Cooperation: A Free Market Benefits Everyone

The following will explain the most important idea in the history of social analysis. The notion (actually, it’s a description of reality that is all around us but rarely noticed) has been around for many centuries. It was first discovered by late-medieval monks working in Spain. It was given scientific precision in the classical period. It is the basis of advances in social theory in the 20th century.

In fact, it is an essential part of the case for freedom. It was the basis of the belief of our ancestors that they could throw off tyrannical rule and still not have society descend into poverty and chaos. The failure to comprehend this idea is at the very root of the pervasive bias against liberty and free enterprise in our times, on the left and the right.

I speak of the division of labor, also known as the law of comparative advantage or the law of comparative cost, and also known as the law of association. Call it what you will, it is probably the single greatest contribution that economics has made to human understanding.

This law — a law like gravity, not a law like the speed limit — is a description of why people cooperate and the ubiquity of the conditions that lead to this cooperation. If you can take a few minutes to learn it, you will understand how it is that society functions and grows wealthy even without a visible hand directing its path. You will also see how the criticism that the market economy leads to the strong dominating the weak is actually a sham.

This law shows how it is that people can gain, materially and in every other way, by working together rather than working in isolation. They don’t just gain the sense of satisfaction that comes with participation in solidarity with one’s fellow man; they can actually gain in the real stuff of life, the goods and services that are available to us all.

What’s more, they gain more than the sum of their parts. Through cooperation and exchange, we can produce more than if we work in isolation. This applies in the simplest economic settings as well as the most complex ones.

 

It helps to lay this out more rigorously so that you can observe the magic of the marketplace at work. (I owe the following exposition to Ludwig von Mises in Human Action, Murray Rothbard in “Freedom, Inequality . . .” and, especially, Manuel Ayau‘s Not a Zero-Sum Game.)

Let’s say you and I can both make bagels and pies. But there’s a problem: You make both with incredible efficiency. In fact, you do a better job at making bagels and pies than anyone who has ever lived. You are the world-class, all-time champion.

Meanwhile, I’m not so hot at either. My bagels taste as good as yours, but they seem to take me an age to make. My pies are the same way. I struggle and struggle, but try as I might, I just can’t seem to crank them out the way that you can.

What is likely to happen under these conditions? The intuitive answer, which you will hear in just about every sociology class in the country, is that you will make all bagels and pies. No one else will. You will lord it over the rest of us, and have massive market power. If anyone wants either, he or she must come to you and you alone. You are privileged, favored, rich, powerful, and the rest of us can only sit in awe and beg from you.

But in fact, that’s not what happens at all. Let’s back up a bit and see why.

Let’s say you and I have never met, and we are both making bagels and pies. Here is what happens in a 24-hour period: You make 12 bagels in 12 hours, and 6 pies in the remaining 12 hours. I, on the other hand, only manage to make 6 bagels in the first 12 hours, and a mere 2 pies in the remaining 12 hours.

If we both work at this pace, the total production is 18 bagels and 8 pies.

In each case, the cost of what you decide to do is the thing you give up. So for you the cost of each pie is 2 bagels, and, likewise, the cost of each bagel is 1/2 of a pie. For me, the opportunity cost of making a pie is 3 bagels, and the cost of making a bagel is 1/3 of a pie.

Just looking at this, you might observe that you have your act together, whereas I’m pretty shabby. What chance in life do I have?

Well, my hope is bound up with the reality that your time and resources are scarce and you want ever more of each. So you began to think about exchange. Even though I’m not very good at either pies or bagles, you can still see that you can make more of one thing or the other by encouraging our cooperation, thereby freeing up your time to do what you do best.

If you specialize in making pies, you still need some bagels. So you plan to exchange pies for bagels from me. With this thought in mind, you increase pie production and reduce bagel production. I, on the other hand, stop pie production completely and devote myself to bagel production in hopes of fobbing them off on you.

So you now spend a mere 8 hours on bagel-making, in which time you produce 8 bagels; in the remaining 16 hours of your day, you are able to bake 8 pies. Meanwhile, I can now devote all of my time to bagel-making, and I turn out 12 bagels in 24 hours.

Let’s total up the production. Before cooperation: 18 bagels and 8 pies. After cooperation: 20 bagels and 8 pies.

So what is the gain here? Precisely two bagels. Can you believe it? Nothing else changed; there was no increase in our productive potential, no increase in technology, no change in consumer demand or the weather or the linearity of history itself. All that happened is that we agreed to produce in cooperative exchange rather than isolation, and voila — two additional bagels.

You think there’s a trick? Go back and check the numbers and the assumptions. I’m just as shabby as ever, and you are just as fabulous. And yet there’s a role for both of us.

 

Let’s say we now exchange the goods we make. You might give me 2 of the pies you made in exchange for 5 bagels that I made. That leaves you with 13 bagels and 6 pies, while I now have 7 bagels and 2 pies.

This would be reasonable, since those bagels you buy from me would have cost you 5 hours of production time. True, it took me 10 hours to make them, but what do I get if I exchange? I get 2 pies, which would have taken me 12 hours to make. So there is a sense in which I, by specializing, have saved 2 hours. And how many hours have you saved by encouraging me to make bagels? Five hours, during which time you made pies.

And what is the cost of exchange in material goods for each of us? You have given up 2 pies. I have given up 5 bagels. If our time is measured in terms of goods, you have given up the time equivalent of 4 bagels for 5 bagels, and thereby gained 1. I have given up 5 bagels but gained the time equivalent of 6 bagels, since my pie-to-bagel ratio is 3 to 1.

So who gained the most? In terms of bagels, we gain the same: one. In terms of time, I have gained more. In terms of pies, you have saved more. Who is the winner? Both of us. Again, what made us gain? Cooperation and exchange. Nothing more.

 

Now, you might say that this is absurd. No one sits around drawing exchange matrixes to see how we might benefit by dividing up the production. But in fact, we do this all the time. I might be a wonderful musician and Web programmer. But my advantage is Web programming, so I leave the music production to other people, even if they do it less effectively. It’s true in the business world: The boss might do an amazing job at accounting, clean-up, marketing, and customer support. He or she might do these things more efficiently than anyone else, but the cost of doing one thing is another thing given up. It makes sense to depend on others so that we can all specialize.

Consider the great 19th-century pianist Franz Liszt. He was the best and mostly highly paid musician in Europe. Let’s say he was also a great piano tuner. Would it make sense for him to give up practice time for a concert that would pay him $20,000 in order to tune his own piano? Not at all. He would rather pay someone $200 to do that. The opportunity cost of piano tuning for Liszt was very high, but for the tuner, it was very low. They exchange, and both benefit.

It is the same with doctors and nurses. The doctor might be great at prepping patients, but in doing so the doctor is giving up performing another surgery that would cost him many thousands of dollars.

