vendredi 2 juillet 2010

Answering John Clarke

Mr. John Clarke, I read your article The Capitalist Response in The Seattle Catholic online, and before I trust your reading of Belloc, or your characterisation of Distributism, it behoves me to verify if you can read the authorities you claim to oppose to Distributism:

St. Bonaventure (the thirteenth century doctor of the Church who laid out an extensive moral application of property rights).

St. Albert the Great (who developed a moral defense of the lawfulness of business as well as establishing the "need theory of value").

Pope Alexander III (who provided an ethical foundation for the formula of a "just price").
Martin de Azpilcueta Navarrus (sixteenth century Dominican canon lawyer at Salamanca who developed the purchasing power parity theory of exchange rates).

Covarrubias y Leiva (sixteenth century bishop of Segovia who promoted the utility theory of value).

Francisco Suarez (sixteenth century chair of theology at the Jesuit College in Rome, who promoted the natural rights view of private property).

Before going on to comment, I admit I have not read these authors on these questions, I simply trust the summaries of their work provided in article are scholarly ones. But the summaries you give yourself do not exactly further your case, if it is to be one against Belloc, not to mention G. K. Chesterton.

Suarez and Bonaventura have nothing to say about Capitalism, where it opposes Distributism, but about either or both or something else as opposed to the Communist view obliging to collectivism. Which, I insist, Distributism does not.

The other four deal with price and value in a way I think may be what I have developed myself, in nuce, as opposing both the Capitalist theory of "demand and supply" and the Marxist theory of "value by working hours plus added value".

Why is a house more expensive than a car, a car more expensive than a pair of pants, a pair of pants more expensive than a loaf of bread?

A loaf of bread is more needed than a pair of pants which is more needed than a house. Not quite. A man may forego a loaf for a day in order to keep trousers clean, or forego clean trousers for some hours if he has a house in which to hide his nakedness. BUT: what is usually most needed is also the least durable, and as such of least utility. A bread lasts half a day in stilling hunger. Two trousers may last one year or even just half a year if you exchange and wash regularly. A car - with the need to add fuel every now and then for using it - may last ten or fifteen years, rarely twenty. A house of any quality is supposed to last hundred years, and may sometimes last five hundred years or a thousand years.

A pair of trousers also is for one person at a time, a car for four persons, a house for up to ten or more.

This is the main reason why the prices are different. And then the process of perfecting raw materials is usually higher for each item in working hours (which is where Marx and Ruskin are reached) as the utility is more longterm. On the other hand the most necessary stuff, which must be cheapest in order to leave as few as possible in dire need, is usually more supplied (which is where demand and supply theory is reached).

Now, Distributism argues that bread and trousers, houses and cars or carts should be made by private producers, owning their means of production. It also argues that only the individual item of merchandise can be considered to have a quality, and that only small scale production gives a full incentive to make each item one of quality.

Skoda is not Rolls Royce.

Distributists and Capitalists agree on that. But a Capitalist affirms and a Distributist denies that small scale high quality production like Rolls Royce must be the privilege of rich consumers. That is only so if most people = most workers are mere employees rather than entrepreneurs or their family members. If everyone nearly is engaged in large scale quality negligent production, which give substantial revenues only to owners, everyone nearly is dependent on consuming cheap stuff. But if everyone nearly is engaged in small scale high quality production, and if not owner at least family member of owners or an employee among a few, then nearly every one can have the means of affording to consume such merchandise. Which is why the latter is preferrable when possible.

John Clarke referred to Belloc as saying big business is more efficient, it is so when it comes to generating cheap merchandise and yet big revenues for the few owners.

Belloc did not say, and examples Skoda vs Rolls Royce with like Volvo or Peugeot in between do not bear it out that serving as many as cheaply as possible is an efficient way of getting a high quality of merchandise. At most, it is a way, through capital concentration, to make foreign merchandise cheaper. So if you want to import chocolate and vanilla, coffee and tea, you do have an advantage if living in a land where big fortunes have been made and big fortunes facilitate competition for large stocks on good occasions on these items. But for wine and cider, beer and hydromel, things produceable in the countries we live in, small properties are lots better. Which is - I presume to have Chesterton on my side here - why Capitalism (as in Big Business) tends to further Puritanism, whereas Puritans tend to favour Capitalism.

In De Regno, St. Thomas says that entirely self-sufficient communities are impossible. Thomas writes:

One cannot easily find any place so overflowing with the necessaries as not to need some commodities from other parts. When there is an overabundance of some commodities in one place, these goods would serve no purpose if they could not be carried elsewhere by professional traders. Consequently, the perfect city will make a moderate use of merchants.

The perfect city is one that engages in trade. St. Bonaventure, the great Franciscan Doctor of the Church, argued that international trade must be moral because without trade, "many regions could not exist."

