05 December 2006

Distributists Unite!

Much ink has been spilled on the topic, so what's a little (a very little) more? As a recent convert, distributism appeals (for those unfamiliar, read Belloc's The Servile State; if you haven't the patience for a whole book, see the Wikipedia entry). It, like capitalism, recognizes the essential link between liberty and property ownership (a link neither socialism, in which all property is owned by the state, nor communism, in which property is held in common by all but inevitably controlled by the state, recognizes). One is either owner or owned. To own property is to be a free man, not indebted to anyone, able to make a living without dependence on an employer. Still, I've got my concerns with the whole scheme, and they have to do with the "G" word: government.

There are different strains of distributism, to be sure, some more amenable to government intervention, some less so. There is the mistaken impression that Belloc advocated equality of property ownership. Not so. One man's industry, creativity, and efficiency might mean more wealth than another's--and that's as it should be. A graded taxing scheme would protect the small property owner in such cases. Thomas Storck's version is more severe; he would place limits on how many acres a man may own, and those lands remaining unused or profitless would be seized by the government and sold, the proceeds going into a central fund for impoverished property owners. Limits would also be placed on the amount of money each family may have, to be increased according to the number of children.

If reading this causes you to flinch, I don't blame you. The continual intervention of government (who else but the government would enforce these strictures?) is worrisome. Even Belloc's less restrictive system is troubling, because a taxing scheme that essentially penalizes those who are too industrious, too creative, too efficient will either (1) discourage such virtues, or (2) encourage entrepreneurs to seek societies more tax-friendly.

Why not capitalism? The common complaint against an unbridled, free market is exploitation of the working class by corporations concerned only with profit, who treat wage earners as mere commodities to be bought and sold at the lowest price. Capitalism thus results in enslavement of the many by a wealthy oligarchy. (Another complaint is that capitalism allows the successful entrepreneur to make obscene amounts of money, and thus is immoral. I've always thought this argument silly; the wealthy are often the greatest philanthropists--and even if they aren't, is it really the government's place to make moral judgments about one's wealth?) Does capitalism necessarily result in exploitation, though?

I visited my country of birth, Viet Nam, about a decade ago. Walking around the dirty streets of Saigon, I saw a puzzling thing. There among the filth and poverty of the city rose sleek new hotels and restaurants owned by enterprising Europeans, Americans, and Asians. In the streets fruit vendors sat row on row, each selling the same assortment of fruit. I wondered how in the world any of them could make any sort of profit; it was a matter of overproduction coupled with little demand. Does capitalism benefit them? Let's say five of ten fruitsellers on the same street begin working for a hotel, as receptionists, cooks, maids, what have you. These five are now earning a steady (and higher) income, while the remaining five fruitsellers get the benefit of increased competition. And the hotel owner benefits by obtaining "cheap" labor and therefore greater profits. As an aside, those who indignantly fight for a higher minimum wage end up harming the wage earner; it's obvious enough to anyone that increasing wages means less employed. The businessman, if he's smart, knows that more money going towards wages means less going towards profit; thus he will reduce the number of employees in order to maintain the same profit margin. Thus there are two less maids, and two more fruit vendors back on the street selling their wares for a pittance.

One might note that the U.S. doesn't know such a thing as unbridled capitalism. The government gets involved all the time in breaking up monopolies or other unfair business practices, and protecting the minority business owner. The federal taxing scheme is progressive, so that those in the highest income bracket are taxed somewhere around 35%; that means over a third of one's income (if one makes over a certain amount) goes to the government (it's been as high as 90%; some might be interested to know the Supreme Court once declared the income tax unconstitutional, and the government did not introduce the income tax, as it stands, until 1916).

All in all, I'm not altogether convinced of the distributist economic scheme--not yet, anyway. If my concerns are adequately addressed, I might change my mind. I welcome thoughts from those more knowledgeable (and always welcome them from those less so).

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