Both communist and capitalist societies have had various tribulations. Communism has been executed poorly to the extent that the very word has a negative connotation; we often think about communist countries like Cuba and China for instance and see the destruction it has caused to their society. On the other-hand, capitalism has been praised by many who do not understand the extent of the idea. Capitalism is essentially an economic system where trade is controlled by private ownership whereas Communism is the public ownership of property through government intervention; although many praise capitalism, for the sake of argument, we must agree with John C. Médaille that both communism and capitalism are flawed in order to figure out if there is a possible third economic system that is neither communist nor capitalist.
According to John C. Médaille, author of Easter and Economics, there is an alternate form of government that avoids the tragedies of communism and the shortcomings of capitalism; it is called distributism. Distributism refers to an economic system based on the ownership of property and wide distribution of materials with little to no state intervention.
Médaille hypothesizes that this is an effective economic system because he considers it to be just in a society. To accept his hypothesis is to accept his idea that economics includes ethics. The ethics which he supports includes various ideals of economics “from the time of Aristotle until the late 19th century” that Pope Leo XIII re-introduced to society in the Rerum Novarum (Easter and Economics). Pope Leo XIII supports a “just wage” and distributive justice. Médaille claims that without distributive justice there would be one of three solutions to balance the market. The solutions would be to put more family members to work, to increase government spending, and to loan with interest, all of which he claims would end in failure and grand loss. He believes that the “standard model of economics has failed us,” and that it is crucial to form a “different” system (Easter and Economics). A “different” form would include elements of current systems to allow for accurate adaptation because reliance on an obscure, “new” form of economics cannot ensure that a system will work. Therefore, a “different” economic system has elements of existing systems.
Distributism combines elements of existing economic and political systems that explicitly express the needs of society. The difference between distributism and conventional economics is that conventional economics teaches that a wage is just if there is a “free contract” —that is if the government is not enforcing a certain wage on someone. This is inaccurate, argues Médaille, because the worker has a certain limit of power that reflects upon his wage. He makes the comparison of a CEO and a line-worker; a CEO receives a much greater wage than the line worker, not because he is that much more productive, but because he is that much more powerful. For this reason, distributive justice cannot be left in the hands of negotiation, because, “negotiation will always be about power” (On Truth and Trade). As a result, there needs to be a mechanism that equalizes power and such regulations are best carried out through distribution of property. Médaille ultimately believes that distributism is the government that Pope Leo XIII suggests in the Rerum Novarem.
Médaille suggests that “power follows property” (On Truth and Trade) and in order for a society to have equal distribution of power there likewise needs to be a distribution of property. He rejects the ideas of capitalism, supporting the idea that when property is in the hands of few, economic power remains in the hands of few. Therefore, for equal distribution of power there needs to be equal distribution of property. Although this strays from the ideals of capitalism, it seems to mimic the ideals of communism. So—what is makes communism different from distributism? Whereas communism refers to public ownership of property by the government, distributism refers to equal distribution in the hands of the people. When considering how property is to be distributed, it is evident that distributism is in fact a hybrid of both communism and capitalism, highlighting the equal distribution of communism with the power in the hands of the people—capitalism.
But is Médaille himself proposing an idea that “never will be”? I believe so. When distribution of property and power is placed in the hands of the individual, it is hard if not impossible for there to be equal and “just” distribution. There are therefore three main flaws. The first is that what makes distributism like communism will cause the same failure to the prior as it has to the later. Additionally, there cannot and will never be enough information about a society to create “just” wages or “equal” distribution of property. Thirdly, distributism implies power in the hands of the people. Without a central authority, how can distributism be enforced?
In the late 19th century, a group of new economists strived to separate economics from ethics. It began with A.E. Marshall’s publication of Principles of Economics. He forced economics to become a “real” science and separated economics from what is “just”. It was then believed that society would have its best outcome if society acted in “self-interest”. As long as people have their best interest in mind, they will partake in trade so long as they are receiving what they deserve.
In this case, does capitalism solve the problems that communism and distributism aim to solve? I suppose it does, as does Robert T. Miller. In Catholic Moral Doctrine and Capitalism, Robert T. Miller suggests that “for people like us in a society like ours, capitalism is the most reasonable choice among the various economic systems we might adopt” (Catholic Moral Doctrine and Capitalism). If we agree with his proposition, we likewise agree with his definition of our society. Our society has limited resources and unlimited wants, a reason why we support the strongly protected property rights of capitalism. But Robert T. Miller suggests that capitalism is never at its truest definition—in other words, sometimes government intervention is necessary. He argues that even a capitalist desires some government intervention. But still, this is the extent to which most capitalists and distributists agree. Whereas Médaille suggests that minimum wage will help bring justice to those who are underpaid, Miller states that the implementation of a minimum wage will, “not have the intended effect” (Catholic Moral Doctrine and Capitalism). Likewise, distributism and communism both aim at bringing economic and social equality amongst a society but do not have the intended effect. Without the possibility of gathering enough information to distribute property “fairly” or to set “just wages”, distributism and communism falls short. Distributism fails more greatly than communism for the central authority who would gather the information to distribute property is undetermined, whereas in communism the central authority is the government. Again I present the case of both China and Cuba. They both formed a communist government to provide equality amongst all people; enforcing communism was not easy and on both ends people rebelled and died from starvation. Ultimately, communism destroyed both countries. If communism failed with the government enforcing the policies, than imagine distributism, where there is no set central authority who rules the distribution of property and labor!
There is therefore no need for a third form for society, for capitalism is the only solution for our particular society. As Miller suggests, “no solution to a complex human problem is perfect. Rather, all solutions have both costs and benefits” (Catholic Moral Doctrine and Capitalism). When considering communism, socialism, and distributism’s costs and benefits, it is evident that although socialism too has many flaws, it is the best of the worst. For our particular society, we thrive on the dependence of property rights, free market, and minimal government interference. Maybe with the evolution of society in ten, twenty, or hundreds of years communism will flourish or distributism will become tangible, but the matter must be put to rest until that time.
Aleman, Richard. Distributists Occupy Wallstreet. Digital image. American Chesterton Society. Gilbert Magazine, 9 Nov. 2011. Web. 07 May 2013.