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Bluegoat
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WillieWonka;5555963 said:
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WillieWonka
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OK. Can you elaborate?
- Did did distributionism say poverty would increase under captalism?
- Did prosperity increase under capitalism? Compared to the 1920’s when Chesterton wrote, it has.
- Did poverty diminish under capitalism. Compared to the 1920’s when Chesterton wrote, it has.
- How was Distributionism correct in ts predictions?
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Ridgerunner
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I guess we’ll get to see what market capitalism does all by itself, when it’s tried, all by itself. I guess the Industrial Revolution in England would give us some idea. Certainly, the American system has never embraced unalloyed market capitalism.
On the contrary, from the very beginning (and part of the reason for the American Revolution) the primacy of capital over individual acquisition and ownership of productive assets was a big part of the American experience. Do you, for some reason, doubt that Americans were, almost from the beginning, able to go out and acquire land, (the major wealth-producer of its time) upon which they could rely for support, and which made them very independent-minded, at little or no cost to themselves except in labor and courage? British prohibition against homesteading beyond the Appalachians played no small part in the Revolutionary War, and it might be interesting to know that, at the start of that war, the American colonists were, man for man, far and away the wealthiest people on the planet because of the easy acquisition of land through labor alone, notwithstanding that England, as a country, possessed far more capital wealth in the aggregate.
Do you know what happened to the gigantic capital represented by the Spanish Grants? Do you know what happened to the big British landowning companies that once owned millions of acres in the U.S.? I do. The British magnates made immense fortunes in the India and China trades, but discovered they really couldn’t profitably invest those fortunes at home, and a good part of the reason was the stratified nature of British society, in which some few were wealthy and the rest poor. So they invested in America, thinking they would own whole counties the way magnates did in England, and hire “croppies” to work them. But it didn’t work so well for them here. My own grandfather bought land that had been acquired by “adverse possession” against the Missouri Land and Cattle Company of Scotland not long before he bought it. And the laws of the state (not to mention the courts) encouraged such “expropriation”. The “Scotch Land Company” as it was known locally, got adverse possessed nearly within an inch of its last farthing. The U.S. government encouraged and enabled homesteading and made the Railroad Grants. West of the Mississippi (and possibly east of it) the government gave the railroad companies every alternating section of land along the proposed rights of way, for free. Millions of acres. The railroad companies virutally gave it away to emigrants, and why? So the latter would build up farms and communities and mines and ship all manner of goods on the railroad. And it worked. A win-win for all concerned.
Savings and Loan Associations were created out of nothing at all, in order to encourage home ownership and land ownership and business ownership by providing a vehicle for low-cost, long term loans. And they did. The old Federal Land Bank (Now FSA) provided low-cost, ultra-long term loans to finance individual acquisition and improvement of farms. The FmHA financed rural housing development.
None of that stuff is “market capitalism” in the 18th Century British notion of things. Those were governmental policies specifically designed to encourage individual and family acquisition of productive assets. And they worked.
(continued)
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Ridgerunner
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(continued)
My father’s family came from Ireland. At the time in Ireland, virtually everything was owned by a very few; particularly land (again, the primary source of wealth at the time). When the famine came, they had no resources at all with which to sustain themselves. They came here and immediately began acquiring productive assets because, for the first time ever, they could. They could, because the system at the time allowed for it and encouraged it. There was no “ruling class” back in England that owned every square inch of land. (refer to the Missouri Land Company of Scotland above. It wasn’t for lack of trying.)
Twice the Roman Empire was saved for a time by emperors who had the good sense to break up the latifundia and improve the infrastructure that served individual owners; roads, canals, irrigation systems, etc. It is certainly possible, as the events leading up to those emperors proved, for a few to end up owning virtually everything. Would you deny that George Soros and B of A and others essentially soaked up all the wealth of the “Asian Tigers” for a considerable period of time? I don’t think that can be denied. Nor do I think you can truly say the very wealthy cannot acquire virtually all worthwhile assets when, historically, they manifestly have at times.
