The Political Economy of Distributism: Property, Liberty, and the Common Good
By Alexander William Salter.
The Catholic University of America Press, 2023.
Paperback, 238 pages, $24.95.
Reviewed by Gene Callahan.
Alexander Salter has written an important book, examining how the political program of distributism can inform contemporary debates about political economy. (I should note here that Salter and I co-wrote a paper on distributism, which is, in fact, cited in the book under review.) The fact that Salter is a trained economist with a PhD is significant, since it contradicts the idea that taking distributism seriously might be simply a symptom of ignorance of “scientific” economics. Despite Salter’s sympathy with distributist thought, he never gives the architects of distributism (chiefly G.K. Chesterton and Hilaire Belloc) a free pass: he continually tests whether their ideas appear plausible given commonly accepted economic theory. Spoiler: in some cases they do appear so, but in others Salter judges them to come up short.
Salter sets the scene for the core of his book with two chapters, the first on “common-good capitalism.” That was the theme of a speech by Senator Marco Rubio, in which Rubio claimed that, despite “years of robust economic growth, we still have millions of people unable to find dignified work, and feeling forgotten, ignored, and left behind.” After rejecting socialism as an answer to our problems, Rubio argued that the right response “is not to abolish free enterprise but to moralize it.” And Salter points out that Rubio has hardly been alone among figures broadly “on the right” who recently have been questioning laissez-faire ideology, noting a manifesto published in First Things signed by “more than a dozen high-profile academics and public intellectuals.” Salter goes on to discuss Notre Dame political theorist Patrick Deneen and Harvard law professor Adrian Vermeule as prominent examples of intellectuals promoting a revived concern for the common good as necessary to cure what ails us, and notes that each of them grounds his critique of the current order in Catholic social teaching. To close out the chapter, Salter points out that “common-good capitalism” is not an example of a “third-way” economic system halfway between socialism and capitalism. The common “third way” is the regulatory-redistributive state, which, given its attention to “material comfort and social pacification,” is focused on “second-order problems,” and thus ignores the first-order problem of “respecting human dignity.” In particular, third-way solutions, such as social democracy, rely on distributing either consumer goods directly (such as food stamps or housing vouchers) or indirectly via cash transfers to those less well off, as if upping their level of consumption alone could make their lives satisfying. Distributism, on the other hand, focuses on individual ownership of productive property, which enables each individual to have the dignity of greater direction of their own life.
In the next chapter, Salter offers a brief outline of Catholic social thought. The Church had always been engaged with social issues, but the impetus for articulating a specifically Catholic approach to social issues was “the economic and political upheavals in the West following the Industrial Revolution.” The foundational documents in this effort were Pope Leo XIII’s Rerum Novarum of 1891 and Pope Pius XI’s Quadragesimo Anno of 1931.
In this chapter, Salter claims that “Industrialization greatly increased living standards.” But recent research has shown that in the nineteenth century the physical health of the rural populations of Scotland and Ireland was much better than that of industrialized England. Salter claims that, during the Industrial Revolution, “Many voluntarily left the countryside in pursuit of wage employment in cities.” Unfortunately, he does not consider the impact of forced enclosures of common land, cutting peasants off from an important source of their livelihood, on the mass movement of peasants into factory work. Once taken into account, his claim is somewhat like saying that “I voluntarily moved into a homeless shelter…after my house was demolished by legislative act.”
In any case, the various pronouncements of the Catholic Church during this period asserted that, contra socialists, private property is vital to human flourishing, but, contra economic liberals, property rights are not absolute: “The state must regulate ownership and its attendant privileges in the interests of the common good.” Pope Pius added the vital concept of subsidiarity to Leo’s work: “higher-order communities [such as nations]…[must not] interfere with the operation of lower-order communities [such as a village] without just cause.”
Salter begins his foray into the particulars of distributist thought with two chapters on the English writer Hilaire Belloc, the first addressing his work, The Servile State. Belloc’s work was influential enough that even a classical liberal like F. A. Hayek quotes it in The Road to Serfdom, to wit: “The control of the production of wealth is the control of human life itself.” Belloc’s concern is that the property arrangements of industrial capitalism, where the ownership of productive property is concentrated in fewer and fewer hands, will eventually lead to the re-establishment of a servile state such as was common in the ancient world, where most work was done by largely unfree labor for the benefit of a ruling elite. Belloc would not be impressed by neo-liberal defenses of current arrangements based upon noting that contemporary workers can own very large SUVs and plasma-screen TVs: it is ownership of the means of production that makes a person free to direct his own days.
Salter also argues that Belloc’s contention that large firms exploit their workers is naive, since workers receive “the value they contribute to the production process.” But is this really how workers are paid? When it comes to individual workers, the idea is preposterous: I have been employed by many companies and not a single one of them ever had any idea what the “marginal product” of any individual worker was. When it comes to different categories of laborers, or to workers as a whole, it would be true that they would get paid their marginal product in Mises “imaginary construction of the evenly rotating economy,” but Mises was quite clear that this is an imaginary construction. So even setting aside political interventions and power dynamics, there is still room for Belloc’s argument to have validity.
