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Let Free Markets DistributeLet Free Markets Distribute

Let Free Markets Distribute

G.K. Chesterton was right about almost everything, John Robson argues, except economics, which he got horribly, horribly wrong.

John Robson
10 minute read

There may be faster ways to make a fool of oneself than by disagreeing with G.K. Chesterton. But I doubt a more certain one exists. Despite which, I take up my word processor to declare that his cherished doctrine of Distributism is dangerous nonsense.

The problem is its analysis, not its goals. Of Distributism's methods I say nothing because it has none. Or rather, I say nothing except that it has none, which is precisely what makes it dangerous nonsense.

Its goals are noble. Chesterton insisted that, for his own sake and that of his society, the ordinary man should control enough property to control his own fate within the limits the universe imposes. As he should. The question is how, if at all, such a thing can be achieved. And it needs to be answered. I do not mean to disparage the setting of goals even when one cannot see a way of attaining them. If you trim your sails to prevailing winds before planning a voyage, you will never get anywhere except, perhaps, elected office. A trip requires both a destination and a way of reaching it. So any goal that does not, even after hard thought, suggest a path is a bad plan.

Chesterton's Distributism never did. Equally appalled by socialism and what he took for capitalism, what he called the indistinguishable menaces of Hudge and Gudge, he sought a Third Way long before Tony Blair, and with far greater integrity. Instead of the average man being ground down by the vast monopolies of socialism or, as Chesterton and many others supposed, capitalism as well, the average citizen should have a home of his own, tools of his own, dignified work and attractive meals put on his children's plates by his own effort. Unfortunately, like Blair's, Chesterton's Third Way has no way to it.

Rather than analyzing economics, it simply posits the imaginary defects of laissez-faire as a premise, then vaguely recommends steering between this imagined Scylla of free markets and the very real Charybdis of socialism. Had he instead gotten after the fundamentals in this area, as he did with such remarkable clarity in so many others, Chesterton would have seen that free markets were the solution he was seeking, not the problem he was fighting.

Chesterton shared the common view that capitalism tended to concentrate wealth and property in a few hands. He also apparently thought those hands were fairly grubby, but that wasn't his big objection. He felt that by concentrating property in a few hands, capitalism took it out of most hands, making a good society impossible even if the rich were, individually, fine people.

In 1925 he wrote, "It is all very well to repeat distractedly, ‘What are we coming to, with all this Bolshevism?' It is equally relevant to add, ‘What are we coming to, even without Bolshevism?' The obvious answer is—Monopoly. It is certainly not private enterprise."

Likewise in The Servile State, Chesterton's close friend Hilaire Belloc contrasted the Middle Ages, where "the determinant mass of families were owners of capital and of land," with "the dreadful moral anarchy... which goes by the name of Capitalism" in modern England, where "at least one-third is indigent... nineteen-twentieths are dispossessed of capital and of land, and... the whole industry and national life is controlled upon its economic side by a few chance directors of millions, a few masters of unsocial and irresponsible monopolies."

I defy him to name them. Or explain why, a hundred years on, there is still lively competition in every market from computers to coffee and cars, and the populace is overweight rather than hungry. After all, the other pointed criticisms the Chesterbelloc made of modern trends from politics to family life have generally come true. Not this one.

One can, at the risk of boring the audience, make a clear three-part argument why capitalism does not trend toward monopoly. First, it's just not worth it. A small company really needs to expand sales. But a big company cares much less about squeezing out an extra buck or pulling in one more customer and more about keeping the revenue and customers it has.

True, a billionaire can do things a millionaire cannot, from ordering gold-plated yachts to promoting Third World health on a Bill & Melinda Gates Foundation scale. Still, even the most successful businessmen or corporations don't try to grab the last dollar and drive their last feeble rival out of business unless they are psychotic because, rationally speaking, it's not worth the bother.

