A Secular Party paper

THE Origins

“Under , man exploits man. Distributism’s philosophical origins can Under , it’s the other way be traced to the same nineteenth century around.” roots as , as a reaction against the perceived inequalities and misery of late Victorian high capitalism in England. Introduction The inspiration for the Distributist At the beginning of the 21st Century of Movement was the 1891 Papal social the Common Era, following the collapse , De – On the of the Soviet Union and with it the Condition of Labour – calling for a new political credibility of socialism, we compassionate interpretation of are daily confronted by those who claim capitalism, although a majority of that these events are a vindication of 19th distributism’s later supporters were not century laissez-faire capitalism. Catholics and many were in fact former radical socialists who had become Whilst undoubtedly a new golden age for disillusioned with socialism. corporations whose transnational commercial opportunities and economic Local attempts to form grower co- might are increasingly beyond the operatives to redress the regulatory power of even medium sized impoverishment of agricultural national , we find the dawn producers who were paid little for their of the age of accompanied by crops by middlemen who then on-sold the concentration of more and more them to consumers at a great had wealth in the hands of a few whilst the achieved considerable success in rural wages and living standards of the many Ireland in the mid-19th century. Equally, are moving rapidly backwards. the and movements, that sought to lend money In these circumstances, it is perhaps on a not-for-profit or minimal cost basis opportune to look again at alternatives for housing and small business and consider whether the failure of development enjoyed great success, communism has vindicated laissez-faire particularly in Scandinavia. In England, capitalism or whether, perhaps, a the success of the Rochdale co- genuine Third Way is possible. operative retail outlet proved that not- for-profit retailers could operate In recent years, many have sought to lay successfully, and continues to form the claim to the concept of a Third Way, but basis of all retail co-ops to the present for most, like British PM Tony Blair, use day. of the term is simply self-serving rhetoric and spin for business-as-usual. It was however left to Hillaire Belloc and GK Chesterton at the turn of the century There is however one claimant to the to draw together the disparate mantle of a Third Way that does not experiences of the various co-operatives simply collapse on closer examination and friendly societies in Northern into welfarist capitalism or state England, Ireland and Northern socialism in drag, and that is the into a coherent political which political movement known as specifically advocated widespread distributism. private ownership of housing and control of industry through owner- operated small businesses and worker- and the , controlled co-operatives. distributism seeks to devolve or widely distribute that control to individuals This became the basis of a concrete within society, rejecting what it saw as of political goals which formed the the twin evils of and objectives of the distributist movement bureaucracy. and which, ironically, achieved their greatest successes outside England in Early 20th century distributism saw the Italy, Canada, Northern Europe and most concentration of ownership in a few spectacularly in Spain. hands as the primary source of social ills but saw the removal of control from Distributism Defined all private hands as even worse.

Distributism is a political Subsequent history certainly seems to based on the contention that a just and have supported their contention. sustainable social order can only exist in which the ownership of and the Distributism versus socialism means of production, distribution and exchange are widespread. In Das Kapital, Karl Marx’s analysis of capitalism led to his Labour Theory of The Distributist Movement thus seeks to Value – that the value of a good or achieve this end both by means of the service lay exclusively in the labour democratic political process and by non- required to produce it. From this state mutual organizations of individuals premise Marx concluded that those who that facilitate widespread private made a profit from employing others had ownership through not-for-profit lending unjustly appropriated the surplus value for private purchase and co-operative of this labour – the difference between enterprise. what workers were paid and what the product of their labour was sold for. In Britain of the 1920s and 30s, the Marx’s solution was the collectivization distributists sought the restoration of of the means of production, distribution family and individual liberty by a revival and exchange – including property and of smallholder agriculture and small the elimination of the supposedly business and an end to grasping parasitic class of employers and landlords, by attacking monopolies and property-owners – so that workers trusts and denouncing what they saw as would all receive the benefit of this anonymous and usurious control of surplus value rather than have it taken finance. from them.

Opposed to laissez-faire capitalism, While superficially sounding reasonable, which distributists argued leads to a we can now look back on a century of concentration of ownership in the hands untold misery and tyranny as various of a few and to state-socialism in which efforts to implement Marx’s ideas led not private ownership is denied altogether, only to the destruction of whole distributism was conceived as a genuine societies, but ironically to the Third Way, opposing both the tyranny of impoverishment and death of countless the marketplace and the tyranny of the millions of the very workers that state, by means of a society of owners. Marxism purported to champion!

