“A Distributist View of the Global Economic Crisis”: A Report

By
Allan Carlson
-
23

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A conference with this title convened in St. Benet’s Hall, Oxford, England, on Saturday, July 11. Organized by the G.K. Chesterton Institute, the great Chestertonian Father Ian Boyd offered greetings to the participants while the gentlemanly Southern attorney, John Odom of New Orleans, served as Chairman. Mr Odom described the small Virginia town of his youth, which was done in by “the Chamber of Commerce model” focused on growth at any cost and consequent instability. The Distributist ideas of Belloc and Chesterton, he said, offered a better way forward.

The opening talk came from Phillip Blond, the United Kingdom’s infamous “Red Tory,” who is said to have the ear of Conservative Party leader David Cameron. If so, Britain may enjoy a very interesting future. Mr. Blond described his conversion to Distributist ideas through reading Hilaire Belloc’s THE RESTORATION OF PROPERTY and Chesterton’s AN OUTLINE OF SANITY. He offered a fairly complex, but compelling, macro-economic explanation for the financial meltdown of 2008. He emphasized (quite correctly I believe) that the decline in the economic status of most Americans and Britons actually began in 1973; this deterioration was covered up at first by inflation; then by the flow of married women in to the labor market; and finally by a massive growth in personal debt, particularly in housing: as this was the “only secured form of property available to ordinary people,…this form of asset acquisition itself became for working families an unsustanable burden and ultimately for many a very real financial catastrophe.” Mr. Blond noted that the “Anglo-Saxon paradigm initiated by Thatcher, Reagan and Clinton” had progressively removed all limits on capital movement and control; “All capital whether local, regional or national became global.” The “securitisation of debt” after 2000 then created a vast new form of instability, which finally unravelled in the Fall of 2008.

Looking to the future, Mr Blond declared the gap between Neo-Conservatism and Marxism to be quite small; and he praised Pope Benedict XVI’s new encyclical, CARITAS IN VERITATE, as a decisive repudiation of neo-liberal economics and an open embrace of Distributist principles. He urged Distriutists to give more thought to how their goals can be made relevant to urban majorities. His own proposals for England include mechanisms to expand types of property ownership other than just housing, such as “investment vouchers” and “child trust funds” for the relatively poor.

As the second speaker, I described “How ‘The Business Government,’ ‘The Loathsome Thing Called Social Service,’ and Other Distriutist Nightmares All Came True.” I defended the Distributist goal of home ownership by all responsible families from current charges that this had brought on the financial meltdown. The real problems in the American housing market reached back into the 1970s, when the purpose of home ownership began to shift from providing decent shelter for a family in a safe and stable neighborhood toward “investment,” resale-ability, and constantly “buying up.” Moreover, regulators after 1970 shifted federal subsides away from help for young families toward “underserved,” “non-family” households. This stripped American housing policy of normative content, and actually appears to have encouraged the practice of divorce and cohabitation.

“The winner in all this,” I continued, “will be the Servile State: Hilaire Belloc’s label for a system where monopoly capitalists, financiers, and government bureaucrats merge into an entity practising state capitalism. Under its terms the capitalists and bankers gain order and protection of their wealth and property while property-less workers receive welfare benefits specifically tied to their wage labor, such as unemployment insurance, which provides security but also confirms their servile status. For his part, Chesterton called this arrangemnent a ‘Business Government’ which, he said, ‘will combine everything that is bad in all the plans for a better world…. There will be nothing left but a loathsome thing called Social Service.” The balance of my talk included examples of the Servile State at work in America, Russia, and China. It also explored the curious new subjegation of women found– most remarkably– in Scandinavia, where the Business Government has essentially socialized “women’s work”: “women find servility in their strange, new, functional marriage to the state.”

Professor Salvador Antunano of Francisco de Vitoria University in Madrid, Spain explored the infuence of Distributist ideas and possibilities in Spain. He traced the roots of the current economic crisis to “the insufficient anthropological basis of capitalism,” where “man becomes an isolated reality.” In turn, this orientation undermined the family, “the first place for culture, the first school of values and morals, [and] the first place for socialization.” He praised Distributism for defending the family “as the very heart” of society.

Professor Antunano lambasted the current Socialist government of Spain for its legal assualts on marriage and family; and he described some efforts to apply Distributist ideas in Spain, notably the COVAP cooperatives farms in Cordoba. Referring to Tolkien’s LORD OF THE RINGS, he also stressed “distriutist hope”: “There is strength that works in History…. It is possible, then, that in todays crisis we distributists and we families may have the feelings of Aragorn and his men just before the final battle for Middle Earth. If we look at our swords, we will find them fragile and weak in comparison with the nazgul and orcs. But something so little like a hobbit and so odd like Gollum can change History. For this reason, in the current crisis at the very gates of Mordor, what seems to be our end may be actually our beginning.”

