13 February 2009

Towards a Just Distribution of Wealth

David Cameron’s speech at the World Economic Forum, ‘We need a popular capitalism (30 January)’, has caused quite a stir in certain conservative circles. While arguing against ‘markets without morality’, Mr Cameron stated that ‘We’ve got a lot of capital but not many capitalists, and people rightly think that isn’t fair.’ These remarks—and much else in the speech—caused Daily Telegraph columnist Simon Heffer to retort: ‘After all, those who take the risks and have the superior judgment should have the rewards: anything else is communism (‘David Cameron’s infantile economic policy is no better than socialism’, 3 February).’ What could the leader of the Conservative party have been thinking?

Many themes in Cameron’s Davos speech warrant further examination, especially as they relate to his mantra-like message of several months, ‘progressive ends by conservative means’. For now, though, it is well worth looking at the crux of Heffer’s criticism with respect to conservatism and capitalism.

In broad outline, Cameron revisits ground that had been covered in the great social encyclical on ‘the condition of the working classes’, Rerum Novarum. ‘That the spirit of revolutionary change, which has long been disturbing the nations of the world,’ wrote Leo XIII, ‘should have passed beyond the sphere of politics and made its influence felt in the cognate sphere of practical economics is not surprising (§1).’ To-day, it is the flailing financial sector that casts its shadow upon the sphere of politics. In the late nineteenth century the contending antagonists were an all-encompassing socialism made attractive when ‘working men have been surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition (§3).’ These threats from either end of the spectrum were feared for their internal logic that placed humanity in thrall to materialist ends.

For Pope Leo, the false allures of socialism ‘hold that by thus transferring property from private individuals to the community, the present mischievous state of things will be set to rights, inasmuch as each citizen will then get his fair share of whatever there is to enjoy (§4).’ But these supposed remedies would only worsen the situation of those it sought to alleviate; socialist principles were, ‘moreover, emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community (ibid.).’ Leo foresaw this would only lead to greater subjugation as man’s essential dignity was reduced to nothing more than a cog in the machinery of industry and a pawn of the State. From this perspective, the pope would have broadly accepted Heffer’s assertion that capitalism ‘is moral because it is about the exercise of free will between buyers and sellers: and few things can be more moral than allowing someone to be free. Capitalism is about the link between effort and reward.’

Far from contesting this connexion between capitalism and liberty, Cameron agrees: ‘Open markets and free enterprise are the best way to increase human wealth, health and happiness. We’re not blind to the system’s flaws but we know that at its best, capitalism extends ownership, spreads opportunity, and works arm in arm with political freedom.’ Rather, his principal adversary is ‘monopolisation, sweeping aside the small, personal, local competition in our neighbourhoods.’ Leo XIII was equally dismissive when ‘the hiring of labour and the conduct of trade are concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the labouring poor a yoke little better than that of slavery itself (§3).’

Capitalism needed its own checks and balances; contrary to the classical school of liberal economics, it was not a perfectly self-regulating mechanism. There was a legitimate role for the State in overseeing its proper—that is, human-centred—operation:

The foremost duty, therefore, of the rulers of the State should be to make sure that the laws and institutions, the general character and administration of the commonwealth, shall be such as of themselves to realise public well-being and private prosperity (Rerum Novarum, §32).

Unlike socialism—with disordered aims and ends—capitalism can be redeemed if rightly regulated, albeit with a light hand:

The State should watch over these societies of citizens banded together in accordance with their rights, but it should not thrust itself into their peculiar concerns and their organisation, for things move and live by the spirit inspiring them, and may be killed by the rough grasp of a hand from without (Rerum Novarum, §55).

One such response—in concert with Cameron’s ‘the small, personal, local’—in habilitating the unfettered market has come to be known as distributism.

Distributism’s goal is that one should be able to earn a wage sufficient to satisfy immediate needs, with enough left over to provide for the future. Instead of this surplus accruing only to the capitalist or only to the State, the proceeds of industry are distributed justly to all who had a hand in its creation. ‘The law, therefore,’ wrote Leo, ‘should favour ownership, and its policy should be to induce as many as possible of the people to become owners (§46).’ The latter proviso of desert is a requirement of distributive justice:

something is given to a private individual, in so far as what belongs to the whole is due to the part, and in a quantity that is proportionate to the importance of the position of that part in respect of the whole (Summa Theologiae, II-II.61.2, c).

An added promise of distributism is that, in theory, it promotes localism and community initiative against corporatism’s ever-increasing concentration of capital and resources. ‘It’s time to decentralise economic power,’ said Cameron, ‘to spread opportunity and wealth and ownership more equally through society and that will mean, as some have put it, recapitalising the poor rather than just the banks.’ This focus on civil society as the ‘theatre of action’ is also a concern of subsidiarity—‘the State must not absorb the individual or the family; both should be allowed free and untrammelled action so far as is consistent with the common good and the interest of others (Rerum Novarum, §35).’

Still not convinced? The benefits of the distributist model are clearer if contrasted to what happens in the process of proletarianisation, a situation referred to in Leisure, the Basis of Culture as ‘being bound to the working-process’: no living wage, so providing for one’s quotidian needs becomes a constant preoccupation; a burgeoning State with an insatiable economic appetite that renders thrift a luxury; and a life where labour and ‘just getting by’ have overshadowed the transcendent beauty, inter alia, of inter-personal relationships and self-realisation.

If this were not to become the workers’ fate, Josef Pieper wrote, ‘three things would be necessary: building up of property from wages, limiting the power of the state, and overcoming internal poverty.’

The first and second are clear aims of distributism; the third is more central to a philosophy that sees the person not as a means to an end—not a part but a whole, an absolute. It is, to my mind, a most compelling raison d’être for the free economy.

How is the elysian vision to be achieved? As Cameron said, ‘the devil is in the details’ (a commonplace that only heightened Heffer’s ire). Aristotle’s Nicomachean Ethics may be more rarefied when it asserts that ‘Mere reasoning, however, can never set anything going, but only reasoning about means to an end (6, ii)’. More distinctly still, the motto can be distilled as ‘deliberate, decide, act’. Heffer surmises that for the Conservative leader, this ultimately means that ‘All he wants is for the state to regulate capitalism more or less out of existence’; yet if the principle of State oversight is agreed as a way of redirecting the excesses of capitalism, then the question shifts to its prudent use (and Oliver Letwin’s speech to Policy Exchange, ‘The right kind of regulation (27 January)’, presents a compelling case for more insight into the complexities of the free market against administering mechanical, bureaucrat-satisfying, entrepreneurial-stultifying, rules).

Quite unintentionally, Simon Heffer may have performed some small service for David Cameron’s popular capitalism. By raising the communist spectre, he challenges the movement to sharpen its aims and to distinguish itself from a redistribution without the prerequisite of merit, which is, as we learned from the last American presidential campaign, merely ‘spreading the wealth around’, not proportionally, but equally. Now that is a concept anathema to conservatives.

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