Capitalism vs. an Intervention
by James Hitt Jr. The following is in response to the article "Distributism vs. Capitalism" by Roy Moore, which appeared in the September 2006 issue of Gilbert Magazine. The pantheon of anti-capitalistic and authoritarian systems of political economy contains many varied members. One such variety of "non-capitalism" is Distributism, put forward by the British writers G.K. Chesterton and Hilaire Belloc. Although I have been aware of Distributism for some time (and have been skeptical of it for just as long), when I very recently happened upon an article in Gilbert Magazine by Mr. Roy Moore discussing Distributism and capitalism (or at least what he presumes to be capitalism), I felt the need to respond. In his article, Moore faults many of the capitalist critics of Distributism for their claims that Distributism, as an enemy of capitalism, is little more than a kind of socialism, and their claims that capitalism is synonymous with a true market economy (a claim which I happen to share). Unfortunately for Mr. Moore, the modern market economy is a capitalist one. He is correct in saying that the "market economy has been with us ever since the beginning of civilization", but his implication that the capitalist economy is somehow a fundamentally separate system is incorrect. As Murray Rothbard showed in Man, Economy & State, in the strict meaning of the term "capitalist", it applies to someone who bears the bulk of the risk in a business venture, and who pays for labor and capital goods for the production of consumer goods before the goods are finally manufactured and sold to consumers. Otherwise, laborers would have to forego their wages until the product was put on the market and sold before they could receive their rewards (provided the risk taken in the venture was a wise decision and the product even sells at all). Thus the capitalist provides an extremely desirable service in bearing these risks and promoting the growth of large and productive enterprises on his own initiative, when large numbers of diverse and less-informed individuals with different goals and desires of their own would not be able to do so. So, this capitalist system may not have existed in the entire history of market economies, but it is without question a necessary and hugely advantageous outgrowth and an inseparable part of the modern market economy, especially one which presently has to support over 6 billion consumers. No, what Chesterton and Moore are actually bemoaning, as opposed to capitalism, is a kind of modern mercantilism, big businesses made big artificially by government ordinance to promote special interests rather than strictly by the ability to produce efficiently to supply the demand of consumers. (Bewilderingly, Moore seems to praise this very same kind of mercantilist system as it was practiced in the Middle Ages, then known as the guild system.) A truly capitalist society of free individuals acting in voluntary contract with each other would tolerate no such unfair promotion of special interests by state enforcers. The degree to which property and the means of production are in the control of private individuals (or groups of individuals voluntarily acting as one body) is the degree to which that society has a free market economy. Mr. Moore makes the general and typical arguments that as state restrictions on business declined in history, exploitation of the masses increased. He laments the lost days of when the guilds, with the backing of the Kings, kept a strangle hold on the economy and restricted the possibilities of competition and growth, with the Church all the while making sure that the souls of the masses weren’t corrupted by materialism and greed; the lost times when individuals were self-sufficient and only produced what they needed to sustain themselves with their own personally owned means. This is all largely Marxist in content and tone (supporting the arguments for Distributism resembling socialism), and just like the Marxists, it overlooks or ignores the fact that as restrictions on markets declined, material wealth and standards of living dramatically increased. The worst aspects of the Industrial Revolution were invariably either the fault of governments and their interventions into the economy, or were issues of capitalism simply not having yet produced enough wealth to allow for the abolishing of the worst aspects of earlier Ages, child labor, to name one. Moore describes how in a Distributist social order, big businesses would be "encouraged to break up into smaller independent units". But just how exactly can government encourage big businesses to do this (assuming that the enterprises in question achieved their success through voluntary exchanges, untainted by state-given privileges)? For that matter, how does a government "encourage" any individual or group to do anything? A government’s actions consist in only one thing: that of coercing. This leaves no room for the vague, undefined "encouragement" that Mr. Moore would recommend as a part of the Distributist system. In a free society, should a particular business become exceptionally large and prosperous due to a high demand for its products or services and that business’s exceptional methods of producing its services cheaply and in large quantities, would the Distributists demand that these boons to society be broken up by government force, and their valuable services removed from the choices that the free market gives consumers? In his meticulous and thorough work, Socialism, Ludwig von Mises most eloquently characterized the various different forms of anti-capitalistic/non-market "economic" systems, such as syndicalism, mercantilism (or guild socialism), and socialism (whether nationalist, communist, Christian, or any other of its various incarnations). In my best estimation, Distributism would fit into the category of syndicalism. In a Distributist society, Mr. Moore says that "productive property is owned by the many, rather than the few. In practical terms, it means that small businesses, cooperatives and worker-owned and -managed businesses run the day-to-day workings or commerce." Syndicalism is a system of economy where syndicates of labor in different industries collectively own the capital goods of their own respective branches of industry (somewhat similar to the guild system of old), as opposed to private individuals or groups owning them, as in the capitalist economy in which the only restrictions are the owner’s personal abilities at speculation and utilization of capital to maximize efficiency and production. If in a free market economy, the tendency is not towards a distribution of the ownership of capital goods, then the Distributist system could only be promoted through government – or some other violent imposition. The very fact that a society of people would have to be compelled to uniformly adopt this syndicalist method of production should reveal, however, that it is a mode that many, if not all of them do not deem satisfactory for the fulfillment of their desired ends. In the capitalist market economy, anyone of any background could possibly become a capital owner (or capitalist), and the best and most proficient would reap the highest profits (and concurrently produce the most at the cheapest cost, to the benefit of everyone). This leads to issues of morality and materialism. Much of the Distributists’ arguments rest on the grounds that unfettered capitalism begets an unhealthy or immoral materialism and greed upon society. But how can this justify government intervention into economic life in order to prevent such immorality? It cannot. Even the pure ascetic is completely free to practice his self-denial of everything material, even in the most abundant capitalist society. Further, if morals are the concern of the Distributist, they should certainly not support state intervention in economic affairs, because morality ends precisely where coercion begins. Further sophistries and outright fallacies that Moore raises have to do with what he sees as an obsession of both the systems of socialism and capitalism with the desire for power and control. He could not possibly be so obtuse as to not see that it is socialism that works through the political machinery and seeks such power, and to whatever degree that a (nominally) capitalist system pursues these political avenues, that system drifts closer to socialism, or syndicalism, or mercantilism or another such system whose only means are those of violence. Distributism may or may not precisely be a form of socialism (it matters little to me; in any case, it is an impracticable, immoral system), but it is most certainly not a pure market economy. Not every invasive system of economy is necessarily socialist; even Mises was clear in his separation of syndicalism and socialism when discussing their traits in Socialism. However, this in no way validates them or makes these systems less unworkable or unethical. In the final analysis, Distributism is just so much stifling interventionism. October 18, 2006 James Hitt [send him mail] is a senior in Mathematics at Nicholls State University in Louisiana, because professors can't lie about numbers. Copyright © 2006 LewRockwell.com |