EconBuff Podcast #37 with Alexander Salter
Dr. Alexander Salter talks with me about distributism. Dr. Salter walks us through what distributism is and from where it comes. We discuss the history of distributism, and why distributists think it is a Third Way between capitalism and socialism. Dr. Salter explains which issues with capitalism distributists focus on and how distributists believe wide spread productive property can solve these issues. Dr. Salter lays out how disributists view the use of government intervention to achieve distributist ends. Dr. Salter addresses how distributism views markets and answers whether distributists are “anti-free market”. We discuss the distinction between capitalism and free enterprise. Dr. Salter evaluates the historical record of capitalism and the implications of the first and second industrial revolution on the prospects of distributist thought impacting public discourse over how the economy is ordered. Finally, Dr. Salter answers my question about the nature of ownership and whether people merely own things to access the “service” that particular piece of property grants the owner.
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Photo by Crystal Huff on Unsplash
Transcript:
Stitzel: Hello, and welcome to the EconBuff Podcast. I'm your host, Lee Stitzel. I'm happy to announce that we're now an award-winning podcast, having won The Innovations and Online Learning Award for 2022, for the Paul and Virginia Engler College of Business here at West Texas A&M University. It's a big honor, and we want to definitely thank all of our listeners. An even bigger honor is our guest today Dr. Alexander Salter from Texas Tech. He is the Georgie G. Snyder professor of /at the Rawls College of Business, the comparative economics research fellow at The Free Market Institute at Texas Tech. He is the author, along with Peter Boettke and Daniel Smith, of Money and the Rule of Law Generality and Predictability in Monetary Institutions. I've read this book it's one of the most excellent reads I've had in a long time --- short, digestible, [and] accessible, but also rigorous. I can't recommend that book enough. He also has 71 academic publications including some at Southern Economic Journal of Economic Behavior and Organization, Contemporary Economic Policy, Journal of Macroeconomics, Journal of Money, Credit, and Banking. He also writes for the Popular Press at The National Review, Wall Street Journal, and The American Institute for Economic Research. Alex -- welcome.
Salter: Thank you Lee. It's great to be here.
Stitzel: So our topic today is distributism. So, I just want to start off --- there's probably a term a lot of our listeners won’t have heard of --- what is distributism?
Salter: That's a great place to start, and it turns out that I wrote an entire book to what is distributism [to] answer that question. That book hopefully will be forthcoming with Catholic University of America Press in between six to eight months. In short, distributism is an economic philosophy --- deliberately don't say school of economics --- and we can talk about why that is in a minute; but it is a economic philosophy that emphasizes widespread ownership of productive property [and] productive assets for both communal and personal flourishing. The good society is one where productive property is widely dispersed throughout society to avoid both the perils of excessive concentration of capital and property, and then also to avoid the perils of complete abolishing of private property. And so, a distributist would say: we like private property so much [that] we want there to be more of it. We want it more widely distributed. We want people to actually own the assets they use to apply their trade. That's going to give them the economic security that they need to form stable families [and] strong communities, and that's ultimately going to be conducive to human flourishing.
Stitzel: So, I like that we're focusing on a property very particular type of property. I think probably your average American listener. I don't know what this would be like elsewhere in the world. We think property --- we think of pretty wide variety of things. I've got a phone in my hand. That’s property, right? I got a car outside. That's property. So, you specifically mentioned productive property. So, why that? And what role is that playing here?
Salter: Sure. The distributists who wrote mainly capital goods in the early part of the 20th century heavily emphasized property that could be used to produce other things. We would call those capital goods in economics --- things like small machines, tools, [and] land (especially land) --- assets like that could be worked, used, managed, and maintained by either a family or a small community of persons to actually earn their livelihood. They weren't talking about financial assets as traditionally understood. I'm sure that they would regard ownership of some income generating asset as better than not. But really that's not what they're concerned with. What they're concerned with is making sure that ordinary people [and] ordinary families themselves control the means of production that they work with, so that in the worst-case scenario, they can say no to the market. They have at least some outside options, some independent option for generating some income by which they and their family can live. And that's going to be conducive, not only to human flourishing they argue, but also political freedom. If you want to maintain a free state, and by that they mean a small-d-democratic state where power is widely dispersed, where no one group of society can impose its will on any other group of society. The classical distributists were very much into small-d-democracy. But that kind of society can only maintain itself when there's a sufficient dispersal of economic power throughout society. They see a very tight relationship between economic power and political power. You get concentrated economic power, you're going to get concentrated political power, and both of those things are not good for human flourishing.
Stitzel: So, this has intuitive appeal to me. I would naturally think this. What's your evaluation of that particular claim that concentration of economic power is going to lead to concentration of political power? My guess is listeners might think the opposite. And, you know, the causation could go both ways.
Salter: Hmm mmm.
Stitzel: But they're probably thinking concentration of political power leads to concentration of economic power. So, what’s your take on that?
Salter: Great question. And I could spend an hour talking just about that.
Stitzel: But that's right.
