Dorothy Day Caucus of the American Solidarity Party A Revolution of the Heart
by Zeb Baccelli
On Monday, Kitchen Table contributor Tara Thieke attempted to bring distributism out of the Shire and into history. Today, contributor and small-business owner Zeb Baccelli shares the first of a two-part series on what distributists policies would look like today, and why moving in a distributist direction is not mere fantasy, but a tangible possibility.
Distributists want as many people as possible to own the means of their production. A farmer should own the farm, a baker should own the bakery, and factory workers should own the factory. But how do we bring this about? Anyone from a libertarian to a socialist may identify as a distributist, agreeing on the end goal but disagreeing completely on what will get us there. So answering “how?” is the key to any distributist politics. I argue that once we get past the false dilemma of government intervention, we must pursue three lines of progress: countering capital concentration, directly distributing capital, and expanding the commons.
The question of government intervention
The first disputed question between distributists is: how much should the government intervene in the economy so as to bring about the distributist goal?
This is a meaningless question. Government intervention is what every economic system is composed of! Of course the libertarian wants to say that a truly free market with all goods and services owned privately and traded voluntarily is a state of minimal government involvement. But this is an illusion. Private property itself is a government program. You own property only to the extent that the government says you do. You may claim to own your coat, but if I file suit claiming the coat belongs to me and the court decides in my favor, then the coat is mine even if you continue to illicitly possess it. Even such minor instances of private property are a government program.
This is even more clear in the case of large assets like vehicles and real estate where ownership is established directly by government in the form of title documents, and all the more so for fictitious entities such as corporations, whose very existence depends completely on the government. So a "free market" is not "free" of government intervention. Just the opposite: it is constituted through and through by government interventions. Distributists, then, should seek the most effective and just forms of government intervention to achieve their goals, and should repudiate objections that doing so is coercion, theft, or giving power to the State. The real question is: in what ways should the government intervene in economic life?
Countering capital concentration
Distributism is not "nice capitalism". It is bluntly anti-capitalist. But what I mean by capitalism is not "free markets and entrepreneurialism." That is just a market economy. Capitalism is the system where a class of people are paid simply to own the means of production. Not paid to develop or utilize capital, nor to allocate itwisely; just paid to be the person who is on some government form somewhere listed as the owner. Distributism would have all capital owned by the people who use it: by the workers, and ideally in as small and local units as possible.
But how do we dismantle capitalism without lopping off heads? Can we radically change our world without the violence and chaos of revolution? As explained above, private property is a government program, so we begin by looking at how government creates capitalism in order to see how we should dismantle it.
Any free market economy is going to tend toward the concentration of wealth: specifically and most importantly of capital. As businesses compete inevitably some will out-compete others and acquire their capital and their market share. Smaller numbers of companies continue to compete and consolidate, gaining competitive advantage through economy of scale as they go. This trend is accelerated by capitalism which demands that the consumer pay 5-10% more than the cost of production. That portion goes to ownership, which increases the owners' share of national wealth year by year. Occasionally concentration gets disrupted here and there by luck, by technological change, and by exceptionally skilled or ruinous management. Still, the overall trend of wealth concentration is inevitable and unquestionably proven by all historical evidence since the beginning of capitalism. Let's find the apparatuses set up by the state to enable and protect this concentration, and reroute them toward widespread distribution.
If you've ever tried to create a company more complex than a sole proprietorship, you've seen that the state has detailed rules about who in the partnership, LLC, or corporation has what rights and what responsibilities, and who gets what in the event of dissolution. It could just as well be written into all business law that the state and the employees must get some equity and/or profit share in any business.
I'm the founder and current sole owner of a business. I realize how much effort and risk and how little reward a founder often sees in the first few years of a company. That should be compensated. Our economic well-being depends on the entrepreneurial drive and it should be incentivized. But it does not follow that the founder of a successful company naturally "deserves" a lifetime (much less his descendant's lifetimes!) of increasing income just because his name is on the charter.
The workers who build and maintain the company deserve their share of the success. Distributists believe every worker should own the means of his own production. We could simply require that all employees get a share of annual profit, and any employee who stays at a company more than a few years starts accruing equity in the company. Couple this with increased worker protections so that employers can't just fire employees to prevent them from getting equity, and eventually the company becomes (at least to a significant degree) employee owned. In an age when unions continue to shrink, this would empower employees to have some say in the conditions of their employment while giving them more of a stake in their company's success.
For larger companies, I'd suggest they should also be partly publicly owned. Our original corporations were created by the government to provide some public benefit, such as the transcontinental rail roads, that purely private business would never undertake. There was an understanding that these corporations were to serve the public good, not just their shareholder's private financial interests.
Perhaps it's too late to go back to that form of the corporation, but we could turn the purely financial drive of corporations to the public good by having a significant part of the shares of any publicly traded company automatically go to a sovereign wealth fund. The income generated by the sovereign wealth fund would provide public goods such as infrastructure, health care, education, or direct income. A sovereign wealth fund ensures that the public benefits from the profitability of that part of the private sector most dependent on government support.
We'd also do well to consider limiting corporations' ability to own property in multiple states, and certainly in multiple nations. Part of the reason our government must to be so large is because business is so big (thanks to government enabling). By limiting the geographic reign of corporations we could scale back the level of government needed to regulate them.
States cannot stand up to national corporations because those corporations wield enormous economic power over states. They are able to play one state off of another to see who can cut regulations and taxes most, sacrificing good governance for the sake of procuring the corporation's favor. Thus ten thousand small acts of different businesses have the unintended result of growing the centralized, federal government because they are the only ones left to direct the market as the corporations require.
We now see this race to the bottom in the service of capital on a global scale. Yet there is no natural reason a New York corporation must be able to buy a factory in South Carolina, or an American corporation buy a factory in Honduras; it only happens because the state and federal governments choose to allow and enable it. Limiting corporations to smaller geographic areas would allow smaller governments to regulate them, and would open up space for smaller businesses to compete with them.
Countering capital concentration is the negative side of the distributist program. It is an ongoing necessity, but in itself it only provides the open space for widespread ownership. The ground is tilled but the seed must be planted and watered. Tomorrow I will describe how we can continually replenish an ownership society through distribution of capital and expanding the commons.
Tara Ann Thieke