Fantasia on a Theme of Hilaire Belloc
by Dr Carol Byrne
Golden goose or wild goose?
Western idealists since Rousseau have often dreamt up an earthly paradise where mankind would live in complete harmony with nature if it were not for the corrupting influences of modern society. They paint a vague, idyllic picture of a lost “golden age” (located somewhere around the high Middle Ages) inhabited largely by contented property-owning peasants all living off the land without any desire for wealth or profit. Hilaire Belloc (1870-1953), Catholic poet, novelist and historian, was so convinced of the existence of this Rousseauesque idyll that he proposed an economic theory called Distributism to bring it back.
The facts of history, however, are at variance with this utopian dream. To begin with, it presupposes that the whole of the medieval economy was sustained by subsistence farming and local, small-scale production of goods. According to this view, whatever commerce existed in those days was confined to the small tradesman solely preoccupied with earning a living for himself and his family. So it is simply assumed that there was no commercial activity of any magnitude to justify belief in a class of capitalist merchants in Europe prior to the Reformation. (We have all heard the canard that modern Capitalism was a direct consequence of the Reformation which encouraged individualism and consequently that Catholics have no business getting involved with it.)
A more balanced view of history shows that this picture of self-sufficiency and “natural” economy posited by the advocates of Distributism does not correspond to reality; for the peasant economy based on smallholdings and crafts was not sufficient, on its own, to supply the growing population of Western Europe with even the basic necessities of life. A blind spot for Distributists is the pivotal role of capital as the single most important element in the economic system due to the fact that commercial credit was the lifeblood of trade which was the primary determining factor in building up the entire medieval economy. (1) What Belloc and his followers did not realize is that sufficient wealth to support a nation even in the Middle Ages could not be generated by smallholders and small firms without the entrepreneurial factor – the ability and funds to seek new opportunities and turn them into profitable, fast-growth businesses.
Medieval Private Enterprise and the Creation of Wealth
By the end of the medieval period, Europe had undergone a commercial revolution, with Antwerp occupying the place of pre-eminence in the field as “the great commercial success story of the sixteenth century.” (2) As one of the largest cities in Europe engaged in a wide variety of industries, Antwerp had a cosmopolitan flavour due to “the presence of merchants ‘of all nations and tongues.’” (3) It is of particular significance to our study that these were not small, local businesses but large-scale enterprises requiring accumulated capital, complex organization and an international network. (4)
Throughout the Middle Ages, the English Merchant Adventurers were among the first capitalist nouveaux riches, making considerable fortunes not from local but long-distance trade by exporting goods and buying commodities in foreign lands as cheaply as possible and then selling them at home at maximum profit. In fact their personal fortunes became so great that they sought ways of utilizing their reserves of capital by lending large amounts of money to kings, princes, monasteries and secular institutions as well as making further investments in landed property. There exists historical evidence of the vast amount of credit that the medieval bankers (the first finance capitalists) and the wealthier merchants (the successful ‘big’ businessmen) placed at their clients’ disposal. It was the success of this new “merchant class” who made initial investments at their own risk that contributed greatly to the economic growth of the Middle Ages. Although all these operations were transacted with an eye toward calculated profit, they benefited the community: large-scale commerce brought an increased supply of foodstuffs to the townspeople and provided the craftsmen with some of their raw material, while the capital accruing from it, as we shall see later, kept the whole economy afloat. (5)
Let us consider a few more salient points about the feudal system which Distributists tend to ignore:
• Ownership of land was controlled by a minority of lay and ecclesiastical proprietors
• The landlords, whether ecclesiastical or lay, also had control over the principal means of production – mills, granaries, mines, forests, rivers etc. – and therefore over the local economy. They made long-term profit-making investments in a large range of industries – iron-working, lead mining, tin extraction, (6)wool, tile and glass manufacture, quarrying, shipbuilding and shipping expeditions
• There was a large social and financial gulf between the masters of large-scale enterprises who ran the centres of manufacture and raw materials and those who worked for them
• A large proportion of urban workers did not own their own means of production, being unable to defray the costly initial investment, and therefore had to pay heavy rentals for looms or frames; some journeymen could only purchase the most basic and inexpensive tools and others could never aspire to owning their own workshops or gaining admission to the franchise (for which a prohibitively high fee was often charged)
• Numerous small-holders of 13th-century England depended for their survival on sources of income additional to their own agricultural production as well as on work done by wives and children – families often only managed to feed and clothe themselves with all their members being breadwinners
• As long as methods of production were primitive, agricultural workers were necessarily tied down to exhausting manual labour from dawn to dusk. Whenever they could do so with impunity, many peasants fled their manorial bonds
• Not all serfs could afford to pay their feudal dues and support a family, so large numbers of younger sons were forced to leave the homestead, swelling the ranks of landless men (the so-called déracinés) seeking new means of livelihood. Some became vagabonds, wandering from abbey to abbey and living off charity or hiring their services for seasonal work, but many risked their fortune as Merchant Adventurers in the burgeoning maritime commerce, notably in the ports of Italy and Flanders and also elsewhere in Europe.