Salter: So, as an economist and as someone who comes at these questions from a little bit of a different background than the classical distributists of the early 20th century. I’m slightly skeptical of the notion of economic power, at least in a way that you would analogize it to political power. I understand what political power means. It means coercive force. It means violence. I get that economic power doesn't really work the same way. I can have all the wealth in the world. I can have all the money in the world, and still I can't do anything with it unless I have a willing counterparty. Now, I don't think that all of morality is reducible to consent, right? There are some things that two parties might consent to that nonetheless could very well be immoral. We can talk about that later if we have some time. But nonetheless, the fact that the norm in politics is for some people to impose their will on other people --- and in economics at least nominally you need the other party to say yes --- makes these, I think, two kinds of power (if we want to use that word) that aren't completely comparable. That being said, I think that there is some intuitive truth to this link. We understand that by concentrations of economic power --- we mean things like great fortunes, great wealth, large mega-corporations. And by concentrated political power --- we're probably talking about the decision procedures of the government whether it's centralized [or] whether it's decentralized. And to the extent that you have large fortunes, large corporations, [and] parties like that who use their wealth to steer the political process in ways that are favorable to them, well inevitably, the ways that are going to be favorable to them are going to be concentrations of political power. So, in some sense, I think, that this claim is defensible. In other ways I think that some of the ways that we use the word power need to be clarified, especially on the economic side. But if you ask me: do I think that big business and big government are friends and allies? My answer is unequivocal they are allies. History shows us that mega corporations and big government love working together. And unfortunately it's a persistent myth in populist political movements that you can use big government to smash big business more often than not they cozy up together.
Stitzel: I often in my classes, you know, I make this this point. So, you know, I've read my Rothbard as I guess you have as well. And maybe he isn't the most mainstream person. But I find this idea undeniable, right? And I don't think it's a bad thing either that, you know, government is the monopoly on violence, right? And when you do something, no matter how trivial at with government activity, it's fundamentally coercive. You actually use the exact word that I would use is coercive, right? Because there is some kind of threat, of some kind of punishment, which, you know, that ultimately does tie back to. But, I think, you know, listeners I think they would feel like [that], right? But even if --- and probably lots of them would grant this to you (I certainly hope they would) --- that you're going to have this kind of interplay between business and government, where their big businesses are trying to wield government power. A good way that that you and I might teach this in an econ class is to talk about how bigger businesses will advocate for regulations, because that's a burden they can bear, and it will prevent startups and smaller businesses. That'd be just one classic example of that. But maybe economic power in a sense that a lot of consumers will get into a situation where they're trying to (I don't know) get Internet or something and feel like: Oh, I don't have any options here, and I'm not getting good service or something like that. And they're thinking of that as economic power. Is that valid? Or would you take that a different direction?
Salter: I think if you wanted to salvage the concept that's the way that you can go. And so here's where I think you can actually do something with this that works. Economists, and this is a different group of people than the distributists. The distributists are Christian, and specifically Catholic social philosophers, who are trying to inquire into the nature of economic and political institutions in order to build a more just society. And they understand just society to be a society in line with Catholic social teaching as evidenced by the papal encyclicals of the late 19th century. Economists who are doing their own thing at this time --- and of course are doing their own thing today who don't pay much attention if at all to the distributists --- have advanced the science in ways that I think can actually put these ideas to work. I think there is something to this idea of bargaining power or market power as developed by economists. Someone might say: O.K. Professor Salter, it all sounds well and good to say that government's coercive [and] voluntary exchange is not. But then you posit an example like someone wandering in a desert dying of thirst. They stumble across an oasis. It's the only one around. They don't get some water they're gonna die. The oasis has an owner and says: you can have a drink of water, but it's gonna cost you $30,000. Is that not coercive? I think in a sense that it actually is. I think that by analogy there is some something going on there with that exchange where one person, instead of being able to fulfill their desires, is being made to serve the ends of somebody else that are being imposed upon them. And so this idea of bargaining power --- which really refers to how thick is the market that you're transacting in [and] how many good outside options do you have --- that's going to be something that's very important when we use the word coercion to apply or not apply to economic transactions. I’m comfortable with a first pass of saying, that all else being equal, if I don't have very many other people to transact with, if my market is not very competitive, [and] I don't have great options, and so [then] that makes it easier for my counterparty to impose his or her will on me. Because that's what we ultimately care about in terms of human flourishing --- the imposition of somebody else's will on me, not because we're all, like, libertarian individualists, but --- [because] we recognize that the dignity of the human person is such that human persons are ends in themselves and should not be reduced to mere tools or means in somebody else's ends. And so, if you ask me can that happen in economic life? I would say it's much, much less common than in political life. But yes, it still can happen, and we should be concerned about it. The distributists by the way were very concerned about it.