The next chapter takes up Belloc’s work An Essay on the Restoration of Property. Here, Belloc admits that sometimes giant economic conglomerates may sometimes be more efficient and even more innovative than small concerns. But he does not believe that these possible benefits are worth the cost in human freedom and dignity that such bigness entails. For Belloc, policies designed to lift workers’ wages while ignoring who owns the means of production miss the crucial fact that “[a] wage employee does not possess economic freedom, regardless of how high his wage is. Freedom requires ownership.” Better to pursue policies that favor “small retailers and craftsmen,” who own their own productive property, than to try to make the servile condition of a wage laborer slightly more palatable.
Salter next turns his attention to G.K. Chesterton, first addressing his book, What’s Wrong with the World. Like Belloc, Chesterton rejects both capitalism and socialism. Socialism denies any value to private property, while capitalism allows excessive holdings of property by a small number of individuals. Chesterton notes, “One would think, to hear people talk, that the Rothschilds and Rockefellers were on the side of property. But obviously they are the enemies of property, because they are enemies of their own limitations.” Critiquing programs housing the poor in state-provided “council flats” or “housing projects,” Chesterton writes: “Man needs not just a shelter but a home, and socialism cannot distinguish between the two.”
But these criticisms of socialism should not lead one to believe that Chesterton is a Tory. Chesterton sees the battle between Tories and socialists as little more than a pantomime, disguising the awful possibility that they are “secretly in partnership; the quarrel they keep up in public is very much of a put-up job; and that the way in which they perpetually play into each other’s hands is not an everlasting coincidence.”
Salter also considers Chesterton’s second book, The Outline of Sanity, which is “as much about politics as economics.” Here Chesterton attacks bigness and monopoly in both the public and the private sphere, the purpose of which is “social control, the modern phrase for the age-old institution of Slavery.” Chesterton also defends democracy in this book, while denying it is opposed to tradition: “tradition is only democracy extended through time… All democrats object to men being disqualified by the accident of birth; tradition objects to their being disqualified by the accident of death.”
Salter spends some time criticizing Chesterton’s contention that large firms are inefficient, but here it is Salter who does not seem to have “kept step,” as he ignores developments such as the Toyota revolution moving us towards small batch manufacturing, and the proven superiority of small teams in rapidly producing quality software.
Salter goes on to discuss Mary Hirschfeld’s work Aquinas and the Market. Hirschfeld notes that while economics discusses efficiency, in terms of what means are employed to achieve any ends whatsoever, Aquinas holds that “human choice is not about efficiently getting what we want so much as it is about learning how to want what is genuinely good.” There is no virtue in being very efficient about achieving evil ends. Salter contends that while Hirshfeld’s work points us towards a humane economics, Belloc and Chesterton’s program is about creating a humane economy. Thus, Salter concludes, these are two complementary research programs that should be united.
Another key figure for Salter is the German economist Wilhelm Röpke, who married Belloc and Chesterton’s concerns about proletarianization and the inhuman scale of modern life with a rigorous knowledge of economic price theory. Salter devotes two chapters to Röpke, the first to show that his social concerns are remarkably similar to those of Belloc and Chesterton (both of whom Röpke cites), and the second to demonstrate his grasp of economic theory and its importance to his recommendations for reform.
Röpke exemplifies why being able to “think like an economist” is important for anyone who truly wishes to improve society. A failure to do so is likely to result in policies that not only fail to achieve their goal, but may even achieve the opposite. For instance, many people concerned about the well-being of low-wage workers advocate setting a high minimum wage. But that can lead to unemployment for many low-wage workers. Belloc, Chesterton, and Röpke would all agree that, better than trying to artificially prop up the wage of a proletarian worker, let’s de-proletarianize him. (And, by the way, so would Marx and Engels, who disdained reforms like minimum wage legislation.)
As someone who has repeatedly committed the venial sin of reviewing academic books, I find too many academic writers seem to believe that the best way of showing one’s intelligence is to write obscurely. Salter does not suffer from that delusion: his writing is always pellucid. A minor quibble: Salter does employ the contemporary, nearly instinctual habit of announcing in advance and retrospectively repeating one’s main argument. At one point he writes, “It will be helpful to summarize the arguments thus far.” My reaction was, “Not really: I have been following along.” I cannot recall a single classic work of philosophy, social theory, or history that follows this method: I think it is a journalistic trick appropriate for casual readers of newspapers that has unfortunately leaked into academic writing.
If I might be so bold as to try to capture the “main message” of Salter’s book, it might be that:
- Those who attempt social reform without understanding price theory are likely to make foolish mistakes that result in the opposite effect of what they wished to achieve.
- Those who rely only on price theory in devising social policy are likely to make anti-human mistakes that ignore all the things about people and their common life that cannot be captured in a supply-and-demand diagram.
My minor quibbles aside, this is an excellent book, which should serve as an important introduction to distributism for both economists and non-economists.
Gene Callahan is a Lecturer in Computer Science and Economics at St. Joseph’s College and a Research Fellow at the Collingwood and British Idealism Centre at Cardiff University, Wales. He is the author of Economics for Real People and Oakeshott on Rome and America.
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