• There was a great deal of poverty in the later Middle Ages, which was alleviated to some extent by Poor Relief and charity from ecclesiastical and private benefactors (7)
It is only by leaving all this out of consideration that Distributists have rashly generalized from conclusions that are only partly true of the Middle Ages. In the face of such clearly established facts, it would be wrong to attach any credence to the Distributists’ notion that commercial Capitalism came into existence only after the Reformation or that poverty was the product of the Industrial Revolution.
The revolutionary nature of Distributism
As the chronicles of history have shown that the desire for an ideal commonwealth goes hand in hand with revolution and the destruction of the existing order of society, we would do well to investigate the premises and goals of Belloc’s utopian vision to see how they influenced his theory of Distributism.
One of the best kept secrets of Belloc’s biography – at least from the Catholic Distributists’ point of view – is the fact that he had a life-long attitude of support for the French Revolution, both the historical event and the political principles that led to it. In an interview with his biographer, Robert Speaight, just a few weeks before he died, Belloc was asked, “Did the Revolution accomplish more harm than good?” He replied that it was necessary. “Otherwise society would just have withered up.” (8)
Anyone who doubts where Belloc’s sympathies lay, should read his book on the French Revolution published in 1911, where he describes himself as “a Catholic and in political sympathy strongly attached to the political theory of the Revolution.” (9) The root of the problem was that he saw no fundamental antagonism between the French Revolution and the Catholic Church. After posing the question: “Was there a necessary and fundamental quarrel between the doctrines of the Revolution and those of the Catholic Church?” he followed it with an answer in the negative that should shock the followers of Archbishop Lefebvre, by asserting that there is no historical, logical or theological reason for believing that the Revolution is “a necessary enemy of the Church.” (10) In fact he regarded its principles as “universal, eternal...and true.” (11)
Belloc took his “doctrine of the Revolution” from the vision of Rousseau as expressed in the Social Contract, which was the foremost influence on the intellectual development of the French Revolution and was a work so pernicious to Catholic social order that it was placed on the Index in 1766. Belloc, however, considered it to be one of the greatest books ever written, “one of the master-books of literature” (12) and thought that no one apart from Rousseau “had put the prime truth of political morals so well.” (13) This was, of course, a dangerous lie which should be rejected by every right-thinking Catholic; Bishop Williamson explained the correct way to regard Rousseau’s philosophy: “His political idea of the “social contract” and his educational ideas were widely propagated and highly influential, and wrong.” (14) Just how wrong is borne out by the facts of history when the French Revolution put Rousseau’s idea of democracy into practice.
As one of the “sons of Rousseau”, Belloc believed that any political community “derives the civil and temporal authority of its laws, not from its actual rulers, nor even from its magistracy, but from itself.” (15) This is the dogma of the Sovereign People that was enshrined in the Declaration of the Rights of Man of 1789. As it militates against the Reign of Christ the King, it was condemned by Pope after Pope, including, in Belloc’s day, St Pius X.
Thus it is clear that Belloc was one of those Catholic Liberals who accepted the principles of the French Revolution and assimilated them into his mentality. It is also clear that the concept of revolution as a means of achieving political change appealed to his nature. What, then, was Belloc’s message for the Distributist movement?
Like many intellectuals of his time, Belloc was virulently anti-capitalist, and viewed the industrialization of the means of production in apocalyptic terms, as an irretrievably evil system. The whole thrust of Distributism was to wage total war against this terribly evil enemy of mankind. As the aim was to deconstruct and destroy the capitalist underpinnings of industrial society, nothing short of a social and political revolution would be required for its overthrow. His close friend and fellow Distributist, G K Chesteron, put it this way:
The thing to be done is nothing more or less than the distribution of the great fortunes and the great estates. We can now only avoid Socialism by a change as vast as Socialism. If we are to save property, we must distribute property, almost as sternly and sweepingly as did the French Revolution. (What’s Wrong with the World, Ch. 3)
Belloc’s vision of a planned society and a planned economy was meant to be a return to the Middle Ages, though how this could be realistically achieved was beyond his or anyone else’s comprehension . The object of his system was to bring about what he described in The Restoration of Property as “economic freedom.” The general principles of Distributism as conceived by Belloc can be summed up as follows:
1. Central to Distributist theory is the attempt to criminalize a basic and legitimate freedom by making laws to prevent the most efficient entrepreneurs from expanding the sphere of their activities. This would be accomplished by restricting the amount of productive property a land- or factory-owner could turn to his own financial advantage
2. modifying the credit and taxation systems (credit must be removed from the control of the financiers) so as to increase opportunities for the “small” businessman and produce large numbers of independent and autonomous shopkeepers, farmers and craftsmen. The idea was to shift the pattern of ownership so that most people would have some property and there would be neither plutocrat nor pauper.
3. emancipating the workers from what Belloc (and Karl Marx) termed “wage slavery” i.e. making them their own bosses so that they would be financially independent of capitalists who own the means of production.
4. Everyone would live in villages or in rural locations, while peasant farmers supplied food for local consumption, and there would be guilds regulating the supply and sale of mainly handmade goods so that all competitiveness would be eliminated.