Note that this makes sense even if one person has an absolute advantage in each area. What matters for the real world is not absolute advantage but comparative advantage. That is where the law of association comes into being. It is true for two people, two hundred people, two thousand people, or all people all over the world. Herein we have the case for international trade, for it changes nothing about the mutual advantage for people who reside in different lands.

This is why it makes sense for both poor and rich countries to trade, as noted by Bartolomé de Albornoz as early as the 16th century:

If it were not for these contracts, some would lack the goods that others have in abundance, and they would not be able to share the goods that they have in exchange with those countries where they are scarce.

Note that these gains come not from design but merely from the freedom to associate, which Pope Leo XIII called a human right in his encyclical Rerum Novarum: “If [the state] forbids its citizens to form associations, it contradicts the very principle of its own existence; for both they and it exist in virtue of the same principle, namely, the natural propensity of man to live in society.”

Both the moral and practical advantages were reiterated by Pope John Paul II in Centesimus Annus: “It is becoming clearer how a person’s work is naturally interrelated with the work of others. More than ever, work is work with others and work for others: it is a matter of doing something for someone else. Work becomes ever more fruitful and productive to the extent that people become more knowledgeable of the productive potentialities of the earth and more profoundly cognizant of the needs of those for whom their work is done.”

The law was formalized by David Ricardo in England, and further emphasized by economists ever since. The significance is impossible to exaggerate: It means that it is not necessary that all people of the world have the same talents in order to benefit from cooperation. In fact, it is the very diversity of the human population that makes it advantageous for them to work together and trade to their mutual benefit.

What this means is that isolation and self-sufficiency means poverty. Cooperation and the division of labor is the path to wealth. Understand that, and you can refute libraries full of nonsense from both the left and the right.

 

This column originally appeared on March 25, 2008.

Jeffrey Tucker

By

Jeffrey Tucker is managing editor of Sacred Music and publications editor of the Church Music Association of America. He writes a bi-weekly column on sacred music and liturgy for Crisis Magazine and also runs the Chant Cafe Blog. Jeffrey@chantcafe.com

  • Steve Skojec

    Considering my relative economic ignorance, this was very enlightening.

    The problem is that I am now craving many production-hours worth of baked goods.

  • jeffrey

    I worried that this demonstration would be too much for the web and tax people’s patience. The thing is that many, many people write whole books on economic topics and don’t account for this basic reality of human cooperation. I’m thinking here not only of the socialistic religious left but also of the distributivist right – total absence of understanding of the social advantages of the division of labor.

  • Aristotle Esguerra

    “What this means is that isolation and self-sufficiency means poverty. Cooperation and the division of labor is the path to wealth.”

    I am reminded of the short story “Long Handled Spoons”.

    http://tinyurl.com/2fhp2z

  • Joe Marier

    Last time I checked, you do both musicianly things and Web programming. In fact, it took me a while to realize that there was only one Jeffrey Tucker.

    My favorite exposition on comparative advantage was P.J. O’Rourke’s in “Eat the Rich”.

  • Miguel Miramon

    To my way of thinking, the Austrian School has done more to bridge Catholic Social Thought with free market philosophy than any other school of political economy or economics. The Church has traditionally been very uncomfortable with aligning itself with economic liberalism and “capitalism”. In the papal encyclicals economic liberalism was condemned along with socialism. There are still many Catholics who find aligning themselves with capitalism to be very distasteful, indeed. Someone above mentioned the distributivist Right.
    The kind of economic liberalism they find distateful is proabably that which grew out of the classical school in England in the 19th century represented by Adam Smith and essentially Protestant in origin.
    The Austrians (not surprisingly) come from a Catholic philosophical background represented by their Spanish Scholastics antecedants you mentioned. Ludwig von Mises was himself Jewish but I think the background and grounding of the Austrian School is Catholic.
    I think this can help certain Catholics, including our beautful tradtion of Catholic Social Thought to be more comfortable with free market economics…..dare I say, capitalism.

    • IrishEddieOHara

      Capitalism and Catholicism do not go together. Capitalism and Socialism are two sides of the same coin — economic serfdom for all but a very privileged few.

  • Joseph A. Nagy Jr.

    Not being very educated in economics (I took a semester in high school and have read a book here and there since then) I found this very enlightening. It is definitely hard to refute the truth it espouses.

    My question, though, is how do you get people to listen/read and understand to the point where we (as a society, from your local neighborhood all the way on up to the world) can engage in such productive cooperation. What are we missing toward reaching that goal?

  • Reiner Gerdes

    Jeffrey:
    Great article, especially your perspective regarding the Rerum Novarum and Centesimus Annus encyclicals.
    It would be interesting to read your thoughts about capital and the role it plays in funding enterprises. It would appear that without some minimum amount of capital, any comparative advantage would have a hard time making much of a difference. You do not need a lot of money to bake bagels or pies. iPhones and similar, however, are an entirely different matter.
    Also, I think there are some interesting ramifications for foreign aid (don’t give anything to foreign governments, give it to new enterprises).
    Reiner Gerdes

  • Mike Fotheringham

    When Pope Leo XIII made the comment about ‘associations’ he wasn’t refering to global trade but rather that labourers should be free to start unions to protect themselves from the tyranny of bourgeois class.
    What the popes say actually refute a basic tenet of neo-liberalism (Austrian school/Chicago School)that you are trying to push on this site. That belief or tenet of standard economics is that humans are fundamentally individual rather than social animals. The theory holds that all economic choices are acts of authentic, unmediated selfhood, rational statements reflecting who we are and what we want in life.
    Unfortunately for these theorists such as Jeffrey here, we are social animals! That was the popes were getting at.
    I find it difficult to see “Catholicism” used to make people into free-market fundamentalists. There is so much evidence that free-markets neither create free people nor trickle down benefits to the poor. Read Naomi Klein’s new book “Shock Doctrine: The Rise of Disaster Capitalism” and you’ll get a glimpse of that evidence.
    Inside Catholic: don’t be used as a pawn by neo-cons to rob Catholicism of it’s rich social teaching.
    If Dorothy Day read this she’d be picketing your front lawn by morning.

    • Martial Artist

      Mr. Fotheringham,

      You write:

      There is so much evidence that free-markets neither create free people nor trickle down benefits to the poor.

      Before anything else, I would challenge you to cite more than one example of a free market in the present era. To borrow from Hans-Hermann Hoppe, there are only two possible archetypes in economic affairs: socialism and capitalism (by which he means a free market). The capitalist model he defines as pure protection of private property, free association, and exchange—no exceptions. All deviations from that ideal are species of socialism, with public ownership and interference with trade.

      You will not that, at least within the past hundred years, even the US has not had a truly free market. Dorothy Day, as well as Chesterton and all other distributists, are simply advocating that we all go back to what approaches an autarkic status, in which no one, not even the feudal lord, benefits from the rejection of the use of the additional wealth created by the specialization that is enabled by the division of labor. Travel that path if you wish, but do not feel free to compel others to accompany you on such a fool’s errand.

