Hilaire Belloc and G.K. Chesterton were the primary champions of Distributism, an economic system neither Capitalistic nor Communistic seeking widespread ownership of property as the chief means to household freedom. Chesterton’s chief work on the topic, Outline of Sanity, points out the troubles of industrialism and describes life under a Distributist scheme. Chesterton’s work does little to explain how such a wanted transition might be made. Belloc’s 1936 essay, On the Restoration of Property, answers the detailed policy questions. Belloc fully understands that replacing industrial capitalism or its evil progeny, the welfare state, cannot happen wholesale. He recommends various small efforts that might be compared to a few saplings planted to restore a vast deforested wilderness. The hope is that others wandering the wilderness notice the new life and yearn for more.
Belloc insightfully traces many of modern society’s ills to their source. The cause is unchecked competition in which the most efficient shop, warehouse, factory, farm, etc. inexorably wins more and more business from slightly less efficient competitors. Nothing wrong with competition or efficiency, but the result in a mature market driven economy is always a few ‘winners’ that become very large corporations and many ‘losers’ forced out of business. The losers then have no choice but to become employed as wage slaves of the corporations. In the drive for greater efficiency, the wage slaves are pressed down, yet are provided enough to live and even a slight excess with which to purchase products from the big corporations. Nobody starves or is coerced yet little true economic freedom exists outside the owners of the corporations. The wage slave has little surplus so can attempt to change his employment only at the risk of rapid personal ruin and poverty. And even if he did start a small business, market forces virtually guarantee his production to be less efficient than the large corporation so he will likely face bankruptcy.
How to change this situation? Belloc admits than Communism or Socialism where the government owns the corporations are no better. The system dynamics are the same, though the corporations are publicly owned rather than privately. Employees are still enslaved, only to the government rather than private masters. The solution is Distributism where large operations (shops, factories, farms, etc.) are systematically discouraged and smaller operations are encouraged. Some efficiency is lost, but many more families have true economic freedom – controlling what they produce, own, and consume.
How to transition to Distributism? Belloc recommends a series of government regulations designed to hinder operations as they grow. The main tool is a progressive tax rate where income above that required by a small operation is taxed at a very high rate. Belloc suggests various limits and mode of implementation. While agreeing with the goal of Distributism, I believe the idea of setting limits and such will not work. Any system a government can devise can be thwarted by sufficiently clever lawyers or government corruption. Large corporations would simply restructure themselves into a web of ‘small’ operations, all performing the collective work of the large corporation. Since each piece would be under the established limits, it would escape the tax penalty. Then the society would be ruled not by the most efficient corporations but by the corporations with the most shrewd and clever legal departments.
A better system would be one which naturally inhibited large operations, without the enforcement of artificial limits that must be set and policed by fallible men. Such a mechanism is already available, but governments allow it to be set aside, ignored, or overulled by legal protection. Personal responsibility will limit the size of any organization. If the leader of any organization remains personally responsible for the legal behavior of the organization, that organization cannot grow beyond what the leader can personally oversee. Thus personal accountability necessarily keeps all organizations fairly small – whether shops, factories, schools, or churches. However, governments allow organizations to ‘incorporate’ which shifts the liability from the people leading the organization to the faceless, nameless, legal entity. The corporation may go bankrupt if it breaks laws or produces a harmful product, but no persons are penalized as long as the problem was not caused by malice. ‘Accidents’ and unforeseen consequences are excused. Thus the organization can grow far beyond what any one individual can understand or manage. The bigger, the better, as any problems can be blamed on a faceless bureaucracy inherent in large organizations, thus insulating the leaders themselves even further against personal penalty.
I learned a lot from the book and recommend it highly. Think with Belloc through the solutions he proposes and be better equipped to encourage smaller, more distributed forms of ownership and personal responsibility in your community.