The totalitarian roots of Distributism
The core of Belloc’s view was the primacy of revolutionary political action in the reconstruction of society, and his affinity with Rousseau’s theory of the General Will – to which individuals would have to give up their rights (redefined as “selfish” individualism) – indicates that Belloc’s view was characterized by profound totalitarian instincts. This is confirmed by his biographer who avers that, in Belloc’s world view, political power was “something to be seized…and centralized to the highest point of efficiency.” What would that mean in practice for the way in which a Distributist State would be organized? Two likely scenarios, based on empirical evidence of totalitarian regimes, are:
1. Just as Rousseau in his Social Contract envisaged authoritarian figures who would penetrate and control all aspects of public and private life to ensure that everyone toed the party line, so Distributism, if it is to work, would require economic planners to demand total conformity on the part of the people. (This gives the lie to the story line that under Distributism the people control their own work and the means of production.)
2. Once the legislator is granted, in principle, the right to limit people’s means of production so that all may have a “more equal” share, the point at which the limits are set becomes a matter of subjective judgement. If the law that creates and disposes of property can take one step toward equality, why should it not take two – or more? Belloc himself may not have gone so far as to advocate absolute equality, but the lessons of history have shown that wherever equality becomes a political issue i.e. wherever the egalitarian passions of the masses have been aroused à la Rousseau, the hierarchical structure of Christian society is eroded and replaced by a fratricidal struggle for more of that ever-elusive ‘equality’. After all how many people are really satisfied with their status in relation to others?
The ‘E’ factor
And so we are faced with the ‘E’ factor – envy in relation to equality. It is common knowledge that in the ordinary circumstances of life it is not what people lack that chiefly troubles them, but what others have. The envious are never satisfied with equality; they secretly yearn for superiority and revenge by depriving others of their goods – whether it is capital or real estate, social status or privilege or merit of any kind. Few things are more valuable to a politician than people’s envy of the “filthy rich”, which explains why envy-mongering has been the path to political power for demagogues who made full use of the Evil Eye, like Lenin who incited the people against the rich bourgeois, Hitler against the rich Jews and the Ayatollahs against the rich West.
This can be easily applied to Distributism which is based on criticism of industrial Capitalism as the cause of poverty and all social miseries (whereas not a word is mentioned in denunciation of the French Revolution which was the major contributory factor to the evils of society.) Nor is there ever the least admiration or appreciation for the great intellectual feats of science and the ingenuity of those exceptionally gifted inventors (not to mention the personal investments of the entrepreneurs) that have made possible our standard of living today. Millions of people have improved their lot by benefiting from the creativity and entrepreneurship of a few. But by a curious paradox, the increasing wealth of capitalist nations is to be deplored by Distributists because it makes the rich richer, even though its effect has been to lift whole populations out of poverty.
Socialism by any other name is just as bad
There is no doubt that Belloc wanted the power of the State to be used for the common good, ensuring property for all, and saw compulsion as the only means, as he explained in An Essay on the Restoration of Property:
There must be some official machinery today for fostering the destruction of small, widespread property by large owners: and the effort at restoring property will certainly fail if it is hampered by a superstition against the use of force as the handmaid of Justice. (p. 38)
But however high-minded and well-intentioned his plan may be, it suffers from internal contradictions which make it unworkable. The chief inconsistencies of Distributism can be briefly enumerated:
• Any distribution of property involving the whole of society could only be accomplished by massive State intervention
• When it comes to actually curbing production, restricting markets and ensuring that property is more equitably distributed, it is only a Socialist State (to which Belloc was opposed) which would have the coercive power to do so
• The government is the only agency that has the power to outlaw (i.e. regulate) competition
• As coercive measures would be needed to introduce Distributist policies, such States always degenerate into corrupt and tyrannical regimes in their bid to enforce “fairer” policies – all that is required from citizens is to give a blank cheque on power to their leaders who proclaim themselves to be the “vox populi”.
It is true that Belloc never advocated the socialization of private property, and that he wanted to preserve it among families. Nor did he propose to confiscate the property of the rich without compensation and redistribute it among the poor. But that is of little significance for economic freedom if the means of production, i.e. its use and disposal, is taken out of private hands and placed under government control. After all, a fundamental characteristic of the fascist State is to allow nominal private ownership and control of property as long as the means of production are used for the ends ultimately dictated by politicians in charge of the economy. That is where Distributism is heading.
Belloc himself came belatedly to realize that it was all a fantasy, but his grand collective project to reorganize the economic system continues to appeal strongly to those of a Socialist turn of mind. It was sufficiently vague and lacking in concrete details to allow the movers and shakers of a certain type (16), once they got their hands on the legislative machinery, to implement draconian measures with a dangerous fascist potential.
Just as a two-tier system operates in any Socialist society, Distributists come in two types: tigers and pussycats. On the one hand there would be the inner elite (tigers) or influential subset of the general population who would plan the economy and “understand” exactly how everyone should live, and on the other hand the rest of the population (pussycats) who would have to be moulded into the politically correct view. Of course, there would be no room for dissent in such an arrangement. The tigers would see to it that no criticism of the system be tolerated – anyone advocating free market Capitalism, for instance, would be regarded as having extremely bad motives indeed, a true enemy of the people. In place of “capitalist” money as the medium of power, goods and services would be apportioned according to the subjective judgement of the nomenklatura in charge of the Distributist State. In such a system it would also be easy for political power to take the form of personal influence and political connection – precisely what happened in the Soviet Union and other Communist countries where the privileged few in the workers’ paradise enjoyed a “more equal” distribution than the toiling masses.