      Pax et bonum,
      Keith Töpfer

    • Cord Hamrick

      Mike:

      It seems to me you understand neither the Austrian school nor the breadth of freedom of association in the encyclicals, which extends far beyond mere union-forming.

      On Freedom of Association:

      One may associate with another person by forming a union with him; or by doing business with him. (Or in other ways, but those two are apropos.)

      The former is an act of mutual defense against a monopolist who has used his market power to achieve a compulsory power which distorts the markets; it is a corrective to a situation which will be infrequent in a healthy economy.

      The latter is normative, because it is a friendly, mutually ennobling, mutually enriching voluntary exchange in which the image of God in the other person is acknowledged and respected through the respect of his freedom to choose the transaction voluntarily. It is normative, not corrective.

      So, of the two, the former exists as medicine, and is a rarer part of a healthy economic life; but the latter exists as food; and is a daily part of the functioning of man as a social animal.

      To confine the freedom of association only to unionizing is to say: A man is free to take medicine when he is ill, but has no freedom to eat when he is well.

      On The Austrian School:

      The Austrian School says all of the above. Free-market advocates do not oppose unions, provided they are voluntary. They oppose unions which are compulsory (hence the existence of “right to work” states), or which achieve a monopolistic power in the labor market which would distort that market in the same way a monopoly in the grain market would distort that market.

      As for individualism, there is a good kind (which affirms the dignity of the individual and opposes the error of collectivism) and a bad kind (which replaces responsibility to God’s law with selfish pursuit of disordered desires and advocates a ruthless every-man-for-himself attitude towards one’s fellows).

      Now there is nothing in free-market economics which makes the bad kind of individualism logically necessary for free-market advocates. (If there were, their ranks wouldn’t be chock full of Christians who give alms voluntarily and donate blood and serve in soup kitchens!) By and large, free-market advocates practice the good kind of individualism, which exists as Catholic truth and is trumpeted as an corrective against dehumanizing ideologies such as Marxism and Fascism.

  • theorist

    society was created by individuals unless there is some other way for it to have come into being.

  • R.C.

    Mike,

    You’ve taken hold of a straw-man, there.

    Far from refuting it, Austrian/Chicago school strongly supports the notion that people are social animals. That they think human societies should largely be formed and governed on a voluntary, rather than a compulsory, basis, in no way suggests that they think human interactions and associations are unimportant or disadvantageous! (What a tremendous non-sequitur such a conclusion would be!)

    Also, a fairer embrace of the Catholic position on this topic would be to take a both/and approach, not an either/or approach: Men are individuals by God’s gift of free will; and by God’s design and command that they must love one another, they are also social.

    Observe also the economic policies (trade rather than isolation), and charitable-giving habits (the political right in the U.S., which tends toward the Austrian/Chicago school, is roughly twice as generous to the needy as the U.S. political left) of the American right, who support the Austrian/Chicago school. Are these the actions of greedy, selfish, isolated Scrooges? Not at all!

    In any event, no Austrian/Chicago-school free-marketer’s definition of “individualism” bears much resemblance to the definition given the term by those who oppose their views. The free-marketer, when he champions “individualism” means, by it, such things as:

    1. One is morally responsible to do what is right, even when one’s peers do otherwise;

    2. Loving your fellow man is a personal moral responsibility, and a person becomes increasingly less human the more he attempts to delegate help for and contact with the needy to employees and impersonal systems;

    3. All men are endowed by their creator with certain inalienable rights and with a dignity which is intrinsic to their humanity, which should be enhanced, not sacrificed, by any associations they form. Put differently, groups and associations are secondary and temporary creations, formed from individuals, who are primary and everlasting. Groups and associations are important, but they begin to have a negative impact when they oppress or dehumanize the individuals and smaller groups of which they are formed.

    5. Fallen human beings are not angels, and therefore it is often not safe to allow them to arrogate unchecked power to themselves. When a human being has unchecked power to use force against others, he is likely to violate their intrinsic human dignity. Therefore government power, which is intrinsically compulsory, ought to be checked and circumscribed, lest the dignity of persons be injured;

    6. Members of a group do not lose their free will or individuality by becoming members of a group. To treat them on the basis of their group membership without regard to their individual differences is thus an insult to their human dignity;

    7. It is often morally obligatory that Person X help Person Y when Person Y is in need. If Person X fails to do so, he is morally culpable. It does not, however, follow that Person Z is morally justified to point a gun at Person X to force him to help Person Y. Moral Law would prefer that Person Z help Person Y himself, and leave it up to God to put the fear of God into Person X. These generalizations are true both at the individual and broader social levels.

    These are the kinds of truisms a man of the Austrian or Chicago school has in mind when he thinks about “individualism.” If such things are incompatible with man being a social animal, then so is Catholic truth!

    The silly caricature of individualism (or of the free market) foisted on us by Hollywood — I have in mind the Gordon Gecko character in the ridiculous 80′s movie Wall Street, but these greedy executive stock characters from central casting are legion — bears no relation to the Austrian/Chicago School.

    Such depictions are exactly as realistic as Hollywood’s depiction of faithful Catholics, Christians in general, officers and enlisted persons in the U.S. military, homeschooling families, and the like. Which is to say, they’re 99.9% organic fertilizer.

    Yet they seem to have been swallowed wholesale by some portions of the Catholic electorate. I don’t know why it should be so, but it is, puzzlingly. When these folks decry “individualism,” those who justly insist on the dignity of the individual are apt to respond after the manner of Inigo Montoya: “You keep on using that word. I do not think it means what you think it means.”

    In the end, Dorothy Day might have picketed Jeffrey, but that’d be her error. But it is an understandable error, stemming from an unavoidable ignorance, since giving in the United States is usually an unheralded affair, as Christ taught that it should be.

    The poor in the U.S. get two-thirds of their voluntary assistance from folks who’re more likely to listen to Rush Limbaugh than to Rachel Maddow. Yet the former are called greedy and selfish, because they also generally keep their almsgiving, their volunteer work, their military service, their Red Cross donations, et cetera, private.

    If Dorothy knew the contrast between the giving and volunteering habits of folks like Jeffrey and of the average left-leaning Catholic, her picketing would likely occur on a different lawn.

    I am a proponent of Catholic social teaching, and want the poor to be helped, not harmed. That, in the end, is why I avoid voting for someone who slams the principles of free-market economics: It would be unjust to do so, and more injurious to the needy, than to anyone else.

  • R.C.

    When enumerating my aspects of individualism as held by individualists, I combined items 3 and 4 into a single item 3…but I forgot to renumber the remaining items.

    Sorry.

  • Aaron

    Good stuff. Capitalism is what happens when people own what they produce and are free to associate and exchange it. A lemonade stand is capitalism. When I trade my old couch for my neighbor’s used bicycle, that’s capitalism.

