Distributism and the welfare state

[loz87]

Hello all, this is my first thread on this forum! I always look up different political topics to see the differing opinions that you guys have. An economic system that is highly supported by many Catholics is Distributism. So far I like what I’ve read about it, but I am curious as to what role the welfare state/social programs would play in a distributist society? I’m not seeking an argument, I am just curious.

God bless,
Christian

 

[youkokun]

I’m also interested in this discussion. I’ve just started this environmentalist philosophy class and one of the conclusions is that the economic inequality between the First World and Third world countries is mostly due to poverty in the Third world because their resources are drained and stay in consumerist societies, while the only imports are usually luxury goods for the elite or political weapons in the Third World countries. The world food bank claims to have enough food for everyone, but no one, curiously, has found a way to distribute it. Why is that?

I’m very interested in the direction this could go as opposed to the other solution my text offers, which would be Steady-State economics, where the material goods and population are maintained by the state as constants and either there is no economic growth or low growth, but rather development–whatever that means. These ideas come from my textbook Radical Ecology by Carolyn Merchant.

 

[wittgenstein]

The US no longer has a work ethic. Those that gamble (Wall Street etc) on other’s productivity are the millionaires and billionaires. This productivity is both creativity and labour. We reward gambling not work. We now have a gambler’s ethic.
Romney had it right. There are makers and takers. Unfortunately, he got it backwards (he is the taker. He made his millions by firing people. He never made anything!). Those that he disparaged (us, the working class) are the makers.

 

[Zoltan_Cobalt]

Hello all, this is my first thread on this forum! I always look up different political topics to see the differing opinions that you guys have. An economic system that is highly supported by many Catholics is Distributism. So far I like what I’ve read about it, but I am curious as to what role the welfare state/social programs would play in a distributist society? I’m not seeking an argument, I am just curious.

God bless,
Christian

That is a ponderous question.

I would say that the role of welfare state/social programs in a distributist society would be as it is in any economic system. That is to say, it would be up to the people who create the system to define the role of welfare or social programs. A distributist society could eliminate welfare and social programs entirely…or it could structure itself into a total welfare state.

 

[loz87]

Oh I didn’t know it was a foolish question . But I stil don’t really know of the difference between distributism and capitalism. Can someone please explain?

 

[Zoltan_Cobalt]

Oh I didn’t know it was a foolish question . But I stil don’t really know of the difference between distributism and capitalism. Can someone please explain?

Ponderous does not mean foolish…It means I had to really ponder the question to come up with an answer. Definitely not foolish!

So after pondering some more…here is the difference between Capitalism and distributism:

Capitalism = GOOD
distributism = bad.

Distributism is regularly flaunted as a “third way” between Capitalism and socialism, but it is actually just a quasi-socialist ideology. The goal of distributism is to eliminate any economic distinction between various classes in society by creating an equal distribution of the means of production.

Distributism MAY have worked if it was started from scratch in some agrarian kingdom. It would have ended when consumer demands and economic expansion created the need for more and larger production facilities (Companies)

Distributism fails because it tries to make men equal. It can’t… because we are not equal.
Assuming that, at the start, there was complete equality. All ranchers had an equal number of cattle and an equal amount of land. But one rancher is a clever breeder and his herd increases rapidly while his neighbor loses his cattle to disease. Now one has become rich and another poor. Distinctions in fortune quickly bring about class distinctions. The rancher who has lost all must now hire himself to the rich man and become dependent on him.

To prevent the rise of the hated economic class inequalities within a distributist society, the distributists would have to regulate the accumulation of things such as cattle and grain as well. They would have to redistribute cows and corn if one farmer did better than another with the land he was given. In the final analysis, socialism and distributism both advocate the confiscation and redistribution of certain individuals’ private property. We can’t have that in America.

 

[PolarGuy]

This is really 3 threads. Wittgenstein has a separate one (with which I largely disagree) and youkokun’s textbook has one, with which I disagree also.