Underpinning the ideology of Distributism is the idea of “wage-slavery”, a term used by Karl Marx to indicate the relationship between what he, in opposition to the Church, saw as two warring factions – capital and labour, the bourgeoisie and the working class, the owners or managers of the means of production and the employees who sell their labour for a wage. Because it is the former who give the orders and the latter who take them, Marx insisted that capitalists have “despotic” power to exploit workers and reduce them to “wage slaves.” So he demanded the abolition of Capitalism as an economic system. With this emphasis on resentment and hatred of the rich, Marx’s philosophy appealed to the darkest side of human nature, and encouraged social revolution.
It comes as quite a shock to Catholics to discover that Belloc, while rejecting Communism, shared this central aspect of Marx’s economic philosophy – the elimination of the employer-worker relationship so that “wage-slaves” can be free to work without having to sell their labour and submit to the authority of a boss in order to gain a livelihood. He stated: “But the odds are against a reconstruction of economic freedom in a society which has long acquired the practice and habit of wage slavery is difficult beyond any other political task.” (17)
When Belloc argued that Capitalism was re-establishing feudal servility on economic lines, he was referring to the relationship between the worker and the employer. It was not just servility to the State (which every Catholic should reject) that he condemned as slavery, but, according to him, no one could be free in the contemporary economic system “living by another’s leave.” As for the status of the propertyless working poor vis à vis the capitalist employer or corporation, the “dispossessed masses” he refers to were already, thanks to the developing economy and capitalist enterprise, on the road to the wider ownership and greater prosperity of modern society.
To show how far removed Belloc was from true Catholic Social Teaching, we recall the words of Archbishop Lefebvre who condemned those who called for “independence of the worker in regard to his employer; of the working class towards the bourgeois class… extending the factitious opposition of capital and proletariat to the scale of all of society.” (18)
Distributists have a fear and loathing of big business, as if ‘big’ is intrinsically evil and ‘small’ always beautiful. In his Essay on the Restoration of Property Belloc talks about the usurpation of ownership of the means of production (i.e., property) by an oligarchy of financiers who monopolize the market and crush the local and independent tradesman, craftsman, retailer or farmer. Here again he is borrowing the rhetoric of Marxian economics which states that Capitalism is designed predominantly or exclusively to promote the interests of a very narrow (usually very wealthy) portion of the population (a plutocracy) and to enhance the economic status of the few (an oligarchy) who own most of the resources. The fear is that the captains of industry might corner the market and charge what they like, putting the small retailer out of business and holding the nation to ransom.
But this picture, replete with the postulates of historical materialism, suffers from a Marxist bias. First of all, the economies of advanced countries in the West are concerned with financial growth (a moral imperative in an expanding population.) The dynamics of free market Capitalism ensure that there is enough competitiveness for prices to remain within the grasp of consumers, and that no one firm controls enough of the whole market to be able to set its price indefinitely – those businesses which succeed are the ones that produce a better and more diversified product at a lower price. If any business tries to charge higher prices than its competitors, it will lose all its business to competition; as soon as it tries to undersell its competitors, they will have to reduce their prices to keep their customers. These are the powerful counter-tendencies and self-correcting measures which act to prevent the formation of a general cartel, as Distributists fear.
Large firms backed by the accumulation of capital are essential to the functioning of any developing economy. Without their buying-power and facility for mass production, vital goods could never be manufactured in a cost-effective way so as to reach whole populations. For example, with the discovery of new agricultural technologies, food production has increased much more rapidly than population, enabling millions to stay alive who would otherwise have died of starvation. Similarly with improvements in technology – the Wright brothers’ project would not have taken off the ground without Boeing, Lockheed and other airline companies to develop it for public transport; and the medical breakthroughs in drugs, vaccines etc. invented in universities and small companies could not have reached worldwide proportions without the expensive resources provided by large-scale pharmaceutical companies. In short, it is only the big firms that can turn innovations into products which ordinary consumers (not just the wealthy) can afford to buy or use, surely a benefit to mankind.
Another advantage of big business is that ownership of such enterprises (and profits from them) is widely dispersed among many shareholders, often including some large institutional investors (insurance companies, pension funds, universities, religious bodies, charitable foundations, and the like.) Their benefits accrue to individuals and to society as a whole. Therefore terms like ‘oligarchy’ and ‘robber barons’ are misplaced as a description of the few who become mega-rich in the process. Their wealth is always a source of benefit to communities whether in the form of taxation, job creation, investment, philanthropy or their personal expenditure. Apart from possibly taxation, none of these benefits would be generated by Distributism whose arbitrary controls would deprive investors and entrepreneurs of the freedom and incentive to use their property in the most efficient and profitable ways. So society would become poorer under Distributism. A small Wealth Pie brings fewer goods and services, long queues in the shops, stagnation in development, with resultant deprivation of essential commodities (food, hygiene, health care etc.) – not a good idea if you want a long and healthy life above the barest minimum of subsistence.
Big business v Mom and Pop shops
A situation often cited by Distributists is that of the corner shop being put out of business by the large chain store. Putting sob-stories aside, by what principle of justice should neighbours be constrained to purchase goods locally at a higher price than in the supermarket? Whose interests should be served first – the consumers’ or the inefficient retailer’s, the large number of workers in the bigger enterprise or the family shop that operates its own single-seller “monopoly” prices in the local area? Where neighbours are willing to pay more for convenience, corner shops survive with good reason because they fill a need. But experience shows that most people prefer to take a trip to the large supermarket whose superior buying-power allows customers to save money and boost their living standards. The alternatives for the small shop-owners (to move elsewhere or find employment with a bigger firm) are unacceptable to Distributists as demeaning and inhumane “wage-slavery”, even though their living standards would be enhanced by the reduced prices of commodities in the competitive market.