Stitzel: So, let me make a counter point and get your reaction to it. And I find this absolutely fascinating, because I use this as one of my staple examples when I teach this idea that value is subjective and marginal. So, a classic Austrian school idea, and a very important idea in economics, right? One of the marginal revolution ideas --- one of those ideas that allows you to see things you couldn't otherwise see. This is why probably both you and I and the classes that we teach make a big deal out of the way that we perceive value, right? Rejecting labor theory of value --- stuff like that. So, I'll give an example. I saw this in a comic strip. and I wish I could remember which one so I could credit it. If I remember this. If I can figure it out, I'll put a link in the show notes, along with, by the way, where to get your books. And like, there's a king crawling through the desert. And he shouts, like, you know: my kingdom for a bottle of water. Basically, right? And he crawls along another panel. And here's a guy with a pail of water or whatever. And, you know, then they engage in this transaction. I forget how the, you know, what the punch line is, you know. The king goes back and then has the guy exiled or whatever so he doesn't actually have to pay him. You know, what I tell my students [is]: wait a minute, I'm a king dying of thirst. I literally have a kingdom. My option is to die. If you're there with a pail of water, and I say I'll give you my kingdom (or half my kingdom or some ridiculous price), well except value is subjective and marginal. If I can spend that in order to survive, [then] that bottled water might really be worth that in that moment. So how do I tie this to the idea that you just brought up, because it's important, right? How do we even detect coercion in this case? If I'm willing to make this trade, right? It's like all my kids just got Easter candy, right? And so, they're trading back and forth. And should I intervene if my son says to my daughter: I'll trade, you know, Snickers for Smarties? Like well, clearly Snickers are better than Smarties, except maybe they're not at the moment. You don't like chocolate, right? Or…
Salter: At the margin.
Stitzel:…at the margin. Or your subjective value. What's your take on that? How do we even identify coercion in this case?
Salter: Yes. So, here's where I think about this the science of economics. And this actually is a nice question because it ties back in that thing I said at the very beginning about the difference between economic philosophy and a school of economics. What I see the distributist doing is promulgating what we would call a vision of political economy. They are not engaged in what you and I would call the science of economics. The science of economics is what you were just talking about --- subjective value, marginal analysis, [and] all that stuff that we use to understand first and foremost, and then also predict how human beings are going to behave. I believe that economics is a value-free social science. I believe that we can make statements about how people actually value things and actually behave that do not themselves reflect any moral claims. Not that the agents themselves are not moral agents; but we're not imposing any of our analysis [and] analysts’ value judgments on the exchange scenario. Political economy is broader. Political economy is about the quest for the good society; however, we understand that and you need to know the science of economics in order to get your political economy right. You need to know demand curve slope down before you can talk about what your constitutional arrangements are going to look like. Understand how people make trade-offs in the markets and politics. But also, political economy is an inherently normative project. We are necessarily talking about ethics and morals. We are necessarily bringing the ought dimension of reality front and center. So, while going back to our king in the bottle of water, we can use value-free social science to talk about bargaining power and the range of exchanges that all of those guys are willing to accept --- whether one guy would be willing to trade up his bottle of water to not die even if he's not a king anymore. But we can also look at that from a humanistic standpoint, a more philosophical standpoint, and say once we introduce ethical considerations --- and we should, and we have to whenever we say that the world should look some way and not some other way, that's an inherently normative enterprise --- [then] you're not just doing economics anymore. You're also doing ethics. Whenever you do that ---should the king be forced to make that trade, should a tradesmen be forced to sell out to a large conglomerate and close up his shop --- those are ethical questions. We need economics to help us answer the consequences of various choices, but that does not exhaust the analysis. I think it's perfectly legitimate to say this guy will make the trade and thereby not die. He’s better off from his own perspective than if he died. But we can also look at that as human beings and say that’s morally repulsive. I can't accept that. We need to find some other way of structuring the rules of the game where we don't have a monopoly oasis owner who gets to impose those terms on everybody else’s ethical framework.
Stitzel: Yeah. That's a good that's a good answer and good response. You know, probably most of the listeners are thinking: yeah, if I ran across somebody in the desert and I had a spare water bottle, [then] I'm not bargaining. It's just, you just give it to them. And that's probably because they have an ethical framework that they're working from, right? And in this case, the distributists have a very specific one with Catholicism, right? And so, that kind of gives us a place to turn. What is that based on? You mentioned, sort of, like when this started. And talk to me a little bit about some of who these people that started distributism were, and, like, what got them going down this path to try to bring --- I don't know if they would even think that this is exactly what they were doing, but bring --- some of those ethical values into economics. Or maybe that's exactly what they think they're doing? So.