I will agree with your seeming belief that “market capitalism” is essentially a tabula rasa, upon which almost anything could be written without destroying the beneficial aspects of the tablet itself. The question is, what should be written on the tablet?
I don’t know what your politics are, but I suspect you might be a Republican, since Democrats don’t usually praise “market capitalism”. I would like to ask you what you think of George Bush’s proposal to partially (and voluntarily) privatize social security. That’s Distributist all the way. “Rerum Novarum” to the core. Privately owned and inheritable assets instead of governmental largesse seized from the people who provided it to begin with. 401Ks are the antithesis of both social security and “defined benefit” retirement programs, and government created 401Ks. All in the world Distributism is, is advocacy for the widest possible individual and family ownership of productive assets. Can a “market capitalist” like yourself really oppose that? Or do you think somehow it means “redistributionism”? Do you, as a market capitalist, really think economies are a zero-sum game, in which someone must lose in order for another to gain? If you think that, then you might reconsider whether you ought to be thinking of yourself as a capitalist at all. There really is another term for that.
My father’s family came from Ireland. At the time in Ireland, virtually everything was owned by a very few; particularly land (again, the primary source of wealth at the time). When the famine came, they had no resources at all with which to sustain themselves. They came here and immediately began acquiring productive assets because, for the first time ever, they could. They could, because the system at the time allowed for it and encouraged it. There was no “ruling class” back in England that owned every square inch of land. (refer to the Missouri Land Company of Scotland above. It wasn’t for lack of trying.)
Twice the Roman Empire was saved for a time by emperors who had the good sense to break up the latifundia and improve the infrastructure that served individual owners; roads, canals, irrigation systems, etc. It is certainly possible, as the events leading up to those emperors proved, for a few to end up owning virtually everything. Would you deny that George Soros and B of A and others essentially soaked up all the wealth of the “Asian Tigers” for a considerable period of time? I don’t think that can be denied. Nor do I think you can truly say the very wealthy cannot acquire virtually all worthwhile assets when, historically, they manifestly have at times.
I will agree with your seeming belief that “market capitalism” is essentially a tabula rasa, upon which almost anything could be written without destroying the beneficial aspects of the tablet itself. The question is, what should be written on the tablet?
I don’t know what your politics are, but I suspect you might be a Republican, since Democrats don’t usually praise “market capitalism”. I would like to ask you what you think of George Bush’s proposal to partially (and voluntarily) privatize social security. That’s Distributist all the way. “Rerum Novarum” to the core. Privately owned and inheritable assets instead of governmental largesse seized from the people who provided it to begin with. 401Ks are the antithesis of both social security and “defined benefit” retirement programs, and government created 401Ks. All in the world Distributism is, is advocacy for the widest possible individual and family ownership of productive assets. Can a “market capitalist” like yourself really oppose that? Or do you think somehow it means “redistributionism”? Do you, as a market capitalist, really think economies are a zero-sum game, in which someone must lose in order for another to gain? If you think that, then you might reconsider whether you ought to be thinking of yourself as a capitalist at all. There really is another term for that.
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WillieWonka
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I agree what we refer to today as market capitalism is not the 18th Century British notion of things. And I agree it exists nowhere in any pure form.
Distributionism as advocated by Chesterton and Day was far more than advocacy for widespread private ownership. It prescribed a specific social and economic system to achieve it.
Private ownership and inheritance is certainly not unique to Distributionism. The unique aspect was the elimination of large ventures in favor of the much smaller enterprises directly controlled and owned by the workers. Subsidiarity was paramount.
Redistribution and Distributionism are very different things.
I am unaware of anyone who advocates market capitalism who says it is a zero sum game.
Distributionism as advocated by Chesterton and Day was far more than advocacy for widespread private ownership. It prescribed a specific social and economic system to achieve it.
Private ownership and inheritance is certainly not unique to Distributionism. The unique aspect was the elimination of large ventures in favor of the much smaller enterprises directly controlled and owned by the workers. Subsidiarity was paramount.
Redistribution and Distributionism are very different things.
I am unaware of anyone who advocates market capitalism who says it is a zero sum game.
