What's Wrong with Distributism

Recently, in the Intercollegiate Review online, Dr. David Deavel published two articles, the first entitled "What's Right with Distributism," and the second, "What's Wrong with Distributism."As a contributing editor of The Distributist Review and indeed, one of the distributists whom Dr. Deavel mentions, I am replying to him here, not as an official reply on behalf of the Review, but simply as a private response of someone who has perhaps been as involved as any other in the contemporary revival of Distributism.Dr. Deavel's first article is a sort of praise of distributism, or at least of some aspects of it, and he instances four areas of agreement with distributists. First, "distributists are right to emphasize the place of morality and ethics in economics and our working lives," next, distributists "object to the concentration of power that is so endemic in modern Western economies," thirdly, distributists "are right that a wider distribution of wealth is essential to a healthier society," and finally, "distributists believe, and rightly, that too much of the modern welfare state hinders the moral and social development of the human person."It is in his second article, however, that Dr. Deavel gives his fuller—and critical—assessment of Distributism. He begins the substance of this article by claiming that "Distributists tend to deny that economics is a real mode of knowledge in any sense. They scoff at the notion that there might be predictive laws of economic behavior, such as supply and demand." Now while I do not necessarily blame Deavel for making statements such as "distributists tend to say this or that," nevertheless this kind of statement can be misleading unless he provides references to a particular distributist writer, since it gives the impression that such an opinion is widely held among distributists. Speaking for myself, I have explicitly and more than once acknowledged the existence of economic laws and specifically the laws of supply and demand. I have only pointed out that such laws necessarily function within a particular cultural and legal matrix. This can easily be seen simply by observing differences in the way capitalism operates in the United States as compared with how it operates in Japan, Germany or Italy. Supply and demand are indeed constant factors in economic life, but they are not absolute factors which operate independently from everything else, nor are they necessarily always the most important factor in any given economic outcome. In addition to the legal and cultural context, the exercise of power is a fact of economic life which at times is of greater importance than the principle of supply and demand. It was not supply and demand that rewarded inefficient corporate CEOs with big bonuses and pensions while their companies were descending into bankruptcy, but the CEOs' ability to control appointments to the compensation committees of their boards of directors. The CEOs were able to take advantage of legal and corporate rules to appoint the very people who awarded them huge bonuses and pensions. Indeed, Dr. Deavel's frequent mention of crony capitalism indicates that he is aware that power can and often does play a role in determining economic outcomes. But if this is so, it calls into question Deavel's criticism of distributists for our skepticism of the textbook presentation of how economies actually function. These texts present the economy as for the most part a mechanism working automatically, so that if a particular input is made, we can predict and expect a particular output. On the basis of such an understanding of economics one would predict that incompetent CEOs would be fired. Instead in many instances they were rewarded. Dr. Deavel would probably acknowledge this, but argue that this is because of the widespread cronyism in our economy, and that if only we had a truly free market, or something approximating it, we would not have these distortions of the supposedly infallible mechanical laws of economics. But in the last forty years the U.S. economy has become more, not less of a free market, and cronyism has flourished in such an atmosphere. This is only to be expected, for a free market, by its absence of regulation and oversight, allows and facilitates the very concentration of economic power that in the end gives rise to crony capitalism and other abuses.Next Dr. Deavel propounds a thesis much beloved by certain free-market proponents, especially supporters of Austrian economics. This thesis is that the essentials of the free-market position were contained in the writings of a group of 16th and 17th-century Spanish scholastic theologians. "Distributists also tend to dismiss free market arguments as products of the secular Enlightenment, unaware that they were in fact developed not just by Christians, but by priests." Well, I am not unaware of this claim, but it is true that I do not accept it. In support of his view Deavel mentions a work by Alejandro Chafuen, Faith and Liberty: the Economic Thought of the Late Scholastics, which is a reissue or revision of an earlier title by Chafuen, Christians for Freedom: Late-Scholastic Economics (Ignatius Press, 1986) with an introduction by Michael Novak. This earlier book I have myself read, and while obviously there is no room for a review of that work here, I can make a brief comment on it. The book is curious in that one can see a progressive difference in the statements made about free markets by Novak, Chafuen and by the scholastic writers themselves. In the first place, Novak, who apparently had not read widely in the scholastic authors under discussion, tends to view them as uncritical supporters of the free market. Chafuen, who had read them, is a bit more tempered in his claims. Then lastly the authors themselves. Here, since Chafuen provides numerous extended quotations, one can see even less of a free-market attitude. But even if it were the case that these writers held the proto-libertarian ideas sometimes attributed to them, they would still be merely a group of private theologians, whose opinions count for nothing whenever they are opposed to the papal social magisterium. (For a good discussion of the claims made about the Spanish late scholastics, see Peter Chojnowski's article, "Corporation Christendom: the True School of Salamanca.")Then Dr. Deavel takes up the papal social encyclicals. Here he is on even shakier ground. First of all when he says that distributists "tend to treat papal encyclicals as if every word in them were infallible"—again, what distributist said that? I have pointed out that papal social teaching