The Place of Guilds in A Distributist Economy

One of the reasons frequently advanced for Distributism is the freedom and independence which a system of small and well-distributed property allows for families and individuals, in contrast to the wage slavery of Capitalism. And this is certainly true and constitutes one of the virtues of a distributist economy. But some of those who stress this aspect of Distributism appear to think that it is only on this one point of property distribution that Distributism differs from Capitalism. Capitalism is objectionable in this view only because of the large concentrations of property that result from it. Such distributists seem to think that there is nothing wrong with other aspects of Capitalism, such as its free competition and its commercialism, but only with the bigness that it produces, the large corporations which almost always dominate economic life in a Capitalist system.[note]If certain passages in Hilaire Belloc are taken out of context, he can be seen as promoting Distributism only because it leads to “freedom,” freedom understood as the anarchic freedom of Capitalism, because of a failure to grasp what Belloc means by the term. Cf. The Restoration of Property (New York : Sheed & Ward, 1946), for numerous laudatory statements about economic freedom, especially the discussion on pages 21 through 27. But the entire theme of the book and the plan which Belloc sketches for creating widely distributed property make clear that he is not arguing for the free market or free competition. One of the clearest statements to this effect is on p. 38. “Private property acting unchecked, that is, in the absence of all safeguards for the preservation of the small man’s independence, tends inevitably to an ultimate control of the means of production by a few….” Or as Pope Pius XI put it in his encyclical Quadragesimo Anno (no. 107), “This accumulation of power, a characteristic note of the modern economic order, is a natural result of unrestrained free competition which permits the survival of those only who are the strongest.” (All quotations from Quadragesimo Anno are from the Paulist translation as published in Seven Great Encyclicals and elsewhere.)[/note] Some even suppose that as long as there exists the well-distributed property of a distributist society, free competition among producers and sellers would be beneficial. But any such notion of Distributism fails to take note of one of the key points in the distributist plan, namely the existence and function of guilds as regulating and moderating forces in a distributist economy.[note]Although I will generally refer to these entities as guilds, probably a better name for such organizations in a modern economy would be occupational groups. Various twentieth-century writers have referred to them by such names as: vocational groups, functional groups, industry councils, organized industries and professions, corporations, professional bodies, orders, estates. See Raymond J. Miller, Forty Years After: Pius XI and the Social Order (St. Paul, Minn.: Frs. Rumble & Carty, c. 1947) pp. 161-62, for a discussion of the best English name for these bodies. In 1948 a committee of the American Catholic Sociological Society recommended the term "industry council," and the American bishops, in a statement later that year, took note of that decision without officially endorsing it. John F. Cronin, Catholic Social Principles (Milwaukee : Bruce, 1950), 221-22.[/note] Belloc clearly recognizes them and mentions them more than once. For example,

Still, for the purpose of spreading the moral effect of economic independence, and familiarizing modern men with the idea thereof, the re-erection even of a small number of craftsmen protected by a charter and guild in some of our departments of production would be of the highest value.[note]The Restoration of Property, 75, emphasis author's. See also page 35.[/note]