Salter: It's fascinating to study what they think they were doing, and then also figure out is that how we would classify it today. In some ways yes. In some ways no. And that's an interesting topic to talk about. In the late 19th century, Western nations are undergoing the Second Industrial Revolution (as we conventionally call it now in economic history). That’s massively changing not just how we produce and consume, but how we live. Previously, the vast majority of the population was engaged in agriculture [and] living on agricultural land. Many were producing for subsistence labor. Then some more and more producing for the market. And then the industrial revolution or the second one comes along and revolutionizes all areas including agriculture. Work is released from traditional modes of production. People move into the city. They start becoming day laborers for wages, right? The possibility of large-scale unemployment becomes a thing for the first time in history, really. So, the Catholic Church is grappling with all these questions in the context of what does this mean for what it means to live a human life? What does this mean for a life lived in Christ in community? And disclaimer: I’m not myself Roman Catholic, although I have a great admiration for the Western Roman Church. And in many ways, I see myself as a fellow traveler. The popes and hierarchs of the Catholic Church at that time wanted to refine Catholic social teaching to address these questions. So when you get the papal cyclicals on the relations between capital and labor --- what workers owe their employers, and what employers owe their workers, and what each of them owes the state, and in turn what the state the government owes them --- this sort of is going into new territory to address the challenges posed by modernity. That's sort of the ethical background for all this. Those social documents, those social encyclicals that you can now find in the compendium of the social doctrine of the Catholic Church. In response to that thinkers like G.K. Chesterton and Hilaire Belloc, both of whom were Englishmen. Belloc had a French background, but he was raised in England, and would even serve in parliament for a time. They built on those, since they themselves were Catholic. And they were asking the question how can we apply these principles institutionally? How can we adjust the way that our political and economic systems work such that they actually respect the dignity of the human person, where what that means dignity of the human person is found from Catholic social teaching. And their answer was distributism --- neither abolishing private property nor super concentrating it. So, no socialism. No mega industrial concentrated capitalism. They want that widespread dispersal. They want localism, local control of economic production. Just while --- they just, like, they want local control of political production. They basically want life on a human scale. You can think of this as, sort of, the early 20th century forerunner of the Small is Beautiful Movement of the later 20th century, and in terms of the way that things unfolded obviously. What happened looked very different than what they wanted to see happen. And we can learn some lessons from that by comparing the way that they wanted society to go versus the way that we actually went. At the same time, I think it's important that we don't overly romanticize the distributists. As part of their project, even though they weren't economists, they were compelled to do economic analysis. Because in order to convince people that the world looks [or] should look some alternative way, they had to partly come up with a way [or] an explanation that the economic world works. And so, they made some statements about how markets work, about how firms operate, that I think just are not tenable in light of what we know about microeconomics today. In fact, I think it's not tenable in light of what we know, what we knew, about microeconomics at the time. Even in the early 20th century, we were micro-economically knowledgeable enough to know that some of the claims that they made about monopolies and political power and economic power just don't work that way. But not all of their claims are wrong. Some of them are good and true. Some of them we don't know enough to know whether they're true or not. But my gosh, are they interesting. And that's ultimately why I wrote the book, because I found all these interesting propositions, especially about the relationship between economic systems and political systems. And it's that bridge of institutional political economy [and] institutional analysis that I think is particularly interesting. It's where the forefront of economic and political science research is right now in terms of describing the social world. And so, I think there are things that the distributists have said that contemporary social scientists should pay attention to. This shouldn't just be a conversation for as Small is Beautiful Catholics. This should be a conversation for anyone who's interested in understanding the way the world works; because we have a neglected perspective here, and I think markets vs. politics that it bears further analysis. We should dig into it some more.
Stitzel: There's a lot of things to unpack there. You know, the comments that you said about the markets [is] probably where I would like to start as a classically trained economist, [so] of course I would. So, are they wrong about markets? Or are they, sort of, anti-markets in this case?
Salter: No, I don't think that they're anti-market, but I think that they attribute to markets the workings of political processes impinged on markets. So, you wouldn't be able to distinguish those two without economics training of some kind. I’m not saying you have to go to university. You just have to like familiarize yourself with your subject. So, they see markets as inherently centralizing. They see capitalism as inherently monopolistic. And they view it that way, because as actually existing capitalism unfolded, there were lots of tendencies that suggested [that] hey, it looks like increasing market scope and increasing economic/political power. Those things went hand in hand. I think an economist trained in social science can look at that same history and say: we know how markets tend to distribute resources. And by themselves, it doesn’t look like this. Because we see the heavy hand of politics on this thing like everywhere, especially in the United States when you have all sorts of late 19th century regulations that were designed --- well in theory they were designed to support competition, but really all they --- [to] do is end up concentrating industry and helping the big guy against the little guy. Because complying with those regulations is largely a fixed cost. Guess what kinds of businesses can more easily absorb the fixed cost of regulatory compliance?
Stitzel: Yeah.
Salter: Businesses that are already big.
Stitzel: Right.
Salter: Whereas smaller mom-and-pop joints smaller businesses have a harder time competing on that playing field. So, this is why I think even though economics is not sufficient, it is necessary. In order to understand economic history, you have to be able to look at a given scenario and say: O.K., how much of this is due to what markets naturally do on their own? And how much of this is due to political interference in or manipulation of the market mechanism? What they see as the monopolistic anti-competitive tendency of markets inherent in capitalism --- I see crony politics. Now you might disagree with that. That's fine. And we can argue about the causes. But one of the neat things is --- once we're arguing just about the causes, we're no longer arguing over ethics. We’re back into the realm of arguing over value-free explanations for a given observed phenomenon.
Stitzel: I’d even maybe add a wrinkle here. I would, I always make the point to my students that capitalism and markets are different things. You know, so you can (you could) actually have an anticapitalism free market. Like, that's a (that is) a sensible combination of things to be. And of course, I obviously --- my tendencies I would naturally --- agree with you a lot about the role of governments and in shaping the way that these things would go about. I have some good friends, some philosophers that I talk about, that make this kind of claim. Like, this is the inevitable end of capitalism. And I think there are two ways we can take that. I think both of them are very interesting through this distributism lens, one of which I don't think I agree with the notion that this is the inevitable end of capitalism. Because I do understand some of that apprehension that people feel when they look at large corporations, like maybe Amazon or something that are just doing everything and they're everywhere. And you kind of understand maybe where that coercion that we were talking about earlier could actually come to life. And my simple response to that --- you've mentioned localism. I'm a big advocate obviously for decentralizing government [or] making your governmental decisions at the smallest unit possible, the most local unit the place that the individual can have the most impact on political outcomes. And I think you can have sensible capitalism in those --- in that, kind of, like you said --- institutional setups. So first, what's your take on that?
