Lets consider the basic economic principles involved in distributism.
[NB: I am not an economist. I am an accountant. I have a basic understanding of these things, but perhaps slightly more than a layman. You could consider me a Layman who read a book once. I’m no expert, but I read the book, so I can tell you what the book said.]
Markets work by Supply and Demand. Supply is produced by the Means of Production. Demand is produced by the inherent nature of inequality. Trade is how I get something that you have. Currency is how we compare the relative perceived values.
Capitalism is the idea that the Free Market is the most efficient means of moving resources between those who supply and those who demand. The person who produces the supply is entitled to keep the benefits from meeting the demand, and the person (or people) who do this the best will afford the ability to continue best serving demand and grow their operation. People that are unwilling or unable to meet demand will eventually exit the market because no one demands what they supply, or they supply what no one demands. Capitalism can be compared to Darwinism insofar as it suggests that the organization best fit to the market will succeed, and the organization unfit to the market will fail.
Socialism is the idea that the State is the most efficient means of moving resources between those who supply and those who demand. Because the person who produces the supply is the State, the State gets to keep the benefits from meeting the demand. This is borne from the belief that the State is always aligned to the public good. Therefore, suppliers who do not wish to commit their resources to the State, do not wish to commit their resources to the public good. Demand is infinite, and so everyone must contribute to increasing the State’s supply, in order to meet Demand.
Distributism then, is the idea that the public good is not considered by the pursuit of wealth, nor is the State a perfect arbiter of the public good. Therefore, the public Good is best left to the public. Markets are most efficient when they are small and local.
Digging in
We can learn more about Distributism by discussing what it isn’t. There are two pillars of our current economic system which violate Distributist principles as I understand them right now. First: A national market. Second: Absolute Competition.
Second point first. Absolute competition means any given business is in competition with every other business for bodies and dollars. The first competitive goal is against businesses in the same field. Lets say, shoe makers. If a shoe making innovation comes to town and suddenly a dozen shoe makers pop up, they will all oppose each other, strive for advantage. There is only so much shoe business to be done in town, so they scrap over the dollars in the market and the ones that can’t sustain their business slowly drop out. Competition is designed to reduce every industry to one or two major players. When there’s only one shoe business left, every dollar in the shoe market goes to that business, and they begin to behave like a monopoly. If there is a big rival, then they go back and forth and the market forces begin to be about what the two companies want, and less about what the market actually needs.
The National market, then, is when that local shoe business gets big enough to compete in the next town over. then the next state over. Then it’s National Shoes Corp, and suddenly it’s rivalry all over again. If National Shoe Corp can make enough money catering to profitable coastal metropoli, it is going to sell Small-townie Missouri whatever it has left. The national market reduces proximity to consumer, and so proximity to need.
These two forces combine with the following effects: Capital concentration in the shareholders of the two main rival corporations, and a monopolist market that can dictate demand.
Distributism poses a contrast to this. By promoting local marketplaces, it ensures the people who are buying are able to actually communicate their need to the people who are selling. By encouraging artisanal “guilds”, it ensures the profits in a given market don’t consolidate in one organization. Capital doesn’t concentrate.
Further Study
The questions that remain, for me, are all variations of, “How?”
- How do Guilds work, how do we prevent the current problems with Labor Unions?
- Is there still a competitive factor in a distributist market? How do they prevent capital concentration while still preserving competitive market forces?
- Do Distributist markets actually serve the market more efficiently, or is the advantage just that, while not optimized, it does ensure less capital concentration which serves the public good?
These questions will be addressed in a subsequent issue!
AMDG
Times-Dispatch of Vichy Earth 