It is clear then that guilds have a permanent role in Distributism, but what is that role and what are the reasons for it? In fact, why are guilds an essential part of any well-functioning economy?We might begin our consideration of guilds by asking some basic questions about the economy: What is an economy for? Why is economic activity necessary and appropriate for mankind? What purpose does it serve? With a little reflection, the answer to these questions should be obvious. Economic activity exists so that we can provide for ourselves the necessary goods and services not only for our mere existence and survival, but so that we can live a life specifically human, a life in which human nature in all its aspects can flourish and be perfected. The economic goods we produce are not ends in themselves, but exist for the sake of human life, including our family and social life, our intellectual life, our spiritual life.This might seem a truism, but a very important corollary flows from the principle that economic goods are for the sake of human life in its fullness. This corollary is simply that economic goods and services are for our use, they have as their primary object to be used by mankind. This might also seem an obvious point, but one of the constant motifs of Capitalism is that goods are produced primarily and directly for sale and their use is secondary to that. Thus the first question in a Capitalist economy is not whether a particular good is truly useful for mankind, not whether it truly promotes human life, but whether it can be sold and whether, using all the arts of advertising, people can be persuaded to desire and purchase it. The reason that Capitalism has this effect is because of what Capitalism essentially is, namely the separation of ownership and work.[note]This characterization of capitalism as the separation of ownership and work is taken from Pope Pius XI's encyclical Quadragesimo Anno (1931) which speaks of capitalism as "that economic system in which were provided by different people the capital and labor jointly needed for production" (no. 100). It is important to note that Capitalism in itself is not unjust. But it is always economically unstable and tends toward injustice, and is hence unwise. Although theoretically Capitalism could be operated with justice, in practice this seldom if ever has happened.[/note]That is, a Capitalist economy is one in which the characteristic economic arrangement is for some to own the means of production and to hire others to work for them, using the property of the owners to produce goods and services which are then sold to consumers. How does this result in the subordination of use to sale? Simply because those who own the means of production and exercise most of the economic power in the society are at least one step removed from actual production of real goods. In a corporation, which is the most highly-developed form of Capitalist enterprise, the shareholders, who are the legal owners, usually have very little interest in the actual products or services that the corporation produces. Their concern is with their dividends or with rising stock prices. And management likewise gradually tends to become focused not on making sure that the firm is truly serving human needs by producing a necessary quality product, nor even on persuading people to buy a product, useful or not, but on finance, on manipulating shares, engineering mergers and buyouts, and providing enormous salaries, bonuses and pensions for themselves and their friends.[5] Belloc describes this process in the following words:

But wealth obtained indirectly as profit out of other men's work, or by process of exchange, becomes a thing abstracted from the process of production. As the interest of a man in things diminishes, his interest in abstract wealth—money—increases. The man who makes a table or grows a crop makes the success of the crop or the table a test of excellence.

The intermediary who buys and sells the crop or the table is not concerned with the goodness of table or crop, but with the profit he makes between their purchase and sale. In a productive society the superiority of the things produced is the measure of success:  in a Commercial society the amount of wealth accumulated by the dealer is the measure of success.[note]An Essay on the Nature of Contemporary England (New York : Sheed & Ward, 1937), 67.[/note]

This commercial spirit, moreover, which is the real spirit of Capitalism, tends to poison the entire soul of a nation. It subordinates everything in society, including education, the family, sports and recreation, to moneymaking. Thus in the United States sports are no longer about people enjoying themselves in healthy physical activity, but have become big business, while the purpose of education is usually understood as the chance of getting a better job and making more money. The intellectual life as the pursuit of truth for its own sake and for the sake of the better ordering of our souls is hardly understood at all. In fact, it is not even thought of by most people.Now to avoid such a commercial spirit, economic life must be oriented toward production for use. Distributism tends in this direction because the ownership of small property, whether workshops, stores or farms, naturally inclines the proprietor to concentrate on producing goods, even to taking delight in well-made articles or in providing needed services to the community, since his whole livihood and life are dependent not upon financial manipulation, for which he will have little opportunity, but upon his own efforts as a worker. Even if a small craftsman or farmer has an inordinate love for money, generally that is tempered by at least some respect for his product or craft, for he sees himself primarily as a producer of a particular product.But the mere existence of well-distributed small property does not guarantee a well functioning economy subordinated to its purpose of serving human life in its fullness. There is still the need for certain structures to guide economic life more surely toward its true end. And this is why the guild is necessary even in a distributist economy. Let us look at a definition of medieval guilds in order better to understand their purpose and necessity.

A guild was a federation of autonomous workshops, whose owners (the masters) normally made all decisions and established the requirements for promotion from the lower ranks (journeymen or hired helpers, and apprentices). Inner conflicts were usually minimized by a common interest in the welfare of the craft and a virtual certitude that sooner or later every proficient apprentice and industrious journeyman would become a master and share in the governance of the craft. To make sure that expectations would be fulfilled, a guild would normally forbid overtime work after dark and sometimes limit the number of dependents a master could employ; this also served to maintain substantial equality among masters and to prevent overexpansion of the craft.[note]Robert S. Lopez, The Commercial Revolution of the Middle Ages, 950-1350. (Cambridge : Cambridge University, 1976), 127.[/note]