Salter: There's a lot there that I like. There’s capitalism vs free markets. Really a lot there that I like. There's no visual component to this interview. But when you said there's a difference between capitalism and free markets --- I was like doing two thumbs up in my seat. Just want the listeners to know that. That's definitely a defensible viewpoint And I like it a lot. Because to a lot of people capitalism means the system of mutually supporting economic and political power. It means legally entrenched economic privilege supported by the coercive force of government. It means cahoots between big business and big government. And they think that that's all there can be. To the extent that we distinguish that from free enterprise --- a level playing field where people are free to buy, sell, [and] trade as they please without anybody manipulating the rules to their advantage --- [then] I’m very sympathetic to the idea that that's actually something different than capitalism as we historically observed it, right? Like, what's the ultimate capitalist act of the last couple of centuries. You would probably point to something like the creation of the Bank of England. Late 17th century, [the] parliament grants the Bank of England a monopoly privilege for banking --- basically banning the Bank of England’s competitors in a given geographic ratio --- guaranteeing them monopoly profits [and] excessive rates of return in exchange for which the bank of England (which is nominally privately owned) would agree to periodically grant parliament loans so parliament could finance its wars. It was very much an alliance between political power and economic power for the furtherance of the interest of elites that was expected to be paid for out of the produce of the common man. So, if you call that capitalism --- yes. There's definitely a difference between capitalism and free enterprise in that sense. I’m not a capitalist, but I’m very much a free enterprise guy. And I’m glad that you brought up the localism stuff too, because the distributists were all in on localism. They wanted local control of everything that could feasibly be locally controlled. They wanted locally controlled. And if there were any methods of production --- that just because of the nature of the production technology was not amenable to local control --- they used electricity generation as an example. They at least wanted the ownership shares in that enterprise widely dispersed. Or in some cases, they wanted state ownership of the thing. So, you could have actual democratic control. Now --- disclosure. I'm not very optimistic about that last one. I think there are a lot of problems on that last one. But it shows you where they're coming from.
Stitzel: Those in economics would have a lot to say, right? Yes that's straightforward calculation debate. Hayek and Mises and the (and this) part of economic history is all about why that wouldn't work very well. Let me run around and take this from the other side if you will. And in defense of capitalism, I find any time --- although, I’m very much like you [in that] I have a lot of (no I’d say) [arguments in that] I just I am for decentralization and maybe localism, and yet I find any time --- somebody goes too hard after capitalism, I have to kind of look around and check the scoreboard. And I think it’s just a life that we're living that's very different now than the time period you were talking about, even the when the church was looking around, as the transitions between the different industrial revolutions were happening. So, how would a distributist --- and I mean I know there are good thinkers out there about this, though I will say I have sampled them [and] I think you're the smoothest representative of distributism, even if you don't call yourself a distributist how they --- respond to that? How would they say: right, yes we have this great environment. And this question would have been really hard in 2019. So, at least now you have some global supply chain shocks to point to.
Salter: Right.
Stitzel: What kind of responses do distributists give to that kind of point?
Salter: The most coherent response I think was given by Hilaire Belloc, the French-Englishman that I mentioned a couple minutes ago. And he explicitly talks about this point he's looking at the industrial transformation of England. And he says: yes, monopoly-capitalism (and to him they’re the same thing, I’m using his words not mine) monopoly-capitalism has actually captured economies of scale. They've delivered cheap goods. Yeah, your income goes further than it has or than it would under a more decentralized mode of economic production. But what else are you giving up to get that? The distributists remember are also very concerned with economic freedom as they define it, which means widespread dispersal of property, because they want to maintain political freedom. They want ordinary families to not only to be able to produce for themselves, they want ordinary families to have a say in the political process that matters. And the landscape of early 20th century England, the ordinary free yeoman, you know, land tenant had almost no impact on politics. Politics was a closed game. You had to go through several closed doors, you know, that were guarded very tightly just to even get in parliament. And even then, you're a backbencher, right? You had to pedal influence for years and years. It was largely closed off except to oligarchs from either the landed aristocracy or big business elites. The idea that ordinary people, even in a nominal democracy, should be free to determine their own political fate was --- to the people at the time, [and] the powers that be at the time --- just sort of silly, right? There's no way to make that work. How impractical. You have to understand the distributists actually believe in democracy, which means they actually believe that ordinary people (even if they aren't very good at it) should govern themselves. And the only way that you can sustain those kinds of political institutional relationships --- which includes massive decentralization and a lot of direct democracy in a like in a small town setting, the only way you can keep that up --- is by dispersing private property. So, if I had to interpret that claim economically --- I would say, and this is my interpretation [that] Belloc is claiming --- [is] that market economies have a political externality. The price mechanism does not fully reveal the sacrifices and political freedom we're giving up to get cheap food and clothes and all that stuff. You have to buy of course that political freedom is an independent value that people would otherwise want. You might deny that. You might say that people just don't care that much about political freedom. They just want cheap stuff. O.K., If that's your anthropology that's all well and good. As a Christian, that's not one that I can accept. As Catholics in particular, that's not one that Belloc and Chesterton can accept. There is something contrary to the dignity of the human person to centralizing political power, and walling off ordinary people from political power, and just having it be this formless bureaucratic mass that dictates to people from on high what they do and how they have to live their lives.
