Distributism vs. Socialism

[rben20]

Hello Catholics,

I’ve come to debate both sides of the political philosophies and wonder if anyone has really done any reading on the subjects? From what I have gathered, both seem very similar, the key difference being Socialist take then distribute accordingly while Distributism allocates property to everyone without taking from someone already. But how is this possible? How can we REALLY give something to everyone and be equal? Surely something has to be of someone’s unless it has no value or is completely given as a gift. It sounds more like a novelty than something possible. Why is socialism looked down on in the Church if it does the same thing? Yes, there is taking away but if in the end you benefit as well I just don’t understand why the frown on Socialism. Besides, what would be a better way of providing everyone an equal chance?

 

[MarkThompson]

Hello Catholics,

I’ve come to debate both sides of the political philosophies and wonder if anyone has really done any reading on the subjects? From what I have gathered, both seem very similar, the key difference being Socialist take then distribute accordingly while Distributism allocates property to everyone without taking from someone already. But how is this possible? How can we REALLY give something to everyone and be equal? Surely something has to be of someone’s unless it has no value or is completely given as a gift. It sounds more like a novelty than something possible. Why is socialism looked down on in the Church if it does the same thing? Yes, there is taking away but if in the end you benefit as well I just don’t understand why the frown on Socialism. Besides, what would be a better way of providing everyone an equal chance?

I’m not sure that socialism as such is looked down on by the Church. The problem (from a religious point of view) is that making socialism work on a large scale requires an omnipresent and totalitarian government, which for some reason always seems to wind up being militantly secular, and (from an economic point of view) that it removes incentives to work hard and innovate.

Remember, Jesus said “sell all you have and give the proceeds to the poor,” not “seize all your neighbor has, sell it, and give the proceeds to the poor.” State socialism requires the latter.

 

[Cojuanco]

Of course, even before anyone ever mentioned the word “socialism”, rulers taxed their subjects and spent the proceeds on the common good. They even spent that money to help lift the poor to a more dignified state. Of course, in those days, this was done through the auspices of the Church, working in partnership with the State.

There are elements in Socialism that are not per se inimical to the Church’s teaching. But the militantly secular, quasi-totalitarian spirit of socialism per se means that as an ideology, socialism per se is condemned by the Church (see, for example, Red Cuba, Red China, North Korea and so on).

 

[maritain]

maybe this might be of help:

lxoa.files.wordpress.com/2010/10/catechismofthesocialquestion.pdf

 

[markomalley]

I’m not sure that socialism as such is looked down on by the Church.

I would suggest that you review Leo XIII’s encyclical letter Quod Apostolici Muneris (On Socialism) (December 28, 1878).

Or John XXIII’s encyclical letter Mater et Magestra (On Christianity and Social Progress)(May 15, 1961):

1. Pope Pius XI further emphasized the fundamental opposition between Communism and Christianity,** and made it clear that no Catholic could subscribe even to moderate Socialism**. The reason is that Socialism is founded on a doctrine of human society which is bounded by time and takes no account of any objective other than that of material well-being. Since, therefore, it proposes a form of social organization which aims solely at production, it places too severe a restraint on human liberty, at the same time flouting the true notion of social authority.

Or any number of other documents. Socialism is condemned unequivocally by the Church.

The problem (from a religious point of view) is that making socialism work on a large scale requires an omnipresent and totalitarian government, which for some reason always seems to wind up being militantly secular,

Or to put it more bluntly, that system of government attempts to make the State its god.

and (from an economic point of view) that it removes incentives to work hard and innovate.

True{/quote]

Remember, Jesus said “sell all you have and give the proceeds to the poor,” not “seize all your neighbor has, sell it, and give the proceeds to the poor.” State socialism requires the latter.

One other point: people cite this verse about the rich man and the example from Acts 4 where the early Christians sold their excess and laid the cash at the foot of the apostles as a “spiritual” justification for socialism. But what these people do not recognize is that there is a difference between voluntary poverty and poverty enforced at the point of a gun.

By the way, the concern I personally have with distributionism is not with the economic system, per se, but how it could be initially implemented in a just fashion.

 

[tafan]

distributionalism and socialism are not the same at all. It has never been really well defined how you get to a distributionlism status. That’s the main problem. But distributionalism celebrates private ownership of property, it’s goal is that everyone own their means of living, not just having a job. This is nto at all what socialism is about.