needs to be regarded just like every other instance of the ordinary magisterium. Sometimes the ordinary magisterium is ordinary and universal, and when it is, then its teaching is as binding as that of the extraordinary magisterium, as the First Vatican Council taught. So on certain points where a series of popes have taught the same thing over and over, such as the just wage, the insufficiency of free competition as the ruling principle of an economy, the institution of private property and its limitations—on such matters one can discern that the magisterium is both ordinary and universal, and thus infallible. But any reader of these encyclicals can see that the many statements in them fall into different categories, ranging from infallible statements to simple suggestions.However, Dr. Deavel attempts to do more than point out that not everything in these documents is infallible. Sadly, he pretty much attempts to explain them away. For example, he quotes Leo XIII, "If I were to pronounce on any single matter of a prevailing economic problem I should be interfering with the freedom of men to work out their own affairs," and then Pius XI to the effect that "economics and moral science each employs its own principles in its own sphere" and that in "matters of technique" the Church has nothing to teach. One would never suspect from Deavel's selective quotations that both Leo and Pius taught that employers were obliged in justice to pay a living wage whenever possible, that Pius denied that free competition was a correct principle to direct an economy, and indeed that the very passage from Pius XI which Deavel quotes is part of a justification for why it is "Our right and Our duty to deal authoritatively with social and economic problems" (Quadragesimo Anno, no. 41). It is true that the Pontiff limits that authority to questions "that have a bearing on moral conduct." But this limitation of his teaching authority to the moral realm does not mean what many American apologists for the free market seem to think that it means or should mean or would like it to mean. For in this same encyclical Pius denounces the classical liberal idea of the state and teaches that "the civil power is more than the mere guardian of law and order" (no. 25), sanctions state limitations on property ownership (no. 49), asserts that "the wage paid to the workingman should be sufficient for the support of himself and his family" (no. 71), teaches that "the proper ordering of economic affairs cannot be left to the free play of rugged competition" (no. 88), an idea which he says originated "as from a polluted spring," and remarks that the economic ideas of the more moderate socialists "often strikingly approach the just demands of Christian social reformers" (no. 113). Nor are Deavel's quotations from Centesimus Annus to the point either, for all the key tenets of Catholic social doctrine were repeated and reaffirmed by John Paul II in that often misunderstood and sometimes dishonestly quoted encyclical. Although space prevents me from offering an extended treatment of any of the encyclicals here, on Centesimus, I refer interested readers to this article of mine which discusses it at length and the false claims often made about it: What Does Centesimus Annus Really Teach?Dr. Deavel next asserts that "Distributist confusions go beyond the Church and extend into their ideas about the state. Complain as they will of the evils of crony capitalism...distributist solutions in fact amount to crony capitalism on a massive, societal scale. What else were medieval guilds but a system by which certain producers used the government to restrict their competition?" Well, indeed, what were the guilds, those institutions whose demise Leo XIII lamented or whose revival Pius XI and Pius XII so strongly advocated? Were they really such nefarious entities as Deavel believes? In fact the guilds did not represent crony capitalism at all, though of course they could and sometimes did develop abuses, just as every other institution peopled by fallen human beings, including the Church, can and does. Crony capitalism is the manipulation of capitalism engaged in for one's own enrichment or the enrichment of one's friends. The regulations that the guilds imposed were designed to provide a steady supply of goods and services to the public at a fair price, and at the same time allow each workmen enough business so that he could provide decently for himself and his family. The constant free-market catchword is competition, regardless of how many businesses fail and how much economic or social turmoil results. The medievals understood that economic activity is meant to serve our larger social life, and that as a result its goals are logically subordinate to the overall goals of humanity, including, above all, our attainment of eternal life. To those who long for the "creative destruction" of capitalism such an arrangement no doubt seems quaint, even old-fashioned, but anyone who realizes that our use of external goods in this world is meant to serve our cultural, intellectual, family and spiritual life, not supplant or distort it, will recognize in the medieval situation, as did Pius XI, "a social order which, though by no means perfect in every respect, corresponded nevertheless in a certain measure to right reason according to the needs and conditions of the times" (Quadragesimo Anno, no. 97).Deavel's indictment of guilds is part of his larger attack on what he calls the distributists' "secret lust for big government." Very correctly he argues that distributism is not libertarian. Indeed, were it so, I would not be a distributist. I do not hesitate to say that political authority is something natural and good, as Aristotle and Thomas Aquinas held, and that the state has a proper role in economic activity, as the papal encyclicals teach. But this does not mean that distributists desire an oppressive, centralizing state. Deavel attempts to paint distributists as statists by bringing up extraneous matters, such as Belloc's and Chesterton's qualified and temporary support for Mussolini. Since anyone is free to call himself a distributist, I cannot vouch for the views of every single one, but the central distributist movement as represented by The Distributist Review has no interest in fascist economic theory, whatever anyone in the very different historical situation of the 1920s may have thought or said. Distributism as an economic concept stands or falls on what the leading distributist thinkers of both past and present said about it, not about other matters with no relevance to today.Next, in the section entitled, Are You a Price