story is part of Walter
Block's Autobiography Archive.
Confessions of a Practicing 'Socialist'
James V. Schall
by James V. Schall
are collectivist in their proposals. But they are Communist in
their idealism. Now there is a real pleasure in sharing. We
have all felt it in the case of nuts off a tree or the National
Gallery, or such things. But it is not the only pleasure nor
the only altruistic pleasure, nor (I think) the highest or most
human of altruistic pleasures. I greatly prefer the pleasure
of giving and receiving. Giving is not the same as sharing: giving
is even the opposite of sharing. Sharing is based on the idea
that there is no property, or at least no personal property.
But giving a thing to another man is as much based on personal
property as keeping it to yourself.”
G. K. Chesterton, “Why I Am Not a Socialist” (1908).1
I am asked, “how does capitalism work?” I like to recount something
I read in Andrew Beyer, the turf commentator for The Washington
Post (June 20, 2003). Beyer had noted the
sudden increase in interest in thoroughbred racing after the surprising
run of Funny Cide in the first two legs of the Triple Crown (2003).
Some 101,864 fans showed up on a terribly rainy and chilly day for
the Belmont Stakes, the third event of the series, the chance for
the first winner of the three races – the Kentucky Derby, the Preakness,
the Belmont – in over a quarter century. Track owners naturally
have been seeking to capitalize on this increased interest in racing.
They see it as a way both to help the business and to make a profit.
They are legitimate capitalists using their minds to expand their
business. But how to make it work is also a legitimate and essential
Park several years ago had devised a sure-fire, free-enterprise,
entrepreneurial way to accomplish this purpose. They sought to
lure back to the track those bettors, who showed up in large numbers
for the popular Belmont Stakes, on other Saturdays when attendance
and tote were way down. The managers of the track shrewdly thought
that if they put a coupon into the Belmont Stakes Program, entitling
every holder to a free entrance to any other Saturday of the Meet,
they would have a perfect gimmick for increasing attendance and
hence profit. Once the bettors were in the stands, of course, they
would make up for any loss of gate fees by cash on the nose of multiple
losing horses, not to mention food and drink sales and parking fees.
happened, however, was just the opposite of expectations. The
risk of losing money (including bankruptcy) is essential to capitalism.
It is better to let some things go broke rather than subsidizing
them at increasing losses. The fact is, most people are not going
to go to ordinary race days no matter what their cost. They come
to the Belmont because of its excitement, especially with the
possibility of a Triple Crown Winner.
the regular, much smaller crowd that would go to the races every
Saturday and pay the fee anyway, spotted the many hundreds of
free coupons that the Stakes attendees threw away. This abundance
of free coupons meant that the regulars, by picking them up, would
get in free for the rest of the season without paying the normal
entrance fee they would have gladly paid anyhow. In addition
to this boon, several innovative bettors sold their extra collected
coupons for 50 cents apiece to pick up some extra change. Seeing
this defeat of their plan to increase attendance go awry, naturally
the capitalist owners cut their losses and did not try that scheme
conclude from this amusing account that, at least at the track,
capitalism is working as it should. That is, entrepreneurs seek
to increase revenue from their product. They dream up (innovate)
schemes to do so. They try them out. Other lesser entrepreneurs
in the stands see an opportunity to make some money on the failed
plan and do so. The lesson is learned that tracks must figure
out other ways to increase attendance and revenue. The market
tests the plan. Someone wins, someone loses. Enterprising bettors,
however, chalk up some extra cash to bet on the horses they would
have bet on anyhow even if they had to pay to get into the track.
the scheme worked, however, increased revenues would have accrued
to the track. The sharp bettors who collected free coupons would
have gone to the track anyhow with their ordinary fees and bets.
Perhaps anybody could have told the owners of the track that the
scheme would not work. Capitalism, however, allows them to give
it a try and take the consequences. Some free coupon offerings,
after all, do work. The racing market meanwhile adjusts to a
new equilibrium, while waiting for new innovations.
includes the possibility of spending money to make money with
the connotation that this making money is caused by producing
something new, needed, or desirable. Profit has a title of legitimacy.
The world can be improved for human purposes. Capitalism also
includes the possibility of losing money to make money, or even
just losing money period. Without this possibility, we are socialists.
