The Face of True Capitalism

“I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks]  . . .  will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” — Thomas Jefferson — The Debate Over The Recharter Of The Bank Bill, (1809)

Capitalism is the economic model of choice here in the United States and is considered antithetical to other models such as fascism or socialism. However, there is a lot of confusion regarding what constitutes “capitalism,” exactly. And does it even work? Most people think of economic models on a spectrum with socialism on one end and capitalism way on the other side. However, what people don’t usually consider is that maybe there’s more than one type of capitalism. The particular capitalist breed that dominates America is really corporate capitalism. Nothing is local anymore. If a product is tainted the subsequent recall is often nationwide, affecting hundreds of millions of people. This should come as no surprise when you realize that, for example, 5 massive corporations own 62% of the hog industry – and the same consolidation of capital is present across virtually every industry. Compare this to little over a half century ago when that same 62% would have been spread across thousands of local businesses. This trend has resulted in the consolidation of wealth and power to the point that 147 “super-entities,” mostly banks, control 40% of the world’s wealth. Austrian economist Friedrich von Hayek argued that socialism and fascism were fundamentally the same in that both were grounded in central-planning – I would add corporatism to that list of centrally controlled systems. Central planning, whether by government or corporate decree, is diametrically opposed to Catholic social teaching as it treats man as mere capital to be controlled by a few ruling class elites thus denying such aspects of human nature like self-determination and, sadly at times, basic human dignity.

Corporatism is the end result of capitalism that allows for unjust practice. The capitalist alternative then is distributism which seeks to establish a “society of owners” and thereby decentralize wealth and power. This is not socialism which demands redistribution of wealth to everyone equally to create one solitary economic class (indeed, the term “distributism” is somewhat of a misnomer). Instead, according to distributist theorist Hillaire Belloc, the distributive state contains “an agglomeration of families of varying wealth, but by far the greater number of owners of the means of production.” This distribution does not extend to all property, but only to productive property, namely, the things needed for man to survive including land, tools, etc. Thus, each man can be alloted what he needs to make his own livelihood. This is less of an economic system to be enforced like socialism or corporatism and more of an individual and cultural aspiration.

It would be both wrong and ineffective for the government to attempt to instill a distributist society as it might a fascist or corporate one because unlike fascism or corporatism it is not a systems-oriented economic theory but an individual-focused theory, deeply grounded in the principles of subsidiarity and solidarity. Instead, the role of government should be to enable distributism through several different means. First, the government must remove the obstacles to a truly free market that it has created. This means no more bailouts, ending the treatment of corporations as people, and eliminating the bureaucracy which CEOs manipulate to regulate industry in such a way as to stifle emergent entrepreneurship. Secondly, our government must return to its original purpose of defending individual liberty in order to eliminate the unjust practices of “greed is good” corporatism. Our government must especially take a stand in defense of the individual’s right to property, including ending the property tax and prohibiting anti-production investments meant to stop competitors. These interventions will then grant a greater freedom of choice by individuals to control their own production in the form of wealth-producing property if they so choose – because ultimately distributism must be an individual choice and a cultural movement towards a different way of life. This isn’t just about economics, this is about affording a lifestyle that incorporates all aspects of human nature. Thomas Storck argued that “both socialism and capitalism are products of the European Enlightenment and are thus modernizing and anti-traditional forces. In contrast, distributism seeks to subordinate economic activity to human life as a whole, to our spiritual life, our intellectual life, our family life”. The capitalism of faceless corporation is failing, so let us turn instead to the true capitalism of the family: distributism.

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