There is nothing historically unusual about inequalities between big and small businesses. In the Middle Ages, the big landowners, including monastic houses, who were able to dispose of very large amounts of wool produced on their demesnes, usually made wholesale contracts with export merchants who in turn made lucrative deals to get the most possible out of buyers on the continent. And what happened to the medieval Mom and Pop merchants who could not produce goods in larger quantities or deliver them to distant ports? They could not compete with the politically dominant “cloth barons”, and many found themselves extremely disadvantaged. (19)
The “inequities” of the medieval economic system
Distributists whip up anti-capitalist feeling by urging us to escape from the iron grip of so-called commercial monopolies and banking oligarchies. It is a major irony in Belloc’s outlook that he advocated a return to the medieval Guild system as the remedy for monopolies and oligarchies. For it was the Guild system par excellence which promoted monopolies, creating in the process highly oligarchic structures. Historical evidence shows that the Guilds acted to ensure their members could earn monopoly profits from trade by crushing all scope for initiative and all possibility of competition, internal and external. Each guild, whether butchers’, bakers’ or candlestick makers’, managed its affairs for the protection and profit of its members by setting prices, wages, hours of labour and numbers of workers, restraining the initiative of the more enterprising and banning advertising. However, it is important to keep in mind that the Guilds were not wholly independent, but were subject to control by the municipal and central authorities.
The opportunities for economic and political collusion to the detriment of smaller groups in this system are obvious, and can be seen to full effect in the struggle between the London and the provincial merchants for control of medieval England’s prime exports, wool and cloth. The trade was eventually dominated by the Merchants of the Staple who obtained export concessions from the monarch in exchange for fees, a tax called the ‘maltôte’ and a guaranteed financial loan on their profits. Thus the English Kings furnished themselves with a lucrative source of income and instituted the wool staple (an exclusive centre for commerce) granting the merchants a royal charter for complete monopoly of exports. (20) This meant that the wool and cloth export was in the hands of small groups of rich monopolists who formed the Company of the Staple and received many civic and political favours. Commerce was organized around the woof and weft (or rather the warp) of their interests. There were even multiple monopoly takeovers, e.g. when the already wealthy London Grocers’ Guild (then called the Pepperers) dominated the wool and cloth trades, and profited not only from this double commerce but also from their ability to import goods from overseas. (21)
Similarly, there is plenty of evidence that merchant oligarchies and super-rich dynasties ruled the political roost in the Middle Ages. In 1315, the Venetian Golden Book of the Nobility listed the names of the most influential families in the city, allowing them membership in the Great Council and disenfranchising all others. One only has to think of the merchant-banking organizations bearing the name of single families – Medici, Lombard, Frescobaldi, Bardi, Peruzzi for example – that were in control of commercial companies and enjoyed great political power and wealth. (22) Not only did they control their own governments, but they had foreign kings and rulers in their thrall by control of the royal revenue. (23) First these family-owned banks exercised a private monopoly on the production of all the important commodities (for instance salt, wool, cloth, iron etc.) which were produced only under royal licence and taxation, and then they extended their political power by ‘privatizing’ the royal functions of governments as well.
We can also cite the Knights Templar Bankers who established financial networks across the whole of Christendom, making them the world’s first multinational corporation! They invested their immense wealth not only in land (e.g. they bought and owned the whole island of Cyprus), farms and industrial pursuits (e.g. financing the building of Gothic cathedrals), the shipping industry (they owned their own fleets) but also in the Pilgrimage industry which brought huge revenues to the Church and created jobs for workers like innkeepers and ferrymen. The Knights also arranged safe transfer of funds for international and local trade, and loaned money to kings, emperors and princes, bishops and entrepreneurs alike. In fact, Templar wealth was so great that it helped shift the balance of power in medieval Europe from the feudal lords to the “merchant class”.
The myth of economic freedom
It should now be clear that Belloc was on a wild goose chase when he proposed a return to the “economic freedom” that prevailed in Europe for the thousand years when it was Catholic, where everything was supposedly small and local and no one’s livelihood depended on a wage. He envisaged Distributism as a cordon sanitaire to halt the advance of industrial Capitalism with its division of labour and its dependence on the credit and banking system. But he overlooked the fact that the increasing prosperity of the Middle Ages was due to investment, credit and risk-taking in which the banks played the decisive role in sustaining the national economy.
The following quote shows Belloc’s misplaced criticism of modern bankers who provide financial services to the world’s corporations and institutions:
The bankers can decide, of two competitors, which shall survive. As the great majority of enterprises lie in debt to the banks-any one of two competing industries can be killed by the bankers saying: “I will no longer lend you this money”....This power makes the banks the masters of the greater part of modern industry. (24)
But if banks did not exercise such discrimination, they would be guilty of irresponsibility to their customers; credit lines available to the bank would be cancelled and its share price would plunge, to the detriment of many. It was Belloc’s view, expressed in The Servile State, that the mass of small owners would have provided the accumulation of wealth for material prosperity “without the leave of the bankers.” This ‘grand narrative’ (he was, after all, a gifted story-teller) which casts industrial and finance capitalists in the role of enemies of mankind and proposes medievalism as the remedy, is not only socially irresponsible but historically false. History has shown that there has never been a society whose economy was based simply on small enterprises in agriculture and crafts that provides anything more than a primitive standard of living for the majority of its population.