Like socialism, distributism is The oft-repeated truism is that concerned with improving the material communism is fine in theory but fails in lot of the poorest and most practice, as it does not account for disadvantaged. Unlike socialism, which human nature. In fact, I would argue that advocated of property this is not only arrant nonsense but with product, decreasing price by almost an oxymoron! increasing supply relative to demand. In the time it takes to make several was a failure because hundred pairs of shoes, fashions could Marx’s analysis was flawed – because change or an early start of summer shift his theory was just wrong. demand to open sandals, decreasing the value of the cobbler’s shoes. Valid theories work in practice. Its invalid theories that don’t work! The common factor in all cases is demand. Labour contributes to value but Understanding where Marx went wrong it is demand that sets it. is central to understanding the ideological underpinnings of And what if a deranged cobbler made distributism because the founders of the two hundred left shoes rather than a movement – Belloc, Chesterton and hundred pairs of shoes? Labour and others – were themselves mostly material contributions are the same but socialists who developed distributism in try to sell them and he’ll quickly response to the theoretical problems discover that two hundred left shoes which they had come to see Marx’s have a fraction of the value of one analysis. hundred pairs.

The most fundamental issue is the Once again all that differs is demand. Labour Theory of Value. Since most people have two feet, most demand is for pairs of shoes! That doing work is a path to improving value cannot be disputed. To take wood If demand rather than labour content is and brick and concrete and tiles and the basis of value, then Marx’s whole build a house creates a product that has edifice falls apart. Employers, salesmen greater value than that of the materials and property owners aren’t necessarily that comprise it. That making a pair of exploiting workers, because if demand shoes from leather and stitching creates and not labour is the basis of value, their a product, which obviously has more activities are contributing to demand value than the leather and stitches just as much as workers. themselves. That creating steel out of iron ore produces a product of much If the bourgeoisie aren’t by definition greater value than the simple cost of its parasitic exploiters, then the whole constituents is equally self-evident. In concept of class warfare becomes a each case, the added ingredient is nonsense. labour. So far, so good for Marx. If class warfare is a nonsense then what But let’s take this analysis a little further. can revolution achieve except cruelty, How is this increased value realized? injustice and a changing of ruling elites? Only at the point of sale. Yet, if Marx’s analysis is wrong, the very Up to the point when someone else is real issues that he sought to address prepared to hand over the cash, that remain unanswered. house, that steel bar, that pair of shoes has an expected value, but the value is In an age in which State socialism has only actually set at the point of sale. been discredited, the tendency is to see Between building a house and selling it, this as a vindication of what went before, interest rates could rise and demand for to simply throw the baby out with the housing drop, lowering its expected bathwater. value. Between mining iron ore and smelting, new producers could flood the That it is untrue to say that employers, Friedrich Heyek) Belloc called no less a landlords and middlemen necessarily road to serfdom. exploit workers is not to say that their involvement is exclusively beneficial. Belloc argued that what a divided Britain That the value of a good or service is not with a vast impoverished underclass solely based on its labour content is not needed was not ever more unrestrained to say that, all other factors being equal, capitalism nor the false dawn of it does not substantially derive from it. socialism, but a new , which for Belloc was first last and foremost And most importantly, while I argue it is about liberty. false to claim that surplus value is unjustly appropriated by those Freedom, however, as Belloc well knew, employers, landlords and middlemen isn’t free. What use is the mere absence who are contributing to the value of a of the physical control of others if your good or service, it is undoubtedly true poverty renders you subject to their that those who work for them, rent from financial control? It’s simply a subtler them or sell to them would be financially form of tyranny. better off if they could keep the financial benefit of this transaction – the surplus The beginning of freedom is the end of value – for themselves. poverty and the end of poverty argue the distributists comes not with state This in a nutshell is what distributism is ownership or handouts but with all about. owning the full value of what you work to create and being able to afford to buy Distributism is not trying to make the your home, not living by another’s leave. poor rich by making the rich poor, but empowering the poor and the not-so-rich Belloc was elected to parliament shortly to accumulate more of the demand- before the First World War and served in based value of their labour, more of the the of Lloyd George, but his demand-based value of their produce, uncompromising personality denied more of the demand-based value of their distributism the opportunity it could accommodation. otherwise have gained.

Achieving this by giving as many people For all its colourful leadership by Belloc as possible the means to employ and Chesterton, and the considerable themselves or own dividend-paying publicity it enjoyed in the 20s and 30s, equity in their employer, to have the distributism was never implemented in opportunity to sell their produce directly Britain and after its dalliance with to consumers and to be able to buy their Oswald Mosley’s New Party, it never own home is distributism’s aim. recovered public credibility when Moseley turned to . How distributism works The laurel for outstanding success in The key work to understanding early 20th implementing distributist aims must rest century distributism is Belloc’s seminal with the Spanish, where following the work, the Servile State. Spanish Civil war, Don Jose Maria Arizmendiarrieta founded the A savage denunciation of laissez-faire Mondragon Co-operative in the Basque capitalism, which Belloc argued was re- region. From a handful of unemployed establishing feudal servility on oil lamp makers, Mondragon has grown economic lines, the Servile State is no to become the ninth largest corporation less savage towards state socialism, in Spain. which (ironically presaging the later words of economist Unlike the isolated and fragmentary co- Australia is however not a nation of operative experiments in Australia and starving match-girls and poverty- Britain, Mondragon is an expression of stricken tubercular factory workers the broad distributist agenda that seeks crowded six to a room. This is a rich not simply to sell to its members at a country whose poor are still fabulously discount but to transform their lives. To wealthy by Third World standards. consistently improve living standards through sustainable development and to Australia is however, at the beginning of rebuild community and culture as the 21st century, a country whose living opposed to promoting dog-eat-dog standards have not been rising adversarial . consistently.