As to Wittgenstein, he (I presume it’s a he) thinks the US no longer has a work ethic. I partially agree; the nation generally has less a work ethic now than it used to, but I wouldn’t say it’s nonexistent. I don’t know what a “gambler’s ethic” is.

I don’t think Wall Street is really gambling. It’s more science IMHO. IMHO Romney was and is right about just about everything. IMHO, however, he is not a taker, the furthest thing from it. He made millions by firing people? Bunk IMHO; he made millions through hard work and by making billions for the people who invested with him and his partners. His “making” was to make them money, which is the same task as those who make widgets to make profit for their company. Romney didn’t disparage the working class, because he wanted to make jobs for them – as opposed to others who’d rather have them just collect welfare. The working class are the makers? Anyone who’s management and who has ever tried to get a union member to do something productive would probably disagree. I’d say the “makers” start with risk-taking entrepreneurs; those are the real makers in our society IMHO.

 

[PolarGuy]

Now, as to youkokun’s textbooks, I’m sorry, I totally disagree and say their theories are utter rubbish (the textbooks, not youkokun!).

As to the claim that the economic inequality between the First World and Third world countries is mostly due to poverty in the Third world because their resources are drained and stay in consumerist societies, I would respond that the difference between first & third worlds lie in their peoples/cultures, not by one raiding the resources of the other. The USA and first world nations come from a Judeo-Christian moral background that has historically valued hard work; personal responsibility; individual rights; savings; risk-taking; and productivity on a personal level. Africa by contrast has gold; diamonds; and other resources in abundance; they also have (increasingly radical) Islam; corruption; unstable governments; civil wars; and some of the few remaining nations in the world that still allow slavery. Those problems did not IMHO occur because of having their resources stolen; they persist because of other reasons, and are sometimes circular, but not because the first world stole their resources.

A good discussion nonetheless!

 

[teeboy]

Let’s make this simple.

The Church teachings teach that disproportionate wealth can be a blessing and a curse.

 

[Zoltan_Cobalt]

Let’s make this simple.

The Church teachings teach that disproportionate wealth can be a blessing and a curse.

So what is you point?

I’ll take the “blessings” of wealth and live happily ever after.

 

[manualman]

Oh I didn’t know it was a foolish question . But I stil don’t really know of the difference between distributism and capitalism. Can someone please explain?

Both are fundamentally free market systems, but with different emphases.

Capitalism is an economic philosophy in which the investor (capital) is seen as the primary “good guy” that drives economic growth. It tends to be fundamentally structured towards rewarding investors, but (IMO) does little to structurally reward those who innovate or take the risk of trying to be a small business proprietor.

Distributism is an economic philosophy in which the entrepreneur is seen as the primary driver of economic growth (rather than his financial backers) and posits that tax and legal policy should be set accordingly.

Some examples of the difference: In a capitalist economy, wages (and small business profits tend to be treated this way) are usually taxed at a higher rate than investment income (capital gains). This directly illustrates the way that capitalism values investors higher than workers and entrepreneurs.

A capitalist sees nothing wrong with a scenario where everybody works for a few giant corporations whose stockholders actually own everything. Distributists have nightmares about the same scenario (rightly, I’d say). They’d rather see a far larger number of companies with owner/proprietors actually calling the shots and making the profits.

You may notice that Zoltan and I don’t agree. Nor do I agree that he is correct about what Distributism IS. Our critics generally assert that Distributism is not a free market system and that only capitalism is. This is incorrect and borders on dishonest. Distributism does not need any more command/control over the economy than capitalism does. It just has different systemic priorities and sets tax and law policy accordingly.

 

[Rob_Arnzen]

An economic system that is highly supported by many Catholics is Distributism. So far I like what I’ve read about it, but I am curious as to what role the welfare state/social programs would play in a distributist society? I’m not seeking an argument, I am just curious.

Distributism is a utopian economic proposal supposedly based on Pope Leo XIII’s encyclical Rerum Novarum and Pope Pius XI’s Quadragesimo Anno. Catholic authors G. K. Chesterton and Hilaire Belloc were two early proponents of proposed system.