We have seen how the merchant banking elite has always exercised hegemony throughout the Middle Ages and could decide the destiny of whole nations and towns, let alone industrial companies. It was a time when the Money Masters enjoyed an even greater financial monopoly than they do in the highly competitive modern era. Money played a significant role in the sense that everyone depended ultimately for their material benefit on the accumulation of capital by a few, and that its power had a salutary effect on the economy, enabling large-scale navigation and land transport, boosting the import and export trade, and leading to the rapid growth of commercial companies. Most of the medieval working population from the peasants upwards benefited from the growth in the market by gaining from the sale of the goods they manufactured, traded or grew. From kings to workers, they were “beholden” (and grateful) to those who had access to capital and held the key to material prosperity. Even the master craftsman who owned his own premises and employed his own staff, was also working for and in the pay of the great capitalist merchant who exported the products of urban industry to outside markets. (25)
But let us not forget that none of this could have taken place “without the leave of the bankers.” The medieval bankers and money-lenders not only loaned money to impecunious kings and princes for investment in the means of production (building projects, mines, bridges, roads etc.) but also to merchants and entrepreneurs setting out in ‘big’ business. The Church, at one stage, was the primary financial power and used part of its wealth for the common good – giving charity during times of famine, helping the poor and needy at all times, founding educational establishments especially the universities, patronizing the arts and lending money to large-scale commercial enterprises. (The monasteries, too, engaged in entrepreneurial activities, e.g. the pre-Reformation Bishop of Durham invested in coal mines, the profits of which benefited Durham Priory.)
Distributists criticize the capitalist system for being based on credit (banking, mortgages, loans, credit cards etc) without realizing that these aspects of modern banking are the development of traditional methods dating from medieval times. There were many devices such as promissory notes, letters obligatory and negotiable bills of exchange which helped the liquidity of money by acting as lubricants for a more efficient market economy. (26) These were the precursors of our more sophisticated cheques and credit cards. (27)
What is not always appreciated is that, as markets expanded, medieval commerce depended for its growth on the existence of credit arrangements which allowed borrowers and buyers to pay late, so that everyone involved was caught up in a circular chain of debt. Historical records show that not uncommonly, when a merchant died, the bulk of his assets consisted of unpaid debts! (28) It is also of interest to note that the usury laws did not forbid lending capital for business purposes and receiving profits on the investments. (29)
Why should we rely on men like Belloc or Chesterton to tell us the best method of Catholic Social Action to follow? They were, of course, Catholics, but they were also idealists who had no room for practical economics that could work in the real world and upon which the lives of millions of people depend. But now their fuzzy-minded romanticism has an updated, politicized face: today’s Distributists try to convince Catholics that the key to all the ills of modern society is the economic system. The rise of Capitalism, they declare, has enabled the spread of materialism on an unprecedented scale by regulating everything exclusively in terms of unlimited material gain – and they claim to have the remedy for this problem: it is basically a question of overthrowing Capitalism, restricting the amount of privately-owned industrial production, and the world will automatically be a more equitable and charitable place. The result of such a short-sighted policy, as medieval people knew only too well, would be to kill the goose that laid the golden egg. It is one of those ironies of history that Capitalism has been instrumental in procuring many of the things Distributism originally hoped to foster but failed to do so: wider ownership of private property, greater economic participation, co-operative enterprise, etc.
One cannot fail to observe how this Distributist propaganda has cast a baleful spell on the moral perception of some Catholics, including traditionalists, inducing them to believe in its intrinsic goodness and efficacy as readily as if it were invested with biblical inerrancy. Even though they may be unknowledgeable about Economics, some people presume that Distributism is a workable system capable of benefiting mankind, not because they have good reasons for believing it, based on large-scale practical outcomes, but because others (in whose word they trust) have told them so. Distributism, therefore, is a creed that has been accepted on Faith Alone. Turning Distributism into a religion only exacerbates the problem, and does nothing to produce an objective and intelligent study of an extraordinarily complex issue.
The problem is not confined to uncritical acceptance of an unproven theory, for there are more complicated issues involved. What makes the situation more disturbing is the unjustified extension of the basic idea of Distributism – the widespread ownership of private property – into a multiform system of other ideas (anti-Capitalism, anti-banking, anti-‘big’ business and ‘high’ finance, anti-industrialism, anti-imperialism, anti-machinery etc.) all woven around the original principle. These are all part of the application of Distributism on the practical level and are being presented to Catholics by political activists who claim that it is a morally sound economic system. But, in pursuing a presumed morality, Catholics who accept Distributism on its face value unwittingly swallow the whole ideological package. Surely our Catholic religion was never intended to cause us to abandon our God-given critical faculties and lead us down that dubious path.
We have to ask: When and by whom has Distributism been proposed as an economic system compatible with Catholic social principles? This is the central, most crucial question, for on its answer hangs the validity of the claim that it is a system which Catholics could and should accept as a moral postulate.
