[For Part I, click here.]
The Failures of Capitalism
Capitalism fails on a number of levels philosophically; however, here we will limit ourselves to its failures due to its fundamental misunderstanding of the nature of human economy, based on the principles we’ve discussed previously.
When a society begins to mistake money for wealth, it begins to dedicate itself to the production of money rather than to the production of wealth. The accumulation of money is seen as the acquisition of wealth, and the constant flow of money is seen as the lifeblood of the economy. Because money must be constantly moving, this system requires the greatest amount of spending by the greatest number of people possible. This encourages everyone to continue accumulating still more money, and so on, ad infinitum.
The capitalist, of course, argues that this fact also encourages production. After all, people have to be spending their money on something, and someone has to produce that something. This argument, however, misses the material point, which is that the purpose of this corrupted system is to produce money, not wealth. While people certainly spend a good deal of their money on things, and that those things must be produced, people also spend large quantities of money on things which have little or no real wealth behind them.
The current system is interested in producing money, not necessarily in producing wealth. So men in our system naturally turn to those professions which can produce the greatest amount of money in the shortest amount of time. Needless to say, this does not include farming or shoemaking; rather, it consists largely in finance. Short selling, ludicrously complex derivative packages, credit default swaps, and various esoteric types of insurance are the lifeblood of such a system. Trading money back and forth to each other while selling each other insurance on the packages occupies an astoundingly large portion of our population. Meanwhile, the portion engaged in such tasks as growing food and making tools continues to dwindle.
In other words, it’s clear that people still consume as they always did; however, what they consume, how much they consume, and what’s behind that consumption are quite different.
First, people are driven to consume large quantities of useless things that they do not need. This sort of consumption is encouraged by the enormous quantities of advertising required by the consumptive capitalist society, which is needed to induce the populace to keep buying things that they don’t really require. This is often accompanied by huge, tragic cultural losses, losses which are largely, if not entirely, ignored by our society. For example, the average citizen owns a large quantity of purchased music, in the form of tapes, compact discs, and digital files. Yet the average citizen rarely gets together with others in a pub and makes music for himself anymore, so distracted is he by the bought music he constantly pumps into his ears.
Second, people consume enormously more than they once did. They have to or the system would come crashing down about itself, depending as it does upon the unending flow of large quantities of money. And so while people once saved for years to buy a home, which they would live in for decades at a minimum, people now get mortgages to pay for the entire cost of the home, or more, and yet leave it within only a few years. This also encourages massive personal debt and discourages personal savings, as it’s necessary to constantly buy to get the things that we “need,” while thrift and saving only delay the gratification that our society and the constant barrage of advertising tell us ought to be immediate.
Finally, what’s behind the consumption is often merely a veneer of actual wealth. Production simply doesn’t produce money fast enough; this has encouraged our citizens to avoid the productive trades and pursue others, which yield larger quantities of money more quickly. Because production doesn’t pay enough to fuel our highly consumptive lives, production has increasingly left our shores and been “outsourced” to other lands. We are thus left physically dependent upon others for the wealth that we require for our survival. We also further the spiral of debt, consumption, and costs that’s been briefly outlined above, aggravating still more our society’s descent into hedonism.
Furthermore, behind all our reckless consumption lies an untold ocean of exploitation and injustice. To keep us constantly buying more and more stuff, prices must be kept down and durability must be kept minimal. The cheaper things are, the more likely we are to buy them; the quicker they break, the more often we will purchase replacements. Not only does this run roughshod over all the traditions of craftsmanship in each particular trade, it also exploits the populations of other lands than ours. Those who do our production for us must do so at near-slave wages, for paying a living wage would remove the price benefit of producing there in the first place, and fewer of us would buy the goods produced. More and more, rather than producing wealth for their own countries, foreigners are led into borderline slavery to produce unnecessary flotsam for ours. In this way, while we corrupt ourselves, we also impoverish our neighbors.
Finally, our current system largely takes away the freedom of families and local communities within our society. Since goods are generally produced quite far from where they are sold (since they are generally produced in foreign countries, and even overseas), sale of those goods tends to become limited to those who can afford to transport them most cheaply. Huge retail monstrosities thus arise, vending the generally foreign and often useless garbage that advertising assures the populace that they need, as well as the few necessities which people cannot avoid buying. Families and local communities are thus led outside of themselves, not into themselves in solidarity. Rather than communities producing most of what they need themselves, and supporting one another with their money by buying what their neighbors have produced, communities are constantly split apart by the necessity to stray farther and farther away from home to make any purchase. These families and communities thus become absolutely dependent upon others, who are usually based far away and have little concern for them other than for their money. Communities dissolve, and small producers based in those communities become increasingly unable to survive.