Stitzel: So, I’m very interested in that, because I have (I always make) this argument, you know, [that] society and culture --- these kind of things are emergent, right? And so, this is a very important idea because we have a hard time thinking about this; because we think about things very mechanistically, right? Everything is kind of input output, and there are lots of good examples of things that are emergent, right? So, some things emergent when it's of human action, but not of human design. Language, is a good example of this, right? We make choices that that sort of influence what our language (what words) come to mean, but nobody really sat down and designed the language. And maybe Tolkien aside, but like languages we actually use, right? And culture and society are emerging in the same way. And so, I always find it a little bit difficult when we want to talk about, like, what people want; because I agree with you completely. I mean, this is just (I find this to be) an obvious statement, right, that you would say this, you know, people just trade cheap stuff they don't care about, right? Like, that's obviously wrong. Maybe a really cynical view of people. But anybody who would say that would say: well, everybody accept me, right? So, you can always be a little suspicious of those kind of takes. And yet, maybe there's some (a little) more weight to that than we might otherwise think; because and, I mean, this is the society and culture and economy that we built in some ways. Like, we voted for things that led to this point, right? And if the process is reflecting --- especially in a setting like this where we have free markets and we have democracy --- then I give the distributists some points there. What do you make about that? Am I taking emergent order too far? Or do you think there's some kind of? Well here's another way that we could say this, because I see some of these policies where we have political movements. Probably the most striking one in recent memory is some of this, like, anti-police rhetoric when we had riots and very sort of on unsavory events surrounding police. And then, people were, you know, advocating for police reform. But that's been going on for a long time. We've never had it. And I would, you know, sort of, point to something like median voter theorem. Say look, we're getting what we really want. And then when other things happen, we say we want different things. This is just revealed preference. What's your assessment of that? Am I taking emergent order and revealed preference too far?
Salter: I think there's something there. I think the distributists were too constructivists, in the sense that they thought if you could just write down the right set of rules and get enough political will behind enforcing those rules, [then] you could get significant transforms to society, [or] transformations to society that way. Now, it wasn't just a political project. They were very much on board with the idea of changing hearts and minds. But they also did think that: oh yeah, it's just a matter of structuring the rules of the game to favor small independent enterprises over large mega corporations. And that's going to go along way to getting us the kind of social order that we want. I don't think it's that simple. I’m highly unlikely you are, not in the sense that I think that everything is emergent, [because] we can't plan anything; but oftentimes we exaggerate the amount of order that we can bring about by design. And I think that's what (that's one of) the reasons, for example, that the Constitution in the United States, right, [shows] how government has actually unfolded. And what the words of the Constitution say it’s often difficult to square actually existing government with the words on that piece of paper. Depending on your own political beliefs, you might say that that's a benefit or a cost. We can argue about that, but that’s just an example, right? The natural spontaneous evolution of governing structures, regardless of what box we might want to constrain them in --- right, politics has a logic of its own, and politics --- don't really care what words we read on a piece of paper 250-ish years ago. So, I do think that there's too much emphasis on just getting the rules right and then we'll be all good with the distributists. That's not really unique to them though. A lot of people do that. A great number of people do that. And I think that a lot of our political problems today is our belief that we can do that. So I would push back on that a little bit. And I also think that policy humility [and] epistemic humility in the face of complexity --- these are all important things. We can't dismiss them and we have to realize that, --- especially when the interactions between politics and economics those kinds of institutions get very complex --- we really can't predict how any of this is going to unfold with any extended accuracy, right? Just look at inflation right now. Yeah, a lot of economists are saying that inflation was obviously going to happen following what, you know, the coronavirus pandemic. Those are the exact same people who predicted hyperinflation back in 2008, right, when from 2008-2016 the highest inflation we got was, like what, 1.8%? So, congratulations. You predicted one out of the last nine significant --- no, you’ve predicted nine out of the last one significant inflationary events. So, I’m not giving them much credit for that.
Stitzel: Yeah.
Salter: At the same time, all the smart set was like, oh, this is transitory. It's gonna go away. Supply chains --- no demand problem. Oops! Turns out there's a demand problem. So, with all these complex emergent phenomena that follow multiple institutional logics and processes, we do have to maintain a little bit of humility in the face of that. So, I think it’s about finding the right balance between what we can actually do to the rules in terms of producing the consequences that we want, while also realizing there's just going to be some of the stuff that we can't really control. And I would add economics as a science is particularly well suited to helping us understand where the boundary between those two kinds of things are; which is why I think that anyone who wants to participate in this conversation can and should be educated somehow in economics.
