Category: Distributism

Occupy this Blog

A confluence of articles online this week highlights the need for fundamental economic change.

  1. William Galston’s “Visions of a Permanent Underclass,” a review of Tyler Cowen’s Average is Over in the Wall Street Journal, to which I alluded already once.
  2. Patrick J. Deneen’s Two Nations, Under Mammon, at The American Conservative, a sharply pointed review of Galson’s review in light of Galston’s personal role in building that permanent underclass.
  3. Thomas Storck’s The Profit Motive at Distributist Review. Storck makes me ashamed, as he reminds me of things I knew quite well 45 years ago but have suppressed.

So let’s take a survey.

1. Galston

Galston was the first out of my gate, though I had already noted Storck and “marked” his piece for revisiting and comment. Here’s a repeat of what I said about Galston:

[T]he members of Mr. Cowen’s new underclass would accept their lot without much complaint, certainly without revolting against it. Even though they had no prospects for escape, they would enjoy cheap food and cheap fun, and that would be enough to pacify them.
If this were Swiftian satire, Mr. Cowen could retire the Best Deadpan Award. But it isn’t. It’s a prediction coupled with the injunction that resistance is futile. There’s nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.
Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence.

(Wall Street Journal review of Tyler Cowen’s Average is Over.)

Whether by accident or design, Mr. Cowen’s book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in?
I know I wouldn’t.
I’ve seen the future—and it doesn’t work.

There’s a pay wall, and I hesitate to quote too much more. I’ll just say that Galston’s review was chilling, and that the second block quote seemed most apt.

2. Deneen

I don’t know that Deneen would disagree with “apt,” but he uses “a real howler” instead, since Galston helped make the mess:

We should be unsurprised, as Galston seems to be—shocked, shocked!—that this world comes ever more clearly into view. Indeed, as domestic policy advisor for President Clinton, Galston assisted in the expansion of this social and economic arrangement, participating in one of the most libertarian administrations the world has ever seen. According to Cowen, “technology” is displacing middle-class workers into either a shrinking class of “winners” or a growing class of “losers,” but assuredly, part of that “technology” is a regime of free-trade agreements and a host of other government incentives that have supported the infrastructure of globalization and worker replacement.
This inconvenient fact makes Galston’s closing paragraph a real howler: “Whether by accident or design, Mr. Cowen’s book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in?”
It is altogether risible that Galston, or anyone, thinks there is any significant difference between Republicans and Democrats in this regard. One need only look at the widening chasm of income inequality under Obama who—as a candidate running for his first presidential primary—dispatched Austan Goolsbee to Canada directly after pretending to be a populist for rust belt voters in the 2008 Michigan primary, to assure the Canadians that he would do nothing to touch NAFTA.

Deneen acknowledges the importance of Galston’s review (some of the importance no doubt derives from its publication in the Wall Street Journal, of all places). But there’s a reason why Deneen thinks Galston’s surprise is risisble: the prophet Kurt Vonnegut:

Aficionados of science fiction know that Kurt Vonnegut predicted this world already in 1952, with the publication of his first novel, Player Piano. There he describes with chilling accuracy this world ever-more coming into view—one divided between a meritocratic class with all the right degrees (even the secretaries will have Ph.D.s in a credential-inflated future) and the “Reeks-and-Wrecks,” who a visiting dignitary from the Middle East insists on calling “Takaru”—”slaves.”

Deneen doesn’t have much use for any of the builders of this new world, Right and, yes, Left:

The fact is that this project was readily discernible to the likes of Vonnegut in 1952 and Michael Young (author of The Rise of the Meritocracy) in 1958, and national and international elites have been busy constructing this world ever since, regardless of political label. The Right laments the decline of “family values” as it supports economic policies that support this arrangement (even as it has garnered votes from those displaced by an increasingly rapacious economy, attracted to its message of traditional values. Notably, many of these voters simply stayed home during the last election, rightly perceiving that neither of the major candidate was in their corner.). The Left laments the income gap, and proposes various forms of social welfare that will cushion the blow, all the while even more enthusiastically constructing the meritocratic society and populating government and leading thinkeries with Ivy League “winners.” These button-down hipsters increasingly accumulate in a select number of urban echo-chambers described most recently by Charles Murray, where they lament the rise of a growing underclass while sipping $7 lattes. These social policies are purportedly to be supported by a tax base of theoretical future citizens that are not being born, a logical outcome of an aggressively expanding and government-subsidized sexual revolution, contracepting, gay marriage, and abortion culture advanced by the very same Left.

