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political economy

Our friends at ISI Books have recently published a very interesting new book on the political economy entitled Toward A Truly Free Market. Author John Médaille describes the theme of the book this way:

“Economics, or more properly, political economy, cannot be a proper science unless it is a humane science; to be a humane science it must embody some notion of justice, and particularly of distributive justice. Indeed, as a practical matter as well as a theoretical one, there can be no balance between supply and demand without distributive justice; the moral question and the economic question are, in reality, one question.”

ISI describes the book thus: “For three decades free-market leaders have tried to reverse longstanding Keynesian economic policies, but have only produced larger government, greater debt, and more centralized economic power. So how can we achieve a truly free-market system, especially at this historical moment when capitalism seems to be in crisis?

The answer, says John C. Médaille, is to stop pretending that economics is something on the order of the physical sciences; it must be a humane science, taking into account crucial social contexts. Toward a Truly Free Market argues that any attempt to divorce economic equilibrium from economic equity will lead to an unbalanced economy—one that falls either to ruin or to ruinous government attempts to redress the balance.

Médaille makes a refreshingly clear case for the economic theory—and practice—known as distributism. Unlike many of his fellow distributists, who argue primarily from moral terms, Médaille enters the economic debate on purely economic terms. Toward a Truly Free Market shows exactly how to end the bailouts, reduce government budgets, reform the tax code, fix the health-care system, and much more.”

John Médaille’s approach is very much in the tradition of Chesteron, Belloc and Fr. McNabb. He has a fresh and expanded approach to their views of political economy which deserves our attention. The passage from Toward A Truly Free Market below certainly describes our current economic crisis.

Economic equilibrium cannot be divorced from economic equity, and the attempt to do so will lose both equity and equilibrium; the economy will be unable to balance itself, and so will either fall to ruin, or to ruinous government attempts to redress the balance.

ISI also posted an excellent short interview with the author of “Toward A Truly Free Market” on ISI Books.

Books mentioned in this essay may be found in The Imaginative Conservative Bookstore.

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16 replies to this post
  1. Sounds like a promising response to those who claim distributism is a utopia idea, incapable of practical implementation. I'm also glad to see another effort to treat, as Aristotle did, economics as a subset of ethics. As with many things, we do well to start with Aristotle.

  2. Forty years ago or more, the BBC went about interviewing common village folk before an election where, to their surprise, the town's oldest citizen proclaimed himself to be a communist. Why, they asked. "Well there's them what 'as and them what 'asn't,' he explained. And what would should we do? 'Well, you take the wealth in this country an' you divide it up equally like.' And once you have your share, what would you do? The codger stared in puzzlement: "Like, I'd spent it, wouldn't I?" The interviewer fumbled for words: "but then someone else would have your money and you would not…" The old fellow nodded thoughtfully: "Then we'd divide it up all over again!" he replied.

    The two fatal conceits of distributism are, first, who would do the distributing: government which always toadies to the rich and powerful (or to their own cronies)? Commissars? Jacobin 'citizens' committees? The Church (and which one?) or angels presumably hired from Kelly Girls? The second conceit is that many of the poor (who shall always be with us) are often poor for a reason, sometimes being indolent or just plain dim.

    With distributism, a true conservative's revulsion to modernity turns to romanticism and from there slips effortlessly into ideology. It is how, in a secular or political sense, a conservative sells his soul. It does not bring back Chesterton, so full of wit and insight and English beer and (sometimes) very impractical ideas. It brings back Robespierre.

    More co-ops are fine, and the best ones are rooted in community. But this author and his admirers went shopping for community and came home having purchased an 'ism,' an ideology, and sold the cow for a handful of magic beans.

    Stephen Masty

  3. I haven't read this book, Stephen, but I would be surprised if it argues for some kind of wholesale all-at-once RE-distribution of goods or capital. It seems to me that those interested in more subsidiarity ought to try to get there through genuine free market reforms. Too often our political culture has confused "pro-business" legislation with "a free market."

    Just look at the current mess in our food supply: It is government subsidies of food production that have distorted the market and made many unhealthy processed mass-produced foods so much cheaper than locally-grown healthy alternatives. I don't want government to redress this imbalance by trying to figure out a more equitable cocktail of subsidies. I want government to get the heck out of the way and let consumers notice that much of the price disparities between the unhealthy and healthy foods drops away once government stops propping up the huge agribusinesses.