    All the other things that get called capitalism when they get out of whack and cause problems–banks, government regulations, taxes, licenses, reserve systems, fiat money, protected monopolies, subsidized industries, etc.–are not capitalism at all, and are frequently injections of socialism or fascism or some other top-down system. Some of those additions may be necessary or useful–we have to have some taxes or tariffs–but they are exceptions to capitalism, not an inherent part of it.

  • Matthew Wade

    Mr. Tucker, you’ve offered a fine illustration of Ricardian exchange theory – a very “classy” move (pardon the pun). You would do well, of course, being on a Catholic website, to start even before Ricardo’s theory of exchange and discuss theories of production. You see, your claim that this “theory” was “discovered” by Scholastics really misses the point that even Our Lord (who should be the focus of all of the articles on this website) recognized the four major aspects of “economic life”: production, exchange, giving, and use (consumption) (Luke 18:27-2smilies/cool.gif. I’ll refer you to Mr. John Mueller’s article about this topic to avoid running into a lenthy post (search for “Restoring Economic Orthodoxy” at http://www.eppc.org). Your Austrian viewpoint really misses a most important aspect of “economic life” because you miss the fact that exchange comes AFTER production. This is not a temporal relationship, becuase the two nowadays seem to happen simultaneously, but a causal relationship. Another weigh-in on the topic of exchange and production, two of the four aspects of “economic life”, can be found here: http://www.frontporchrepublic.com/?p=7752

    Mr. R.C., you gave quite a lenthy response to Mr. Fotheringham’s post, but you completely missed the point that he was trying to make: Mr. Tucker deliberately tried to use a quote from Pope Leo XIII in an incorrect context. I caught this mistake quite immediately as well, but thankfully Mr. Fotheringham posted about it first. Deliberate misrepresentation of papal teaching is dubious at best, malicious at worst. Throwing around a late, great pope’s name like Leo XIII should be done with the utmost reverence. At least dissenters like Thomas Woods have the decency to acknowledge that their beliefs do not align with Papal teaching. Also, your comments about individualism are not necessarily unique to Austrian economic thought. Please see the school of Distributism for a similar, and richer, exposition of the nature of economic activities, and its true foundations.

    I urge everyone who feels (I use “feel” on purpose) enlightened by this post to take the time and effort to read a 5-part series done by Mr. John Medaille over at the Front Porch Republic called “The Economics of Distributism” (part 1 can be found here http://www.frontporchrepublic.com/?p=3149). May you begin this new year without the drive to constantly assess all information from a partisan viewpoint, but from a Christian one.

    Sincerely,

    Matthew Wade

  • theorist

    having looked at both there is nothing in distributism which contradicts pure free markets, and there is nothing in austrian theory which contradicts the scholastics.

  • R.C.

    Matthew:

    Thanks for your reply.

    It seems to me, though, that you gave neither my post, nor Mr. Tucker’s, the benefit of the doubt you’d probably want other people to give yours. As a result, your characterization of what I was, and wasn’t, aware of in my post is…inaccurate.

    Firstly, and most importantly: Of course I agree with you that the view of individualism taken by free-marketers is not unique to the Austrian/Chicago school.

    Why should it be, since it’s true? Just as Christianity isn’t the only religion to note that murder is wrong, so too the Austrians weren’t the only economists to note that the freedom and dignity of the individual, and his right to form voluntary associations in order to exchange property and services with his fellow man, are important principles to acknowledge in society’s laws.

    But some accuse free-marketers, when they cite “individualism” as an important principle of justice, of meaning no more than greed and selfishness by it. It was that particular slander which I was taking pains to refute.

    Secondly, and of lesser importance, I did not, in fact, “miss the point” regarding Mike Fotheringham’s note. (There was more than one, but by “the point” you mean his accusation of Mr. Tucker re: the quote from Rerum Novarum.)

    Normally I’d expect Mr. Tucker to defend himself against an accusation of taking a quote out-of-context. I felt my role was not to reply narrowly to Mike on a point of Mr. Tucker’s honor, but rather more broadly to the topic of whether Mr. Tucker’s assertion of the economic benefits and overall moral rightness of the free-market system is true.

    On closer examination, though, I see that Mr. Tucker’s article is a reprint: There’s no particular reason to expect him to be aware of comments made in early 2010 to an article published in 2008!

    So I suppose I should say something in Mr. Tucker’s defense about this, since he isn’t here to do it:

    1. Mr. Tucker’s economic example is intended first to illustrate the advantages of trade between persons within a society, noting comparative advantages which are acknowledged by economists generally, not just those of the Austrian/Chicago School. Mr. Tucker categorizes this commercial association between individuals as a sub-category of associations between individuals, generally. (Actually he doesn’t say this explicitly, but rather operates from it as a point too obvious to need stating.)

    …continued…

  • R.C.

    …continuing…

    2. He later extrapolates from the benefits of trade between persons to its natural logical extension: the benefits of trade between larger associations, or even whole societies. (What is civil society, after all, but a really big association?) Mr. Tucker argues that societies can and should benefit from comparative advantages, just as individuals may.

    3. But the argument in Point 1 would be invalid if individuals had no ability to associate, or no just right to associate, or if such associations tended to be detrimental to those involved in them, rather than helpful. And if Point 1 were invalid, then so too would be Point 2.

    4. However, Pope Leo XIII, in Rerum Novarum, states that individuals do have a right to associate, and defends the benefits of so doing.

    Pope Leo XIII states this in defending the rights of individuals to form a particular association (trade unions) but he does not limit this right to form associations to trade unions specifically. Instead, he quotes St. Thomas Aquinas describing associations in general (St. Thomas was not focusing on trade unions) as being private objects.

    Then Pope Leo XIII concludes, on the basis of St. Thomas’ characterization of voluntary associations between persons as “private” societies, that trade unions, because they are a subset of the set of all such voluntary associations, are therefore also private, and, because they are private…

    …although they exist within the body politic, and are severally part of the commonwealth, [they] cannot nevertheless be absolutely, and as such, prohibited by public authority. For, to enter into a “society” of this kind is the natural right of man; and the State has for its office to protect natural rights, not to destroy them; and, if it forbid its citizens to form associations, it contradicts the very principle of its own existence, for both they and it exist in virtue of the like principle, namely, the natural tendency of man to dwell in society.

    5. Pope Leo XIII, therefore, was basing his argument for why trade unions may not be prohibited by the government, on a broader principle that voluntary associations generally may not be prohibited by the government. These associations may be formed for many purposes. Collective bargaining is only one; barter and exchange and lending are others; and chess-playing and music instruction and myriad other purposes exist also. But they all fall under St. Thomas’ description of private societies. Therefore, while Pope Leo XIII was focused on trade unions, it is not inappropriate to use his same argument, and his same words to defend the benefits and rightfulness of markets, which, being exchange associations formed between persons or larger societies, are also subsets of St. Thomas’ category of “private societies.”