Journalist Philippe Maxence, with L’HOMME NOUVEAU (“The New Man”) of Paris, France, gave the final formal paper. Essentially, he argued that until about 60 years ago France had avoided submersion into global capitalism. As late as 1950, France remained “a society of peasants and artisans.” Then, the independent farmer-peasants were undone by a national policy to mechanize farming; during the 1970s “it was the turn of the small shopkeeper to be threatened by the expansion of the supermarkets.” The current economic crisis in France, he said, “demonstrates the perversity of a system which subordinates politics to economics and economics to finance, and to the little games of speculators whose only horizon is self-enrichment to the detriment of the common good.” He continued: “for France, the current crisis is also revelatory. It shows that our country has turned its back on itself. France was an agricultural country, nourished by peasant virtues, a country of artisans, who were part of multiple and diverse social networks. They were hardly rich but they were to a great extent independent and property owning, and they owned what was necessary for them to make a living…. Now such a France is gone. Today under the sway of globalization, France is part of a society which has always been denounced by distributists, a type of society which–excuse me for saying it– we call in France the Anglo-Saxon model.” And yet, he now found it a wonderful paradox that the Distributist response, which originated in England, “offers France the chance to reconnect with its own traditions.”

Excellent commentaries on the talks come from Stratford Caldecott and Russell Sparkes, and from an enthusiastic audience containing an impressive number of students. One could almost imagine being part of a meeting of the old Distributist League during the early 1930’s, when an earlier financial crisis seemed to open up possibilities for building a Distributist order of property-owning, independent families. Perhaps results will be better this time around.

–Allan Carlson, St. Benet’s Hall, Oxford, England
12 July 2009

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23 COMMENTS

  1. Ok, this is interesting but two crucial questions:

    1) was there no talk about the relationship of the monetary system to the accumulation of debt? No talk of institutions and policies that encouraged the bubble? From what you are describing, it seems as if there was some confusions concerning cause and effect here.

    2) what precisely does distributivism propose be done? More state management or less state management? Those are really the only choices. I can’t understand what it is that is being called for other than good intentions about family, responsibility, values, etc. If government is to expand, in what ways? If freedom is to expand, how so and what will be the effects? Were this issues not addressed?

  2. This conference gives me hope on a number of levels.

    1.) It shows that distributism is making its voice known what with the debate at Nassua Community College in NY and this latest conference in England. Maybe the powers that be in England are taking notice which will mean may the powers that be in the States will take a look as well.

    2.) I’m glad to see Phillip Blond participating in the conference as his “progressive conservative”/Red Tory ideas very similar to American traditionalism. It would be nice to see a revival of such ideas become an international network and have think tanks and publications emerge to lead the way on policy and opinion (Front Porch Republic does this already I think).

    3.) There may be an opportunity to convince public officals in the U.S. that capitalism and socialism and two sides of the same coin and that the distributist alternative is the best option. Ron Paul sort of thinks this way as he contributed an introduction to one of the distributist books put out by IHS Press.

    Hopefully as things progress the conservative movement and the Republican Party will look seriously at the arguments traditionalists/progressive conservatives are making. Who knows, we could be the future…

  3. If the roots of this crisis began around 1973 – which I find fairly credible – then shouldn’t we look at an event which unleashed the dogs of inflation – namely, the closing of the gold window in 1971? Prior to that time, when the US created too much money, other central banks could trade dollars for gold. This helped to regulate the money supply. Even further back, prior to 1935, any American could trade dollars for gold, and this led to tighter control of inflation. Indeed, the prices in 1913 – prior to the creation of the Federal Reserve System – were about the same as in 1815.

    In short, the more control of the money supply the government has, the greater its appetites, the greater the burden on ordinary people, and the more unstable the system. To protect smaller banks from the consequences of overproduction of money (failure), the central bank became the “lender of last resort”, leading all banks to overproduce, and to eventually create a vast tsunami of debt.

  7. In reply to Empedocles, in addition to IHS Press publications and thw two books already mentioned in the posting, I would recommend (among books in print):

    –Hilaire Belloc, THE SERVILE STATE (Liberty Fund);
    –Herbert Agar, WHO OWNS AMERICA? (ISI Books);
    –G.K. Chesterton, WHAT’S WRONG WITH THE WORLD.