(Emphasis added)

3. Storck

Perhaps Galston’s surprise is genuine. But if so, it’s because we’ve strayed far, very far, from Christian roots. This is the burden of Storck’s essay, for my money the most devastating of the lot.

[P]rofit is not a well-understood word or idea …
“[An entrepreneur] realizes that, after paying for labor of all sorts, returning interest to the capitalist and rent to the landowner, defraying the cost of repairs, and setting aside a fund to cover depreciation, [what] he has left for himself …constitutes the share called profits….”
… Why is, or why should there be, something left over for the businessman after all the expenses noted have been paid? What elements enter into or justify this? … Profit, as he means it, is “the return for his [the entrepreneur’s] labor of organization and direction, and for the risk that he underwent.”
… Profit comes from a twofold source. On the one hand, the business owner’s “labor of organization and direction,” on the other hand “the risk that he underwent.” Now the first of these is actually a wage or salary for the owner, something to which he is surely entitled. Whether he has others working for him or not, the entrepreneur is almost always performing some sort of work of management, and possibly much more, for which he, like all other workers, deserves remuneration. The second title to profits, the risk that the businessman undergoes, is more complicated, and is peculiarly associated with a capitalist economy.
Risk can be for two reasons. One is the ordinary risk that any businessman undergoes. The second is the special type or degree of risk associated with a new or better product or service. In a capitalist economy there is always considerable risk, since the failure rate among businesses is high. But in the case of a new product, there are extra expenses for making the public aware of it and its advantages, for example. It seems fitting that someone who does take a risk to provide something new—provided of course that we are talking about a truly useful product—is entitled to some reward for that. In the case of ordinary risk involved in the operation of a business under capitalist conditions, it seems less clear that a special reward is due simply for that, for this is common to all or most business owners …
When profit, however, instead of being understood as recompense for labor and (possibly) reward for risk, is understood merely as “the difference between total sales and total costs,” there is no suggestion as to why such a sum should exist. It simply happens, and, naturally, those who enjoy the use of such profits would like them to be as large as possible. In this view there is no moral linkage between profits and the work or the risk of the owner – no moral linkage to anything.  Thus if owners can manage to obtain huge profits, that creates no moral problem, for profit (in this understanding) has and needs no moral justification. But when profit is specified … as compensation for labor and risk, then we do have the suggestion that such profits must bear some reasonable relation to that labor and risk. For example, if someone taking a risk to provide a needed good or service is entitled to a reward, then presumably the greater the risk, the greater ought to be the reward. And if part of the profits received is compensation for the labor of the proprietor, similarly this should be in proportion to the amount and type of labor. If we accept Msgr. Ryan’s understanding of what profits are, then the entrepreneur is not entitled to open-ended compensation, to whatever might happen to be “the difference between total sales and total costs,” but his profits must bear some sort of reasonable relation to his work and risk. If a businessman is becoming immensely rich, especially in a short period of time, then there is reason to suspect that something is amiss: either his customers are being charged too much or he is not paying just wages to his workers.
…
Capitalism encourages the idea that economic activity exists for personal enrichment, and the more enrichment, the better. Distributism encourages the Christian idea that economic activity exists to provide for mankind’s needs, including of course the producer’s need for a decent and reasonable living for himself and his family. The remuneration of the producer or merchant would be, as St. Thomas Aquinas put it, simply a payment for his labor (stipendium laboris), and such gain could licitly be sought for the support of his family or to give alms or to provide for the common welfare.[vi] This approach to wealth getting is deeply rooted in the teachings of the Church, both in Holy Scripture and the papal magisterium. In his first epistle to Timothy, St. Paul wrote:
“If we have food and clothing, with these we shall be content.
But those who desire to be rich fall in temptation, into a snare, into many senseless and hurtful desires that plunge men into ruin and destruction. For the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs. (I Tim. 6:8-10)”
…

The conclusion:

One of the most essential, yet apparently most difficult of economic lessons for modern man to learn, or rather relearn, is that economic goods, including money, the universal surrogate for real goods, exist to serve and support human life in its fullness. Although they are necessary, they are not ends in themselves. There can come a time when a person has enough of such goods, and if he continues to seek more for no sufficient reason, he is in fact hurting his own spiritual life and compromising his soul. Our society looks with favor on great riches, and CEOs who earn in one year more than they could reasonably spend in a lifetime, instead of being ostracized as anti-social criminals or pitied as contemptible fools, are envied and looked upon as successful winners in the capitalist game.
The fact that this is so, the fact that the seeking and gaining of immense wealth is a socially acceptable pursuit, points to the fact that the moral standards of our society are not based on those of Jesus Christ. Capitalism, rather, has poisoned that moral sense ….

