NOVEMBER 2003 The Fallacies of Distributism by Thomas E. Woods, Jr. n certain disaffected pockets of the politi- A family possessed of the means of pro- cal left and right, more and more voices duction—the simplest form of which is can be heard on behalf of an economic and the possession of land and of the imple- Isocial system known as distributism. ments and capital for working the land— According to the celebrated Catholic writers cannot be controlled by others. Of course, G. K. Chesterton and Hilaire Belloc, who various producers specialize, and through popularized the idea in the early twentieth exchange one with the other they become century, that social system is best in which more or less interdependent, but still, “productive property” is widely dispersed each one can live “on his own”: each one rather than concentrated. They contend that can stand out, if necessary, from pressure the market order undermines community life exercised against him by another. He can and introduces an intolerable level of insecu- say: “If you will not take my surplus as rity and anxiety into the economic life of the against your surplus I shall be the poorer; ordinary person. They would, therefore, but at least I can live.”1 limit business competition and implement a system of punitive taxation against firms For Belloc, then, the great advantage of dis- that had attained what these writers consid- tributism is that it gives the household a sig- ered excessive economic concentration. nificant measure of independence. A new I do not for a moment doubt the good will introduction to his Essay on the Restoration and pure intentions of those who support of Property describes his view of “economic distributism, and indeed I count some of freedom” as something that “comes from the them among my friends. My own view is possession of sufficient productive property, that if someone wishes to live in relative self- such that a man need not depend upon his sufficiency and to retreat, to a degree, from employer for a wage, but has rather to depend the division of labor, that is his decision. upon himself and his land, craft, tools, and What I wish to do here is to suggest that the trade for his sustenance.”2 Belloc acknowl- purported advantages of distributism, as edges in passing that of course anyone selling well as the alleged iniquities of the market, to others is in some way dependent on those have both been greatly exaggerated. others, thereby conceding that risk and uncer- Let us consider Belloc’s fundamental claim tainty are unavoidable aspects of life rather for distributism. As he sees it, distributism than unique to a system of economic freedom. brings freedom: If the price and quality of his goods do not remain sufficiently competitive, he is surely Thomas Woods ([email protected]) holds a Ph.D. in history from Columbia University and is bound to lose business. However, Belloc assistant professor of history at Suffolk Commu- points out, the family can nevertheless live on nity College (SUNY) in Brentwood, New York. its own, even if buyers refuse to purchase its 37 Ideas on Liberty • November 2003 surplus goods. They can live on what they they are as a result of forces beyond their themselves produce. At heart, then, Belloc’s control; an ineluctable process of wealth promise of security amounts to the distributist concentration brought about by capitalism family’s ability in the last resort to retreat has deprived them of the possibility of own- altogether from the division of labor and live ing “productive property” and avoiding the in a condition of self-sufficiency. dependency that the wage relation implies. Yet the advantages of the division of labor But the fact is, many people clearly prefer to are so clear that relatively few people have be wage earners rather than business own- found Belloc’s proposal attractive enough to ers. Belloc and his followers are free to insult have actually attempted to adopt it. Practi- such people by calling them “wage slaves”— cally anyone in the United States today who the distributists’ favorite slur—but they have possesses the requisite knowledge and modest made an entirely rational choice. And it is a capital can acquire farmland and chase after choice. As Fr. James Sadowsky observes, the kind of self-sufficiency Belloc advocated. Producing their own necessities and in posses- The fact is that in the nineteenth century, sion of the means of production, so to speak, when workers had far less disposable such a family would be utterly independent of income than their counterparts today, a employers or anyone else. They would proba- remarkable number of them became capi- bly also enjoy a standard of living so talists. It is all too often the unwillingness depressed and intolerable as to throw the to restrict consumption, a grasshopper rationality of the entire enterprise into ques- attitude, that prevents workers like me tion. This certain outcome probably accounts from becoming capitalists. In our day we for why the overwhelming majority of people see especially among immigrants from choose to take their chances within the divi- Asia what is, for us, an amazing willing- sion of labor, balancing the risks from which ness to defer present consumption. We this earthly life is never entirely secure against find these people living initially in condi- the unparalleled wealth and comfort they can tions that we should judge to be enjoy by not retreating into semi-autarky. absolutely impossible. Yet before we Even granting the distributist premise that know it, they are operating successful smaller businesses have been swallowed up businesses.3 by larger firms, that it is always preferable for a man to operate his own business rather As for the alleged insecurity with which than to work for another is by no means workers must live, those who work for obvious. It may well be that a man is better wages in fact enjoy a kind of security that is able to care for his family precisely if he does simply not acknowledged at all by distrib- not own his own business or work the back- utists—namely, that the worker receives his breaking schedule of running his own farm, pay whether or not the goods toward whose partially because he is not ruined if the enter- production he contributes ever sell. It may prise for which he works should have to be many months or years before they make close, and partially because he doubtless it to market at all. During all that time, enjoys more leisure time that he can spend instead of suffering the anxieties and uncer- with his family than if he had the cares and tainties of the independent craftsman or responsibilities of his own business. Surely, shop owner, the worker consistently earns therefore, we are dealing here with a matter his wage. He need not wait until—if ever— for individual circumstances rather than his product is actually sold in order to reap crude generalization. his benefit. While Karl Marx claimed that any differ- Deprived of Property ential between capitalist profit and wages paid to labor constituted “surplus value” The way distributists portray the situa- and exploitation, the Austrian economist tion, the wage earners of today are where Eugen von Böhm-Bawerk attributed such 38 The Fallacies of Distributism differentials to the time factor involved: worker is a uniquely reprehensible aspect of rather than having to wait, say, the full year modern society rather than an inevitable that must ordinarily elapse before the prod- aspect of life that has been with us since the uct on which he has worked is sold, the beginning of time. Were peasants in pre- laborer can be paid immediately. Since pre- industrial France—who were, it should be sent goods are preferred, other things equal, recalled, among the freest, most independent to future goods, the capitalist is entitled to peasantry in Europe—free of “hand-to- his profit since he compensates his workers mouth uncertainty”? (Try telling that to a in the present for the production of goods fourteenth-century mother who has just lost that will be sold only in the future. The her fourth child before his first birthday, worker, on the other hand, prefers a lesser lives one bad harvest away from starvation, amount in the present to the greater amount and resides in nearly intolerable squalor.) As he could have received in the future had he late as the eighteenth century, all travelers been willing to wait that long. He is clearly commented on the appalling conditions of benefited by the wage relation.4 the French peasantry and the shockingly To be sure, the worker does labor under dilapidated state of rural housing. The same the very real uncertainty that he may lose his held true for many who sought employment job. But this is inevitable due to technologi- in a trade. A Norman parish priest described cal improvements, changing tastes, new the situation in 1774: methods of production, and the like. The advent of the automobile meant that car- Day laborers, workmen, journeymen and riage manufacturers would have to shift into all those whose occupation does not pro- some other line of production. The introduc- vide for much more than food and cloth- tion of fax machines and electronic mail ing are the ones who make beggars. As must have cut into the business of couriers young men they work, and when by their and package delivery. The net result of these work they have got themselves decent changes is greater abundance and a higher clothing and something to pay their wed- standard of living, as fewer resources are ding costs, they marry, raise a first child, now necessary to accomplish our ends, have much trouble in raising two, and if a thereby freeing up resources for the produc- third comes along their work is no longer tion of goods that prior to these technologi- enough for food, and the expense.