Plodding Insight

1.A) What are Capitalism and Distributism?

This post is part of a series that is outlined here.

[Welcome, TNDL readers! If you just linked here from Athansius’s post, you can find my response here.]

It’s worth noting right off the bat that there is some disagreement over the meaning of the word “capitalism” and to a lesser extent, “distributism”. This disagreement, in a curious way, sheds light on the priorities of each side of the debate.

The capitalist tends to define an economic system by what the legal apparatus does and does not allow. This point of view defines capitalism as the system in which economic freedom is maximized, i.e. where goods and services are bought and sold freely without government interference. The capitalist defines distributism as the system in which the government prejudices the legal apparatus against the large business, in favor of the small venture. Some distributists even suggest that the government ought not allow competition to bankrupt any business.

The distributist defines his terms differently, although both competing definitions seem to referencing the same state of affairs in most cases. Here, capitalism is defined as the economic system in which productive capital is held in the hands of (i.e. controlled by if not entirely owned by) the few, while the majority work for a wage. The distributist usually believes that this situation described is the necessary outcome of a free market. Distributism is then defined as the economic system in which the vast majority of people have personal ownership of productive capital, ie are running small businesses. The historical exemplar of this is an agrarian farming community with the occasional non-farming specialty tradesman, but distributists stress that they are not advocating that everybody turn to farming or reject technology.

To sum up, defenders of a capitalist system tend to see what freedoms are given man as an economic actor, while distributists tend to see whether he owns productive capital. I note the irony that if the word “capitalism” had not already been associated with the free-market ideology, it would probably have been a great way to indicate what we end up calling “distributism.”

Finally, it bears noting that there are several issues on which capitalists and distributists heartily agree. These include opposition to corporate subsidies*, high taxation, especially property taxes, and a powerful central government generally. Both distributists and capitalists are loath to see the national government taking to itself purposes that properly belong to the state, and state governments usurping the proper role of the county or town, etc.

*While capitalists favor an even playing field, distributists sometimes argue that the free market actually works against that ideal. See 2.A.3.

This entry was posted on Friday, August 17th, 2007 at 7:28 pm and is filed under Catholicism, Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Responses to “1.A) What are Capitalism and Distributism?”

Trevor Acorn Says:
August 21st, 2007 at 3:06 pm
Nice sarting post to what looks to be a interesting series of posts.

I would like to know sometime a little bit about your own economic background. Did you study economics in school? What books have you read? What economic schools of thought whould you most align with?
Samwise Says:
August 21st, 2007 at 5:25 pm
I am largely self taught, perhaps too much so. I took a little freshmen econ in college, and then later, for work, I had to do a much harder set of courses, basically a self-study program of a micro and macro textbook plus final exams, so even my course credit is mostly for self-taught knowledge.

I have depressingly little experience with the “thinkers” of economics. I’ve read Belloc’s The Servile State, and I’m reading Milton Freedman’s Capitalism and Freedom right now. I may be forgetting other “source” texts. But my favorite method of acquiring knowledge is the Socratic method: Argument! (which you’ve probably realized)

I have a much better grounding in philosophy and mathematics, and those two seem to well make up for my not having delved too far into economics.
Trevor Says:
August 21st, 2007 at 7:04 pm
I’m quite impressed with your knowledge given the little exposure. I, like you, have learned a great deal from argumentation. I think it’s the best way for me to learn.

So, would you recommend Belloc’s The Servile State? I’ve had little respect for Distributist authors like Schumacher or Pierce so I haven’t really even considered reading Belloc.

I like M. Friedman quite a bit. My guess is that if you like him you would probably also like Mises and Heilbroner. Also, there is a modern book called “The Undercover Economist” by Tim Hartford which is quite good. For economic history I recommend The Worldly Philosophers by Heilbroner. All these books represent solid orthodox economic thought. No margins here
Trevor Says:
August 22nd, 2007 at 7:42 am
Oh, and I thought you might like this quote: “Land should be taxed as much as possible and improvements as little as possible.” - Milton Friedman

Also, in a letter to William Newcomb in 1979 he wrote: “I share your view that taxes would best be placed on the land, and not on improvements”

:)
Samwise Says:
August 22nd, 2007 at 9:38 pm
If you’re going to read Belloc, you might as well read something else, because he’s got a lot to offer. The central thesis of the Servile State seems not to have played out, given society’s still-strong preference for personal freedoms. I recommend either The Path To Rome (a first person narrative of a walking pilgrimage) or if you can find it, a collection of essays called “On Nothing”, which is quite funny. The best two in the collection were, “On Tea”, and “On Them”.

Because of the amount of spam I get, please be advised that certain words will get your comment deleted before I even look at it in a moderation queue. This includes: insurance, mortgage, casino, vegas, holdem, poker, bingo, and various forms of foul language.

