As anyone who attended will remember, there was some animated debate at this week's Society meeting on the topic of distributism vs. capitalism. Here, Colm Culleton returns to the fray, putting forward the case for capitalism, and answering points that were made at the meeting.
Your humble blogmaster considers himself a Distributist; but I always admire someone willing to argue an unpopular case (as capitalism certainly is within Chesterton fandom). And, to honour the spirit of the infinitely good-humoured GKC, I ask that any comments be respectful.
So, with that, I'll let Colm speak for himself:
At the last meeting of the Chesterton Society, the question was asked: What exactly is Distributism?, which GKC considered the perfect economic system to counteract the problems of capitalism. The general opinion was that Distributism consisted of every man having 10 (I think) acres of land on which to grow food for his family. I was foolish enough to declare that this idea is similar to Socialism/Communism, which ruined eastern Europe and other countries in recent decades. (If any part of that summary is incorrect, I welcome a correction.)
I was roundly berated for fostering Capitalism, on the grounds that capitalism leads only to monopolies by the very rich. My defence of Capitalism was drowned out then; so now I write this in the hope of being listened to.
The enemies of Capitalism at the meeting were all well dressed, and presumably pleased to have bought their clothes from capitalists. It is likely that they owned cars, which they also bought from capitalists. Several had driven their cars to the meeting (using petrol supplied by a capitalist), or had paid a capitalist taxi-driver to bring them there. The rest had arrived in the capitalist shoes mentioned above. Everybody looked well-fed, from food bought from capitalists. Their hair had been tended to by a capitalist. We were surrounded by books (we were in the Catholic Library), all of which had been bought from capitalists. The group was well educated (except in economics), which suggested that they had paid capitalists for their schooling. Many of them are planning holidays, by negotiating with capitalist travel agents, airlines, and hotels. And, in all cases where the enemies of Capitalism had bought (or will buy) any of the above from capitalists, they had carefully compared the price and quality offered by competing capitalists.
I present the following defence of Capitalism. If you wish to comment, please contact me at email@example.com.
For a trade to take place, BOTH the buyer and the seller must gain an advantage from it. I will not sell unless you give me the price which I want; and you will not buy unless my good is worth the price I put on them. Sure, I would like you to pay more, and you would like to pay less; but BOTH of us are willing, though not necessarily happy, to trade.
The advantage of our trade to you, the buyer, is that you will gain some benefit from what I sell you. The advantage to me, the seller, is that I now have more money than before we traded.
I, the seller, inevitably make you more satisfied by our trade, otherwise you will not trade. But I also make many more people satisfied as well: the men who built and outfitted my factory, the people who made the thing in my factory, my office staff, the people who sold me the raw material to make the thing. I will pay taxes to the state. I don’t want to, so I hire an accountant to reduce them. EVERY ONE of the people who help to make my thing now has more money than if I wasn’t making the thing, and this money permits then to trade with other people, one of whom is inevitably you sooner or later.
The above benefits apply even if there is a monopoly. Monopolies have four brakes. One is government, which can legislate against them. The second is the ever-present threat of a rival appearing. The third, and perhaps most powerful is – us: we can simply stop buying their goods, and they will go out of business. If we continue to buy their goods, it is back to the beginning: we do so only because we gain a continuing advantage from doing so. The fourth brake is their own intelligence: don’t get too greedy, or the above three correctives will be activated.
In short, there is no such thing as A LUMP OF PROSPERITY, whereby the more I have of it, the less you can have of it. The truth is that the magic of free trade makes all of us richer.
What gets up some noses is that some creators of wealth have too much of it; but I say “More power to them”: they are nurturing the circle of trade like every other one of us who buys and sells, only more lavishly. Some millionaires are better than others. American Warren Buffet has so much money that the interest on the interest on the interest on his wealth is enough to bail out Ireland. He has willed only 1 million dollars to each of his children, leaving the enormous residue to charity. Bill Gates pours money into the Third World; and he and Buffet are (successfully) enticing other billionaires to donate as well.
Perhaps a reader will say: “Capitalists can cheat by suborning politicians”. That is true, but that is politics and not economics, and therefore outside the purview of this outline.
There are many more defences of Capitalism, available on request.
As for Distributism’s “10 acres per man”: Who pays for the acres? The man could, but only if he is already earning money in a capitalist economy. The government could pay for them, but only if the man has been paying tax on the money which he has already earned in a capitalist economy.
What about the man who knows nothing about farming? He would soon starve his family to death. He could ask for help from the man in the next farm, except that that other man needs to feed his own family. And, if he does have spare time, the first farmer needs money to pay him, except that the first man has no money since he does not work in a capitalist economy.
What about the man, or his son, who wants to become a teacher?: nobody is building schools or paying teachers, because everyone is farming.
I think I will stop here.