    This is only one example. Any time there is significant government regulation of an industry, you can look for the regulators to be captured by the largest entities in that industry — a phenomenon called Regulatory Capture.

    We can thank all of our "pro-business" Republican friends for the astounding rate of regulatory capture we suffer from in the US. Ask a typical voter, and he will tell you that we've already tried the free market because we've had so many Republican presidents. We've got a PR problem caused by our side's own bad behavior.

  4. Amen to (the second) Stephen's comments, and to Mr. Creech's remark about Aristotle. Nothing that involves lived human life is outside the ethical pale.

    Re: Mr. Masty. Many conservatives hear one facile account of distributism or another, and assume that those crazy old Romantics, Chesterton and Belloc, decided tacitly to condone top-down redistribution of property, when there is nothing like this in their thought. This assumption finds traction, I think, because it is the easiest way to blow off the common sense of distributism and subsidiarity, a move which allows one to remain in a comfortable, unreflective state of mind. Catholic Social Thought will save our diseased politics, if we allow ourselves to get uncomfortable enough to let it.

  5. The proper distribution of property is not so much a matter of what the gov't should do as what it should stop doing. Most monopolies are gov't protected, and the law favors the corporation and discriminates against the small holder. The higher the piles of capital, the thicker the walls of gov't necessary to protect it. There are egregious cases where title is suspicious at best, or where the sheer size of a firm creates a danger to the Republic, and in such cases, the gov't ought to act. But mostly, it should stop favoring the strong over the weak.

  6. Dwight,

    Much as I would like to believe that distributism is anything but another cover for ideology, I can't. To equate it with subsidiarity is also, I think, dangerous. Note Steve Masty's second-to last paragraph, which I think nails the problem to the cultural masthead.

  7. I share the concern over idealistic and utopian systems. When speaking of prudential matters (and economics is certainly prudential), the standard of judgment should be, "Is it on the ground and working?"

    Distributism passes this test; capitalism and socialism do not. "Pure" capitalism is never seen, and actually existing capitalism always requires gov't intervention, while socialism has always had to allow a large measure of market economics in order to function at all.

    Distributism, on the other hand, is on the ground and working in large and small scales over long periods of time. For example, there is the Mondragon Cooperative Corporation of Spain where 100,000 worker-owners do $25B/year, and have a 60 year history of success in good times and bad. They also provide their own social safety networks, retirement programs, school systems, training academies, R&D facilities, and a University, all without gov't help. Ironically, it is closer to the "libertarian" ideal than anything the libertarians have been able to accomplish.

    The truth is, distributism goes from success to success, while capitalism goes from bailout to bailout.

  8. I am beginning to think that we are better at diagnosis than prescription.

    First, let us clean up our lexicon and dispense with this straw-man of so-called capitalism. Misdefined, capitalism is the whipping-boy for anyone peddling an agenda for good or ill. What America has now does not fit into any respectable definition of capitalism as it would have occurred to Smith, De Tocqueville, Bastiat and on down to Calvin Coolidge, not to mention Roepke, Hayek, et. al. It is a kind of state socialism or national socialism of which few classical liberal economists would approve. So, just because Mencken's booboisie think that we live in a capitalist system borrows Marxist terminology to engage in further bad thinking. The nationalisation of banks or car companies is not capitalism: it may be cronyism.

    Next, from Land-o-Lakes in America to John Lewis (departmental stores) in the UK, worker-owned corporations and co-ops are good business models and they seem to keep workers and customers satisfied. Here in Afghanistan, my colleagues and I work to restore farmer co-ops which were politicised (leftwing) by communists then trashed by the Bush administration for (rightwing) ideological reasons. My ministry sees nothing malign in poor farmers clubbing together to rent a tractor or get a better price for their wheat.

    If we want to get radical, I can make a case for India's Congress Party government redistributing land to peasant farmers from feudal landlords in the late '40s and early '50s. We can see the price of inactivity in Pakistan, which retained its feudal holdings to the comparative detriment of its peasants, its growth and national stability. But not many Americans suffer from feudalism and demand 40 acres and a mule.