(Emphasis added)

45 years ago, capitalism’s appeal to avarice bothered me a lot, and struck me as a flaw from which no good could flow. People tried mightily to put some Christian lipstick on that pig, but I still saw the pig clearly.

Until, that is, I just didn’t think about it any more. Sigh. Mea culpa, mea culpa, mea maxima culpa! The craven things we did to avoid being Ayn Randed, nearly branded a communist cause I’m left-handed!

Let’s put aside for a moment that the game is rigged, and that the key to winning is more in knowing how it’s rigged than in producing good goods.

Combine the appeal to avarice with the reality that these supposedly big “risk takers” invariably have elected an LLC or Corporate form precisely to limit the risk while preserving the upside if they win, and isn’t it clear that the economy is deeply corrupt, rewarding some winners insanely out of proportion to the risk they really took – just because big “profit” is sometimes a fact and someone(s) gets it?

I excised a lot of the Christian content from the Storck article, including many attributions to a Msgr. Ryan. But Distributism is rooted (at least in its modern advocacy in the capitalist west) in Roman Catholic social teaching back at least in the 19th century. I think, though, that it’s not utopian. It doesn’t require that all men be saints.

I don’t think anybody’s promising utopia if we replace Capitalism with Distributism, and I try not to fancy that’s what will come. But Capitalism seems to have only one answer, delivered (I fancy) in Al Gore’s hectoring tone: “more.”

Every one of the popular modern phases and ideals is a dodge in order to shirk the problem of what is good. We are fond of talking about “liberty;” that, as we talk of it, is a dodge to avoid discussing what is good. We are fond of talking about “progress;” that is a dodge to avoid talking about what is good . . . The modern man says, “Let us leave all these arbitrary standards and embrace liberty.” This is, logically rendered, “Let us not decide what is good, but let it be considered good not to decide it.” He says “Away with your old moral formulae; I am for progress.” This, logically stated, means “Let us not settle what is good; but let us settle whether we are getting more of it.”

(G.K. Chesterton) Could we, pretty please with sugar on it, consider an economic system with a clue about what’s actually good?

Economic Stork Theory

I recently finished reading John Mêdaille’s Toward a Truly Free Market, and have been transcribing some notes from it. It was both a helpful review of economics (in which my formal education is minimal, much as I enjoyed it) and a fairly powerful brief for Distributism as a “Third Way” economics. A conservative temperament doesn’t rush into things, so I’m taking it slow, but I like Distributism more and more.

The family is in some ways at the center of Distributist thought — unlike standard-issue modern economics:

If economics requires fully socialized participants, and if economics is about social provisioning, then the question of the family cannot be divorced from economic questions. For economic actors, producers, and consumers are “produced” and socialized within the confines of the family; without the family there will be  no next generation, and hence no future, for the economists to worry about. Therefore, it is the family that is the basic economic unit as well as the basic social unit. Modern economics tends to ignore the role of the family completely to focus on the individual. However, the individual, by himself, is sterile and not a self-sustaining entity. Neoclassical economics thus has no way to explain how new workers come into the economy, and hence it has no way to explain growth. John Mueller has characterized these shortcomings in economics as “The Economic Stork Theory.” In the stork theory, workers arrive in the economy fully grown, fully trained, and fully socialized. These storks born workers are a “given”; that is, there is no way to explain the growth in workers or their level of training and socialization, and hence little reason to support them with political or fiscal policies

…

It is an oddity of modern economics that it depends on treating the worker as just another commodity (labor) for purposes of pricing that labor, but treats the production cost of that “commodity” as something beyond the price system. If we take any other commodity, say a bar of pig iron, it is assumed that the price must cover the cost of production, maintenance,  and depreciation, or the product will be withdrawn from the market. But in regards to labor, this assumption is never examined. For labor has its own “production cost” (the family) and its own “maintenance” cost (subsistence and healthcare) and its own “depreciation” costs (sickness and old age). Labor cannot simply be withdrawn from the market when these requirements are not met. Therefore, labor – and the family – does not even gain the dignity of the bar of pig iron in modern economic theory.