    Also, casting humility aside, I would also recommend chapters in two of my books:
    –Allan Carlson, THE NEW AGRARIAN MIND (Transaction);
    –Allan Carlson, THIRD WAYS (ISI Books).

    Jeffrey Tucker is right to ask about specifics. In a few days I’ll post the full paper that I gave, which is chock full of specifics; also, Phillip Blood’s work is full of policy ideas…. many quite novel and contemporary. With his permission, I’ll try to post one or two of his recent essays as well.

    For now, I have to catch an airplane to Chicago.

  9. Jeffery Trucker wrote: what precisely does distributivism propose be done? More state management or less state management? Those are really the only choices.

    A third choice is too restrict the rights of corporations to no more than the citizens and give them the same responsibilities as citizens. Once there is actual risk in investing in corporations, then you will see that investment, the associated corporate tyranny, diminish. Governments will no longer have to do battle with corporate interests, this should allow the people to reduce the size and interference of government.

    This is going to be a real dog fight. With multinational corporations having the size and power that exceeds that of many county’s government, a coordinated effort will be needed. (I think that is where Pope Benedict is coming from when he calls for a world wide organization with teeth.) The scary bit is once you have reigned in corporate power, we will have to reign in government. Otherwise it is just socialism.

  10. The antagonists….Capitalist Corporations and Government joined forces and created a largely helpless progeny that assumes he or she will be taken care of by somebody and so it would seem that any notion of using distributist methods to reform the current sideshow is nigh unto impossible, just as in the 30’s when it was an article of faith that the government is there to protect the citizen rather than exploit them…or at the very least, tame them in order to farm taxes.

    The riddle we face is one of creating a rebellious spirit toward realizing that we are our brothers keeper. These kinds of contradictions are not looked on kindly by the reductionist State. Then again , the State obviously cannot even look out for its own welfare and so it would seem that Ed Abbey is entirely correct in his assertion that “when the situation is hopeless, there is nothing to worry about”.

    The Buzzards are about to see full employment. At least, most unlike the State, they only eat the dead and not the living.

  12. Haven’t seen Joshua of Western Confucian post anything on this curiosity
    (city rice paddies)
    http://joongangdaily.joins.com/article/view.asp?aid=2907376

    out of Korea, so thought I’d link to it here by way of rhetorical inquiry: how could our inner cities be helped by principles (whatever they would be “TBD” I hesitate to quip) of distributism? Tabula rasa, start from scratch Utopias (Mondragon et al) aren’t likely to be forthcoming amidst the detritus many Americans call “home”, so how might we homestead the urban-blighted Front Porch?

    Having volunteered years ago with Habitat for Humanity in Philadelphia, the bureacratic overheads are an insurmountable barrier-to-entry for most citizens budgets. Where theres a will theres a way doesn’t help much, when the wrong way is chosen (attractive tracts are aggregated by the violence of eminent domain expropriating low-income residents to benefit suburban real estate magnates who build profitable condominiums for Yuppies – every man a homeowner, just some homeowners are more worthy than others? Well, to the deeply-indebted city, yes, a revenue-generating citizen is worth more than a revenue-depleting citizen in the logical positivist economics of empiricism. That’s the “price” we pay for leveraging outstanding liens as investment vehicles, the city must collect to pay back their creditors, and if you happen to live on the same street as too many abandoned residences of tax-cheats well, too bad, the “greater good” trumps private property.

    How would solidarity and subsidiarity if exercised correctly avert these intractable circumstances? Are taxes a hard currency? No. From the principle of solidarity, a municipality is munificent only to the degree the munis (money in common) reaches all members fairly, not advancing some at the expense of others (eminent domain only for matter of life/death not commercial utility). Here is where the US dollar fails abjectly. It is not produced munificently, but selectively. The branch of commerce that goes by the FIRE acronym is privileged to receive new money first, all other money users must stand in line to reconcile our accounts in the inflated prices made possible with the newly minted money (a form of embezzelment or fraud that Papa Benedetto decries as “Betrug” in his German original (65) “Die Finanzmakler müssen die eigentlich ethische Grundlage ihrer Tätigkeit wieder entdecken, um nicht jene hoch entwickelten Instrumente zu mißbrauchen, die dazu dienen können, die Sparer zu betrügen” but rendered with less candor in English “Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers.”). Poor Americans have to stop granting the Government eminent domain to our pocket books (and poor Californians may need to resort to inventing some form of scrip to avoid being duped by the taxes-as-hard currency IOUs that are now in circulation there).