    HOWEVER,

    6. Mr. Tucker could have avoided a lot of your and Mike’s ill-will or suspicions by merely noting something like, “Of course Pope Leo XIII was articulating this principle in defense of trade unions specifically, not in defense of all voluntary associations for trade. But as his argument starts from an even broader category (private associations in general), it applies every bit as much to trade in general as it does to trade unions.”

    THEREFORE, Mr. Tucker was somewhat at fault for either not anticipating, or for failing adequately to account for, the suspicions of those persons who’re already predisposed to dismiss what he has to say. Such persons (including yourself and Mike) are a part of every audience, and if one is to convince that audience of a point-of-view, one must make some effort to avoid irritating them.

    ON THE OTHER HAND, I think it’s also a little over-the-top to suspect Mr. Tucker of willfully mischaracterizing Pope Leo XIII in this instance. A little investigation shows how his application of the right to associate for collective bargaining is equally applicable to the right to associate in order to trade. Mr. Tucker is not Satan’s imp, twisting a waxed moustache at an opportunity to mislead Catholics. He’s just using a principle cited by Pope Leo XIII in to illustrate something different from what Pope Leo XIII was illustrating.

    Anyhow all that’s of lesser importance, and had Mr. Tucker been here to defend himself on this point, I wouldn’t have bothered.

  • R.C.

    “theorist”:

    having looked at both there is nothing in distributism which contradicts pure free markets, and there is nothing in austrian theory which contradicts the scholastics.

    You have the right of it, sir. One can be a Distributist and a free-marketer.

    The difficulty with Distributism is not that any free-marketer would be opposed to a society being already Distributist. (How could a principled Capitalist disagree with Chesterton’s statement that “the problem is not that there are too many capitalists, but that there are too few.” Yes, exactly: Let no one be a wage-slave, and everyone know he is a free contractor and an owner of enterprise. One enterprise may be little more than a man and his household, and another may involve a hundred factories: But their respective owners are of equal dignity.)

    Instead, the difficulty with Distributism is that it largely describes a state of affairs without giving many clues how to achieve that state of affairs.

    Even this isn’t such a bad thing: Knowing where you’re going is an important first step to getting there.

    But the problem is that lots of folks then try to fill the gap with lots of unwise plans and laws and taxes and redistributions to try to achieve the Distributist state of affairs by blunt force. That way lies much mischief.

    If we can achieve Distributism without violating people’s rights or impoverishing them, wonderful! But let’s get there the right way.

  • Matthew Wade

    Dear Sir (I hope, forgive me if otherwise):

    I appreciate your response. It’s nice to see a logical flow of argument, whether or not it turns out to be composed of true premises. I hope you’ll excuse me if I delay a longer rebuttal to a time when I may more fully elaborate. I hope to have it up by this evening.

    However, yourself and “theorist” have thrown me for a loop with the term “pure free-markets”. I hope one of y’all would do me the favor of clearing that term up so I can discuss the distinctions between it and Distributism more sure-footedly.

    Thank you and Happy New Year.

    Sincerely,

    Matthew Wade

  • theorist

    according to most austrians (for I do not wish to speak for an entire school)pure free markets is a positive discription meaning zero state involvement and consequently all things are provided for by the market.

    But the market is not synonymous with business. So it is possible to have a purely free market that is made up of communes or such.

  • R.C.

    To Matthew Wade and Theorist:

    Matthew, do you know, I hadn’t actually noticed the use of the term “pure” preceding “free markets” in Theorist’s post. So I confess to not having read his note carefully before I agreed with it!

    Since you raised the question of what “pure” means in that context, I suppose we should both attend to Theorist’s reply:

    According to most Austrians (for I do not wish to speak for an entire school) pure free markets is a positive description meaning zero state involvement and consequently all things are provided for by the market.

    That’s what Theorist said. (Apart from some capitalization and spelling corrections by yours truly — sorry, but I’m that picky and I just couldn’t bring myself to leave it alone!)

    Okay, fellows (and yes, Matthew, I’m a “sir” not a “ma’am”; Theorist, I suspect you are also but let me know if I have misguessed!) I actually have some concerns about the implications of “pure” in this context. So let’s clarify:

    Does “zero state involvement” mean “no state at all” or just “no state-run competition against, or taxpayer subsidizing of, free enterprises?”

    From what I know of Hayekian or Sowellian economists and their opinions, I think they favor the latter, not the former! I have never known the Austrian/Chicago folks to tend towards anarchism, or even towards wholesale “anarcho-capitalism” (though folks outside their school might characterize them that way as a put-down).

    Instead, it seems to me that their idea of the role of the state is to defend the rights of persons while ensuring equal protection under law (as opposed to other conceptions of equality such as “equality of outcome,” “equality of starting circumstances,” or even “equality of opportunity” broadly construed).

    But doing this requires a certain form of state involvement in the economy. At minimum, contracts must be enforced and theft and fraud prosecuted and free trade must be “free” as in uncompelled. It isn’t free trade if GM can come armed to my house and say, “Buy our cars or we’ll shoot.”

    (Come to think of it, it isn’t free if they can say, “Buy our cars, because if you don’t, we’ll just have the tax-man take more of your money than he would have otherwise, and use it to keep our business running, so that you’ll still be paying us, even though you won’t get a car out of it.”)

    So I suppose, Theorist, that in speaking of “pure” free trade, you are contrasting it against the adulterated-to-the-point-of-utter-unrecognizability system currently in use in these United States, correct?

    That is, you are not arguing for a sort of “who needs laws?” kind of approach. Right?

  • R.C.

    I thought I’d also voice my agreement with another observation by Theorist:

    But the market is not synonymous with business. So it is possible to have a purely free market that is made up of communes or such.

    Exactly so.

    When money or services or goods change hands, they either change hands because the two participants decided they’d be better off because of the exchange, or because one or more of the participants had a gun to his head (or was lied to) and participated in an exchange to which he would not have normally consented.

    In the case of the man who gives 50% of his income to the poor, the poor receive the gift because they think they’ll be better off, and the man who gives the gift thinks he’s better off, too: He is seeking treasure in heaven, so to speak, and he is no fool who gives up what he cannot keep to gain what he cannot lose.

    If a man is marched at gunpoint into a monastery, he has not participated in a voluntary exchange. But if he joins voluntarily, and the brothers receive him, he has just participated in the free market for membership in a religious order. He paid his dues (renouncing his goods and committing to the rules of the order) and has received in return the membership for which he paid. And both sides believe they’re better off for the exchange.

    All these are exercises in the free market, and just as the laws of a nation ought to permit persons to buy apples or aspirins or appendectomies, so too should the laws of a nation permit persons to join — to “buy into,” so to speak — monasteries or trade unions or communes or discount clubs or the International Cult of the iPhone. They’re all equal exercises of the freedom after which free trade is named.