Mondragon co-operative runs Thirty years ago a single working-class supermarkets, banks, agricultural and income was enough to support a family. manufacturing concerns, housing A bus driver or council labourer could projects, schools, technical colleges and reasonably expect to be able to buy a even a university! modest house and drive a late model car. Today all that has changed. While a The lot of the poor is improved not proliferation of electrical consumer through welfare but through economic gadgets get ever cheaper and more empowerment. numerous, the fundamental costs of living – accommodation, food, transport, Capital is seen not as the enemy but as health care and education are far less an instrument for social . affordable now than then.

The co-operative, in the Mondragon In response, both partners in most experiment is viewed as a means by relationships have quietly gone to work which instead of capital hiring labour, full time, but even this doubling of family labour can hire capital. incomes has still not kept pace with the erosion in average income standards. Some see the kind of distributism which Mondragon represents as an Yet this is not universally true. The living evolutionary development of socialism, standards of professionals, managers in which the role of the state is and others on higher wages have kept abandoned in favour of locally pace with the increasing cost of living. controlled and owned production. Others, see the Mondragon experience Part of the reason for this is that those as a new kind of , on higher incomes now rarely marry in which the wealth-generating power of outside their socio-economic class. capitalism has been harnessed to Where once doctors and lawyers and achieve social ends. company executives married their secretaries or people on lower incomes In the end though, if capitalism is simply that they met at social gatherings today about maximizing profits and standing they marry each other, maintaining their back even if that leads to monopoly combined earning power but helping to ownership, then Mondragon isn’t lock those on lower incomes out of one capitalism. And if socialism is about means of economic advancement. ownership rather than private profit, Mondragon isn’t socialism either, Fundamentally however, this is a because Mondragon is all about making reaction rather than a cause. The individuals and their families wealthier. fundamental problem is that over the last 35 years the purchasing power of Relevance in Australia take home pay for those on lower incomes has declined, particularly in terms of accommodation cost. Yet what really does this profit anyone?

Concomitantly, waves of takeovers and In the end, the purpose of material mergers has seen ownership of every advancement cannot be simply material aspect of production, distribution and advancement for its own sake but must exchange concentrated more and more be an increase in human happiness. in fewer and fewer hands. As the struggle for living standards As “globalisation” continues to place a intensifies, can we really say that our downward pressure on wages and society as it is today is achieving this? conditions, this situation is likely to be exacerbated. Can even those few who do gain from vast profits really say their lives are In Australia as in the United States, better than they might be if everyone since the demise of Keynesianism in the had a better life, when more and more early 70’s, the gap between rich and their material enjoyment is curtailed by poor has continued to widen. In the US the need to hide behind walls and in 2000 the salaries of the CEOs of the security guards and legalized violence? 365 largest companies was 500 times the average wage and the 13,000 riches Some will say that 1930s social theorists families have around the same collective and the localized success of the co- income as the 20 million poorest. operative system in the Basque region of Spain have little relevance to us in Small family farms, once the Australia today, but in Switzerland, cornerstone of Australian life outside the Norway, Denmark and Iceland, four of big cities, have become an endangered the richest countries in the world, species as vast agribusinesses have communitarian distributism in small grown up driven by the voracious fast- farms and businesses and housing is food industry. alive and well.

For more and more young people today, In addition to having higher per-capita the prospect that they will never be incomes than Australia, all have a tiny anything but poorly paid wage slaves fraction of the levels of poverty, drug living in rental accommodation is a real abuse, homelessness and crime of this possibility. country. They have less pollution, less traffic congestion and much less urban Increasingly all sense of community is sprawl than Australia and a far stronger being lost, as the dog-eat-dog struggle sense of community than we have here. to grab a few chestnuts out of the economic fire turns us into an It is in this context that Belloc’s anonymous collection of disconnected prescient warning of the dangers of the individuals – more a bus stop than a servile state and distributism’s nation – in which no one cares for alternative vision of an affluent, anyone but themselves. cohesive society of home owners and self-employed deserves to be re- Driven by the ceaseless demand for ever examined. greater profits in ever fewer hands rather than nutritional benefit, the very foods that we eat are being genetically Richard Howard transformed and chemically altered, the long-term consequences of which we can only guess.