The complexity of economic activity, even of a medieval urban economy whose reach generally did not extend much beyond the confines of one city, requires that there be some kind of regulating body which helps guide an economy toward those goals which we discussed above, namely, providing needed goods and services for the use of the human community. For example, unless we avoid destructive competition and ensure that there is no large number of people who for one reason or another have little hope of becoming owners of productive property, a distributist system would encounter so many crises that it would probably gradually fall into Capitalist disorder.In thinking about guilds, the first point to note is that these are not structures imposed upon producers. All who produce the same good or service, e.g., all bakers, have certain common interests.They are interested in fair prices, in having a sufficient and sure supply of raw materials, perhaps in the joint purchase of very expensive machinery which an individual owner could not afford, in having a steady and reliable market for their goods, in maintaining training programs for apprentices, in relations with governing authorities and with other economic or industrial groups, especially their suppliers and others with whom they must work. In fact, these bakers, whether they recognize it or not, already form a distinctive group. Guilds are not an artificial layer of bureaucracy, but rather a naturally occurring grouping of those performing the same function. It was to formalize such groups, to make them real and effective, that guilds came into existence in the Middle Ages.[note]Pius XI compares the common concerns and goals of those who work in the same trade or profession with the common concerns of the "citizens of the same municipality," which lead them to form various groups and associations to care for their joint needs and interests. Cf. Quadragesimo Anno, no. 87.[/note]As a consequence of the natural function of guilds in taking care of matters of common concern, they will also be the primary locus for economic regulation. The need for some kind of economic regulation is necessary to avoid the economic anarchy of free competition. Generally in the modern state it is assumed that this regulatory function should be conducted by the central authorities of the state. But this is not usually their proper task.In the first place the principle of subsidiarity--the principle that higher and larger bodies, including the state, should not absorb the functions and duties of lower and smaller ones--is the key to dealing successfully with socio-economic questions.[note]Cf. Quadragesimo Anno, no. 79.[/note] A distributist society will have a natural instinct toward local control, it will have a suspicion of large institutions unless their necessity is clear.Of course this does not mean that distributists look upon the state the way libertarians do. They do not desire a so-called nightwatchman state, whose only concern is keeping order.[note]Cf. Quadragesimo Anno, no. 25.[/note] But while the state has the widest interest in the common good and the welfare of all of society, generally it should confine itself to "directing, supervising, encouraging, restraining"[note]Quadragesimo Anno, no. 80.[/note] the lower bodies as they go about their proper and immediate tasks.Many of the objections to government regulation that are made by economic liberals--known as conservatives or libertarians in the United States--rest on the charge that government bureaucrats know little about the realities of industry and are apt to apply standards that are abstract and too rigid, for example to matters such as safety concerns. And at times there may be some truth to this charge. But the answer is not to do away with regulation. No, the answer is to place regulatory power in its proper and natural place, with those actually doing the work, those who do know the realities of the industry and who themselves must bear any safety hazard.What then would be the proper regulatory powers of guilds? Let me begin to answer that with a quotation from Msgr. John A. Ryan, the greatest American theologian on the Church's social doctrine.

The occupational group [guild] might be empowered by law to fix wages, interest, dividends, and prices, to determine working conditions, to adjust industrial disputes, and to carry on whatever economic planning was thought feasible. All the groups in the several concerns of an industry could be federated into a national council for the whole industry. There could also be a federation of all the industries of the nation. The occupational groups, whether local or national, would enjoy power and authority over industrial matters coming within their competence. This would be genuine self-government in industry.

Of course, the occupational groups would not be entirely independent of the government. No economic group, whether of capitalists or laborers, or of both in combination, can be trusted with unlimited power to fix their own profits and remuneration. While allowing to the occupational groups the largest measure of reasonable freedom in the management of their own affairs, the State, says Pius XI, should perform the tasks which belong to it and which it alone can effectively accomplish, namely, those of 'directing, watching, stimulating, and restraining, as circumstances suggest or necessity demands...'[note]Distributive Justice (New York : Macmillan, 3rd ed., 1942) nos. 340-41.[/note]