First of all, we must note that the Popes did not even mention the term ‘Distributism’ in their encyclicals or recommend any particular economic system that Catholics must adopt – it would be beyond their personal remit to do so. Nor did they denounce Capitalism itself as intrinsically evil or recommend the destruction of the basic foundation on which the capitalist system rested. Rather they analyzed the social situation of the time as essentially a moral one. Once they had set the moral framework within which all economic affairs must be carried out, they were prepared to leave the practical details to experts in the field. The ideal toward which Leo XIII and Pius XI directed their social Encyclicals Rerum novarum and Quadragesimo anno was one that would remoralize and correct the prevailing system of Capitalism so as to purge it of its abuses.
But Distributists do not see Capitalism as capable of redemption or God’s grace as sufficient to work through it for the common good. Theirs is quite a different goal from that of the Popes. Their political starting point is the need to change the world by a radical upheaval of society, taking the principles of the French Revolution as their model. It is evident that the doctrines of the Revolution espoused by Liberal Catholics such as Belloc have now entered the Catholic bloodstream through the efforts of a few extremists working for the acceptance of Distributism. To argue against them is to encounter not merely closed minds and the cold shoulder, but moral rage. Anyone who denies Distributist nostrums is accused of being not only in error but intent on harming the workers and the poor.
The root of the whole problem with Distributism is that it sees Capitalism (and the class system) as the major obstacle in the way of creating the new society along properly democratic (read Marxist) lines. It is a diseased mentality which has introduced the corrosive social poison of envy-mongering and encourages people to entertain feelings of shame, guilt and even loathing for the material benefits that Capitalism has brought to mankind. Perhaps that is why they show no appreciation of the new ideas, inventions and machinery that were the brainchild of great inventors or the entrepreneurship that made possible the technological advances of the Industrial Revolution.
There are good reasons, based on solid historical and doctrinal grounds, for rejecting the political utopian fantasies of Belloc and the early 20th century Distributists together with their jaundiced notion of Capitalism. Not least is the hidden anti-clericalism embedded in their ideology: for they also train their guns on the temporal powers of the Church represented by her historical land- and capital-owning status which is important for her survival and ascendancy. (Belloc complained that the Church was “too rich” and as such was a major cause of and target for the French Revolution!) For Distributists, the remedy lies not with the supernatural aids given by the Church but with political action to curb the profits of the most productive entrepreneurs and efficient contributors to the living standards of all. By trying to impose their notion of the common good, which consists in the overall impoverishment of the economy, Distributists implicitly deny that the government has a duty to prevent the common harm.
We have seen how Capitalism did not mark a sharp break with the past under the aegis of the Protestant Reformation, but had already been operative in Catholic Europe for centuries, much of it carried on with the blessing of the Church. Then, as now, its proper moral use is subject to the Natural Law and the teachings of the Church. While Capitalism can be conformed to Catholic Social teaching by using its resources with Christian prudence and with an eye to the common good, morally and philosophically the system of Distributism cannot be justified. It comes from revolution and must lead to revolution. We cannot therefore attribute the origin or the dissemination of these ideas to the Church, or qualify Distributism as a Catholic school of thought.
Distributism died peacefully in the early 20th century, but has since been exhumed by certain Catholic political extremists for its revolutionary potential. Let us put it back in its box and give it a decent burial. May it rest in peace.
1. On the economic history of Western Europe, see Medieval Merchant Venturers: Collected Studies, Methuen, London, 1954 by Eleanora M. Carus-Wilson who reconstructs the general conditions and development of the economic life of the Middle Ages, using statistical data drawn from Customs Accounts of export and import trade
2. J. M. Roberts, The New History of the World, Oxford University Press, Oxford, 2003, p. 556
3. J. A. Van Houtte, An Economic History of the Low Countries: 800-1800, Weidenfeld and Nicolson, London, 1977, pp. 182-3
4. See Robert L. Reynold, ‘Origins of Modern Business Enterprise: Medieval Italy’, Journal of Economic History, Autumn 1952
5. See Henri Pirenne, Economic and Social History of Medieval Europe, New York, Harcourt, Brace and Co., 1937
6. An authentic source of knowledge about medieval mining methods comes from De re metallica (On metallic matters) written in 1556 by Georgius Agricola, otherwise known as Georg Bauer. This original text shows that mining in the Middle Ages included technological innovations such as the blast furnace, the water mill and tools for digging and splitting rock, hauling implements, drainage pumps and ventilating machines.
7. Information gleaned from Christopher Dyer, Standards of Living in the Later Middle Ages Social Change in England c. 1200–1520, Cambridge University Press, 1989 and Making a Living in the Middle Ages: the People of Britain 850-1520, Yale University Press, 2002
8. Robert Speaight, The Life of Hilaire Belloc. The Authorized Biography, New York, Farrar, Straus & Cudahy, 1957, p. 134
9. Hilaire Belloc, The French Revolution, reprinted 2nd ed., Oxford University Press, London, 1945, p. vii.
10. Op.cit, pp. 171-172. Archbishop Lefebvre consistently denounced the political principles of the French Revolution, for instance: “The Masonic and anti-Catholic principles of the French Revolution have taken two hundred years to enter tonsured and mitred heads” and say them as “the key to the “changes” in the Church.” Open Letter to Confused Catholics, Ch. 13, ‘Religious Liberty, Collegial Equality, Ecumenical Fraternity.’