I have always thought that you could look at late 19th century and the first half of the 20th century midwestern rural america and come close to seeing what distributionalism is like.

The two are very different, could not be more different as a matter of fact. There is a reason why Belloc said that communism and early industrial age capitalism were almost the same thing. No one owned anything, in Capitalism a few owned and controlled everything, in Communism the state owned it, but a few controlled everything.

 

[manualman]

In Socialism, the state (by definition) is the owner of the major means of production. The theory is that the state then distributes the work and the outcome fairly. Unfortunately, no sinless humans are available to run this state apparatus and so the outcome has generally been one in which the government bureacrats simply replace the oligarchs and are 100% just as corrupt.

Distributism, on the other hand, is not necessarily based on direct seizure of assets. Instead it is open to other means. For example a distributist approach to economics would tax publicly traded corporations at higher rates than individually owned companies. Distributism would likely make illegal the current common practice where medical insurance companies contract with doctors to pay lower rates than the doctor is allowed to charge his cash customers. A Distributist tax policy would likely NOT tax capital gains lower than wages. There are MANY things that could be done in our legal and tax systems that would encourage broad ownership of small enterprises rather than the “Return of the Trusts” that we are experiencing in America right now without involving direct government takeover and operation of the means of production.

 

[Ridgerunner]

In Socialism, the state (by definition) is the owner of the major means of production. The theory is that the state then distributes the work and the outcome fairly. Unfortunately, no sinless humans are available to run this state apparatus and so the outcome has generally been one in which the government bureacrats simply replace the oligarchs and are 100% just as corrupt.

Distributism, on the other hand, is not necessarily based on direct seizure of assets. Instead it is open to other means. For example a distributist approach to economics would tax publicly traded corporations at higher rates than individually owned companies. Distributism would likely make illegal the current common practice where medical insurance companies contract with doctors to pay lower rates than the doctor is allowed to charge his cash customers. A Distributist tax policy would likely NOT tax capital gains lower than wages. There are MANY things that could be done in our legal and tax systems that would encourage broad ownership of small enterprises rather than the “Return of the Trusts” that we are experiencing in America right now without involving direct government takeover and operation of the means of production.

As applied, a lot of Distributism is in the mind of the individual. Does one, for example, always look for some way to get a handout from the government? Does one accept it, on the other hand, that his wage from business is all he has, and consumer goods all he has to look forward to?

Without intending to confuse things with terminology, one needs to look at the distributive aspect of economics as discussed by Augustine and Aquinas. Everyone intends some distribution of his wealth, even if it’s only to himself. The Popes very much emphasized the inheritable aspect of property ownership; considering it a good thing, and emphasized the ownership of productive assets by families.

I would be a bit inclined to doubt that Distributism necessarily would require that capital gains and ordinary income be taxed the same. As Pope John Paul II stated, the ownership of productive assets contemplated by Pope Leo XIII in Rerurm Novarum was mostly couched in agricultural terms. Chesterton and Belloc thought of it in those terms as well as in terms of ownership of small shops and manufactories. In modern economies in which few do or can participate in such enterprises, “productive assets” has to have another meaning. For many, that could only take the form of securities of some sort.

But one could also imagine that Distributism would not favor a regulatory atmosphere so harsh that only the big enterprises could afford to comply with it.

 

[manualman]

It’s certainly a Distributist idea that those who have not yet been able to put investment towards buying assets that will eventually yield capital gains (hopefully!) should not be burdened with a higher tax rate than those who have plentiful extra with which they can place in investments. The tax should not be so large as to discourage investment, but IMO it is absurd that the guy who taps on his E-trade computer account for a living pays a lower percentage than the guy who digs sewer ditches.

We can quibble on plenty of details, but the big picture question I’m trying to answer is that while socialism involves direct government control, Distributism allows for and encourages systems that lead to widespread ownership of assets and opportunities for the same.

 

[Ridgerunner]

It’s certainly a Distributist idea that those who have not yet been able to put investment towards buying assets that will eventually yield capital gains (hopefully!) should not be burdened with a higher tax rate than those who have plentiful extra with which they can place in investments. The tax should not be so large as to discourage investment, but IMO it is absurd that the guy who taps on his E-trade computer account for a living pays a lower percentage than the guy who digs sewer ditches.