Since distributism as currently envisioned relies heavily on the principle of subsidiarity, it is opposed to programs such as social security because they further alienate man by making him more dependent on the Servile State.

This of course means distributism is completely incompatible with the welfare state and highly centralized social programs.

Having waded my way through a great deal of the distributist literature, most of it written by non-economists and heavily padded with pseudo-economic jargon, I believe it is completely unworkable in any real world scenarios beyond perhaps the occasional monastery or isolated agrarian community.

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[manualman]

Having waded my way through a great deal of the distributist literature, most of it written by non-economists and heavily padded with pseudo-economic jargon, I believe it is completely unworkable in any real world scenarios beyond perhaps the occasional monastery or isolated agrarian community.

It would be “completely unworkable” for a government that finds itself with vast holdings of land and resources to make that land available “free” in small parcels to those who would put it to productive work? The history of the USA says otherwise. The Homestead Act, intentionally or not, was possible THE most successful distributist policy in world history and enjoys much of the credit for the size and extent of the American middle class at the turn of the 19th to 20th century, which set the stage for much of the later strength and growth of the middle class.

It would be “completely unworkable” to treat wages, profits and capital gains the same in matters of income tax? Seems like it would actually be rather simpler than today’s tax structure to me.

It would be “completely unworkable” to establish graduated property tax rates similar to how we have graduated income tax rates?

It would be “completely unworkable” to end the trust games by which the ultra rich escape estate taxes and to impose a graduated estate tax on inheritances (with reasonable initial exemption)?

Perhaps it would indeed be unworkable to get a completely even distribution of productive assets. But if you’ve actually read as much as you claim, you should realize that establishing economic structures and policies that trend that direction is still a distinctly Distributist form of economic system. After all, capitalism hardly guarantees that if you work hard and invest smart you’ll get rich, does it? Treat each with equal fairness in evaluation, please.

 

[Ridgerunner]

It would be “completely unworkable” for a government that finds itself with vast holdings of land and resources to make that land available “free” in small parcels to those who would put it to productive work? The history of the USA says otherwise. The Homestead Act, intentionally or not, was possible THE most successful distributist policy in world history and enjoys much of the credit for the size and extent of the American middle class at the turn of the 19th to 20th century, which set the stage for much of the later strength and growth of the middle class.

It would be “completely unworkable” to treat wages, profits and capital gains the same in matters of income tax? Seems like it would actually be rather simpler than today’s tax structure to me.

It would be “completely unworkable” to establish graduated property tax rates similar to how we have graduated income tax rates?

It would be “completely unworkable” to end the trust games by which the ultra rich escape estate taxes and to impose a graduated estate tax on inheritances (with reasonable initial exemption)?

Perhaps it would indeed be unworkable to get a completely even distribution of productive assets. But if you’ve actually read as much as you claim, you should realize that establishing economic structures and policies that trend that direction is still a distinctly Distributist form of economic system. After all, capitalism hardly guarantees that if you work hard and invest smart you’ll get rich, does it? Treat each with equal fairness in evaluation, please.

I am inclined to agree with you that Distributism isn’t quite an “ism” all its own. It’s more an emphasis within the larger “ism” of capitalism. One of the problems with the notion is that the term means different things to different people. But if one goes to the early roots, and also see how the Social Encyclicals subsequent to Rerum Novarum dealt with the same subject matter, I think one can reasonably conclude the following:

1. It is absolutely not socialism or any other kind of “command” economic system similar to socialism. Pope Leo XIII could not possibly have made that more clear.
2. It advocates policies within an otherwise free system that encourage individual and family acquisition of productive assets. Taxation would be one of those. Oddly enough, so would a degree of inflation.
3. It disfavors policies that encourage dependence on either government or all-encompassing corporate giantism. As a corollary to the second, it discourages excessive consumerism which leads to “wage slavery”. (Every person spends up everything he makes, becoming increasingly dependent on either government or the company for which he works.)

