, book 2, lectio 4.

[xi]. Quoted in Bede Jarrett, Social Theories of the Middle Ages (Westminster, Md. : Newman Book Shop, 1942) p. 155.

[xii]. Summa Theologiae, I-II, q. 2, a. 1 ad 3 [xiii].

Quoted in Joaquin Azpiazu, The Corporative State (St. Louis : Herder, 1951) p. 145.

[xiv]. "It seems moreover to be the purpose of the multitude joined together to live according to virtue.... the good life moreover is according to virtue; the virtuous life therefore is the purpose of the human community." In the original, "Videtur autem finis esse multitudinis congregatae vivere secundum virtutem.... bona autem vita est secundum virtutem; virtuosa igitur vita est congregationis humanae finis." De Regno, I, 14. (This work is also known as De Regimine Principum.)

[xv]. "Si autem ultimus finis esset divitiarum affuentia, oeconomus rex quidam multitudinis esset." Ibid. Consider also these words of John Paul II in his encyclical Centesimus Annus, in which he describes the mainly U.S. attempt in the years after World War II to defeat communism by trumpeting the material benefits of our economy. "Another kind of response, practical in nature, is represented by the affluent society or the consumer society. It seeks to defeat Marxism on the level of pure materialism by showing how a free-market society can achieve a greater satisfaction of material human needs than Communism, while equally excluding spiritual values. In reality, while on the one hand it is true that this social model shows the failure of Marxism to contribute to a humane and better society, on the other hand, insofar as it denies an autonomous existence and value to morality, law, culture and religion, it agrees with Marxism, in the sense that it totally reduces man to the sphere of economics and the satisfaction of material needs" (no. 19).

[xvi]. Quadragesimo Anno, sections 45, 46 and 49.

[xvii]. This is in De Regno, I, 9.

[xviii]. Quadragesimo Anno, section 5. Emphasis mine.

[xix]. Elisabeth Lasch-Quinn, "Markets and Morals," The Washington Times, Sunday July 21, 2002, p. B8.

[xx]For a good account of this, by someone who favors the new capitalist order, see Ralph Lerner, "Commerce and Character : the Anglo-American as New-Model Man" in Michael Novak, ed., Liberation South, Liberation North (Washington : American Enterprise Institute, c. 1981) pp. 24-49.

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