We can quibble on plenty of details, but the big picture question I’m trying to answer is that while socialism involves direct government control, Distributism allows for and encourages systems that lead to widespread ownership of assets and opportunities for the same.

Agree with your second statement.

I am, at most, ambivalent about taxing investment yields. Yes, there are those who sit on their bums while their dividends roll in, but there are a lot of people whose sole productive assets are the securities they own.

And I think we need to be careful about making policies based on whether they might benefit the wealthy or not. I really don’t care about the wealthy, one way or the other. I don’t, either as an individual or as a citizen, envy what they have or care what they have. They’re taken care of, and i don’t worry about them.

I am concerned about the ordinary working person, just as you are, and I’m a bit queasy about increasing taxes on people of modest means who really earned that stock portfolio or that goat ranch or whatever they have.

 

[manualman]

I am, at most, ambivalent about taxing investment yields. Yes, there are those who sit on their bums while their dividends roll in, but there are a lot of people whose sole productive assets are the securities they own.

I should clarify that I’m not advocating a massive capital gains tax either. But an awful lot of people have their strong back as their “sole productive asset” as well and I fail to see why they should pay a higher percentage than those making money through capital gains. Perhaps the key is to simply lump ALL income as the same and THEN apply the graduated tax system we already have? (I dunno, I use TurboTax and I’m a LONG way away from any capital gains - can’t even manage to max my 401k).

 

[tafan]

I should clarify that I’m not advocating a massive capital gains tax either. But an awful lot of people have their strong back as their “sole productive asset” as well and I fail to see why they should pay a higher percentage than those making money through capital gains. Perhaps the key is to simply lump ALL income as the same and THEN apply the graduated tax system we already have? (I dunno, I use TurboTax and I’m a LONG way away from any capital gains - can’t even manage to max my 401k).

Long term capital gains are likely taxed at some of the higher rates, considering that cost-basis are not adjusted for inflation (on average). If we adjusted cost basis on inflation, then your idea of treating all income as the same may work. As it is, we have a skewed system that works out the same for 80% of the cases. Some examples

I pay 100 for a stock. One year from now, I sell it for $110, $10 of LTCG, so I pay $2 in taxes, or 20% right. Well, if inflation was 3%, then I really only made $7 of REAL gain, yet I paud $2 in taxes, so my tax rate was really 29%.

Example 2:
I pay 100 for a stock, one year from now, I sell it for $102. I pay around 40 cents in taxes, but with a 3% rate of inflation, I actually lost $1 on the transaction in real terms. So I paid the 40 cents on on an actual capital loss.

Studies have shown, that when adjusting cost basis for inflation, the average tax for a long term capital gains is around 35%. Our tax system is really screwed up.

 

[GratefulFred]

Sometimes, theory that ignores reality becomes weary.

What system has succeeded? Which systems have failed? Why?

Government controlled economies tend to fail. If there is even one government controlled econony that raised the standard of living for even a bare majority of its citizens for 100 years, I’d like to be told about it.

In contrast, capitalism has succeed for more than 150 years. Not unbridled capitalism, of course, a government must help set fair conditions and limit abuse just as a car needs a gas pedal and a brake to be successful.

Most well educated, energetic people will not settle for the same compensation given to the less educated and less energetic. The personal profit motive is strong.

Yet there are some who think they are so smart that they alone can make decisons for the rest of us. They may no longer be crowned Kings, but they do try to set up government controlled systems. They try to eliminate competition - no one else is allowed to try a bright idea. Incomplete knowledge, poor timing, and failing to properly consider the ripple effect of decisions causes these folks to make decisions that often make things worse, not better.

When the less educated and less energetic realize that they can maintain an acceptable to them standard of living from government supports, they tend to remain less educated and less energetic and demand more from those who do produce.

With free education through grade 12 and affordable education for at least another two years, why does America have a high school drop out rate of over 25%? Just how much support should be given to those who fail to take advantage of their opportunities?

Better education leads to better paying jobs leads to more taxes and less demand for tax support just to live and less debt that can bankrupt America. Not to mention the great satisfaction of knowing that one is independently capable to provide for one’s self with some ability to care for the TRULY needy.