Although Msgr. Ryan probably assumes the existence of widespread employment for wages, the tasks that Distributism proposes for guilds are essentially the same as those he lists.Belloc, for example, writing of the fishmongers' guild, says, "The... Fishmongers' Guild of London regulated the trade in fish, fixed prices, checked undue competition, prevented the wealthier fishmonger from eating up his smaller brother and so on."[note]Hilaire Belloc, The Crisis of Civilization (Rockford, Ill. : TAN, 1992), 109.[/note]In other words, the chief function of the guilds is to oversee a particular trade or industry so that its prices and wages are fair,[note]In a distributist economy, the question of wages would primarily concern apprentices and journeymen.[/note] its products are well-made and are produced in such a manner as not to harm either the worker or the larger physical environment, and there is an approximate equivalence between the number of workers in a particular trade and the public's genuine need for their product or service so that there will be steady work for all in the trade or industry. In addition, guilds would probably take on many of the subsidiary functions now performed by government or others, e.g., pensions and health insurance, owning their own industrial banks or credit unions to provide financial services to guild members and their families, especially financing for those starting out in the field, and they would act as trade associations to represent the trade to outside interested parties, such as the government, other guilds whose members serve as suppliers or customers, etc. Moreover, in a Catholic society guilds would operate as frankly religious societies, striving to inculcate a spirit of both justice and charity in their members and to sanctify their work by means of attendance at Mass in common, devotion to the patron saint of the guild, Masses and prayers for deceased members and so on. In fact, one of the most important benefits of the presence of guilds in an economy may well be the promotion of social charity, of that fraternal love of neighbor without which individuals and entire societies will fall more and more into selfish behavior, despite how just or perfect their institutions and legal codes may be.[note]Cf. Pius XI, Quadragesimo Anno, nos. 88, 137; John Paul II, Centesimus Annus, no. 10.[/note]It will be clear from the above that in the exercise of all these tasks guild members must always seek more than just their own well-being. As Pope Pius XI wrote, "... it is easy to conclude that in these associations the common interest of the whole `group' must predominate:  and among these interests the most important is the directing of the activities of the group to the common good."[note]Quadragesimo Anno, no. 85. Pius' classic statement of the nature and functions of guilds is in Quadragesimo Anno, nos. 81 to 87. Although Pius XI and Pius XII spoke of guilds or occupational groups much more than have more recent popes, it is not true that there are no references to such institutions in papal social teaching after Pius XII.  See John XXIII, Mater et Magistra, no. 37, and nos. 65-67, 84, 86-90 and 100. Also John Paul II, Laborem Exercens, nos. 14 and 20, and Centesimus Annus, nos. 7, 13, 43, 48.[/note] In other words, and as I have already mentioned, a guild must not aim simply at its own good, but realize that all economic activity exists for the sake of the common good. If an industry is flourishing but supplying the public with shoddy or useless goods or polluting the environment, then that industry is not fulfilling its task. It is more like a criminal syndicate which lives by taking advantage of society. Therefore guilds must be concerned not only with obvious matters affecting the common good, such as product quality and fair prices, but be willing to play a constructive role in the economy. Although a distributist economy should largely be free of the periodic crises that afflict capitalist economies, still there may be times when events such as wars or natural disasters require unusual efforts on the part of some or all sectors of the economy, and in such cases the guilds would be expected even more than usual to orient "the activities of the group to the common good."What of the internal structures of guilds or their relations with one another and with outside parties, especially the government, either local or central? In a distributist economy the internal structure of a guild would probably be comparatively simple, for seldom will there be a complex structure of owners, managers and workers who must all receive fair representation in the guild's governance. Like the medieval guilds, which were also distributist, in a distributist society owners of small productive property would be the primary members of a guild, but there would have to be some way of giving a voice to those in apprenticeship or other training programs, as well as to journeymen, that is, those who had completed their training and were working for wages while gaining experience and capital for setting up their own shop or workshop or farm. Also, we must allow for the possibility that there would be some who would prefer to continue as journeymen throughout their lives, having no desire to establish their own businesses. Such an arrangement would not be harmful to a distributist society unless it became so common that the employer/employee relationship became the norm, as it is in Capitalism. But in any case, these journeymen would also be guild members, who must have some representation in the governance of the guild.It is important to note here, moreover, that as the distributist taxation plan, as set forth by Belloc,[note]Cf. The Restoration of Property, passim. It is possible that instead of using taxation to prevent the formation of large businesses and farms, as Belloc envisages, that this could be accomplished by guild regulations, with very little involvement by the government.[/note] limits the size of entities, so there would necessarily be a corresponding limit to the number of apprentices and journeymen which a single master might employ. Although this would probably happen as a natural result of the tax-imposed limitation on size of shop, farm or workshop, if necessary there could be an explicit rule of the guild on the subject.A guild would have its chief locus of activities in one particular city or district, but, depending on the industry, the technology employed, source of raw materials, etc., there could well be regional, national, and, with proper government supervision, even international federations. For in many cases industries would have a need to coordinate on a regional or national level, and might, for example, negotiate regional contracts for the purchase of raw materials or machinery. These federations of local guilds might also be the first place in which disputes between guilds were adjudicated, with appeal to civil courts as a last resort.It is important to emphasize the point that guilds are not voluntary associations. That is, if one wishes to exercise a certain trade or profession, he will be obliged to become and remain a member of the appropriate guild, and will be subject to its rules, which of course will be formulated democratically by the guild members themselves. No distributist will regard that as an infringement on man's legitimate freedom, for our economic freedom exists so that we can make a decent living for ourselves and our families, not so that we can amass riches beyond our needs. For as G.K. Chesterton remarked, the institution of private property no more implies the right to unlimited property than the institution of marriage implies the right to unlimited wives.[note]What's Wrong with the World (San Francisco : Ignatius, 1994), 42.[/note]With regard to relations with the government, we must remember that the guilds will be legal persons in their own right.

