Last month I stirred up a bit of ill will by poking fun at advocates of distributism (see: Who Gets To Be the Czar of Aesthetic Consumption?). As I said at the time, I like and admire them but get annoyed by their habit of taking their philosophy very, very seriously. What I didn’t explain is why I find it so annoying. The short answer: Because it causes otherwise smart people to miss obvious points of reality.
A prime example is calling distributism a “third way” between capitalism and socialism. The problem with that, as Matt Perman notes, is that once the definitions of capitalism and socialism are properly understood it becomes obvious that there is no third way (though, as Perman notes, there can be degrees). Fortunately, a third way isn’t needed since capitalism can do everything that distributist want their system to do.
For instance, one aspect of how capitalism can create a more “people-centered economy” is to increase the amount of capital that is dedicated to non-profits. As Perman notes:
Even though we are in the midst of a quite severe (and long-lasting!) economic downturn, we are still a society of extreme abundance. An economist friend of mine recently pointed out that the US produces 1 billion units of clothing per year. The number could even be 100 billion; I can’t remember for sure. But it was simply massive.
I’m glad we produce a lot. I think that is a partial fulfillment of the creation mandate, and that it is good, not evil. However, I suggest that we could get by with producing less of some things in order to produce more of other things. We need more pastors. We need more missionaries. We need more people devoted to serving those in need. We need more people devoted to the causes of fighting large global problems, like extreme poverty and corrupt leadership. Many of these things cannot in themselves be done at a profit, but can and must be done.
When society reaches a point that we have a proliferation of trinkets and other such things, it’s not a sign that capitalism has gone bad. Rather, it’s a sign that we need to use the freedom that capitalism affords us to point our efforts more fully in another direction — namely, the social sectors. We need more non-profit organizations, more churches, and more people going in to ministry and non-profit work in general. We can afford it. It will mean less singing fish, and perhaps less pet rocks. More seriously, maybe we won’t be producing exactly the 1 billion articles of clothing per year (which I am fine with as long as Banana Republic doesn’t go out of business). The point of our prosperity is not simply or mainly to enable us to keep buying more stuff, though the desire to accumulate is not evil in itself. The point of our prosperity is, rather, to divert some of our ability to accumulate more to efforts that focus more directly on using our abundance to meet pressing global needs.
I know there is one important consideration and possible objection here, which is actually a point I’ve made for years and that I make in my book (if I don’t cut the chapter due to length). And the objection is that I may seem to be pitting business against social good, when in reality it is business, not charity, which is the long-term solution to global poverty.
So I want to say clearly that I am not doing that. I do believe that business is the only long-term solution to large global problems like global poverty. And I’m not saying that when a person opens a business and makes money that he is not contributing greatly to the welfare of society. They are. But business cannot do this alone, because not all needs can be met at a profit, and there is injustice blocking the way in many instances. We need to be a society of both excellent businesses and great non-profits.
December 27th, 2011 | 11:10 am
We make 1 billion units of clothing per year? I suspect it’s more like “Indentured servants make most of the 1 billion units of clothing per year that we claim to produce.”
But we shouldn’t let that stop us from engaging in a good ole back-patting.
December 27th, 2011 | 12:15 pm
B.E. Ward
And of course you make all of your own clothing, grow all of your own food, make all of your own tools and typed your comment on a computer that was manufactured by high-wage earning workers in a factory fueled 100% by sustainable energy.
December 27th, 2011 | 1:14 pm
I might be mistaken, but doesn’t our economy have many distributist aspects? Our retirement accounts are a significant vehicle for distributing capital: 401(k)s, 403(b)s, and the like are a significant sector of the economy, and have a strong voice on corporate boards. We also have a strong system of credit unions (which are non-profits), who have remained largely unaffected by several banking crises, and here and there you can find co-ops (rural electric power, for example).
These organizations have sometimes had to thrive in environments hostile to their growth. Left-wing thinkers tend to prize a defined-benefit pension from the government, which provides a greater measure of security than 401(k)s (unless your government reneges and/or runs out of money, as state employees sometimes discover). On the other hand, banks (which are for-profit) sometimes try to enact laws that hinder the growth of credit unions, and many corporations try to make it hard to set up and maintain a co-op.
In any case, advocates of capitalism are also likely to say some pretty stupid things. After all, we also live in a culture that assumes that even disproportionate wealth is a sign of success and/or hard work, rather than temporary accidents or the consequence of luck, dishonesty, and/or exploitation, and that income disparities resulting from the same can be dismissed as mere covetousness.
December 27th, 2011 | 1:25 pm
I notice that Perman writes about using the proper definitions of “capitalism” and “socialism” but does not give them.
December 27th, 2011 | 1:41 pm
Steve,
Of course not, but I also don’t try to claim I ‘produce’ something when it’s really done on the backs of other people.
December 27th, 2011 | 2:16 pm
B.E. Ward
The U.S. does produce a lot of clothing. It also imports a lot based on cheap labor. Perlman doesn’t make it clear what clothing he was referring to, but there is a lot of clothing manufactured in the U.S. (1 billion units is likely not an underestimate).
December 27th, 2011 | 6:01 pm
Perry–I think you’re making the author’s point about distributism–that much of what a distributist wants is provided by capitalism. Your point about ownership is particularly germane, and distributist advocates seem to be blind to it.
Nothing quite matches the obtuseness of distributists, who are wont to call capitalism a total failure because there are recessions, while forgetting that even in recession the capitalist participants are vastly better off than they would be under distributism. Capitalists do make dumb comments, but not so much when they are advocating for a market system. Distributists, by contrast, are congenitally blind to reality.
December 27th, 2011 | 8:36 pm
Distributism requires individual ownership of individual means of production, thus the aggregate and indirect forms of ownership that Mr. Perry mentions aren’t distributist at all.
Some advocates of distributism relax the requirement of individuality a bit and include small group, even community, ownership of means of production but never the anonymous, aggregate corporate or indirect ownership that characterizes virtually all 401(k) retirement saving and investment schemes.
The system of natural liberty, or “capitalism” as its detractor Karl Marx insisted on calling it, is quite hospitable to distributist organizations of production – as long as they are profitable. Should a technology arise that is more productive than existing ones, can produce at small scales and yet has large diseconomies of scale, the system of natural liberty will encourage its widespread adoption and the creative destruction of existing mammoth corporate forms of ownership and worker anonymity.
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