Stitzel: This is an excellent point to turn to sort of the next really obvious question about [what] distributism is. I think almost everybody would agree with this kind of normative premise, right? We should have widely distributed labor. People should have lots of economic power and thereby have lots of political security and influence. It should be widely spread, and we shouldn't have constant [insecurity]. These are great things. I don't know who I’d be interested in meeting [with] somebody that disagreed with me on these kinds of things, right? This would be, I guess, some kind of elitist philosophy. I don't even know what they would call that. But how do you how achieve that if [it isn’t] --- you're not right, you said this is not --- capitalism but it's also not socialism? How do you implement this effectively if you're going to actually have rules, regulations, and the political process [of] institutional impact?
Salter: In many ways that's, sort of, the black box of distributism. They pay the least amount of tension comparatively to --- O.K., you've sold me on your vision. What concrete steps do you do now to bring about your vision? Belloc in his writings talks a lot about graduated taxes. He would like to tax anything he doesn't like. You know, big business --- tax it. Having more than one store location --- tax it. Corporate income above some minimum --- tax it. You're a landlord who doesn't live on your own land --- tax it. So, he's kind of a blunt instrument guy. He's very much O.K. structuring the regulatory code and the tax code to be against bigness in all of its forms. Chesterton --- because he's less analytic and frankly more poetic and paradoxical in his writings then Belloc --- hardly at all talks about policy. He's more concerned with strengthening the family through cultural means. Now he doesn't say politics is unimportant. He acknowledges politics is important. He says that we can't do this without politics. But he also says politics by itself is going to get us nothing. If we just try and go all in on a political project, we're just gonna we're setting ourselves up for failure. We have to actually convince people that this is the vision of a society that they want to live in. And that vision has to be founded upon the family. The family is the ultimate non-governmental [and] non-economic institution that undergirds both markets and politics. You can't have a humane economic order without a strong Christian family. You can't have a humane political order without a strong Christian family, right? His understanding of family is, of course, informed by the sacrament of marriage and all those things that Christians talk about, especially Catholics. So, their vision is on the one hand an interesting mix of blood instrument --- just taxing and regulating we can get rid of the stuff that we don't like --- combined with this deep appreciation for other mediating institutions that we really don't have any good idea of how to create once they atrophy. Once the family has weakened, how do you restore it once civil society has weakened? How do you restore it, right? What policy leverage you pull to get all those Elks Lodges that closed over the last 50 years to open back up again? I don't know. Can you even do it? And honestly, this is the most frustrating part. It's understandable because it's also the hardest part. Whenever people are engaged in this reconstructive-normative-ethically-loaded project, they want the world to look more like it did (in some ways) in prior years; and so in other ways they wanted it to look like something that's never existed before. So, it's a beautiful blend of traditionalism and romantic optimism about the future in many different ways; which necessarily means that in terms of how do we get there from here, boy I don't know. We need a map, and we're not even sure how to draw one.
Stitzel: This I would call emergent order though, right? So, your Hayeks of the world, they're talking about emerging, or they’re talking about the individual. But I think there's, [and] this applies very well to the family structure and the way that orders those things. So, when you have choices that are made at the in the family level --- and those things that you said, these erode. And when those things atrophy, those are the kind of things that then cause the downstream consequences that you're pointing to later that are problems, right? It's human action. But you didn't design that as a human family. You just made a particular set of choices. Talk a little bit about where distributism would fit with, sort of, like individualism and classic liberal thought, versus -- you know, I guess it would be --- communism and, like, the good of the community, just, sort of, as like a philosophical or political thought.
Salter: Sure. Both Belloc and Chesterton describe themselves as liberals in the classical sense. That's how they saw themselves. Sometimes their actions or the political movements that they flirted with weren't completely in line with that. I’ll be frank. On occasion they played some rhetorical “footsie” with extreme right-wing corporatist movements, right? Movements that we would now say in retrospect more closely resemble fascism. So, I’m not going to say that these guys are perfect, or that they always exhibited the best prudential judgment. But I would also caution against dismissing them completely because of that. They were never, like, on board with those movements. They were occasionally not as hard on them as they should have been. In terms of their own politics, I think it makes sense to call them fellow travelers of the liberal tradition. In some ways, it's hard to classify them because their normative lodestar is Catholic social teaching. Catholic social teaching is not liberal or conservative or socialistic or communistic. It's none of these things. It defies all these classifications. If I had to put a label on it, it would be personalist communitarianism, right? An extreme emphasis on the dignity of the human person, where it's understood that to be a person is to be a relational entity. I can say I because I can say thou. You can say thou because you can say I. We exist in relation to each other. And it's those communal relationships in which we practice the communion of love --- agape, right, in the Christian tradition --- that we actually find our most perfect expression of ourselves. And so, I think that this movement in many important ways just defies conventional political classificatory labels. A lot of times people will look at this and say: oh, this was a quest for a “third way” between free market capitalism and socialism. And they say that because, O.K., on the one hand distributists didn't want to get rid of private property. So they’re not communists or socialists, but they didn't like the free market. So they're not, you know, lazy if they’re capitalists or call it free enterprise if you want. It's true that they disliked both of those poles, but that doesn't mean that you can situate them in the middle of the pole, right? That would be like halfway between hot and cold is lukewarm. And the distributists are anything except lukewarm, right? They're more engaged in, like, a tight rope balancing act. It’s much more on that end of the spectrum than any sort of, oh, I’m, you know, split in the middle on this one. I would want to put it outside of those boxes, because a lot of times our political terminology focuses on what kind of policies do you want in terms of outcomes; whereas at least as much the distributists were concerned with who decides. Who decides, right? It's less about what the choice is. It's who's empowered to make the choice. We debate, you know, economic policy in the United States today what should the top marginal tax rate on corporations be. The free market answer [is] it should be low. The progressive answer it should be high, right? The centrist answer it should be somewhere between low and high. The distributist answer would be something like what if we didn't answer this question in Washington? What if we answered this question at the state level or even more local than that and allowed people to sort by jurisdiction, right? Now you would need to moderate that with their idea that you would want to, you know, sort of, tilt the playing field against companies or something like that. But it nonetheless remains true that I see distributism as an attempt to escape from the box, that even in the early 20th century existed to, like, pigeonhole people as, you know, conservative or liberals [as] we would call them, right? Of course, liberals mean something different in the United States than it did in England and the continent, right? Over there, the word liberal means more nearly what we mean here by libertarian. So, there are some interesting terminological differences. And I wouldn't put distributism nearly as comfortable on the spectrum. I would say that it's a way of trying to escape that overly oppressive typology and that overly constraining duology.