Slave?, Deavel asserts a number of varying things which revolve around the fact that the economy necessarily involves the cooperation of many different persons. Of course this is true, and Deavel knows that distributists know this too. In his first article he had mentioned the Spanish Basque Mondragon cooperatives and the cooperatives of the Emilia Romagna region of Italy, both of which are rightly seen by distributists as an example of successful Distributisism in the context of an industrialized economy. One can hardly claim that capitalism alone depends upon cooperation. Distributist use of the term "wage slave" is meant to highlight the fact that such employees are economically entirely dependent upon their employers, and if they lose their jobs, have nothing to fall back upon. Capitalism can hardly claim a monopoly on economic cooperation, for some type of cooperation is necessary in any economy, no matter how organized. In fact, with Distributism, such cooperation is more likely to be unforced than either in capitalism or any kind of totalitarian economy.Lastly, Deavel suggests that, in fact, many of the good things distributists advocate are "already available in a free market system. You are free to shop only at small businesses, and get your produce straight from family farms... If enough people make those choices, that will help support an ample, thriving sector of independent farms and businesses...." This is true as far as it goes—we can and should choose to patronize such establishments whenever possible. So is Dr. Deavel therefore right that distributists should simply limit their goal to persuading people to frequent farmers markets and small shops, all within the context of free-market capitalism? I do not think so. In the first place, the economic and even political power of corporations is so vast in comparison with the local producers he mentions that any fundamental change in the economy is very unlikely. In fact, should small businesses and farmers ever become so numerous that they threaten the corporate dominance of the economy, one can be certain that corporations will take effective steps to limit or destroy such local producers and suppliers.More fundamentally, though, those who recognize that economic activity is an integral part of the social order cannot be content with the arrangement that Deavel suggests. Just as any person of good will ought to be disturbed by indications of family pathology in society, no matter how well his own family is doing, so one can hardly look at the economy as someone else's problem, so long as one has ready access to farmers markets and boutique shops. Just as the health of families is an important factor in our general social or cultural health, so is it with the economy. The economy is more than merely about exchange of goods or services; its operations affect how we live, affect the livelihood of individuals and families, and contribute toward the shaping of our culture. Even those who attempt to limit their buying to small shops and farmers markets are affected by the corporate-controlled economy. How could it be otherwise? We are parts of a whole and the social order necessarily has an effect on everyone and on our common culture. The economy ought to be everyone's concern, but everyone's concern as a moral matter, as an important part of our concern for the common good. To quote from Pius XI once more, the economy is supposed to be built on moral principles so that "particular economic aims, whether of society as a body or of individuals, will be intimately linked with the universal teleological order, and as a consequence we shall be led by progressive stages to the final end of all, God Himself, our highest and lasting good" (Quadragesimo Anno, no. 43). Dr. Deavel's suggestion is of a piece with his free-market orientation, an orientation which at bottom prescinds from a recognition that there is a common good, a shared concern that demands the attention and care of every citizen—just as it affects the moral and even physical health of every citizen.As far as one can judge based on his biographical note, Dr. Deavel is a sincere Catholic dedicated to serving the Church. Part of the education of future priests has been entrusted to him, and I am sure he takes this weighty responsibility seriously. Therefore, it is especially saddening to see his failure to see the forest in his preoccupation with the trees. The glaring fact is that the free-market capitalist economy, as a real historical thing existing in the world, has been the engine of a society whose ideals are at odds with those of Christian society. Instead of looking around to see if there might be some Catholic theologian somewhere whose teachings might have some sort of kinship with free-market ideologues, instead of parsing the papal social encyclicals so as to restrict as much as possible their teaching authority, I would hope that Dr. Deavel would simply open his eyes and look—at both the past and the present. Catholic societies were not those that embraced the ideals championed by Enlightenment economists, and in the 19th century Catholic thinkers were among the first who turned to the medieval thinkers, especially St. Thomas, not in order to justify the laissez-faire of their liberal contemporaries, but to find an alternative to their free-market doctrines in Catholic tradition. We cannot compartmentalize our minds so that, while seeking to uphold the Church's teaching on most points, as no doubt Dr. Deavel does, at the same time accommodate ourselves to a doctrine, to an entire system of social life, that is fundamentally at odds with Catholic teaching and tradition. One can only hope that deeper reflection on the part of Dr. Deavel will produce a change of mind—indeed, a change of heart—so that he will realize that Catholic teaching and tradition extend not merely to how an individual lives, but to how whole societies and whole civilizations live, and that he will recognize in the statements of popes, even when they do not exercise their infallible authority, the authentic mind of the Church on social questions, and see in their vision of a Christian society the genuine Apostolic tradition. The fragmented society which has been bequeathed to us by the Liberalism of the 18th and 19th centuries can hardly commend itself to any Catholic who thinks long and much on the social expression of the Faith, and I appeal to Dr. Deavel to allow his Catholic sensibilities to permeate all of his thinking, and to make his own the words and sentiments of the sovereign pontiffs as they expound the law and teachings of Jesus Christ for the social order.