DistributistPersPectives

Volume I

Essays on the Economics ofJustice and Charity

Cdr. Herbert W. Shove • George MaxwellHilaire Belloc • G.K. Chesterton • Arthur J. Penty

H.J. Massingham • Eric Gill • Harold Robbins

Norfolk, VA2004

With “A Twenty-First Century Appraisal of Distributism” by Dr. Thomas H. Naylor,

and an Introduction by Fr. Lawrence C. Smith

Distributist Perspectives Volume I.

Copyright © 2004 IHS Press.

Preface, footnotes, typesetting, layout, and cover design copyright 2004 IHS Press.All rights reserved.

“And His Menatal Exodus,” from People and Things, by H. J. Massingham, is copyright The Society of Authors, the Literary Representative of the Estate of H. J. Massingham; the selection is included in the present volume by the Society’s gracious permission. “On Knowing the Past,” by Hilaire Belloc, is copyright the Estate of Hilaire Belloc, by whose gracious permission this article appears in the present volume. “Painting and the Public,” from Beauty Looks After Herself, by Eric Gill, is included in the present volume by arrangement with Continuum International Publishing Group, Inc. IHS Press was unable to locate the holders of the original copyrights to Distributism: A Manifesto and The Sun of Justice. Any information leading to their identification would, therefore, be much appreciated. Additionally, the Editors wish gratefully to acknowledge the contribution of Dale Ahlquist of the American Chesterton Society and Rodger Phillips of CatholicAuthors.com to the biographical sketches of G. K. Chesterton and Hilaire Belloc.Notes to the original texts are included as footnotes. Editor’s notes have been included as endnotes and are therefore to be found at the back of this edition, immediately following the texts and just prior to the biographical sketches.

ISBN-13 (eBook): 9781932528374

Library of Congress Cataloging-in-Publication Data

Distributist perspectives / [compiled by John Sharpe ... [et al.]]. p. cm.Subtitle varies. ISBN 0-9718286-7-9 1. Distributive justice. 2. Wealth--Moral and ethical aspects. I. Sharpe, John, 1971- HB523.D568 2003 330--dc212003005883

Printed in the United States of America.

Table of Contents

page

Reclaiming the Tradition: Introduction to theDistributist Perspectives Series.......................................................7

by the Directors, IHS Press

Averting Self-Destruction: A Twenty-First CenturyAppraisal of Distributism..........................................................17

by Dr. Thomas H. Naylor

DISTRIBUTIST PERSPECTIVES I

IntroductIon........................................................................27by Fr. Lawrence C. Smith

I. On Knowing the Past...........................................................35by Hilaire Belloc

II. The Truth About Work......................................................40by George Maxwell

III. On Organisation and Efficiency.......................................46by G.K. Chesterton

IV. The Growth of Industrialism.............................................50by Cdr. Herbert Shove

IllustratIons........................................................................58

V. The Buttress of Freedom.....................................................61by Harold Robbins

VI. Painting and the Public.....................................................68by Eric Gill

VII. And His Mental Exodus................................................76by Harold J. Massingham

VIII. Distributism: A Manifesto............................................86by Arthur J. Penty

I. Economic Principles......................................................86II. Historical Observations.............................................100III. Conclusion: Practical Applications...........................106

about the authors.............................................................116

17

avertIng self-destructIon

A Twenty-First Century Appraisal of Distributism

WIth the rIse of communIsm in the Soviet Union and elsewhere in the 1920s, a group of mostly English, Catholic writers proposed an interesting alternative to

Soviet-style Communism and Corporate Capitalism which they called Distributism. Thoroughly grounded in Catholic social teach-ings, Distributism called for broad-based, decentralized ownership of private property as well as small businesses, small factories, small schools, small farms, small crafts, and small towns. It advocated a return to farming, the primacy of the countryside, organic methods, environmental integrity, and human-scale enterprise of all sorts.

The Distributist League was founded in 1926 by a group that included G.K. Chesterton, Hilaire Belloc, Maurice Reckitt, Capt. H. S. D. Went, and William Titterton. Other well-known Distributists included Eric Gill, Harold J. Massingham, George Maxwell, Arthur J. Penty, Harold Robbins, and Fr. Vincent McNabb. Unfortunately, the influence of these smallholder advocates was relatively short-lived. They were soon completely overshadowed by the Cold War. When I studied history of economic thought as part of my Ph.D. training in the early 1960s, there was no mention of the Distributists. Literally all of the action was between Big Capitalism and Big Socialism. It was as though no other alternatives even existed.

However, with the demise of Soviet Communism in 1991, unfettered Corporate Capitalism became the only game in town. This resulted in the Clinton global economic boom of the 1990s with all of its fury.

