Guest post:
Too much capitalism does not mean too many capitalists, but too few capitalists.—G.K. Chesterton
Chesterton probably never realized how close to the truth he really came, and it’s unfortunate that this flash of paradox did not enlighten his views on economics in general. He was an advocate of distributism. This is a "third way" economic school popular in certain traditional conservative and Catholic circles. However, it also has its conservative (and Catholic) critics.
I note this as an ex-distributist who admits to the validity of some of Hilaire Belloc’s insights in his foundational distributist tome, The Servile State, without agreeing to its solution. Belloc's main grievance is what he sees as the collusion of big government and big business in the creation of economic monopolies; a fact also lamented by the free-market theorist Friedrich Hayek who spoke positively of aspects of Belloc’s work in The Road to Serfdom. Seen in that light, the problem is not that there is too much capitalism, but that there isn’t enough. The roadblock to economic independence is heavy taxation and regulation, which ultimately weigh heavier on the small entrepreneur than on the big capitalist. The latter has the clout necessary to get around such problems or even turn them to his own advantage. Unfortunately, distributism takes many anti-capitalist myths at face value and tries to bring about greater property ownership (a noble goal) through yet more regulation, seeking a redistribution of wealth that is hardly distinguishable from socialism.
My own disenchantment with distributists initially had more to do with their methods than their ideas. They often advanced their position as a point of political (and theological) correctness; this despite the fact that very few advocates of that system have a solid grounding in economic theory. For that reason, I am pleased to see that Catholic libertarian Tom Woods (writing with Marcus Epstein and Walter Block) in The Independent Review, offers a perceptive and generally fair critique of the concept. The essay takes into account the good intentions of Belloc and his friend Chesterton (men who made invaluable contributions in so many other areas). But in the end, sincerity cannot make up for flawed reasoning. As the article states,
the creation and maintenance of a distributist economy would have required state action on a scale that, given Chesterton’s and Belloc’s arguments against socialism, would have violated their own principles. Moreover, the distributist argument, although superficially plausible, advanced a number of key claims in a manner that suggested they were beyond debate, when in fact they were quite debatable—and in some cases flatly false. An enormous body of scholarly work published since the time Chesterton and Belloc wrote has undermined their narrative in virtually every particular. (“Chesterton and Belloc: A Critique,” The Independent Review, Spring 2007).
This is more than editorializing here. Hard economic and historical facts are cited by the authors. So please take the time to read it if you're unconvinced.
N.B. While I don’t agree with The Independent Review that the market paradigm can be applied to all instances of human activity, free trade can still do much good if left to operate in a sensible and just manner.