    As for government? Its job is to use force. It is the authority to use force to achieve its ends which makes government unique, as an organization, in any society.

    But force is something that may not be justified for just any old purpose. It takes a dire need to justify the use of force, which is why we have notions like the Just War Doctrine, in which so many hurdles must be cleared before a call to arms. Primarily, it is an attack by an outsider which makes warfare justifiable: Because someone else has already initiated unjust force, force in reply is justified.

    Similarly government force through the police power enforcing the criminal code usually ought not be exercised except when someone else has already initiated unjust force: That is, when one person violates the rights of another through force or fraud (which is a kind of intellectual forcing, tricking people into doing that to which they otherwise would not have consented).

    The Austrian/Chicagoan economist comes in and says, “Don’t use taxes and regulations and such to enforce an equality of outcome between businesses. It’s not a just use of force, and it tends towards mischief and havoc besides. Instead, let government busy itself with protecting people’s rights to life, liberty, and property.” A Catholic who is comfortable with the Just War doctrine can feel entirely comfortable with this view.

    And in a society where the Churches are doing their job in morally educating the populace, citizens will use their liberty not only to buy stuff, but also to feed the needy.

  • theorist

    The relationship between Austrianism and Anarchism is like the relationship between an empirical observation and what one concludes from that observation: that is one does support the other but it doesn’t necessitate it.

    That being said, as a purely positive declaration, anarcho-capitalism (which is an extremely minor/unpopular movement) is possible state of existence in which people provide for their own defence either individually,through subscriptions to personal defense companies, through insurance, and finally through arbitration. What makes it possible is precisely that which makes food and clothing possible on a market -the necessity of sellers to please buyers.

    I write of it here not as a final answer to social questions but as maybe one.

  • theorist

    I make spelling mistakes/omissions that unfortunately affect R.C -for that I am sorry, I’ll work on it.

  • R.C.

    Theorist, don’t worry overmuch on my account about the spelling or the capital letters! I am not perfect, myself, and I now feel a mite guilty for having mentioned it.

    Good grammar, et cetera is a good thing, so if you strive to improve, then that’s wonderful! …but for your own sake, not because I “guilted” you into it, okay?

  • R.C.

    Theorist:

    The relationship between Austrianism and Anarchism is like the relationship between an empirical observation and what one concludes from that observation: that is one does support the other but it doesn’t necessitate it.

    Fair enough. Hayek et alia don’t in themselves refute anarcho-capitalism as a workable system; but they aren’t trying to do so, and their economic observations never claimed to represent a complete collection of all the important truths about human society.

    I myself think that other truths, outside the economic sphere, do make anarcho-capitalism unworkable.

    But that is a side-issue, involving a very unpopular proposal, and risks unprofitably derailing us from the main topic, which is that the free market represents human cooperation by voluntary association, and that this is a good thing, to which human beings have a natural right.

  • Matthew Wade

    Dear Sirs, it seems that we have this discussion to ourselves. However, I hope that at least one casual observance is being enlightened. Indeed, there has been much discussion since last time I checked this article. I apologize for a delayed response, but the Sugar Bowl and Lord of the Rings were occupying my time last night. I hope I can address a few of the major points of each of you.

    Regarding your six-step argument in favor of Mr. Tucker, I have some reservations. With number 1 I fully agree. Mr. Tucker is simply describing what Classical economists described in the early days of that movement. I believe he only used the word “opportunity cost” once, but that’s essentially what he’s describing. However, when we proceed to bullet point 2, I must pause and reflect on the extrapolation made from private citizen-to-citizen transactions – which are purely hypothetical in our day and age anyway – to statewide, national, and international transactions, especially the validity of a ceteris paribus “economical” view of the conditions under which such large networks would operate. I’m weary of an almost guaranteed violation of the Principle of Subsidiarity. Indeed, this is one of the reservations I have, siding with the Distributist School as I openly do, about Capitalism in this sense I believe we’re all talking about. There is no limit to growth in Capitalism, no consideration of the effects of transactions outside of those considerations which private citizens (individuals?) may take into account regarding their own welfare. This is also why I am vehemently opposed to any sort of anarchism, as “organized” as it may be. There must be a state power to circumscribe such activity.

    Furthermore, I take issue with your bullet point 4. As I’ve read through Rerum Novarum numerous times, I do not get the same sense that you, and perhaps Mr. Tucker, get regarding what the Holy Father means by “associations”. I believe that your readings of paragraphs 51 and 52 are incorrect. It is clearly stated in paragraphs 48 – 50 that the Pontiff is speaking of “societies…foundations and…institutions” not in the sense of a market such as the farmers market, or the stock market, but in the sense of clearly defined organizations formed for the benefit of those in weakened or troubled states. His quotation from the Book of Ecclesiastes in paragraph 50 has nothing to do with market transactions, but with men helping each other life themselves up so to speak. It is a stretch, and I believe an untenable one, to say that Pope Leo XIII had the kind of markets that Mr. Tucker and yourself have in mind when he wrote what Mr. Tucker quoted. Whether Aquinas, quoted in paragraph 51, meant the “free market” when he described a “partnership with the view of trading common” is debatable, but Question 77 of the Secunda Secundae does offer some interesting arguments against the “free market” if we want to really switch from Leo to Aquinas.

    As this post may have already gone too long, I’ll continue in a new one.

  • Matthew Wade

    …continued…

    To continue my post, I have to say that my somewhat disparaging comments towards Mr. Tucker were hasty. I apologize for any misrepresentation of his character or motives. I shouldn’t presume malicious intent, but he is directly associated with the Mises Institute and I am an avowed enemy (for lack of more thought out, less harsh term) of most of the principles espoused by that group.

    To address what seems to be a confusion in understanding distributism, let me say that there are certainly aspects of the Capitalism that align with Distributism. However, there are many aspects which do no align. This principle of a “free market” is somewhat tricky. Certainly, we can give the example of a freely-entered-into wage contract versus one in which a gun is held to the worker’s head. But there are more degrees of difference between these two extremes than Capitalism, defined as a concentration of private ownership as opposed to a system that actively promotes widespread ownership, would like to acknowledge. As our Holy Fathers have continually said, you CANNOT separate economics from morality and ethics. To do so is a violation of Christian principle. Take that or leave it, but if you take it then it opens an entire realm of consideration in which the “economic sphere” is but one, small part. Within that same sphere is the political, and the cultural. Perhaps you don’t hold a gun to the head of worker to force him to accept a wage, but without his own capital there is certainly an advantage on the part of the employer which the laborer does not enjoy. He has not the freedom to “take it or leave it” as some Capitalists would claim. Political institutions as currently structured favor this sort of “take it or leave it” system where each person is truly an “individual” in the sense that no consideration of the good of the family or the larger society is taken into account. Consider also the beautifully mathematical formulae of the current “economic science”, and the production and exchange functions thereing. These are not tailored to anything more than the individual wage-earner, and such a person does not exist. There is always a larger context to consider, and to build an entire economic system on such a premise is, to me, downright ignorant.