(Pages 39-41)

In order to accomplish the material provisioning of society, the economy must provide for the material provision of the family, because the family is the basis of both the social and economic orders; it is the reason for having an economy and the indispensable condition of an economy.

(Page 43)

However, we need to note that that this [supply and demand] model applies only to commodities, that is, reproducible, elastic objects and services that are made mainly to be exchanged in the marketplace.

Obviously, many things do not fall under the category of a commodity in that sense. The supply  of rare wines and fine paintings is not affected by the price.  Even when a Monet fetches $30 million, Mr. Monet will not supply the market with any new pictures. Now the importance of Monet’s to the market is not very great, and we can ignore the impact, no matter how high the price. But there are three things of great importance to the market, which also have no equilibrium point; these things are money, nature, and man. Their price and quantity are not regulated by supply and demand, and they are not “manufactured” for the market …

(Page 72)

In chapter 4, we introduced John Mueller’s economic stork theory (EST), which demonstrated that economists have no way to account for arrival of workers in the economy. Even as they “commodify” the workers, economists have no way to account for the “production” of this “commodity”; the worker just  mysteriously “appears” in the economy. Economists are willing to talk about the production of other “commodities,” such as pigs or pig iron. They know that the price of these commodities must cover the cost of production, maintenance and depreciation, or the commodity will simply disappear from the market. When it comes to labor, however, they are reluctant to concede that this too is “produced” and has production, maintenance and depreciation costs. In other words, they can modify labor, and then refused to speak of it as they would any other commodity. Hence, even under its own terms, the neoclassical theory is incomplete; it cannot account for this rather basic “commodity” per se, but must accept its creation out of thin air.

Mueller’s economic stork theory has a rather curious corollary. Under the EST, The only useful work done in the economy is work done for wages or other economic rewards, and hence there are only two kinds of economic activity, work and leisure. Thus, there are only two kinds of individuals in this theory, what I call Partially Useful Individuals (PUIs) and  Totally Useless Individuals (TUIs). The PUIs are partially useful because they spend some of their time at “work” producing things in the exchange economy. The TUIs, However, don’t “work” at all. Rather, some of the TUIs,  otherwise known as “mothers,” spend their time in such leisure activities is taking care of household pets, some of these pets are called “cats” or “dogs,” and others are called “children,” another form of TUIs.

(Page 98)

Mêdaille, an economist, sticks fairly closely to his economic points. I, a curmudgeon (slightly younger than Mêdaille, actually), don’t need to. If Mêdaille is right, I don’t see how this standard market theory can engender enthusiastic support from any serious Christian believer to whom family also is central. (There are multiple ways in which our economy disrupts family. This only scratches the surface.)

In their appreciation of the importance of the family to children (future “labor” to economists, “human resources” to personnel departments), the French have shown themselves to be far more sophisticated than increasing numbers in the U.S. and than standard-issue “capitalist” economic theories.

The French! God works in mysterious ways His wonders to perform!

* * * * *

Some succinct standing advice on recurring themes.

Things that cheer me up

It’s no secret that in many ways I’m less than sanguine about the direction of the country and the world. As a guy who by long habit (I’ll not make a virtue of the habit) sees the glass half empty, it probably behooves me to mention things that cheer me up. Although I open with an explicitly religious one, they’re not all religious by any means. One of them may even have anti-religious undertones. And not even one is political; where’s the good news in that wasteland?

  1. Romans 8:38-39.
  2. People voting with their feet.
  3. Beauty.
  4. Steven Pinker.
  5. Front Porch Republic.
  6. Craftsmanship.

    7. Continue reading “Things that cheer me up” →

The Benedict Option

Rod Dreher got the closing chapter in The Humane Vision of Wendell Berry, with Wendell Berry: A Latter-Day St. Benedict.

Excerpts and a few comments:

There is among Republicans little if any appreciation of how the party’s enthusiasm for laissez-faire capitalism—and the idea that economic growth is the raison d’être of our common existence—undermines the communal and social bonds necessary to support the traditional family-centered morality Republicans claim to esteem.

…

Conservatives, [Berry] writes, exalt the family as a sort of “public icon” but will not stand against economic practices that undermine the family’s structure and purpose. Liberals exalt sexual emancipation and the abrogation of established traditions governing sexual relations but refuse to recognize how their libertine ethic undermines the community they claim to support. Neither side can offer a credible solution to the current crisis because neither side has a credible answer to the question once posed by Berry: “What are people for?”