Nor is this situation sustainable; we’ve seen recently just how fragile and ultimately doomed it really is. We’ve equated our wealth with our money; however, while we’ve based our entire society on our ever-increasing piles of cash, we have not accumulated real wealth to give that money any true meaning. This works for a time, as people get heady in their own richness; however, eventually they realize that there’s nothing behind their money, and they flee from it as quickly as they can. This happened in housing; it happened in the financial markets; it will happen in all segments of our economy. We may be able to stave it off, but we cannot make it flee forever. One can only violate the nature of things for so long.
But what can be done? How can we free ourselves from the endless cycle of consumption designed solely to produce more and more money which in itself holds absolutely no value? That is where Distributism enters the picture.
The Distributist Answer
To sum up: we live in a society in which those who produce no wealth, but merely accumulate lots of money with little or no real wealth behind their gains, are glorified, but those who produce real wealth, like farmers, are laughed at as uneducated and useless bumpkins. Our economic system depends, at its core, upon a rampant consumerism that often borders on outright hedonism, and the real production of wealth is relegated to those in foreign lands, who are thus prevented from producing wealth for their own people.
Distributism seeks to answer all these questions. Distributism is a name produced in the early twentieth century by the great Catholic writers Hilaire Belloc and G. K. Chesterton; however, in a certain sense it is an unfortunate name. While it is accurate, it brings to mind images of commissars tossing the kulaks off their land and forcing peasants to starve on communal farms. However, nothing could be further from the truth.
Distributism could just as easily be called productionism, as both distributive justice and production are its central tenets. Essentially, Distributism attempts to solve the modern consumptive, money-based economy by bringing the focus back to production. It does this by encouraging the widest possible distribution of productive property throughout the populace.
The problem with our modern system is that production has been removed from the ordinary citizen. We no longer respect and honor the man who can produce great wealth, but rather the man who can accumulate the most money. To defeat this tendency, we must once again make production of wealth the center of the normal citizen’s life. When each citizen is again directly involved in production, the production of wealth will again become paramount, and the evils of a money-based system will be substantially mitigated.
However, Distributism also takes account of a vital tenet of Catholic political thought: the principle of subsidiarity. This time-tested principle states that any given task in a society ought to be done by the smallest possible level of society. For example, the education of children is entrusted primarily to the parents of that child, as that is the smallest level of society truly capable of performing that task. Similarly, the management of a given trade ought to be entrusted to that trade itself, since that is the smallest level of society really able to accomplish it. Distributism thus has a strongly localist streak, and it is from that streak that it receives its name. Distributism seeks not only to ensure that most citizens are engaged in the true lifeblood of an economy, the production of wealth; Distributism also seeks to ensure that the production of wealth is done by the smallest units of society capable of doing it. Often, this unit will be the individual family. Thus, Distributism is that system in which most ordinary citizens are the owners of the means of production.
If the average citizen is the owner of some means of production—whether that be land, tools of a trade, or some other productive property—the problems of our current system identified above will be greatly mitigated. Citizens will be involved personally in the production of wealth. More wealth production will be done locally, ensuring that the money economy—that which is based on the exchange of money—will be much more solidly based in the existence of real wealth. Because most citizens will be involved in producing, outsourcing will no longer be necessary, because our own citizens will be happy to work their own property to produce wealth for their fellow citizens for fair trade. This will further enable those in other countries, currently exploited for our own benefit, to direct their efforts to the benefit of their own peoples. Being once again engaged in the production of real wealth, citizens will become better able to see through advertisements for “necessities” that are really superfluous, or even harmful, luxuries. Significantly, too, the most valuable members of our society, those who produce those things which are most necessary for our survival, will once again be held in their proper dignity.
Furthermore, families and communities will be bolstered and unified by their new found comparative independence. Families will depend more on their own hard work and ingenuity than on that of others whom they have never met; communities will unite and support one another by spending their money on the producers within themselves. No longer will communities be dependent upon the good will and largesse of large corporations who care nothing for them; they will become strong and one again, independent and proud.
Most importantly, however, we will again be faithful to our God-given task of stewarding the earth which He gave us. God gave us His creation so that we could dress it and keep it; that is, improve it by making it more useful to ourselves, and keep it by maintaining our improvements, so that the earth would serve us just as we serve Him. He did not give it to us so that we could accumulate ever-larger piles of green paper. Our Lord cultivates our souls so that we can serve Him; this is His primary task relative to man. Let us also cultivate the earth so that it can serve us, as God intended it to serve us; in this way we not only bring about our own sustainable prosperity, but also engage in Tolkien’s subcreation, in order to come closer to our Creator.