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Ridgerunner
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I would say that there is a big difference between Chesterton and Day.
Distributism does not call for the elimination of large ventures, and most definitely not worker ownership in the 'commune" sense advocated by Day. Chesterton was more an advocate of proprietor ownership when small, individually owned, enterprises could fill the need credibly.
Glad to hear that you don’t think of Distributism in the sense of “redistributionism”. Some do. I’m also glad to hear that you don’t think market capitalism is a zero sum game, and I apologize if something you said made me think it momentarily.
I’ll say again, as did Pope John Paul II, the core ideas of Rerum Novarum (which some named “Distributism” or “Distributionism”, which no Pope ever did) are not formulas for a particular economic system that would have the same aspects at all times and in every place. Pope John Paul II, in fact, said that they could not.
But neither is “market capitalism” an ironclad economic formula that has had, or ought to have, the same aspects at all times and in every place. It’s nothing but a general belief in the maximization of private initiative and opportunity. Now, that can run all the way from an oppressive plutocracy with laws that keep opportunity reserved to a few, to the sort of half-capitalism, half-socialism one sees presently in Sweden.
You surely have to admit that there have been many, many government-introduced or supported encouragements to the widespread private ownership of productive assets in this country, historically. And, many of those had good effects on the economy and welfare of the people as a whole. The “private sector” or “market” doesn’t accomplish everything that has ever been accomplished in this country; from colonial governors allowing settlement across the Appalachians against the wishes of the Crown, to homesteading to the FSA. Neither does government, in itself, create prosperity just by governing. It is the duty of a government to enhance, if it can, the fruitfulness of the talents of its citizenry. It is likewise the duty of a government to see to the welfare of those who cannot help themselves.
So that you don’t perhaps continue thinking of me as a complete communist, I am going to add that I think the current administration is not at all oriented to doing those things, and I have a lot of reasons for thinking it. In my opinion, what is forming up is an alliance between big government and big business; an alliance that does not bode well for the middle class and certainly not for individual entrepreneurs. It almost reminds one of the “monopoly capitalism” that one would have thought dead and gone. When one sees the big drug companies paying for ads touting Obamacare, one would not be entirely foolish in thinking they’re about to snuggle up together in the same blanket.
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WillieWonka
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Distributionists saw the large venture as the source of their problem, and advocated replacing it with smaller, worker owned ventures. That was their sbusidiarity based formula for avoiding what they saw as exploitation and conentartion of wealth.
I have no reason to think Rarum Novarum is a formula for an economic system.
I agree market capitalism is not an iron clad system that is the same in all places and all times.
I agree government actions have supported private ownership.
I agree neither market capitalism nor government has alone accomplished everything that has been accomplished in the US.
I have no reason to think you are a communist.
I see no evidence of a general partnership between Obama and big buisness. The specific drug deal is the only significant exception to that I see. However, that in itself is a signficant accomplishment. If ObamaCare does pass, the drug companies will still have the resources to bring new treatments to market and initiate research on promising prospects. If it doesn’t pass they will also be able to continue development. They have covered all the bases. While I wait for the ads, I see Obama getting clobbered everyday.
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Ridgerunner
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I don’t know that we disagree on much of anything except:
-What one thinks Distributism is, and the varying notions of it may be the souce of misunderstanding.