    To touch on the point about the practicality of Distributism, I agree that more could be done to espouse proposals to bring about the society envisioned by Distributists. However, does that mean that I should not give it the best defense I can in the meantime? I can promise you that many more intelligent and wise men than myself are currently struggling with this exact argument at this exact time.

    I have ranted quite enough, and there is a gorgeous, God-given day here in Dallas to take advantage of. I will leave you both with two book recommendations: “Ethics and the National Economy” by Father Heinrich Pesch – translated form the German and available from IHS press (http://www.ihspress.com); and “The Vocation of Business” by Mr. John Medaille – available on Amazon (ironic that I would recommend you purchase a book on Amazon after raving against corporations for so long! I would recommend you buy it elsewhere, but I can’t think of somewhere else besides Barnes & Noble) Heck, if you’re in Dallas you can borrow my copies of either of these books.

    God bless.

    Sincerely,

    Matthew Wade

  • Matthew Wade

    I did want to say that I don’t think that it’s fair to recommend books without asking for recommendations. Do either of you have any recommendations in favor your viewpoints? I have two degrees in economics so I’m fairly well-versed in the secular theory, but I know that there are several well-known Catholics who side with you, against me. Thank you again.

    Sincerely,

    Matthew Wade

  • theorist

    To R.C.: indeed, I never offered anarcho-capitalism as anything more than a hypothetical solution to current social problems.

    To Matthew Wade: I had my eye on some of the books you recommended but I am still going through the summa so I’ll have to tackle the others later but I’ll get down to it.

    One suggestion for austrian econ as represented by the most hardcore proponents would be “Man,Economy,and State with Power and Market” by Murray Rothbard if you haven’t already read it.

    A point to make I will just hypothesize that if there was something immoral about the wage system than it would be easier for people under anarchy to reject that system then it would be currently.

  • R.C.

    Matthew:

    Sorry for my own delayed response. I wish it had been for reasons as pleasant as Lord of the Rings, which I love, but unfortunately I’m doing emergency-speed software development projects for two clients at once. Consequently I can only respond in brief.

    [Regarding] bullet point 2, I must pause and reflect on the extrapolation made from private citizen-to-citizen transactions – which are purely hypothetical in our day and age anyway – to statewide, national, and international transactions….

    Well, I disagree that private citizen-to-citizen transactions are purely hypothetical.

    Anecdotally, they make up the nearly all of the income of my own business. (Well, technically it’s small-business to citizen, or small-business to small-business, since I’m a software developer and do contract work for individual persons, and for small- and medium-sized businesses. But it feels very person-to-person since I’m a “one man shop” and even my customers who are businesses usually are small enough that decision-making is limited to 1-4 persons.)

    More broadly, one must remember that an outright majority of persons employed in the U.S. economy work for small businesses of fewer than 100 employees, and a larger majority are working for the small and medium-sized businesses taken together. So my own anecdotal examples aren’t all that unusual: Our perception that big businesses are the norm may come more from the fact that their advertising is ubiquitous: A skewed perception similar to the belief that violent firearms-related deaths went up in the 1990′s when in fact they were at their lowest levels in decades. (It was the need of 24-hour cable news channels to fill air-time with shocking stories that had actually increased.)

    But I don’t deny there are some very big firms, and that they tend to offer inferior customer service after-the-sale, and throw their weight around in Washington D.C. But more on that in a moment….

    I’m weary of an almost guaranteed violation of the Principle of Subsidiarity.

    Did you mean “wary” or “weary?”

    In any case, consider the old saw about how nobody in the world knows how to make a pencil. (Let me know if you don’t know what I’m referring to; if you don’t, the remainder of what I’m saying will be less-than-clear.)

    Trade creates the ultimate in Subsidiarity unless a business is so vertically integrated as to cover all aspects of the production of a single good or service. The large mega-firms of today exist because both vertical integration and horizontal integration create economic advantages. But as a famous Austrian influenced “social ecologist” (Peter Drucker) noted, there are huge managerial disadvantages to the unwieldiness of large firms. How to account for the fact that such firms overcome these disadvantages and last long enough to become multi-generational?

    There are several answers, but here are three biggies: (1.) Some of them learn to decentralize decision-making even while ownership remains concentrated outside of the employees, thus implementing Subsidiarity sans-ownership; (2.) They’re big enough to have deep enough pockets to influence government, thereby purchasing regulatory and tax advantages unavailable to smaller firms; and, (3.) Vertical integration and horizontal synergies across markets allow large firms to circumvent many taxes and regulations by keeping transactions between different departments in the same firm, instead of between two different firms.

    Now the conservative take on this is to strongly oppose “corporate welfare,” but to want to reduce or eliminate taxes on businesses. (Yes, yes, I know that the politicians elected by conservatives only seem to act on the latter priority, never the former.)

    And of course the left-liberal take on this is to also strongly oppose “corporate welfare,” but to increase taxes on businesses. (And as with politicians elected by conservatives, those elected by left-liberals act on the latter priority, but neglect the former. Both Republicans and Democrats tend to rely on Big Donors, which are often Big Businesses, and of course Wall Street was, in defiance of man-in-the-street assumptions, a purely Democratic stronghold donor-wise in the last election.)

    For my money, the conservative take makes more sense, assuming we can get any politicians to act on both halves of it.

    One reason is that conservatives want to deny centralized government the authority to legislate in many areas; to limit government to its original “Enumerated Powers.” It is only because national government has such broad authority to influence businesses for good or ill that businesses find it well-worth their time and resources of to “buy” politicians and thus obtain corporate welfare. A government with less scope of influence tends to be less corrupt: Nobody bothers bribing the dogcatcher.

    Another reason is that conservatives want to lessen business taxes. As I stated before, business size is a tax advantage: Transactions are often not taxed when they occur between different parts of a firm, when they would be if they were between different firms. The higher the taxes, the greater the incentive to vertically and horizontally integrate, producing monster-firms.

    So, to achieve Subsidiarity in economic life, we’d like to see more Ma & Pa concerns and fewer mega-firms. Fair enough: Reduce the competitive advantages that large firms have over small ones, and you’ll find the big ones failing and splitting up, and the small ones thriving.

    But to achieve this, one must act counter-intuitively, because the instinct is usually to make the market less free — which only exaggerates the benefits of largeness! Make it more free, reducing barriers to entry so that small entrepreneurs have a chance to compete, and the unwieldiness of the larger firms will cause attrition and dis-integration vertically and horizontally. This is a very Austrian/Chicagoan view.

    …continued…

  • R.C.

    …continuing…

    Indeed, this is one of the reservations I have, siding with the Distributist School as I openly do, about Capitalism in this sense I believe we’re all talking about. There is no limit to growth in Capitalism, no consideration of the effects of transactions outside of those considerations which private citizens (individuals?) may take into account regarding their own welfare.