    Secondly, from subsidiarity, a municipality can only be munificent to the extent they can recruit subscribers to a good greater than by mere private association, budgets must match actual revenue realized not an imaginary aggregate of levied assessments. The degree to which citizens share in their duty to pay taxes is the degree of solidarity that can fuel public services. an irresolute populace deserves only meager services, a consolidated populace would engender better-developed services, here one thinks of Papa Benedetto’s suggestion at (60) in CiV

    “One possible approach to development aid would be to apply effectively what is known as fiscal subsidiarity, allowing citizens to decide how to allocate a portion of the taxes they pay”

  14. Jeffery Tucker (presumably of the excellent Mises Institute and New Liturgical Movement) has it right. Indeed, the Distributist cause is more than just “good intentions” and I believe its fundamental cause is one and the same as the cause of the Mises Institute. Such an alliance would profoundly improve the viability of both groups.

  16. Jeffery Tucker falls into what Benedict XVI calls the “hegemony of the binary model of market-plus-State” when he reduces the problem down to neo-liberal market on the one side and socialist state actions on the other. There is the third dimension which the Pope points us towards: The Gift, or Gratuitousness.

    This dimension opens up the possibilities for a greater nuanced approach to these issues because it forces us to examine the basis, source and sustaining necessities of generosity and gift in society.

    Out of these necessities will, hopefully, emerge a more anthropologically sound approach to the question of economic and political order.

    It is the family, and intermediary organizations where the possibility for a third way opens up and breaks down the hegemony written about by the pope.

  17. Columcille, I think you’re the only person to describe Jeffery Tucker or anyone from Mises Institute as anything-“plus-State.” Mises provides an important groundwork for a more humane economy with limits (like the gold standard) instead of the fiat dollar, the Federal Reserve and the Treasury. The family, not economic output or consumption, is at the heart of society but that does not mean a truly free market doesn’t need defense against state-interventionists.

  20. Thanks to Rex, Clare Krishan and Columcille for at least attempting to answer Jeff Tucker, whose questions were however to the point. I was at the Conference in Oxford (see my comment on Allan’s paper). Jeff’s first question was actually addressed from the floor, leading to brief discussion of Lonergan’s economics, in which the basis is monetary flow rather than exchange. Jeff answers his second fair question by another: this time prejudiced by his assertion that the only real choice is between more and less state intervention, and also by his failure to define what he intends by ‘freedom’.

    The simple distributist response to Jeff is of course that subsidiarity involves the State helping coordinate local government rather than (despite its being necessarily ill-informed) directing it “from the top”. Subsidiarity is not delegation from above, but rather the opposite of that. Contrary to subsidiarity and I suspect unconstitutionally, State-level governments are now increasingly delegating government functions to unaccountable and profit-seeking private corporations like the Federal Reserve Bank.

    Clare, delighted though I am by your appreciation of solidarity and subsidiarity, I would like to remind you that when we look at something outside yourself, we have to allow for the fact that its “handedness” appears to be the opposite of our own. When one is in a stationary railway coach next to another, it is not obvious which one moves first. A Copernican revolution was necessary before we realised that the sun does not traverse the heavens every day: it is the earth which is rotating. What I want to suggest is that similar “Copernican revolutions” are necessary to understand both that money (now obviously) represents debt rather than stored value, and that central government should be an advisory service rather than a power structure (for only those affected by law can judge its relevance and that of any apparent lack of discipline). From this, solidarity is required if we are to insist on the truth of these interpretations determining the Constitution, thereby drawing the teeth of the legal enforcement of financial institutions and company laws which are currently undermining genuine subsidiarity.

    The freedom to be gained by this is our being able to do what is appropriate, whether or not that is within the norms advised by absent legislators. Perhaps the first advice an advisory government needs to give is that communities from primary schools up need to replace the concept of Economic Man with an understanding of the advantages of us all being different. If the Mystical Body of Christ does not appeal, we have Aristotle’s model of diverse musicians of more or less equal status creating harmonious music in an orchestra.

  21. Allan Carlson: it would be goood to hear your reactions to the comments, so far, on this paper and your report on the St Benets Hall conference.

  22. How does race play a role in the equal protection case?…

    the class is not suspect and subj to strict scrutiny unless the ct finds there is intent to discrimiate
    2.    intent:
    a.    explict
    b.    facially netural but administered discriminator
    c.    discriminatory as applied (not disproportionate impact, but …

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