Second, those psychos who do pursue money or market share with mentally unsound determination fail because people who are good at business don't get rich by cutting the throats of their rivals, associates and customers. They do it by cutting them in on the benefits of success. Even driven entrepreneurs such as Apple's Steve Jobs must surround themselves with associates well paid to absorb the office tyranny or they will drive employees, business partners and customers to rivals such as Microsoft.

That's the third reason capitalism does not create, and cannot sustain, monopolies: profits attract competitors. Dominant firms suppressing innovation and competition and getting rich selling junk to captive consumers are simply urban legends even if it inspired a U.S. government antitrust suit against Microsoft. And Washington's paradigmatic trustbusting action against Standard Oil a century ago was quite unnecessary. Yes, Standard Oil secured about 85 per cent of U.S. domestic petroleum refining by 1890 by driving kerosene from 30 cents a gallon to under six over a quarter century, letting people read at night for the first time. But by the time it was split into Exxon, Texaco and so many others by court order in 1911, its market share was already down to 66 per cent and falling.

Its success attracted companies willing and able to compete on price and quality. There was simply no monopoly to see here folks, just enormous benefit to customers and employees.

All that is fine and good and borne out by history. But it's also superficial. The real problem with Distributism lies far deeper in the human soul. I am reluctant to allege shallowness in a man who saw so much more deeply than his contemporaries or his critics. But Chesterton not only failed to get to economic first principles, he really seems never to have tried.

I never recall seeing the name John Locke in his writings. But in overlooking Locke, he overlooked the most important fact there is about property: it begins with self-ownership, with our right and duty to make our own decisions, guided by our own conscience about how to spend our time and effort.

In his Second Treatise of Government, Locke worked out in detail why and how, by mixing our precious scarce time and labour with the things of this world, we come to own them, provided, of course, we did not steal them by stealth or open force. And it is because of this mixing of the sweat of our brow with anything we make or earn that defenders of property regard the taking of our "mere" things, by force or a rigged legal or economic system, to be so outrageous. It means stealing our time and effort, which come but once. It means stealing a piece of us.

So taking away legitimate property is dire oppression. But how can capitalism do anything of the sort? Firms may offer us jobs and products, but they cannot literally compel us to accept them, nor forbid us to work for or buy from their competitors. Unless, of course, they secure the assistance of the State.

Chesterton almost got that part right. He railed against Hudge and Gudge, the alliance of progressive with plutocrat. But they were not, as he apparently supposed, equal partners like Scrooge and Marley. Rather, the danger is that the plutocrat might get from government things he could not get from customers, from restrictions on competition to financial guarantees backed willy-nilly by citizens. If the State were not improperly empowered to grant such favours, the corporation could not possibly get them, for only the State may coerce us.

That is why it is governments, not corporations, everywhere and always, that deprive us of freedom, including by continually changing the rules under which we live. Modern man is hemmed in in his everyday life, in his freedom to use his time and energy as he sees fit, in ways even Chesterton could hardly imagine. But always by Hudge.

The ordinary man today cannot buy dynamite in a hardware store (his grandfather could), drive without a seat belt, cut the tag off his mattress or build a backyard fence as he sees fit. His government actively seeks to alter his dietary habits, and he swims in a sea of regulations as turbulent as it is unfathomable.

All these rules were created with the best of motives. But they are well on their way to converting ordinary people from subjects into objects. And none come from companies, which cannot coerce. All come from government, which can. There is no job you cannot quit, and no tax you can decide not to pay.

So what has Distributism to suggest as an explicit remedy? Nothing. In his glowing 1977 introduction to The Servile State, Robert Nisbet says, "Belloc does not tell us, alas, how distributivism is to be brought about..." as though it were a minor oversight. It's not.

For what might the implied answer be? If men were deprived of freedom directly by corporations, or indirectly by material want so they stand at a hopeless disadvantage when bargaining in the job market, the remedy might lie in extending government power.

In principle it is naive to expect government to intervene on behalf of the powerless; Hudge listens more to Gudge, who can return favours, than to Tiny Tim, who never made a campaign donation or hired an ex-politician in his life. After a century of the welfare state, we can see it is not what has tended to happen in practice.