At the apex of Soviet political influence, it’s hard to imagine communist propaganda ever being as effective as our govern-ment, our media, and our academic experts in promulgating the lies, myths, and half-truths perpetrated by Wall Street, Corporate America, and Silicon Valley about the benefits of globalization and

Distributist Perspectives18

the Internet. Before the e-bubble burst and the prices of high-tech stocks came crashing back to earth, millions had turned to cyber-space for everything from information, employment, business, shopping, entertainment, and low-cost telecommunication to more transcendental benefits such as spirituality, worship, meaning, and community. College graduates saw the Internet as a ticket to fame, fortune, financial security, self-actualization, and grassroots democ-racy. The Net was their virtual God.

The intense frenzy with which the ubiquitous Internet was embraced was reminiscent of the nineteenth-century gold rush and the Texas and California oil booms. Americans were mesmerized by the techno-hype and cant dished out by Silicon Valley. Viewed by many as a limitless electronic marketplace, Bill Clinton called the Net “our new town square.”

Federal Reserve Chairman Alan Greenspan described the Clin-ton boom at various times as a “once-in-a-generation frenzy of specu-lation” driven by “irrational exuberance” and “infectious greed.”

Pundits claimed that e-business, the use of PCs and the Inter-net within a firm, would radically transform the way megacompanies do business by extending without limit their ability to reduce average costs as output increases. However, the number of megamergers that have gone sour, such as AOL Time Warner, Enron, Global Cross-ing, Tyco International, and WorldCom, casts doubt on such think-ing. Were Enron and WorldCom metaphors for America?

Claims that information technology, the communication revolu-tion, deregulation, and globalization would so alter the New Economy that increased productivity, record-high profits, levitating stock market prices, strong economic growth and job creation, low unem-ployment, and scant inflation would surely last forever have proven to be premature. Thirty-one months after the NASDAQ reached an all-time high of 5,049 on March 10, 2000, it had lost nearly 80 percent of its value and the Dow Jones average had fallen by nearly 40 percent resulting in a total loss of $8 trillion for investors.

Personal bankruptcies are at an all-time high and United Air Lines and USAir are but two of a plethora of high-profile corporate bankruptcies. A cover-page article in Business Week (February 3, 2003) was entitled, “Is Your Job Next?” It suggested that, “A new round of globalization is sending upscale jobs offshore.”

Averting Self-Destruction 19

An important contributing factor to the high-tech meltdown, mentioned by few, is global market saturation. In a world in which half the population lives on less than two dollars a day and over a billion people live on only half that amount, there is an upper limit on the number of PCs, Internet connections, cell phones, and DVD players which the market can absorb.

The collapse of energy-trading-company giant Enron and tele-communications megacompany WorldCom provided at least a tempo-rary wake-up call for Wall Street, Corporate America, the accounting profession, and the U.S. government. One of the greatest financial scandals of all time, Enron was a deceptive mixture of off-shore businesses, off-the-books loans, fake data, and creative accounting covered up by the firm’s auditor Arthur Andersen. The $107 billion collapse of WorldCom resulted in the largest bankruptcy filing in American history. Unfortunately, Enron and WorldCom have proven to be the tip of the iceberg as one major company after another has been accused of shady bookkeeping or other misdeeds. Some of them include Adelphia, Computer Associates, Dynergy, ImClone, Quest, Rite Aid, Martha Stewart, HealthSouth, and Xerox.

In his recent book Wealth and Democracy: A Political History of the American Rich, conservative Republican Kevin Phillips takes note of the fact that the gap between the rich and the poor in the United States is now greater than that of any other industrial democracy. He argues that, “the imbalance of wealth and democracy in the United States is unsustainable.”

Nothing better illustrates Phillips’ point than the compensa-tion of senior executives of major American companies. According to Business Week, average total compensation (including salary, bonuses, retirement benefits, incentive plans, and stock option gains) for CEOs of the 365 largest American companies in 2000 reached $13.1 million, nearly 500 times the average wage of a blue-collar worker. During the 1990s the average CEO’s paycheck increased by a factor of six. Until recently, Japanese and German CEOs were earning only 20 times what average factory workers earned.

According to Princeton economist Paul Krugman, “The 13,000 richest families in America now have almost as much income as the 20 million poorest. And those 13,000 families have incomes 300 times that of average families.”

Distributist Perspectives20

The combined net worth of the Forbes 400 richest people in America reached $1.2 trillion in 2000—greater than the gross domestic product of China. That year there were 300 billionaires on the Forbes 400 list. Two years later there were only 209.

Heading the 2000 list was Bill Gates whose net worth topped out at $90 billion before a federal judge charged Microsoft with vio-lating the Sherman Antitrust Act. At one time Microsoft’s market value was over $600 billion.

Twenty-three of the people on the Forbes list had net worths of $10 billion or more. Five were heirs of Wal-Mart founder Sam Walton who, if he were sill alive, would have been worth $85 billion. The combined profits of America’s ten most profitable companies was only slightly higher than Gates’ peak net worth –ExxonMobil, Citigroup, GE, Verizon, Intel, Microsoft, Philip Morris, IBM, SBC, and Bank of America. At that time the net worth of the poorest 40 percent of the American population was less than that of the Microsoft czar.