The government covers all our risks, claims any profit. We risk
nothing. Indeed socialism discourages risks, whereas what we
need to do is encourage risk-taking. If no one is allowed to
fail, we won’t know the difference between what works and what
does not. Without a free market, we have no real or objective
test of cost or of the worth of innovations and their relation
to costs of production. Employees and employers tend to think
they have a “right” to their income no matter what they do, no
matter what their product costs or whether anyone wants it. A
free market enables us to test out ideas against demand.
the government owned the track and paid for its operation from
tax money, we would not have to worry about the track’s profit
and loss. But this alternative would be a form of “bread and
circuses.” The present system has the advantage of letting those
who want to spend their money in this way to do so – granted of
course that the government still taxes all entry fees, all winnings,
and all racing corporations, as well as guaranteeing the integrity
of the operation through state racing commissions. This tax,
if set too high, often makes gambling prohibitive. Capitalism
also allows unsuccessful tracks to declare bankruptcy, to cease
operation. Those who want nothing to do with the track or betting
can simply do something else, whereas in a socialist system where
the government ran the track, the public would have to foot the
begin this discussion of how I came to understand the value of a
free market with a homey example of betting because I learned to
understand capitalism from such incidents. In some sense, capitalism
is the natural order of things. It proposes that if we want to
make money, we have to do something to warrant it. It does not
start out with an abstract idea that everyone is owed a living or
an income apart from anything he does. Almost all ancient or modern
ideology arises from some noble purpose that, when put into effect,
does not work in practice. What capitalism is, then, is a scheme
to test what works.
title of these reflections is related a wonderful essay of G.
K. Chesterton entitled, naturally, “Why I Am Not a Socialist.”
Though I do not recall ever being a socialist in theory, my understanding
of free enterprise in practice comes from critiques of socialism
in its various forms. Intellectually, I learned about the market
in an articulate way not from running a business but from reading
about socialism. This latter essay of Chesterton was originally
written in 1908, the same year he published Orthodoxy,
four years after the birth of my father in Iowa.
the essay suggests that if you do not own anything, you cannot
give anything away. If you cannot give something away, there
is no risk in the world. Giving something to someone implies
that something is already yours by real title. It also implies
the existence of someone else to whom you actually want to give
something, not just “share” it. “Sharing” is a form of non-giving.
The owned gift may be given away, but it need not be. This is
the whole point of giving a gift, its symbolism of love and generosity.
Thus, it means something, it reveals your character, whether you
give it away or keep it. There is no virtue in my giving away
what is not actually mine. Indeed, if I give away what
is not mine, it is a form of stealing, just as receiving stolen
goods, even as a gift, is not a virtue. “Sharing” has to do with
justice, not giving.
of the main problems with modern governments is their assumption
that they can give away what is not theirs under the guise of
social purpose. They call it a virtue, usually some sort of
“social justice.” What the government has to give away is necessarily
first taken away, in the form of taxes, from the people who produce
it. Governments are tempted to conceive themselves as responsible
for taking care of everyone in all walks of life – the all-caring
state – whereas their only legitimate purpose is to allow human
lives be lived by free people, themselves deciding what they should
do with them and with their own money.
do not argue that there is no need for government. I do argue that,
in the name of high purpose, government as it actually functions
can and often does undermine the actual lives and wealth of its
people. The government is not itself the common good, it is but
a means by which that good can be achieved by everyone with his
own talents and wealth. Both capitalism and socialism are rooted
in the elimination of poverty. Capitalism does so by making everyone
richer, albeit at differing rates. Hence the problem of capitalism
is mainly envy, that is, chagrin that others legitimately have what
we do not. Socialism begins in equality. Hence it is content if
everyone is poorer if they are equally poor. The problem of socialism
is generally greed, the wanting of what is unavailable.
suggests that the ideal answer to the human problem is that no
one owns anything. If this non-ownership were to be the case,
many of the higher virtues could not be practiced at all; e.g.,
charity. Nor could most people be adequately taken care of by
their own labors. In an important sense, socialism undermines
any direct relationship that one person can have with another
as it implies that everything is due to everyone whether he owns
or does anything or not.
motives of charity and generosity are thus communalized, reduced
to distributive, not commutative, justice – or better, equality
is seen as the only object of distributive justice. And if this
commonality of property is in effect, then the very notion of
“giving” something to someone is subverted. The possibility of
widespread individual virtue acquired in the exercise of one’s
own responsibilities over one’s own property is taken away from
the majority of the people.