Stitzel: I think it's important to add to that argument, right? So, if you don't have formal econ education, [then] you probably never run across an idea like tabu sorting before. And to me --- and I think the field sometimes under undervalues that --- like, that's a neat thing that econ theory talks about. But that’s literally, like, voting with your feet. I think you do top marginal tax rates being decided at a county level or something is excellent, right? Because then you will literally get different distributions of people in different places doing different things because they have different valued. So, I’m a huge advocate of that. What I was gonna ask you --- but, you know, you pretty well covered this beautifully, you know --- where does distributism fit in the current discussion? And I mean, I think you said it right there. Just kind of get us outside of the box of decentralization. So, I need to bring this in for a landing, because you've been so generous with your time. And I’m trying to ask you a question. I think you won't get asked if you're interviewed about distributism in the future with your new book coming out. I’m sure you will a bunch more times. There are some economists that make a very interesting point that has a lot of intuitive appeal. And I just don't know how I feel about that. And this is Mike Munger in his book Tomorrow 2.0, which I also highly recommend, [which is] another short accessible book. He makes the point in there [that] we don’t want the good, [but] we want the service that it [provides]. I don't want to own a hammer. I want to be able to put nails in the wall to hang pictures when I need them. So, other than maybe --- I shouldn't say other, because I don't want to deprive you of the best argument if you're a distributist, you know. How does a distributist approach that? Are they only approaching that through [the idea of that], sure, but you need to own productive things in order to; because there’s a lot (there's a there's a way) in which that idea just makes a lot of sense to me. Does ownership have its own kind of value? What would distributists say about that?
Salter: They would say that it does; because if you have that background in Catholic social teaching, there's not this neat, clear division between work and choices and tools. These things, sort of, flow into each other. And ownership is just as much a mentality or way of living. This idea that these things I am a steward over, and it is my job [and] my vocation to use them well in the service of God’s plan for me and my family's life. And that necessarily means that there's going to be some small corner of creation where I get to be an artist, right? Because all people who create are artists in some sense, right? You don’t have to necessarily use clay and paint. You can use wood. You can use nails. You can put together circuits. You can do whatever in terms of building things with that which is yours, as long as we participate in that creative enterprise, and put our talents to work. We call ownership the social space in which a pro-work sanction for your vocation is supported. Ownership is the community's recognition that this sphere of existence is properly for you and your loved ones for the formation of yourself as a human person, right? We are our own most important projects. And for distributists, it's impossible to separate that way of looking at the human person from what we happen to do in the market, right? As economists, we're used to thinking about it as, you know, we pick whatever our comparative advantage is. [and] that's going to get us the most income for the least amount of time sacrificed. And then we can go and play for the 16 hours of days that we're not at work or whatever. That way of looking at it is not going to fly for a distributist, because they say you're leaving out anthropology. You're leaving out the kind of thing a human person is, and what it means for a human to flourish (qua-human-person as a human being) as God intended. So, yes. I think that there's some analytical value in saying look, what we ultimately want from our tools is the stream of services we provide. The book that you mentioned was talking about the sharing economy as a way of reducing transaction costs, [in order] to reduce excess capacity, right? So, if I’m not using my hammer, [then] I can rent it out to somebody who wants that stream of services, right? Now that's all well and good. But I don't think it's correct, either on distributist grounds, or just on the grounds of the theology and anthropology that I accept to say that all we care about is the stream of services and then that's that. I think that there is a more-richer [and] more-vocational notion of what we're doing with all of this. And I think there has to be, because we were created by God to be fellow stewards over creation.
Stitzel: My guest today has been Dr. Alexander Salter. Alex, thanks for joining us on the EconBuff.
Salter: Lee, it's been wonderful. And if there are by any chance any Eastern Orthodox Christians listening to this podcast --- Kalo Pascha!
Stitzel: Thank you for listening to this episode of the EconBuff. You can find all previous episodes on YouTube at EconBuff Podcast. You can check out our website at www.econbuffpodcast.wixsite.com. You can contact us at econbuffpodcast@yahoo.com.
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