Back to Main Page	Plodding Insight » Blog Archive » 1.A) What are Capitalism and Distributism? Plodding Insight where breaking it down is a labor of love	Entries (RSS) and Comments (RSS)
1.A) What are Capitalism and Distributism? This post is part of a series that is outlined here. [Welcome, TNDL readers! If you just linked here from Athansius’s post, you can find my response here.] It’s worth noting right off the bat that there is some disagreement over the meaning of the word “capitalism” and to a lesser extent, “distributism”. This disagreement, in a curious way, sheds light on the priorities of each side of the debate. The capitalist tends to define an economic system by what the legal apparatus does and does not allow. This point of view defines capitalism as the system in which economic freedom is maximized, i.e. where goods and services are bought and sold freely without government interference. The capitalist defines distributism as the system in which the government prejudices the legal apparatus against the large business, in favor of the small venture. Some distributists even suggest that the government ought not allow competition to bankrupt any business. The distributist defines his terms differently, although both competing definitions seem to referencing the same state of affairs in most cases. Here, capitalism is defined as the economic system in which productive capital is held in the hands of (i.e. controlled by if not entirely owned by) the few, while the majority work for a wage. The distributist usually believes that this situation described is the necessary outcome of a free market. Distributism is then defined as the economic system in which the vast majority of people have personal ownership of productive capital, ie are running small businesses. The historical exemplar of this is an agrarian farming community with the occasional non-farming specialty tradesman, but distributists stress that they are not advocating that everybody turn to farming or reject technology. To sum up, defenders of a capitalist system tend to see what freedoms are given man as an economic actor, while distributists tend to see whether he owns productive capital. I note the irony that if the word “capitalism” had not already been associated with the free-market ideology, it would probably have been a great way to indicate what we end up calling “distributism.” Finally, it bears noting that there are several issues on which capitalists and distributists heartily agree. These include opposition to corporate subsidies, high taxation, especially property taxes, and a powerful central government generally. Both distributists and capitalists are loath to see the national government taking to itself purposes that properly belong to the state, and state governments usurping the proper role of the county or town, etc. While capitalists favor an even playing field, distributists sometimes argue that the free market actually works against that ideal. See 2.A.3. This entry was posted on Friday, August 17th, 2007 at 7:28 pm and is filed under Catholicism, Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. 5 Responses to “1.A) What are Capitalism and Distributism?” Trevor Acorn Says: August 21st, 2007 at 3:06 pm Nice sarting post to what looks to be a interesting series of posts. I would like to know sometime a little bit about your own economic background. Did you study economics in school? What books have you read? What economic schools of thought whould you most align with? Samwise Says: August 21st, 2007 at 5:25 pm I am largely self taught, perhaps too much so. I took a little freshmen econ in college, and then later, for work, I had to do a much harder set of courses, basically a self-study program of a micro and macro textbook plus final exams, so even my course credit is mostly for self-taught knowledge. I have depressingly little experience with the “thinkers” of economics. I’ve read Belloc’s The Servile State, and I’m reading Milton Freedman’s Capitalism and Freedom right now. I may be forgetting other “source” texts. But my favorite method of acquiring knowledge is the Socratic method: Argument! (which you’ve probably realized) I have a much better grounding in philosophy and mathematics, and those two seem to well make up for my not having delved too far into economics. Trevor Says: August 21st, 2007 at 7:04 pm I’m quite impressed with your knowledge given the little exposure. I, like you, have learned a great deal from argumentation. I think it’s the best way for me to learn. So, would you recommend Belloc’s The Servile State? I’ve had little respect for Distributist authors like Schumacher or Pierce so I haven’t really even considered reading Belloc. I like M. Friedman quite a bit. My guess is that if you like him you would probably also like Mises and Heilbroner. Also, there is a modern book called “The Undercover Economist” by Tim Hartford which is quite good. For economic history I recommend The Worldly Philosophers by Heilbroner. All these books represent solid orthodox economic thought. No margins here Trevor Says: August 22nd, 2007 at 7:42 am Oh, and I thought you might like this quote: “Land should be taxed as much as possible and improvements as little as possible.” - Milton Friedman Also, in a letter to William Newcomb in 1979 he wrote: “I share your view that taxes would best be placed on the land, and not on improvements” :) Samwise Says: August 22nd, 2007 at 9:38 pm If you’re going to read Belloc, you might as well read something else, because he’s got a lot to offer. The central thesis of the Servile State seems not to have played out, given society’s still-strong preference for personal freedoms. I recommend either The Path To Rome (a first person narrative of a walking pilgrimage) or if you can find it, a collection of essays called “On Nothing”, which is quite funny. The best two in the collection were, “On Tea”, and “On Them”. Leave a Reply Because of the amount of spam I get, please be advised that certain words will get your comment deleted before I even look at it in a moderation queue. This includes: insurance, mortgage, casino, vegas, holdem, poker, bingo, and various forms of foul language. Name Mail (will not be published) Website
Plodding Insight is proudly powered by WordPress Entries (RSS) and Comments (RSS).

1.A) What are Capitalism and Distributism?

5 Responses to “1.A) What are Capitalism and Distributism?”

Leave a Reply