 

[Austringer]

Distributism and Socialism are not similar, either in ends or in means. Socialism is rightly condemned by the Church because of its intrusion into the family (and the resulting social ills) and for other reasons (the Church, for example, upholds the right to private property). Leo Xlll’s Rerum Novarum is a good encyclical to read regarding the Church’s concerns with socialism.

Distributism celebrates personal property, subsidiarity and the autonomy of the family, and so is in keeping with Church teaching in those areas. The practical problem is, of course, that any government in a position to distribute property is already too big. Distributism is perhaps best practiced on a personal level: buy locally, from family businesses and producers, as much as possible. Try to be as self-sufficient as you can(plant a garden, have a few chickens!). Chesterton and Belloc are good sources for more information on Distributism.

 

[manualman]

Sometimes, theory that ignores reality becomes weary.

1. What system has succeeded? Which systems have failed? Why?
2. Government controlled economies tend to fail. …
3. In contrast, capitalism has succeed for more than 150 years. Not unbridled capitalism, of course, a government must help …
4. Yet there are some who think they are so smart that they alone can make decisons for the rest of us. …

1. Virtually all communism and pure socialism has proved a failure. Cause: Insufficient numbers of sinless humans available for holding the reigns of power. Virtually all unregulated laissez faire capitalist societies have also failed. Cause: Greed knows no bounds and eventually leads to so much massing of wealth in the hands of so few that revolution occurs.
2. Yes, because of Original Sin. Everbody available to pull the levers of massive power needed to run a Socialist economy gets corrupted by it.
3. The second part of your statement is the critical part. Look at US history in closer detail. It wasn’t until the government first distributed valuable land widely and freely in this country and not terribly long after cracked down harshly on the capitalist oligarchs (aka Trusts) coincident with the rise of the original labor union movement (bearing little resemblence to today’s unions) that we developed a broad middle class and generally high living standards. Without those (intentional or not) Distributist events at critical times in US history this could easily be a FAR uglier nation. Don’t kid yourself about America’s inherent and unbreakable virtue. Just ask a Cherokee about that (if you can still find one)…
4. Yes, that is part of original sin. Too much government control and its the pols who are the tyrants. Too LITTLE government regulation and intervention and it is the oligarchs who rigs the game to favor their own and stifle opportunity for everybody else. Finding the balance is the tricky part. And Distributist policies are the way to do it. No direct and total seizure of property, no command and control. Just sensible tax and regulations that offset the dehumanizing advantages offered by behemoth corporations over smaller companies.

 

[GratefulFred]

Excellent points, ManualMan.

So many discussions ignore the effect of Original Sin. We may be able to think ‘great ideas’ but way too few people can actually carry them into effect for any lasting time because of Original Sin.

Even our American Experience is still quite young. The great idea of people being able to govern themselves is still rather unique in the world. Washington was so lucky to not get defeated on many battlefields. Lincoln was amazing how he held America together. America’s Isolationism nearly sent Europe and the Far East into an unimaginable state. We fought a most unusal “Cold War” that ended peacefully because, IMO, of Blessed Pope John Paul II. Now we face a reawakening of Shari’a Law.

And we are so very deep in debt and in seemingly political gridlock that our brand of ‘constrained capitalism’ seems on the brink of breaking irreparably.

I can see, because of your coments, the Distributive effect of the government giving away land for next to nothing in cost as being part of the reason for our large middle class. We also experienced the birth of the Industrial Age and have enjoyed technological break throughs these past 100 years. Although in 2 or 3 months, America will no longer have a way into space except to hitch a ride with others. And China is graduating far more enigneers, even allowing for their larger population.

But I do not see a repeat of ‘free land.’ Any current and future distribution would be of what is already owned by others. With present taxes and charity, it seems that the middle and upper classes already are redistributing much more than the generations before us.

I think it a fair question regarding current calls for more distribution: What have we gotten in return for $14 trillion debt? Something, yes. But enough to justify the cost? Or are we being ripped off? The numbers of divorces, drug addicts, and drop outs seem so much higher. How does this justify the need to redistribute yet more and go deeper in debt?

 

[manualman]

I think it really does need to be a combination of not “take more”, but take what we take more wisely and spend less in the first place.