The whole purpose, according to Pople Leo XIII and later popes, is not economic as such, but is to mentally free individuals and families from moral dependence on organizations that have their own philosophical and moral agendas, allowing families to concentrate on family and, yes, religious values. One tends to adopt the philosophies of that upon which one is excessively dependent; a sort of economic and moral “Stockholm Syndrome”.

In discussing this and thinking about it, it has seemed to me:

1. That Distributism is entirely possible in this country, and it would not take much to encourage its objectives more.
2. A particular mindset is probably even more important than governmental policies like taxation or mild inflation. Put as simply as possible, one should live below one’s means if he can possibly do so. Most of us can do that, as little as we might think so. One should do so for the purpose of achieving as much economic independence as he can, and set his family on a track to do so as well. (Remembering that Pope Leo XIII added “inheritable” to the goal of “acquisition of productive assets”. So, for example, a 401K is an element of a Distributist strategy, while Social Security is not.

I do not believe Distributism in any way precludes aid to the poor. Certainly, it should be delivered by the most proximate capable authority to those who cannot help themselves. (Recalling to mind the economist problem known as “Mother’s Dilemma”, which supports subsidiarity. “Mother” knows better how to distribute scarce resources in the family than do more distant distributers, and is much more likely to be successful at it.)

But, if one truly considers the Social Encyclicals, the modern trend to “middle class welfare” is about as wrong as wrong gets, the very antithesis of a Distributist system.

Thank you for your analysis Manualman. While you and I might not agree on every aspect, your statements above are excellent.

 

[Rob_Arnzen]

It would be “completely unworkable” for a government that finds itself with vast holdings of land and resources to make that land available “free” in small parcels to those who would put it to productive work? The history of the USA says otherwise. The Homestead Act, intentionally or not, was possible THE most successful distributist policy in world history and enjoys much of the credit for the size and extent of the American middle class at the turn of the 19th to 20th century, which set the stage for much of the later strength and growth of the middle class.

If we lived in the 19th century, the United States was primarily agricultural, and the Federal government held land suitable to agriculture it would be workable.

Unfortunately for your hypothesis, all of these conditions that existed at the time of the Homestead Act no longer exist.

It would be “completely unworkable” to treat wages, profits and capital gains the same in matters of income tax?

In fact, yes, it would be completely unworkable.

The flat tax has had zero traction in American politics for decades. Capital gains are NOT the same as wages and profits, and therefore taxing them the same is both incoherent and unjust.

It would be “completely unworkable” to establish graduated property tax rates similar to how we have graduated income tax rates?

In fact, yes, it would be completely unworkable. Property taxes are levied at a very local level. That leaves no mechanism for aggregating property valuations across multiple jurisdictions to assess an individual or company’s total property valuation. It would effectively shift the tax burden to productive property, which would tend to decrease rather than increase economic activity.

It would be “completely unworkable” to end the trust games by which the ultra rich escape estate taxes and to impose a graduated estate tax on inheritances (with reasonable initial exemption)?

The loaded phrases “trust games” and “ultra rich” are rather typical of the distributist propaganda that I’ve perused. At its core much of the distributist movement is simply another thinly disguised and poorly conceived “get the Man” populist movement with vague nostrums and nebulous slogans.

Perhaps it would indeed be unworkable to get a completely even distribution of productive assets.

The Soviet Union tried it. We all know how that turned out.

I am singularly unimpressed with distributism.

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[Rob_Arnzen]

1. That Distributism is entirely possible in this country, and it would not take much to encourage its objectives more.

Distributism is incompatible with a modern industrial society. It leaves no mechanism in place for the formation of capital and private-government cooperation necessary for a large industrial entity such as General Motors or Ford Motor. Its view of banking is incompatible with the international monetary system. As a blueprint for an actual economic system, it really is unworkable.

I do not believe Distributism in any way precludes aid to the poor. Certainly, it should be delivered by the most proximate capable authority to those who cannot help themselves.

It precludes any national plan to aid the poor due to its emphasis on subsidiarity.