The State listens to the well connected so that special interests (including, be it noted, middle-class voters) get special favours. When governments must cut, they target programs for the poor, who are unlikely to vote at all, let alone in sustained defence of their financial interests. But even ordinary people face endless restrictions on decisions from the trivial to the vital while the rich and privileged navigate fairly smoothly through complex restrictions with the aid of expensive accountants, lawyers and lobbyists.

The superficial tone of Chesterton's remarks, and Belloc's, might seem to imply another option than just welfare and endless regulation, namely a dramatic and overtly coercive redistribution of wealth. To be sure, neither ever explicitly advocated such a thing and clearly neither would have. As GKC once observed caustically, "The point about communism is that it tries to reform the pickpocket by forbidding pockets." Yet what other way is there of reversing today's supposedly excessive and harmful concentration of wealth and property than by emptying, then sewing shut, the pockets into which, supposedly, the successful endlessly pour their ill-gotten gains?

Hence the vulnerability of Catholicism to various forms of economic radicalism. When Catholic reformer and author Michael Harrington was dying of cancer, Senator Edward Kennedy said of his ideas, "Some call it socialism. I call it the Sermon on the Mount." But Christ did not call for government action and the Church has stood against such reasoning, including Pope Francis' opposition to liberation theology, which, one might say, is neither liberating nor theological.

Likewise, in Rerum Novarum in 1891 Pope Leo XIII sternly warned that if proposals to abolish private property were adopted, "the working man himself would be among the first to suffer. They are, moreover, emphatically unjust, for they would rob the lawful possessor... in addition to injustice, it is only too evident what an upset and disturbance there would be in all classes, and to how intolerable and hateful a slavery citizens would be subjected." Instead, he said, "The law, therefore, should favour ownership, and its policy should be to induce as many as possible of the people to become owners."

Quite. But how?

The answer is blindingly simple. Give back property rights. Starting, crucially, with self-ownership. Undo a century or more of well-intentioned infringements on the right of normal people to use their time and labour as they see fit provided they do not assault or rob others. Stop government from pushing people around, or delegating to others—including unions— the right to do so.

Some may object that dramatically smaller government would create a far greater need for private charity. I agree. And it would also create far greater opportunities. But that's good, because charity is twice blessed whereas State welfare is twice cursed, breeding resentment in taxpayers and dependence in recipients. In any case, it's a distinctly secondary benefit.

Our goal here is wide distribution of property, and whatever approaches we adopt to those who fall through society's cracks, we must believe they will work far better if the average person has property or else Distributism's goals are nonsense as well. Likewise it is true, though secondary, that fewer people will fall through the cracks if those without significant fixed assets are allowed a firmer grip on what they do have, namely their own time and energy.

Nor is the point the staggering amounts of wealth that capitalism can create, though these benefits are not trivial to those not yet experiencing them. Voluntary poverty may be good for the soul, but the involuntary kind does not seem to be. As Margaret Thatcher acerbically noted, if the Good Samaritan had lacked money, he could not have helped the man in the ditch.

The point is that cutting government will give ordinary people, including the poor, themselves back. It will remove the rules and regulations that hamper their attempts to better themselves, from minimum wages to coercive unionization rules that shut off opportunities, and that hurt them economically and morally. That's why laissez-faire and effective Distributism are not merely compatible but inseparable.

Of course, rolling back the State will not purge greed from the human heart. But neither will socialism. No political system can, and it is a confusion of categories to try. What genuine capitalism can do, unlike socialism, is create an institutional framework where greed and bullying are punished in the marketplace, not rewarded at the ballot box. It makes a kinder, gentler society than socialism and, crucially, one with moral space for ordinary people.

Without liberty to use one's time and effort as one sees fit, one is not a moral agent at all; he who cannot choose cannot choose well. Laissez-faire is free will writ large, in the conditions of a material universe where time flows irrevocably in one direction. That is why freedom must, at bottom, mean economic freedom. And why effective Distributism must mean laissez-faire.

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