News Archive

St. Michael the Archangel, defend us in battle...

Seattle Catholic is not affiliated with the Archdiocese of Seattle
Seattle Catholic
A Journal of Catholic News and Views
6 Sep 2002
Capitalism and Catholic Economics
   by John Sharpe

John Clark vs. Some Surprising Opponents

In the pages of the Latin Mass recently, Mr. Clark launched an attack on Distributism, maintaining rather that capitalism is the economic system that conforms to the teaching of the Catholic Church. In what follows, we will attempt to demonstrate that Mr. Clark's criticism of Distributism is either misplaced or unfounded, and that his praise of capitalism is by no means consistent with the Church's attitude, or that of Her greatest thinkers on economic questions.

Mr. Clark bases his critique of Distributism on what we may classify as two categories of observations; the first are attacks on Belloc's theory which are based on an incorrect or inaccurate representation of that theory, and the second are attacks on the Distributist vision which are themselves based on erroneous principles.


Misrepresentations of Belloc's intent: a new theory.

The first of Mr. Clark's arguments that can be classified as misrepresentations of Belloc's theory is the assertion that Distributism is a "new theory" to which the world was introduced by Belloc with the 1936 publication of Restoration of Property. Actually, Belloc used the term Distributism in his 1924 Economics for Helen; and therein he places Distributism in historical context by admitting that "Distributism" is the rather awkward term coined to explain what had been, throughout the history of the civilized West, a common phenomenon: the existence of widely distributed productive property, in the form of land or a trade or craft and the tools that go with it, privately owned and worked by individual families for the provisions of their basic needs and necessities. In the Restoration he explains that the transformation of society into its present form, one in which the ownership of productive property is concentrated in relatively few hands, began with

Prior to the publication of the Restoration, in his 1925 pamphlet entitled "The Catholic Church and the Principle of Private Property," he makes reference to the need to remedy industrial capitalism with the widespread distribution of property. Meanwhile, G.K. Chesterton had by then been making references to the need for a more widespread distribution of property for over 15 years. And in making such references, Belloc and Chesterton were simply following in the footsteps of the great Catholics of the Catholic Social Movement1 and of Pope Leo XIII who, in Rerum Novarum (1891), hoped that there would come a time when working people could "look forward to obtaining a share in the land" (47).

The above should be alone sufficient to refute Mr. Clark's statement that Distributism is "inconsistent with the traditional teaching of the Church." But let's continue our look at the specific arguments.

Misrepresentations of Belloc's intent: capitalism defined.

Mr. Clark objects to the way in which Belloc defines capitalism, as "a state of society in which a minority control the means of production, leaving the mass of the citizens dispossessed." When Belloc says that the mass of citizens are dispossesed, he is simply referring to the fact that most citizens sustain themselves based not upon their own labor applied to what they themselves own, but rather upon what they can earn in terms of wages, by hiring themselves out to work on another's capital. This definition, which Mr. Clark calls "simplistic," happens also to be that of Pius XI: "that economic system, wherein, generally, some provide capital while others provide labor for a joint economic activity." 2

Misrepresentations of Belloc's intent: radical equality.

Mr. Clark then suggests that the Distributist scheme would make it impossible for "any one individual to have much more than any other." This is simply false. Were Distributism a revolutionary "leveling" and a socialistic denial of inequality, it would be justly deserving of blame. But the persuasiveness of Mr. Clark's critique is based upon the fact that most of us are at the mercy of his representation of Belloc's position, not having handy a copy of the actual text of Restoration of Property. A look at that text, however, dispels the myth that Distributism is an egalitarian, revolutionary and quasi-socialist scheme.

Firstly, Belloc says clearly, in a passage which Mr. Clark must have overlooked, that a variety of levels of ownership obviously form part of the complexity of normal and healthy human society:

Secondly, Belloc desires not to equalize wealth, but to protect the small farmer, the family landowner, the small craftsman, and the small retail trader. He thus advocates a scheme of "Differential Taxation (1) against chain stores; (2) against multiple shops; (3) against large retail turnover," in order to do just that. In no wise does Belloc propose (nor would his scheme produce) a system which which would make it impossible for "any one individual to have much more than any other."

In assuming that this is the case, Mr. Clark confuses the issue between wealth used for production (capital, financial or that in land, tools, machinery, etc.) and wealthwhich is immediately consumed in meeting the needs of human life. If a man, by his initiative, ingenuity, or pure luck, is able to have a business that is more successful than the next, nothing will prevent him from enjoying the added benefits of his effort or good fortune, insofar as those benefits are reflected in increased profits, higher personal income, and more loyal patrons — which will ultimately procure for him more land, a nicer home, better food, more ample furnishings, etc. But the employment of that increased wealth in expanding, Home-Depot style, to the point where that wealth is being used to shut down the independent enterprises, making them dependent upon him or eliminating them completely — such a course would be discouraged by Belloc's scheme of taxation. Belloc's program is not a radical redistribution of wealth "rivaled only by Karl Marx and Leon Trotsky," despite the useful emotional reaction which such an assertion provokes. It is not a limit on natural inequalities, but a limit on unnatural concentration.

Misrepresentations of Belloc's intent: taxation.

Under this heading we should briefly mention Mr. Clark's assertion, based on various condemnations of taxation culled from the writings of the Spanish Scholastics, that the greatest economic minds of the Church would have opposed Belloc's scheme to safeguard the small business man and small landholder. Consider three points in response:

(1) The tradition of the Church has always been to support a widely distributed property,4 and there is no reason to suspect that the Spanish Scholastics would have opposed the taking of measures to safeguard or restore that distribution. Those measures are in no way "confiscatory," as Mr. Clark claims, using a word which we may suspect he learned from Belloc in the very section where he condemns excessive taxation!