    Ah, but Capitalism in the sense you’re talking about actually isn’t an exact parallel to Free-Market, or even Capitalism (a particular kind of market) in the sense Theorist and I are talking about.

    I think the distinction between the two is like this:

    Your Distributist vs. Capitalist view is focused on outcome measured by distribution and equality of ownership of capital.

    Our (or at least my; perhaps I shouldn’t presume to speak for Theorist since I already indulged in the dubious exercise of speaking for Mr. Tucker!) Mixed-Economy vs. Freer-Market view is measured by the degree to which the means and degrees of government intervention in markets are both licit and beneficial.

    Now it’s pretty basic to Church moral theory that you mayn’t do an evil thing to achieve a good end; and that the use of force requires proportional justification to be licit; and that except when a given law is evil, adherence to the rule of law is morally obligatory.

    And it’s just an observation about the nature of government that everything government does involves force to some degree, but that government sometimes uses force directly and harshly, sometimes directly and lightly, sometimes indirectly and harshly, and sometimes indirectly and lightly. These different levels of the use of force would naturally require different levels of justification: Less for indirect and light than for direct and harsh.

    And it’s just an observation about the original intent of the U.S. Constitution to observe that the Federal relationship between states and the national government originally permitted greater Subsidiarity in the U.S., but that the failure of SCOTUS to strike down much of federal spending as unconstitutionally outside the Enumerated Powers of Congress (the warping of the Commerce Clause is especially egregious on this point) has reduced this Subsidiarity.

    Now, let us return to our two different views of Capitalism: Yours as a picture of a result, which is measured as too-highly concentrated ownership and is contrasted against Distributism; and mine, which is defined as a method, namely that of only enacting laws which are more licit and wise than those enacted today.

    If you want to achieve a particular economic result, you’ll have to enact or repeal or alter laws to do so. But if in the process you enact or preserve laws which are illicit, then you have done evil “that good may come of it”: A no-no, even if it works.

    My view regarding Distributism as a result is this: I’m willing to accept it as a desirable end-goal. And, as an already-existing state-of-affairs, it is entirely compatible with the methods I think licit.

    The only question, in my view, is whether those methods which are licit can produce the desired transition from our current economic status (too much concentration of capital ownership) to Distributism (more widely distributed capital ownership; or, in Chesterton’s phrasing, “more capitalists”). If only illicit laws can produce Distributism, then I oppose, not Distributism, but the proposed means of producing it.

    And since my definitions of which laws are licit are derived simultaneously from the Austrian School view of government and from the Church’s requirements that force be justified and that Subsidiarity and Rule of Law be maintained, you might call my definitions “Capitalism” or at least “Free Marketism.”

    So if “Capitalism”/”Free Marketism,” by forbidding us to enact the kinds of laws which would produce Distributism, ends by preventing Distributism from ever occurring, then in that sense, and only that sense, would I ever say that Capitalism is opposed to Distributism. Get it?

    If, however, it is within our power to use what Free Marketers would consider licit lawmaking to produce Distributism, why then: In that case Capitalism and Distributism are not opposed, but rather the former is the tool which, used correctly, produces the latter. According to this conception, Distributism may also be called “the Ownership Society”; that is, the society in which capital has many owners.

    So I think in the future, for clarity’s sake, you and I need to be cautious to distinguish between:

    Capitalism-outcome (the status quo of too-concentrated ownership)
    Distributism-outcome (the “Ownership Society” of less-concentrated capital)
    Capitalism-legal framework (the “Free Market” school’s idea of what laws are or aren’t licit or wise)
    Distributism-legal framework (an unknown set of laws which, if enacted, would produce Distributism-outcome)

    Make sense?

  • Don Schenk

    Let’s see: Red China uses slave labor. (Remember the cover story in Crisis about a long-time prisoner of the Chinese slave labor camps, who finally found a chance to escape when they needed someone in his camp to translate the orders from American customers?) It also places heavy tarriffs and embargoes against American-made goods. Our Congress once estimated that it devalued its own currency, the Yuan, by 23.5%. (That’s a de facto tax of about 30% on American-made goods in the US.) Meanwhile the only response we make is to artificially prop up the value of the US dollar and allow “free” trade into the US.
    “This is good for our economy, because it lowers the cost of labor!”, the supporters of this system say. But because the government has forced down the “cost of labor”, “labor” can’t afford to buy things or make mortgqge payments, and our economy is still in a tailspin.
    I have a suggestion: let’s dump the present system of government control of trade with really free trade, no matter how much “investors” may scream about what happens to their investments.

  • Don Schenk

    A free market would benefit everybody, but unfortumately what we now have is an anti-American conspiracy organized by Wall Street and its foreign allies.
    Consider international monetary exchanges. Our Red Chinese “trading partners” artificaially devalue their currency by estimates ranging from 25% to 40%, killing our manufacturing base. Allowing the US dollar to drop to its true free market value would go far to correct that attack on America’s economy, but Wall Street insists that we artificially prop up the value of the US dollar in order to prop up foreign economies.
    And our masters at the World Trade Organization have ruled that we can’t use “Country of Origin Labels,” because that would help the US economy.

  • David La May

    I like the demonstration of how cooperation and exchange can be advantageous to everyone. I appreciate the math.

    Here’s what I don’t like. I don’t like the author’s assertion that the “real stuff of life” is simply out there for the taking; that there are “goods and services” which are “available to us all.” No they’re not. Perhaps if I believed otherwise, then I would see the wisdom of an entirely free and unregulated market?

  • Martial Artist

    Mr. La May,

    Could you possibly identify the “goods and services” that you (or others) might desire that are not available to us all? Please not that, in asking, I am assuming that you are not simply referring to items or services that cost more than the average resident of the U.S. can afford to purchase.

    Pax et bonum,
    Keith Töpfer

  • David La May

    Martial Artist,

    More or less, I am simply referring to cost. I’m not saying that goods and services do not have value and that, therefore, they shouldn’t have a price. I’m saying that its just not true that these services are available to all.

    For the most part, I’m alright with that. I’m not bothered by the fact that most people will never own a Mercedes, or a 2 bedroom house, or afford an expensive meal every month. And I like the fact that hard work and initiative yield financial blessings while laziness and apathy yield nothing.

    But, I believe that there is a small list of things which should be available to everyone, regardless of whether they can afford it or not. And I think that, as citizens of a state, we need to pool our resources to make sure that no one is turned away when these things are needed. The government provides us with the means to contribute to this common fund for the welfare of all. To me, that’s a sure indication of an advanced civilization.

  • Nick

    Don’t take this the wrong way, but Tucker trying to suppert his economic philosophy by appealing to Rerum Novarum and Centesimss Annus is like a liberal appealing to Casti Connubii in support of gay marriage: they might find “support” in phrases like “affection for the future partner,” but the Church has something very different in mind.

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