All of this flies in the face of the 1986 Pastoral Letter on Catholic Social Teaching and the U.S. Economy which called for “the preferential option for the poor” as the central priority of American economic policy. According to the Epistle of St. James:

And if a brother or sister be naked, and want daily food:And one of you say to them: Go in peace, be ye warmed

and filled; yet give them not those things that are necessary for the body, what shall it profit?

So faith also, if it have not works, is dead in itself.But some man will say: Thou hast faith, and I have works:

show me thy faith without works; and I will show thee, by works, my faith.

For even as the body without the spirit is dead; so also faith without works is dead. (ii:15–18, 26.)

Yet another form of unsustainability in America is the demise of the family farm. High energy costs, the increased cost of mechanization, depressed farm prices, a government farm subsidy program – which primarily benefits huge corporate farms – and the purchasing policies of the fast food industry have all taken their toll on small family farms.

In his book Fast Food Nation, Eric Schlosser makes a convincing case that the fast food industry has played a major role in transforming

Averting Self-Destruction 21

the American beef, pork, chicken, and potato industries into a hand-ful of megacorporations which have almost total market control over the small farmers and producers which supply them. McDonald’s is the nation’s largest buyer of beef, pork, and potatoes and the second largest buyer of chicken behind KFC (Kentucky Fried Chicken).

According to Schlosser, the top four meatpacking firms—Con Agra, IBP, Excel, and National Beef—slaughter 84 percent of the nation’s cattle. Eight chicken processors control two-thirds of the American market.

Schlosser claims that meatpacking is the most dangerous job in the United States. Working conditions in the vehemently anti-union industry are among the worst anywhere in the world. He further points out that a single fast food hamburger now contains meat from dozens or even hundreds of different cattle. The effects of tainted beef could literally reverberate around the world.

As though this were not enough, small farms—particularly organic farmers—also have to deal with the economic realities of pesticides, chemical fertilizers, growth hormones, and genetically altered crops and farm animals.

How many people feel comfortable eating genetically-altered, taste-free fruits and vegetables grown and saturated with herbicides and pesticides on California megafarms and allowed to ripen during shipment across the continent?

For capitalism to work effectively, those who do the work must believe that the path to happiness involves accumulating enough money and credit to purchase a nicely furnished home, a couple of cars, a computer, a boat, and a college education for our kids. To be able to afford all these things, we must work hard until we retire or die. The harder we work, the more money we will have, the more we can buy, and the happier we will be. Or so the story goes.

But if that were really true, why are so many people in the United States so anxious, so angry, so unhappy, so cynical, and so stressed out? Why are the rates of divorce, suicide, depression, abortion, substance abuse, and incarceration so high, if the American dream is working the way it’s supposed to work? Why does the United States have the highest child poverty rate – 14.8 percent – of any industrial democ-racy? And why is that rate significantly higher than the rates found in

Distributist Perspectives22

Switzerland (7.1), Japan (6.8), Germany (6.0), and Sweden (1.3)? Why are 6.6 million Americans either behind bars or on probation?

Although real per capita personal consumption expenditure nearly tripled over the last half century, the percentage of people claim-ing to be “very happy” actually declined. The Index of Social Health decreased by nearly 50 percent during the past quarter century.

Even though we live in a period of unprecedented prosperity, it is also the time of the living dead. Many affluent Americans who deny themselves virtually nothing in the way of material satisfaction seem to be more dead than alive. As novelist Walker Percy once said, “There is something worse than being deprived of life; it is being deprived of life and not knowing it.”

The defining characteristic of the American Empire is that ostensibly free individuals allow Corporate America and the United States government to manipulate and control their lives through money, markets, media, and technology, resulting in the loss of polit-ical will, civil liberties, collective memory, and traditional culture.

Even though we all have different genetic maps, most Ameri-cans think the same, vote the same, watch the same TV programs, visit the same Web sites, and buy the same consumer goods. Trans-national megacompanies accountable to no one tell us what to buy, where we can work, how much we will be paid, and what the working conditions will be like. Like their counterparts in the former Soviet Union, these giant companies are among the least-democratic insti-tutions in the world. They do everything possible to silence dissent and quell behavior which differs from the corporate norm. There are no rights of freedom of speech, freedom of assembly, freedom of the press, or due process. One can be fired on the spot at the whim of one’s supervisor. This is called “free enterprise.”

The environmental consequences of the American Empire have proven to be disastrous, taking the form of over-mined resources, over-logged forests, over-cropped farm lands, over-grazed grass-lands, over-drained wetlands, over-tapped groundwaters, over-fished seas, and over-polluted air and water. And according to the Worldwatch Institute, these results have in turn given rise to climate changes from greenhouse gas emissions, ozone depletion, toxic build-up and dispersion, extinction and loss of biodiversity, forest loss, decline in fisheries, and scarcity of fresh water.