there are religious and philosophical origins to the idea that
the less property we have the better. These are not unworthy
ideas. The rich young man in the Gospels was told to sell what
he had and give it to the poor. He was not told to open a business
to put the local unemployed to work. Greek philosophers sought
to convince us that their personal poverty was chosen, that they
did not want to be distracted by material goods. They rightly
saw how riches could interfere with their pursuit of the higher
the Old and New Testaments manifest a special concern for the
poor, who, we are assured, will always be with us, but whose needs
are especially to be looked after. This poverty seems to be still
rather widespread, even though there are economists who maintain
that the problem of poverty is, in principle, solved, as I think
it is. This conclusion suggests that the problem of poverty may
not, at bottom, be a wholly economic one. If our neighbor has
more than we do, we can be relatively well-off and still feel
comparatively poor, still feel envious, even though our neighbor’s
wealth is come by legitimately and we are by no means in a dire
condition, certainly not as a result of his efforts; indeed, we
may well be bettered by them.
observation leads to the issue of relative wealth, of how little
is “enough” or of how much is “too” much? Most people, following
Aristotle, recognize that we generally need a certain amount of
property or wealth to practice minimal virtue. Many also recognize
with this same Aristotle that we can put too much emphasis on
wealth to the detriment of other more important things in life.
Moreover, contrary to many ecology schools, the world is in fact
an abundant place, almost as if it is inviting us to “increase,
multiply, and dominate” it. There would be something radically
wrong with a position suggesting that we ought not work on, improve,
make beautiful and productive the land and seas we are given.
consideration also brings us to the Platonic notion that our faculty
of desiring material things is, in itself, unlimited, and thus
a potential cause of disorder among us. It needs to be controlled
by virtues, specifically those of liberality and munificence.
Liberality was the virtue that enabled us to use a moderate amount
of riches for our real good, including the good of freely giving.
Munificence was the virtue of those who had much wealth.
was quite clear that wealth in itself was neither an evil nor
a detriment to virtue. He proposed that a great amount of wealth
could have a very high social purpose. Generally, he indicated
that it be used for three purposes: for beauty, for truth, for
goodness; think of art galleries, university chairs, hospitals.
He understood the need for a certain graciousness in the use of
property. Rich and poor really did not differ when it came to
their possibility of practicing virtue. The poor could be generous,
as could the wealthy. Both could be stingy and narrow. Virtue
and vice are not external to our own souls.
have entitled this essay, “confessions of a practicing socialist.”
This experience of actually living a “socialist” life made it
clear to me that such a life, while legitimate in certain circumstances,
is not for everyone and itself depends on that which is not
socialist. The reason for this peculiar title, then, is that
I am a member of a religious order whose members have vows of
poverty, chastity, and obedience. Basically, the effect of these
vows is that members have no private property of their own in
any form. They neither own nor use common property simply on
their own choice. Since property was designed, in Aristotle,
as the material support of family life, not having a family means
not having a great personal need for private property. Greek
philosophers understood this point.
purpose of such vows was pretty much the same as that found in
Plato’s proposal for commonality of property, wives, and children,
namely to be freed from certain real and worthy obligations in
order to be at liberty to devote one’s full attention to other
projects. The Christian solution to the Platonic proposal was
not commonality of wives or children, or the genetic engineering
and state day-care regimes that went with it. Rather it was not
having wives, children, and property in the first place, a more
humane and manageable solution, though one not meant for everyone.
I have lived most of my life as a “practicing socialist.” Any
income that I might receive from work or gifts belongs by right,
actually by gift, to the Order. The Order can in law own property,
but not the individual members of the Order. “From each according
to his capacity, to each according to his needs” is pretty much
the principle of monastic living. Such vows do not mean that
one has no access to food, clothing, or shelter, but that these
are not one’s own, one’s personal property to do with as he wishes.
Like Plato’s guardians, we dine in common dining halls. The emphasis
is mostly away from personal possession and towards the freedom
to do things without having to worry overly much about personal
wealth and its conditions.
is to be noted that this way of life was not seen to be for everyone
or even for most, either by Plato or by the religious tradition.
It was considered a separate way of life, with its own dangers and
goods. It was not, furthermore, considered to be in principle antagonistic
to the “normal” life of families or wealth production and distribution.
Indeed, without the latter, without families, there could be no
new members or normal way of life for monastic communities.
responsible government would allow such forms of voluntary religious
life to exist on their own legal terms. The contribution of the
monastic orders was seen to be measured in new ideas and initiatives
that directly or indirectly benefited both its members and the public.