    I recoil at 'isms' and would like to see some distributists tell us the agenda rather than complain about the (deplorable) status-quo – kindly give us some practical steps. If by distributism they merely mean encouraging the voluntary formation of co-ops, what decent soul could disagree? If they mean the widespread, compulsory redistribution of private property, then whose to we redistribute, to whom and by whom? Their focus on lovely objectives, and the seeming lack of detail in how we get there, is the gap through which the Robespierres and Dantons sneak in, volunteer to handle the details and set up Madame Guillotine.

    Okay, distributist friends, propose some steps so that we can all think more clearly. Ante-up.

    Stephen Masty

  9. Mr. Masty, I agree with clearly defining terms, especially capitalism. I also think it reasonable for distributist to propose concrete, practical steps on how it would be implemented. However, it would also be helpful (at least to me – I humbly profess a lack of deep understanding of distributism) if you could give us the specific steps that lead from distributism to Robespierre and Madam Guillotine. I certainly enjoy the rhetorical flourish of your posts linking distributism to such violent ideology, but I'm not seeing the logic (again, I'm sincerely attributing it this to my own ignorance). Perhaps one of the reasons I'm failing to see the logic is because the people I've encountered who have some sympathy with distributism are often demur, bookish Catholics who focus almost exclusively on family, church and local community in promoting social and cultural change — hardly the sort to lead a French/Bolshevik-style revolution.

    Additionally, I'm not sure that the practical difficulties with the implementation of a thing should discredit its moral rectitude. If it turns out that distributism is an articulation of moral principles that should guide our economics then the next step is how can we transform our economy so that it embodies these principles. As your posts suggests, the means for transforming the economy in light of these principles must themselves be morally legitimate. However, your posts suggest that there are no such morally legitimate means of doing so or, at best, that it consists of such things as co-ops. And, if distributism involves the formation of co-ops, you seem to imply that there's nothing unique and interesting about it. But doesn't that miss the point? If distributism is a way of understanding a free-market economy that embodies certain moral principles that our current system doesn't, doesn't that mean we should transform our economy accordingly, assuming our means are morally permissible? And If the only practical and morally permissible means is the formation of co-ops, that would not seem to undermine the moral force of distributism. If anything, distributism would, in that case, provide the moral foundation for such measures.

  10. Dear Mr. Creech,

    I heartily recommend that you read Burke's Reflections on the Revolution in France, and as much Russell Kirk as you can lay your hands on, maybe starting with The Conservative Mind or The Roots of American Order, which explain better than I can how to spot an ideology and how to oppose it and why. The sweetest sounding 'value' can be dangerous if it seeks top priority and ignores (or seeks to overturn) tradition, habit, custom, other older values, and law.

    If distributists say "it's payback time for bankers," and "we need to redistribute (someone else's) property," then it is incumbent upon them to carefully describe where and how far they want to go taking what steps, while referencing it to traditional values, ancient laws, and time-proven methods of change. Otherwise they may be genuine ideologues, monomaniacs for whom one idea or value takes precedence over the bouillabaisse of habit, tradition, values and laws on which we've fed for the last few millennia. Done sympathetically, thoughtfully and well a movement such as this may end well like the Corn Laws: done badly or haphazardly and it ends in Bergen Belsen as political operators seize control and use a tasty platitude to terrible advantage. Does that help?

    Stephen Masty

  11. There are two problems with the "This isn't real capitalism" defense. One, it is correct, and has always been correct, and; two, it is identical to the defense of communism offered by the Marxists. Whatever the theoretical basis of capitalism, actually existing capitalism always looks like this. It looked like this in 1776, when Adam Smith wrote the Wealth of Nations, 3/4ths of which is dedicated to critiquing gov't involvement in the economy in behalf of the mercantilists, the "globalists" of their day. The truth is, for both the capitalists and the Marxists, there are no historical instances of their systems; they remain Utopian and idealistic. But the Utopian language is always used to justify the oligarchic practice. There are no exceptions to this rule.

