THE THIRD WAY Origins

A Secular Party paper THE THIRD WAY Origins “Under capitalism, man exploits man. Distributism’s philosophical origins can Under communism, it’s the other way be traced to the same nineteenth century around.” roots as socialism, 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 encyclical, De Rerum Novarum – On the of the Soviet Union and with it the Condition of Labour – calling for a new political credibility of state 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 governments, we find the dawn producers who were paid little for their of the age of globalism accompanied by crops by middlemen who then on-sold the concentration of more and more them to consumers at a great profit 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 credit union and building society 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 Europe socialism in drag, and that is the into a coherent political ideology 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 means of production, controlled co-operatives. distributism seeks to devolve or widely distribute that control to individuals This became the basis of a concrete set within society, rejecting what it saw as of political goals which formed the the twin evils of plutocracy 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 philosophy 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 property 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 state ownership of property this is not only arrant nonsense but market with product, decreasing price by almost an oxymoron! increasing supply relative to demand. In the time it takes to make several State socialism 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.

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