(emphases in italics in text)

The tirade against Distributism on the issue of trade is precisely failing to see that to St Thomas moderate trade is one that serves the purpose of making merchandise and needs for it meet despite inequalities of production facilities. What distributists like Belloc see as an upsurge of immoderate trade is the situation where indigenous producers are put out of business by same or similar product being produced cheaper elsewhere (often at the price of slave wages). And the reason why that is immoderate is, that this means less producers and more mere employees or out of work i e indigent people in same indigenous population.

Indigenous and indigent do not mean the same thing and are not supposed to become the same thing by trade.

A final word on taxation. This can be used against Big Business, but has in fact, in societies as Capitalist as Spain of the 1960's, France under de Gaulle, Sweden under Social Democrats, also 60's been used to stamp out small business, more precisely small farmers, in order to rationalise for trade. No Distributist properly so called would approve of that.

Hans-Georg Lundahl
Faidherbe, Paris XI

3 commentaires:

Hans Georg Lundahl a dit…

Did I say final?

Only in above article. Taxation punishing small enterprises was an older story than that of the 1960's.

Look here:

Small farmers also protested that Hamilton's excise effectively gave unfair tax breaks to large distillers, most of whom were based in the east. There were two methods of paying the whiskey excise: paying a flat fee or paying by the gallon. Large distillers produced whiskey in volume and could afford the flat fee. The more efficient they became, the less tax per gallon they would pay. Western farmers who owned small stills did not usually operate them year-round at full capacity, and so they ended up paying a higher tax per gallon, which made them less competitive.[13] Small distillers believed that Hamilton deliberately designed the tax to ruin them and promote big business, a view endorsed by some historians.[14] However, historian Thomas Slaughter argued that a "conspiracy of this sort is difficult to document".[15] Whether by design or not, large distillers recognized the advantage that the excise gave them, and they supported the tax.[16]

From Wiki on Whiskey Rebellion, section "Western Grievances"

Hans Georg Lundahl a dit…

Notes in above refer to:

13) The Whiskey Rebellion: frontier epilogue to the American Revolution By Thomas P. Slaughter pp. 147-149


William Hogeland: The Whiskey Rebellion: George Washington, Alexander Hamilton, and the frontier rebels who challenged America's newfound sovereignty pp. 68-70

14) Hogeland pp. 68-69 and Wythe Holt: "The Whiskey Rebellion of 1794: A Democratic Working-Class Insurrection". Paper presented at The Georgia Workshop in Early American History and Culture, 2004 p. 30

15) Slaughter p. 148
16) Slaughter p. 148, Hogeland p. 69

Hans Georg Lundahl a dit…

Quote from p. 30, Holt's paper:

The law gave distillers two choices. They could either pay a $54 yearly tax, or they could
be taxed by the gallon. Most small distillers could not afford the annual single payment, a ridiculously large sum for folks whose total worth might not exceed $300, and Fennell estimates that this put them to as much as a 7:1 disadvantage to large distillers in being able to pass this expense on to their customers. The tax was indeed designed to do away with the small distillers. Henry Marie Brackenridge noted how many formerly distilling western farmers were forced by the tax itself to turn to their wealthy neighbors to have their grain made into spirits. This was consistent with the “developmental” motivation behind Hamilton’s financial schemes: in order to
create a money economy, where none existed before, smaller, more “inefficient” seasonal distillers were to be replaced by large commercial distillers. Not only did this mean that the larger western distillers were favored over the family farmers, but, as the second set of Mingo Creek Resolutions claimed, that huge eastern distillers were given a monopolistic favoritism over all western distillers. It was not just factional politics which caused western opposition to the whole Hamilton funding scheme by petition in 1791 and 1794, and which led the protesters in Carlisle in August 1794 to oppose “the funding system[,] particularly the assumption of state debts,” as “oppressive unjust and unconstitutional.”65 Despite Hamilton’s stubborn denials, the excise tax was unjust and oppressive to the small distiller.

On the other hand, since there was no circulating specie in the west, distillers of any size had no means to pay the tax. Since workers were paid in the circulating medium that did exist–whiskey (or sometimes grain)–the excise tax operated unfairly as an income tax on farm laborers, on artisans, and in fact on most people.66 Westerners justifiably felt attacked at the very heart of their economic and social life, and when this was added to their traditional hatred of excises, they were furious. The elite Whiskey Rebels hated being treated in a colonialistic fashion–the tax, and the Hamilton policies, were “odious”–while lower-class Rebels were also actually deprived by the tax–it was “unjust” and “oppressive.”

Note that it is by taxation favouring larger companies over smaller, since larger can more easily pay taxes, that government has been blown bigger from Hamilton up to de Gaulle.

Hey, Lyndon LaRouche, with this in mind, considering you value Hamilton and de Gaulle in economy, I can see why you do not like Distributism, if that is the case!