Whether that is good or bad is another question.

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[Ridgerunner]

Distributism is incompatible with a modern industrial society. It leaves no mechanism in place for the formation of capital and private-government cooperation necessary for a large industrial entity such as General Motors or Ford Motor. Its view of banking is incompatible with the international monetary system. As a blueprint for an actual economic system, it really is unworkable.

It precludes any national plan to aid the poor due to its emphasis on subsidiarity.

Whether that is good or bad is another question.

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It’s a shame that there’s really no agreement on what “Distributism” is. It ranges all the way from the very basic principles of Pope Leo XIII that we might call a “market system with widespread individual opportunity” to the almost monastic notions of Dorothy Day.

If one looks solely to the Social encyclicals for one’s concept, it is precisely the formation of capital that Distributism encourages. They really don’t deal with corporate/government cooperation or international banking in detail and likely had no intention of doing that. They deal more with “micro” than “macro” economics, though certainly they express concern about excessive influence and dependency on centralized government and corporatism. But they do not condemn everything about them.

One might at least wonder about the benefits of corporate/government cooperation. One recalls that GM survived the Great Depression without a government bailout, but somehow couldn’t do it in our own era without it. But that’s a whole other subject.

Pope John Paul II, while endorsing the concepts enunciated by Pope Leo XIII and his successors, acknowledged that the small farm model was outdated but nevertheless expressed that the individual and family acquisition of productive, inheritable assets would need to take other forms.

Parenthetically, it struck me as ironic when G.W. Bush floated the partial and voluntary privatization of Social Security. The USCCB did not hesitate to condemn it as if they had never read the Social Encyclicals or, having read them, rejected them.

Subsidiarity does not preclude national plans to aid the poor. It merely means that aid to those who cannot help themselves should be exercised at the most proximate competent level. There is no certainty that must always be at the federal level. A great number of programs are handled at much more proximate levels. Many are funded locally. Some are funded with a combination of local, state and/or federal funds. The very fact that even many entirely federally-funded programs are administered at local levels with local variations is a virtual admission that ultra-centralization is not the best except perhaps in the collection process, and perhaps not even that.

 

[Paleocon]

Distributism is incompatible with a modern industrial society. It leaves no mechanism in place for the formation of capital and private-government cooperation necessary for a large industrial entity such as General Motors or Ford Motor. Its view of banking is incompatible with the international monetary system. As a blueprint for an actual economic system, it really is unworkable.

If Distributists claimed that it was compatible with the current system, you might have something resembling a point.

 

[Rob_Arnzen]

If Distributists claimed that it was compatible with the current system, you might have something resembling a point.

Perhaps I was not clear.

Distributism is not compatible with a modern state with high industrial production, high agricultural production, high states of medical care, and so on.

At best it would produce city-states, perhaps as large as a small state, operating at the economic level of the USA around 1930.

Since there no schools of distributism, no degreed economists who are distributists, no political parties that favor distributism, nothing but a variety of self-proclaimed distributists who spend most of their time arguing with other distributists, distributism is theoretical and will almost certainly never get tested in the real world.

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[Rob_Arnzen]

Pope John Paul II, while endorsing the concepts enunciated by Pope Leo XIII and his successors, acknowledged that the small farm model was outdated but nevertheless expressed that the individual and family acquisition of productive, inheritable assets would need to take other forms.

And yet the American Catholic bishops pushed small family farms for decades. Had they succeeded the world would be starving.

Parenthetically, it struck me as ironic when G.W. Bush floated the partial and voluntary privatization of Social Security. The USCCB did not hesitate to condemn it as if they had never read the Social Encyclicals or, having read them, rejected them.

It is important to remember that almost all of the USCCB postions on economics, immigration, and other national issues are the work of staffers, most of whom are nascent socialists, which have been approved as USCCB statements by a handful of bishops. A national bishops conference can only teach authoritatively by a full 2/3 approval of all bishops. Opposition to the death penalty, for one example, was never able to gain the requisite 2/3 majority.

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