This is true and is a terrible Republican “conservative” blind spot. If you’re incredulous at the suggestion that consumer capitalism undermines families, you need take the blinders off and get out more. But the Democrat blind spot is never far from my mind, either, and makes me a bit cynical about Gubernatorial candidate John Gregg’s otherwise fetching “we take care of our own” TV ads.

We are a people given over to autonomous individualism. Mainstream liberals are more sympathetic to sexual autonomy; mainstream conservatives to economic autonomy. The ferocious contempt partisans of both sides have for each other obscures their fundamental philosophical agreement.  As the philosopher Alasdair MacIntyre has said, all modern political arguments come down to disputes “between conservative liberals, liberal liberals and radical liberals.” He meant that in our culture, nearly all political factions accept as given that the choosing individual is the base unit of our political order, and all claims must be made in terms of expanding freedom to choose.

C.S. Lewis’ essay “On the Reading of Old Books” observed:

Nothing strikes me more when I read the controversies of past ages than the fact that both sides were usually assuming without question a good deal which we should now absolutely deny. They thought that they were as completely opposed as two sides could be, but in fact they were all the time secretly united — united with each other and against earlier and later ages — by a great mass of common assumptions. We may be sure that the characteristic blindness of the twentieth century—the blindness about which posterity will ask, “But how could they have thought that?” — lies where we have never suspected it, and concerns something about which there is untroubled agreement between Hitler and President Roosevelt or between Mr. H. G. Wells and Karl Barth.

Dreher, channeling MacIntyre, is suggesting that one of our untroubled agreements is that “the choosing individual is the base unit of our political order, and all claims must be made in terms of expanding freedom to choose.” Having viewed the world mostly from the Right, that’s starkly obvious in Left slogans like “pro-choice.” Perhaps even more telling is Justice Anthony Kennedy’s view in Planned Parenthood v. Casey in the early 90s:

These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the 14th Amendment. At the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life ….

(Emphasis added) That’s telling because Justices know that the legitimacy of their opinions come entirely from the persuasive plausibility, as the court has no troops or police to enforce its will. Radically autonomous individual choice either has real cachet or Justice Kennedy is tone deaf. I wouldn’t bet on the latter.

There are more communitarian ways of viewing reality, and as I’m now ensconced in a religious tradition one of whose modern voice wrote “Being as Communion,” I’m trying to shift into such ways of thinking.

[W]hile it is satisfying to bewail the failures of the Republicans and the Democrats, let’s not deceive ourselves. Our problems come not so much because American political parties have lost their way but rather because we, the American people, have lost our way. There are no votes in telling people this, so politicians don’t. Still, the wise among us will heed Wendell Berry’s verdict: “Our country is not being destroyed by bad politics; it is being destroyed by a bad way of life.”

…

This principle—that our natural state imposes duties and limits upon us and our relations to others—is increasingly foreign to the American way of life, which rejects limits, natural or prescribed. As the military historian Andrew Bacevich has argued, with reference to Jimmy Carter’s disastrous attempt to convince Americans to live within our means (the so-called malaise speech), we have become a people who will tolerate war in the Middle East as the price for maintaining the right to live without limits. It is, or has become, the American way.

…

Alasdair MacIntyre counseled rejecting both political parties in 2004 “not primarily because they give us the wrong answers, but because they answer the wrong questions.”

…

I am convinced that conservatives have placed far too much stock in political action and far too little in the work of culture. “Society’s long-term direction is not set mainly by politicians,” the political theorist Claes Ryn recently wrote. “It is set by those who capture a people’s mind and imagination.”

You don’t need much to capture minds and imaginations. A TV network will do. Currently, Glee and Modern Family, having supplanted Will & Grace, are doing a nice job of convincing us that niceness is job #1, and that it’s not nice to say “no” to anyone’s sexual preference. That’s a major reason why the same-sex marriage cause is triumphant already, although the “conservative” undermining of the family didn’t help. (Bless their hearts. They just can’t help themselves.)

The ideal polity will favor small-scale economics—small farmers, small manufacturers, small merchants—because that is the kind of society in which people are most likely to develop in wisdom, virtue, and happiness.

…

We are waiting not for a Godot, but for another—doubtless quite different—St.Benedict.

Much more might be a spoiler. I commend the whole book and the works of Berry generally.