Indeed, economic historians have seen the vows of poverty to be
responsible for the initial savings, hence accumulations of wealth
from which things like banking and public or religious buildings
and institutions sprang. The very discovery that savings could
be the foundation of wealth productivity is not unrelated to the
am, however, in agreement with the basic point of the Aristotelian
critique of Plato’s proposals in Book V of The Republic,
that we should have, for peace, justice, and philosophy, this
commonality of wives, children, and property, at least in the
city in speech. Aristotle, who seems to have taken Plato’s proposal
as a serious one for actual polities, observed that if everyone
was our parent or child, no particular person would really be
adequately taken care of. He saw that good order required private
property. Paradoxically, people took better care of what was
theirs than what was public, no matter how noble-sounding public
concern might appear. Accountability followed ownership. The
general destruction of family or property did not improve but
harmed human enterprise.
property made the family, in which real children with their own
parents could flourish, much more possible and secure. Thus,
institutions like monastic life, while they were justified if
seen as something extraordinary, were not designed for everyone.
Monasteries have to take special precautions that its members
do not become sloppy, or neglectful, or unconcerned. Human nature
remains the same and needs to be counteracted if such a life is
to be possible. The point is not that it is impossible or inadvisable
to live such a life, but that it is a very special and often dangerous
way of life if the virtues that support it are not practiced.
I think that my experience as a “practicing socialist” has been
a major factor in seeing the value and worth of a private property
system for most people. The great attack on this view today is,
paradoxically, in the name of the poor, who generally speaking,
if given a choice, want nothing better than having their own homes
and families and private property. Modern ideology is often economic
in nature, proposing some better way of coming to the aid of the
poor. This endeavor has been the moral justification for movements
from communism to liberalism. Moreover, this concern for the
poor has been a major factor in pronouncements of religious leaders,
including Catholic ones.
economic systems are generally faulted for failure to help the
poor in the third world, or sometimes at home. Schemes to remedy
this failure are prevalent in modern parliaments and economic
discussions. The question remains, what is the best way to help
the poor, as well as enhancing the growth and abundance that is
necessary to manifest the myriads of things that people do when
they are free and no longer poor. A society concentrated only
on poverty relief would be one that missed understanding what
life was for. “Man does not live by bread alone” may still be
the most revolutionary social principle yet enunciated. For the
question implies that there is indeed something else to live for,
and it is best that we be about it.
I think that the most important idea for me that makes the question
of the free market so important is the realization that wealth
is not to be identified with physical things, even though we need
physical things and they are good and necessary to have. The
ultimate riches, the ultimate wealth in the universe, is the human
brain, the mind, not property. Probably the most dangerous idea
ever proposed, one that would do the most damage to the poor,
is what I call “distributionism” or “gapism.” These theories
are based on the notion that the world is a finite body of goods.
What is wrong is that they are ill-distributed. Thus, if we see
someone with more, it necessarily means, according to the theory,
that an injustice has been done to others who have less, no matter
what the one or the other did in the past to bring about this
situation. Therefore, the solution is to take away from the rich
and give it to the poor, usually by governmental coercion. This
is what socialism’s moral justification is all about. This theory
fosters envy and really undermines the security of property and
the homes for which it is designed.
is a variety of distributionism. It is a theory that argues that
the “gap,” usually calculated in terms of GNP, between the rich
and the poor is growing greater and greater. By itself, this
growing gap is taken as incontrovertible evidence that the poor
are being exploited or getting poorer. The solution therefore
is to “narrow” the gap, as if that is a necessary sign of economic
or moral well-being. The main problem with this theory is that
it implies that because the “gap” between the rich and poor is
growing, assuming it is growing, it must mean that the poor are
getting poorer. It also implies that the cause of this increased
poverty is the gap.
it is quite possible that a “gap” of some degree between rich
and poor is in fact normal and even necessary in order that anything
at all be improved or produced. Without incentives to change
things and rewards for actual contributions, the fact is that
little will be altered or accomplished. Likewise, it is quite
possible that, even though there is a growing gap between rich
and poor, that those with comparatively less are not in
fact getting poorer. Everyone may instead be getting richer
because the whole economy is growing. Indeed, this latter is
largely the case. It is what modern economies are about. The
only real way to help the poor on a reliable and sustainable basis
is to have an economy that grows in all its sections at the same
time so that every one becomes relatively richer. The current
use of the word “globalism” to describe this phenomenon is not
speaking, I am of the opinion that if there is poverty in the
world, as there is, it is not caused by riches or economic growth.