-Unlike you, I have a substantial concern that alliances between government and business are building up that will not necessarily be to the advantage of ordinary Americans. It has always been true that business seeks government aid or advantage, and that political rulers seek funding from business. (and I count big labor as a “business” in this context) So it seems the drug companies now wish to ally themselves with this government and overtly serve its political purposes. That’s a step they have not taken before. I see that some utility companies are already preparing their own “carbon offset” programs, for which they will not only get government tax breaks but direct government subsidies as well. It is well to remember that some 85% of permits under the proposed cap and trade bill are to be given in the form of waivers. If ever there was an invitation to corruption, it’s difficult to think of a better one. And, of course, the marriage of the auto industry and Washington is virtually complete and, of course, taxpayers are paying for the whole adventure. As a side benefit, the UAW will receive a $500 mm annual subsidy from GM just for existing. If that doesn’t resemble a political slush fund, I think it would be hard to find something that does. And perhaps my favorite is the PPIP program. It’s off to a rocky start because the potential investors (who have to be very large to participate) don’t think the discounts are big enough. But it’s absolutely a welfare program for the super-wealthy. Never mind the incredibly generous FDIC terms (giveaways, really) financial institutions who participated in TARP are given in order to take over other financial institutions. And could there be a more incestuous relationship than that which exists among this administration’s people and Goldman Sachs, with AIG as the “bag man”? And, of course, ordinary middle class people will pick up most of the tab for all that, reducing the resources available to them for individual investment.
Perhaps you don’t think of those things as troubling. I do.
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o_mlly
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Perhaps a thought on human nature. I might agree with the comment “based on fallen human nature, capitalism is the most practical system.” But as God created us, human nature cannot be satisfied by any political/economic system we devise.
Catholic Christians have always been concerned about the goodness of a system that claims a private vice (greed) practiced widely somehow becomes a public virtue promoting the common good.
The evil or goodness of an act or a system is to be found in its effects. The sin or sanctity of a moral act is found in the state of mind of the subject. If prompted by greed or self-promotion over and against another, the capitalist does no good for such motivations cannot come from the Holy Spirit.
The City of Man will always be flawed because human nature is flawed. The system which is the most practical will be the system which most often allows us to freely respond to the shatterable impulse of the Holy Spirit to be other-oriented. I don’t know of any such system including “Distributism” that offers each individual a free rather than an imposed response to justice and charity.
Peace,
O’Malley
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WillieWonka
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The drug deal is the same one Bush made with Billy Tauzen when he got the prescription drug bill passed. Obama’s deal is now unraveling as it becomes public. The admnistration is backpeddling. I expect the promsed ad money to unravel along with it.
The US auto industry is composed of more than GM and Chrysler.
Utilities will make the best of a bad situation. They are making contingency plans in the event Cap and Trade passes. I suppose they could sit back and let Al Gore make the profit from selling the offsets.
PPIP has floundered because the funds don’t want to participate. It is a stupid program, but those super wealthy are not stupid and are not participating.
FDIC has been around since the Depression and covers deposits up to $100k. (I know you can have multiple accounts.)
Goldman Sachs is a primary bond dealer, as are others. I agree there is a revolving door, but I’m not sure what the complaint is.
I do not think they are as troubling as you do. PPIP failed. Cap & Trade is toast. ObamaCare is sinking by the day. Roosevelt also put in a bunch of silly laws, but was forced to pull them back when they didn’t allow for the production necessary to actually win a war. Events tend to steamroll stupidity.
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WillieWonka
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Well, when we don’t know what the perfect system is, we do the best we can.
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Langdell
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Ridgerunner
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I would like to be as sanguine as you are about all of this. Obviously you trust this administration more than I do.
PPIP’s foundering is due to the fact that the discounts were not deemed sufficiently generous by the investors. But remember, there can always be an adjustment to that.
Godman Sachs was “made whole” with bailout money given to AIG by the government, and AIG is still on shaky ground. And, of course, a lot of administration folks came from Goldman.
I was not talking about FDIC account insurance, but about the deals they are making with banks that take over failed institutions. In some cases, they are giving more “sugar” to the acquirer than it would have required to shore up the failed institution. But you got preference on the “call list” if you took TARP funds, whether you needed them or not.
I did not say the entire American auto industry is made up of GM and Chrysler, even with Ford thrown in. That wasn’t my point. My point was that I do not feel comfortable with relationships among government, big business (including unions, which are “big business too”) that amount to trading favors.
Since cap and trade waivers are discretionary with the government, do you really have any doubt in your mind that those who contribute to the party in power will more likely receive the waivers than those who don’t?
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o_mlly
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St. Augustine’s insight that we are better off evolving the system we find ourselves in – maintaining what is good; eliminating what is evil – rather than revolving to another flawed system seems to me the best we can do.