In legal language the vocational group would be designated as a corporation or a syndicate. It would in some manner be regarded as a moral person capable of assuming responsibility for its corporate actions and of representing the interests of its members. The State would have to see that the corporation fulfills the social function wherefor it exists and in return enjoys the social advantages, material and cultural, which the general condition of society warrants and should make available for all. Within the corporation, since there would be no one possessing a disproportionate power, all matters could be settled on a democratic basis.[note]Charles P. Bruehl, The Pope's Plan for Social Reconstruction: a Commentary on the Social Encyclicals of Pius XI (New York : Devin-Adair, c. 1939), 247-48.[/note]

In short, with its stable legal status a guild would be able to represent the interests of the trade or profession as a whole, yet always aware that those interests were subordinate to the overall interests of society, both economic and otherwise. A reasonable prosperity would of course be sought, but a prosperity which respected the rights and needs of other guilds and their members, of the consuming public, and of the overall economic, cultural and even spiritual state and needs of the locality or region. No conception of guilds, or of Distributism itself, can isolate their economic aspects from the general welfare of society, and even from man's true destiny to live with God forever in heaven.God created men as rational animals, indicating thereby that we would need a care both for our bodies and our souls, and that our external physical life is by no means to be despised. But external goods, as well as serving as necessary means for true human fulfillment, can become snares which turn us away from our final end. Distributism and the guild system aim to set up safeguards around economic activity to minimize this danger, the danger of material goods taking us away from how we ought to live. This was a danger that the medievals well understood, and their attitude toward riches was described by Tawney in this manner:

Material riches are necessary; they have a secondary importance, since without them men cannot support themselves and help one another; the wise ruler, as St. Thomas said, will consider in founding his State the natural resources of the country. But economic motives are suspect. Because they are powerful appetites, men fear them, but they are not mean enough to applaud them. Like other strong passions, what they need, it is thought, is not a clear field, but repression. There is no place in medieval theory for economic activity which is not related to a moral end, and to found a science of society upon the assumption that the appetite for economic gain is a constant and measurable force, to be accepted, like other natural forces, as an inevitable and self-evident datum would have appeared to the medieval thinker as hardly less irrational or less immoral than to make the premise of social philosophy the unrestrained operation of such necessary human attributes as pugnacity or the sexual instinct.

At every turn, therefore, there are limits, restrictions, warnings, against allowing economic interests to interfere with serious affairs. It is right for a man to seek such wealth as is necessary for a livelihood in his station. To seek more is not enterprise, but avarice, and avarice is a deadly sin. Trade is legitimate; the different resources of different countries show that it was intended by Providence. But it is a dangerous business. A man must be sure that he carries it on for the public benefit, and that the profits which he takes are no more than the wages of his labor.[note]Richard H. Tawney, Religion and the Rise of Capitalism (New York :  Harcourt, Brace, c. 1926), 31-32.[/note]

Modern distributists are seeking to recreate some of that atmosphere and attitude toward riches that our medieval ancestors had. And the existence of guilds within a distributist society is both an additional safeguard and a necessary institutional means for promoting the welfare of man, in both his personal and civic aspects, and for his life both here and hereafter.