These latter are the solutions to, not the causes of, poverty.
We do know the general mechanics of producing wealth for everyone,
but this does not mean that any economic or political system could
achieve it. The fact is, the means of wealth production have
to be invented and put into effect, into existence.
ultimately is not a thing, but it is a knowledge. There is not
a “shortage” of material goods for the world population. There
may be a shortage of ideas, or more likely, a failure, usually
due to some theory of religion or politics or economics, to allow
ideas that work to be put into effect. This brings me back to
the socialist view, that no matter how noble and worthy its basic
idea, it will work to create poverty. It will prevent ideas
that will work to enrich everyone from being put into place and
allowed to operate.
there should be a premium not on the idea that the poor should
“be helped,” but on ways and ideas that allow them to help themselves,
to have their own homes, businesses, power to give and make things.
In contemporary history, the main causes of failure of such systems
coming to be are governments and left wing ideologies, often with
good intentions, that do not allow what needs to be done to happen.
if I were to answer the question about why I, even though a “practicing
socialist,” am an advocate of a free market, it is because I think
it is really the only way that the poor will be helped or the
only way in which a rich society can remain free to deal with
things beyond politics. We are in an anti-growth, ecologically
oriented ideological world that is not based on the idea of the
real abundance of nature and of the effects of mind with regard
to things. The real enemies of the poor are those who maintain
ideas or institutions, including governmental ones, that do not
final word on the notions of envy and greed. Though envy is generally
associated with the poor, it can also be a vice of the rich. And
though greed is also considered a vice of the rich, it can also
be a vice of the poor. In other words, the virtues and vices
that make life worth living are not the exclusive property of
anyone. For Aristotle, envy was the desire of honors due to another.
Greed was the desire of another’s property. Aristotle recognized
that both greed and envy needed to be ruled through the will.
also remarked that if someone steals because he is poor, the proper
solution is to see that he has some property so that he can produce
his own necessities. But some people steal because of pleasure.
The solution for this vice, he thought, was virtue. But there
were still others who might steal because of some grandiose scheme
to cure mankind. He thought a correct philosophy was the only
solution for this more deep-seated and dangerous problem.
we read the classics, it looks like first we confront the economic
problem, then the political problem, then the philosophical or
religious problems of mankind. In terms of analysis, this is
a perfectly good way to proceed. But in terms of action, it seems
quite obvious that the economic problem, which can be solved,
is not allowed to work because of prior problems of vice or more
likely of philosophy.
was not wrong to point his whole philosophy toward properly understanding
the highest things, in the light of which generally speaking worldly
and economic things are structured. Chesterton’s remark about
a world in which giving was possible contains a whole philosophic
understanding of the right order of worldly things. We can have
private property or wealth and still be stingy or miserly. But
we cannot have common property and still be able to give a gift,
even so much as a cup of water.
means the possibility of devising a system whereby people can
have pure water to drink and wash and water their lawns and at
the same time provide a service to each other and an income for
themselves via the market. Politics means allowing these systems
to be put into effect at a reasonable cost. Ultimately, the poor
are not poor because the rich are rich. The only possibility that
the poor be not poor, a reasonable desire for all including socialist
monks, is for them to imitate the ways of those who have lifted
themselves out of poverty. To insist on a way to accomplish this
goal that will not work might be a noble dream, but it is not
a way for free men.
ultimate battles are not economic or even political. They are
philosophical and theological. It has been the tradition of the
West that such battles be fought out in the academy. It has been
the unfortunate experience of modernity that they have been fought
in the streets. In the end, a good idea, an idea that works,
can be rejected. It is the virtue of the free market that a good
idea can at least be tried to see if it is found wanting or tried
to see if it is profitable. The pleasure of giving and receiving
is to be preferred. This is not merely an economic principle.
The ultimate wealth is in the mind. We do not become poorer if
everyone is becoming richer. But freedom and virtue still have
to do with what we do with our riches, little or great.
K. Chesterton, “Why I Am Not a Socialist,” New Age, January
4, 1908, reprinted in The Chesterton Review, VII (August,
V. Schall, S. J. [send him
mail] is Professor in the Department of Government, Georgetown
© 2003 LewRockwell.com