Peace,
O’Malley
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WillieWonka
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I am not at all sanguine. I simply look at the overall situation and observe there is an incredible counter attack against Obama and the dems.
I have zero trust in the administration.
I disagree on PPIC. I’d say it is foundering because the funds know they can’t trust the governement to keep its word. They figure if they make a lot of money, Congress will take it back. The also don’t want to be subject to the future restrctions that we have seen can be put on firms that deal with the Treasury. It’s not that the discounts are too small, it’s that they don’t believe they will be able to keep the money. There’s really not much more room to make the discounts more generous to investors. That shows the level of distrust.
The jury is out on the initial bailout in the fall of 2008. There were compelling arguments for and against. As far as being made whole, I don’t know what you mean. Goldman has paid back billions, so how are you doing the accounting?
Need for TARP funds was not the driving force in Fall 2008. At that time, if a bank did not take TARP funds, it would have been irresponsible for a company to leave its business with the bank. Why? The bank had been weakened. Across the street is a much stronger bank. Why? Because it took TARP funds. So, a bank really had no choice in the matter. The mergers were at the behest of Treasury. The banks didn’t want the merger until Treasury sweetened the pot.
I am not comfortable with the GM and Chrysler situation either. However, I do not see it as a major obstacle in the future. The bond holders got shafted, and that will come back around to shaft union companies when they go to the credit market. In the medium and long term, unions will be weakened. That story is not yet finished.
I have no doubt the C&T bill allocates waivers based on politics. That’s a fact. It’s in the bill. However, I think C&T is dead. There are already ten dems in the senate opposed, including Rockefeller, Byrd, Franken. Look at how ObamaCare is being publicly shredded. The same would happen with C&T. These guys missed their chance when they couldn’t get C&T and ObamaCare passed before the August recess. How do you think TownHalls would go with the requirement that every house pass a governement inspection before being sold?
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WillieWonka
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Agree. We are not smart enough to set up a better system. Those who think they are smart enough should be ignored.
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Ridgerunner
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It would be a comfort to know that PPIP is dead. It drew a lot of fire. But there is some level of profit at which someone will take the toxics. Geithner just hasn’t reached the right price. Not yet anyway.
It would be good to believe Cap and trade and the government healthcare bills are dead. I’m not sure yet that they are. An angry public is one thing. DNC money is another. It appears for the moment that the administration is foundering and hasn’t found its legs on this quite yet. But I give them a great deal of credit for being persuasive and being able to do things and get away with them.
TARP 1(b) (my terminology) is something I favored. Except for the “too big to fails” though, it was never offered to the walking dead or even to the walking wounded. It was offered to institutions that already had adequate regulatory capital. The purpose was to ensure sufficient capital to take over banks that were going to fail. And that’s pretty much the way it has worked out. Part of the “price of the ticket” for taking TARP funds was to be on the “call list” for takeovers of failing banks. And those banks are the ones who are called by FDIC for takeovers.
Now, the weird part of it all is that TARP money and market share were not enough to induce the sound banks to do it. So, FDIC has generously subsidized takeovers as well so that the acquiring banks’ profits on the assumed assets are both discounted and guaranteed. The acquiring banks cannot fail to make a profit on the assets they took over, whether the loans pay or not. That’s why some of the TARP banks presently have extraordinarily high Tier 1 capital levels. Since they couldn’t “book” all of the discounts immediately, those levels will likely match loan loss reserves on such of their own loans as are shaky. And, of course,many of those banks have doubled or more in stock price since taking TARP, so the warrants increased in value with it. A win-win for the banks and the government together, if ever there was one, and one of the few in which taxpayer losses will be negligible, if there are losses at all. Interestingly, the acquiring banks of which I am aware, are also banks with very good workout teams; a fact that probably had a lot to do with the government’s choosing them and leaning on them to take TARP money to begin with.
I don’t particularly like Paulsen, but I will have to admit that in the welter of all these new government expenditure programs, his was far and away the smartest, and maybe the only truly smart one of the whole lot.
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