I’ve spoken of some examples already. I think our current system of taxing wages differently than investment income is practically designed to murder the middle class and reward the already rich.

I think our legal precedent of treating corporations as having all the rights and precious few of the responsibilities of individuals is foolish and also designed to exploit the many by the few.

While the system of stock ownership theoretically offers investment income to people who would never have the means to truly start their own business (especially a mid to high cap one), it apalls me to see the size that these corporations have become and what a small, incestuous “family” runs the boards and senior staff of them all. Where smaller companies CAN compete, they should. Tax and legal policy should protect that. It should be illegal for Widget Co to sell wholesale to Walmart for less than they sell to Joe’s General Store. It should be illegal for Blue Cross to require doctors to sign contracts promising NOT to charge cash customers rates as low as BC pays them. And so on…

Once upon a time we had something called the Sherman anti-Trust Act in the US that was used as a stick to beat on semi-monopolies in this country that used business practices designed to unfairly exploit consumers. Hasn’t been in the news in my lifetime. What ever became of it? Are pols today just to cowardly to use it or too corrupt?

Taxation IS a drain on the economy and a disincentive to investment. So design the tax system to minimize those ill effects whenever possible. To me this has always meant that there should be a hefty estate tax. Nobody refrains from investing due to post-mortem tax rates (no disincentive). If republicans really were motivated by the pro-business ideals they claim to be, reducing the estate tax wouldn’t even be on the radar. But in real life, it is priority #1. Follow the money… Eliminate the trust funds loophole while we are at it.

Insist on fair trade. If a country taxes or uses other means to drive up the costs of American products in their country, respond in kind. I recently heard that it costs $215,000 to buy a Cadillac Escalade in China. What are they here, $65k? Why do we stand idly by while they rape us like that? If we can’t sell our products there, why do we let them sell here without similar tarrifs? Goose, meet gander.

Finally, do we really need all our overseas military bases? A tank heavy army the size we have? A navy equal to that of the rest of the world combined? I dunno.

 

[GratefulFred]

ManualMan said earlier the trick is finding and maintaining the right balance. In a word: governing. With at least two major parties, frequent elections, and three branches of government we have the structure for balance. But, have we and will we use that structure well?

To use our structure well we need certain skills. I suggest many of our politicians, major new media, and taking heads have forgotten the most basic needed skills: the four cardinal virtues of Prudence, Temperance, Justice, and Fortitude. Have our leaders forgotten Plato, St Augustine, St Thomas Aquinas? Were they even educated in the virtues? They sure do not talk about them.

While America can do anything, we cannot do everything. So temperance looms large.

Who here can say that it is prudent to pass a federal budget that would spend 175% of what we expect to collect in taxes (see Dave Ramsey April 28, 2011)? Especially when past overspending has put us $14 trillion in public debt? America has been warned that its top credit rating may be reduced. Would that generate a sell off of debt owned by others where instead of just paying interest we have to pay back the principal? Or a refusal to buy more of our debt which would also force cuts in spending? Any discussion of distribution will go out the door if that happens.

While Justice does demand we care for those who cannot care for themselves, prudence and temperance tell us there is only so much we can or should do. We tend to forget all that we are doing and look only to do more. “Forget the annual deficit and total debt, we need to spend more” is not a program I can support.

Fortitude, the ability to endure and work hard to improve one’s current circumstances is seldom mentioned in the main stream media. I note America was made great long before the Great Society came into being in the mid 60s. I have been and am happy to help but there is a limit beyond which we can sink the lifeboat.

The Sherman Anti-Trust Law of 1890 seems to be alive and well and operating in the Federal Fair Trade Commission. There, major mergers are reviewed and approved, or modified, or denied. Competition is still good and unfair restraint of trade is still bad.

I resent a government that wants to tax us more so IT can spend more. I see government’s role is to provide for the common defense (yes, bases overseas no matter to our defense) and to set fair conditions so citizens can achieve what they are capable of. And also to look after the TRULY poor. Beyond these basic roles, the government should tread lightly; it should not have too much control over our freedom to succeed.

We can either spend what we earn or save it. The more we are taxed, the less we have to spend or save. The more government takes, the more power it has and the less power we have. At some point, the government no longer works for us but rather we work for it. I think more and better jobs are created by allowing citizens to save and spend than by wanting to tax more.