    America and the Soviet Union may not be or have been "true" capitalism/communism. But it is what the historical instances of these systems always look like. At some point, after something has been tried by different groups in different contexts, yet always turns out the same way, then one may say, "this is the way it must turn out."

    As to how to get there, that is why I wrote the book. But as with anything else, you get there by imitating systems that have gotten there. And the examples are many. There are cases where actual redistibution of property is required, as in the "land to the tiller" program of Taiwan, but mostly it is a matter not so much of what the gov't should do as what it should stop doing.

    There are, of course, positive steps the gov't can take, like enforcing its own anti-monopoly laws, or dropping the corporate personhood and limited liability doctrines. And there are positive things that could have been done. For example, instead of bailing out the banks, they could have been nationalized and sold off to the regional and local banks. As it is, the opposite happened: they used our money to buy up smaller banks, so that today the "too big to fail" banks are larger than they were before the crash, and the consolidation was subsidized by Bush and Obama. The same is true with GM and Chrysler. They could have been acquired and sold to the workers; they couldn't have run them any worse than what the management did, and odds are they would run them a lot better.

    You are right. We must overcome ideology and look to what works. We must look to traditional values. But oligarchy belongs to a different tradition, a dark tradition that has always been the enemy of true freedom, an observation that goes right back to the Politics of Aristotle.

  12. Mr. Masty,

    Thanks for your response. I am familiar with the writing of Burke's and Kirk's that you mentioned as well as a few others of theirs, so I suppose I will need to go back to these texts and think more deeply about how distributism meets Kirk's criteria for an ideology. This will also involve more reading on what distributism is.

    Kirk does make some statements, however, that do not appear on the surface to be inconsistent with the wider distribution of private property. For instance, in Prospects for Conservatives, Kirk states:

    ""The proletarian is a person without property, without duties, without roots, without love, almost without the communion of humanity….The proletarian is rootless; well then, he must be enabled to send down roots. Ways must be found to help him acquire property….the object of the conservative is to lift all men up from proletarian degradation."

    A wider distribution of private property would allow more people without it – the proletariat, as Kirk calls them – to possess property, which in turn, enables these individuals "to send down roots", "to have duties, interests, and love", to be part of a community and, most of all, to be human. Thus, Kirk's statement in Prospects appears to support what I understand to be one of the key ideas of distributism – the wider distribution of property.

    Additionally, Kirk says that it is a duty of the conservative to lift people out of the proletariat state. Insofar as a wider distribution of property diminishes the proletariat, distributism not only appears consistent with Kirk's conservativism, but seems to be one of its integral components.

  13. I believe it is incumbent upon Imaginative Conservatives to reexamine our understanding of free market economic theories in light of the dignity of the human person. We should be proponents of business on a humane scale.

    The most fascinating work in this area in recent years is by David L. Schindler. In particular I recommend his book "Heart of the World, Center of the Church" and his essay in "Wealth, Poverty and Human Destiny". Schindler encourages us to strive for an economy of gift and gratitude, with a foundation built upon a proper anthropology of man as a creature of God.

    I believe this is only possible if we look to the perfect example of a community of Love, the Blessed Trinity, for our inspiration.

  14. Thanks indeed to Winston for finding and posting the multi-part article on distributism elsewhere on TIC: it is so good, thus far, that I had better order my own copy of John Medaille's book.

    So far, we seem to have overcome a two-part language problem, or at least I have. I wouldn't use the word capitalism to define the economic status quo in the way that distributists do, but as long as I understand them, the terminology does not matter really. Secondly, the term distributism may be misfortunate with its Marxist-sounding or revolutionary-sounding baggage however unwelcome that may be to distributists. Certainly Belloc was correct in many of his predictions in The Servile State whether or not his prescriptions were workable. Still, it may be wise for distributists to adopt a new name and engage in a little rebranding.

    I look forward to reading more.

  15. This is an excellent discussion–we can hope these ideas will come to the fore amidst our current political upheaval. The time may be ripe!

    Agreed with Stephen Masty that Distributism badly needs re-branding. Something along the lines of The Personal Wealth Movement? The word "personal" suggests personalism, an ecumenical philosophy congenial to most distributists, I would expect. Moreover, wealth can also be understood in a non-material sense.

    Great work, this blog–look forward to more!

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