11. Hilaire Belloc, op.cit., p. 1
12. Robert Speaight, op. cit., p. 130
13. Hilaire Belloc, op. cit., p. 7
14. Bishop Richard Williamson, ‘Americanism and Vatican II’, Si Si No No, April 1996
15. Hilaire Belloc, , op. cit., p. 1
16. Many modern Distributists are associated with neo-fascist organizations or have been members of paramilitary organizations, which should not surprise us, as George Orwell had observed this connection between Distributism and Fascism in “The Intellectual Revolt”, published in 1946. In his essay on “Christian Reformers”, he mentions the Distributist theories that G K Chesterton had picked up from Hilaire Belloc, and noted that “after his death a few of his disciples drifted into the British Union of Fascists.”
17. An Essay on the Restoration of Property, (1936) p. 22
18. They Have Uncrowned Him, pp. 18-19
19. For further details see E M Carus-Wilson, who states in Medieval Merchant Ventures: Collected Studies: “This industry, moreover, was already “capitalist”, the weavers and fullers being in effect employees of entrepreneurs, amongst whom the dyers were prominent.” Professor Carus-Wilson elaborates on this situation in ‘The English Cloth Industry in the Twelfth and Thirteenth Centuries’, Economic History Review, 1944. As workers in the textile industry, the weavers and fullers lost their independence when the entrepreneurial dyers, using their political influence as members of the Merchants Guild, abrogated their monopoly rights which they had held by royal charter. This meant that they were subordinated to the authority of the dyers who set earnings and established quality control standards. In London and Oxford, for example, the dyers also exercised pre-emptive rights over their weavers’ and fullers’ production by restricting their business dealings, and preventing them from taking their cloth (the products of their own labour) to the fairs and regional markets.
20. See Eileen Power, The Wool Trade in Medieval History, Oxford University Press, 1941
21. See Pamela Nightingale, A Medieval Mercantile Community: the Grocers’ Company and the Politics and Trade of London, 1000-1485, New Haven, Connecticut, Yale University Press, 1995, p. 20
22. See Edwin S. Hunt, The Medieval Super-Companies: A Study of the Peruzzi Company of Florence, Cambridge University Press, 2002
23. See Frederick C. Lane, Money and Banking in Medieval Renaissance Venice, The Johns Hopkins University Press, Baltimore, 1985. Examples of their financial hegemony are provided: “the Peruzzi bank owned all of the revenues of the Kingdom of Naples (the entire southern half of Italy, the most productive grain belt of the entire Mediterranean area); they recruited and ran King Robert of Naples’ army, collected his duties and taxes, appointed the officials of his government, above all sold all the grain from his kingdom…Between 1250 and 1350, Venetian financiers built up a worldwide financial speculation in currencies and gold and silver bullion… It was the Bardi’s representatives who proposed to Edward III the wool boycott which destroyed the textile industry of Flanders -- because by 1340 it was the only way to continue to raise wool prices in a desperate attempt to increase King Edward’s income flow, which was all assigned to the Bardi and Peruzzi for his debts! Genoese bankers largely controlled the royal revenues of the Kingdom of Castille in Spain, Europe’s other supplier of wool, by 1325.”
24. Hilaire Belloc, Economics for Helen, p. 96
25. See William Ashley, An Introduction to English Economic History and Theory, Part 2, End of the Middle Ages, Augustus M Kelley, 4th edition, June 1966. Here we find evidence that it was the wealthy entrepreneurs in the cloth industry who gave employment to the master craftsmen and their dependants, and sent their goods by the Merchant Adventurers to be sold in the Netherlands and elsewhere.
26. The Knights Templar had an international network of banks which, besides arranging for the transfer of funds for foreign and local trade, fuelled the Pilgrimage industry. When the pilgrim made his initial financial deposit with the local Templar treasurer, he was given a chit to cover the estimated cost of the return journey, including travel, accommodation and incidental expenses, so that he did not need to take money with him. At each stopping place, representatives of the Templar Bank would deduct expenses from the chit, which acted as a sort of credit card. Upon his return, the pilgrim presented his chit to the Templar who had issued it and would either receive a cash return on any balance of credit or pay outstanding debts if he had overspent on his journey.
27. The origns of our modern “fractional reserve banking” (by which a bank profits by lending more money than its equivalent in its vaults) can be traced to the medieval London goldsmiths who took depositors’ money and valuables for safekeeping in their vaults, issued cheques and banknotes, invested most of their cash reserves and printed more money “out of nothing” apart from paper and ink. As many of their transactions did not involve much movement of money or metal and were merely recorded in bookkeeping systems, they have a certain resemblance to modern arrangements whereby “invisible” transactions are recorded as figures on a computer screen.
28. Christopher Dyer, Making a Living in the Middle Ages Ages: the People of Britain 850-1520, Yale University Press, 2002
29. George O’Brien, An Essay on the Economic Effects of the Reformation, London, 1923, p. 70: “The usury code never forbade any transaction analogous to what we now call investing money in business. So long as the person advancing the money was prepared to share in the risks of the enterprise on which it was employed, he was perfectly entitled to share in any of the profits in which the enterprise might result.”