(2) As we will see later on, the Church, in her magisterial teaching, has always granted to the state the power to regulate private property, and to take necessary steps to ensure that it is defended.

(3) The citations produced by Mr. Clark which allegedly prove that Belloc's scheme would have been repudiated by the Spanish Scholastics actually do nothing of the sort: they merely imply that, all things being equal, a sovereign cannot licitly tax one citizen more than others. The context obviously assumes a case in which a king might try to eliminate his political enemies by taxing them out of existence. Such a circumstance has absolutely nothing to do with Belloc's proposals, and it merely constitutes a straw man, through which Mr. Belloc may be conveniently (if ineffectively) refuted. For Belloc himself, in Restoration, condemns excessive taxation; he says that the institution of widely distributed property is itself a barrier against high taxation; and that high taxation is itself a tool which may be used to destroy widely distributed property:

Misrepresentations of Belloc's intent: Socialism.

Mr. Clark elsewhere accuses Belloc of advocating Socialism, by referring to a statement which reads as follows: "State ownership is better, of course, than ownership by a few very rich individuals." But Mr. Clark commits two serious errors here: (1) he takes Belloc's comment out of context, and (2) he ignores the rest of Belloc's writing (both the text of Restoration and his other works) in order to make his point.

(1) It will be sufficient to point out that Belloc makes the above-noted statement in reference to a specific, limited, narrow circumstance: he is discussing whether or not it is possible to have distributed property in the case of that "economic unit which has, from the nature of the instrument used, to be worked on a large scale; the classical example is the railway system." The context of Belloc's statement — the points he makes before and after the single, isolated sentence in question — reveal Belloc's true meaning: he is clearly suggesting that ownership by the state of a very large enterprise (such as a national postal service, a railroad, or such like) is to be considered only as a last resort ( a last resort sanctioned by the Church5), and that ownership by private shareholders or a Guild is obviously to be preferred:

It could not be clearer that Belloc is a mile away from advocating Socialism, as Mr. Clark scandalously suggests.

(2) Belloc's condemnations of Socialism, both in Restoration and elsewhere, should be well-known. They should be so well known as to make Mr. Clark think twice before making such an accusation. It suffices to point out that Belloc speaks of the "Socialist fruit" of capitalism in Restoration with the same condemning language that he uses when speaking of capitalism itself, and he makes his position perfectly clear in any number of other works, not the least of which is his pamphlet "The Catholic Church and the Principle of Private Property." 6 What he thinks of Socialism was expressed therein with almost Chestertonian cleverness; nonetheless his meaning remains perfectly clear:

Misrepresentations of Belloc's intent: means of production.

Mr. Clark suggests that Belloc's vision would dictate that society consist of "millions of family businesses," and that his plan calls for a "redistribution of the means of production" which ignores the fact that not everyone alike possesses the same initiative and entrepreneurial skill. To so suggest is to miss the essential point.

As we have noted above, Belloc is not calling for some radical scheme of leveling, some smashing of factory equipment and handing out of corporate infrastructure to impoverished families in depressed economic areas. Nor does he deny, as Mr. Clark implies, that managers and leaders of enterprises which require above-average skill, effort, and energy are entitled to a larger income; such a notion remains merely a question of wages in exchanged for labor, and has little to do with an examination of how productive property may be better distributed. It is obvious (certainly to Belloc) that higher wages are justly paid for more complicated, more demanding, or more risky work. As a Distributist, however, Belloc is addressing himself to the problem of the common lot of men, which is to work for someone else for a wage, rather than for themselves for their sustenance. He is addressing the problem which Pius XII called "economic dependence and slavery." He is calling, primarily and principally, for the defense, the support, and the restoration of the craftsman, the small farmer, the small retailer. He is calling for what numerous Americans casually yet frequently hope for as consumers: a local coffee shop, as opposed to a Starbuck's; a family general store, rather than a 7-11; a local video shop, rather than "Blockbuster"; a personal hardware store, rather than Home Depot. And he is calling for what they should wish for as producers: the ability to depend upon themselves, their own capital, and their local community for their livelihood, and not solely upon their employers or the state.

In Belloc's defense, he does in fact reserve several pages for the treatment of how to handle large enterprises, which, by their very nature, would require both large amounts of capital and the direction of capable men. But his vision of how those capable men manage their respective industries is at issue, not what kind of wage they should receive for their trouble. His vision is a Catholic vision, not a social-Darwinist vision. Those large operations, he maintains, following the teaching of Leo XIII, Pius XI, and Pius XII, must be run in a manner consistent with the common good, and must serve the community by producing necessary commodities, in exchange for a fair profit, while at the same time respecting the proper economic order, which the Church has declared to be a wide distribution of productive property which helps to constitute families in a requisite degree of economic freedom and security. All things being equal, from a Catholic standpoint there is no degree of "business savvy," "entrepreneurial vision," or "economic initiative" that gives a man who runs a huge corporation the right to eliminate another small business, bearing in mind that such a business may be the means whereby one or several men, as business owners, support their families without being forced necessarily to work for someone else in exchange for a wage.

In suggesting that not everyone is capable of turning raw materials into actual products, Mr. Clark must obviously imagine that Belloc's scheme applies exclusively to the question of who owns and manages factories, industry, and large-scale corporate life (which it does not), rather than how those operations are managed and how characteristic they are of society (in comparison with the prevalence of smaller, local, more personal economic activities). Furthermore Mr. Clark must be at a loss to explain how it is that Western Europeans, before the great age of industry and business conglomeration, managed to feed and clothe themselves, unable as the mass of them were to "turn raw materials into actual products."


There remain to address three arguments advanced by Mr. Clark against Distributism. We may classify them as follows: it is anti-competitive, it restricts the use of private property, and it is in some fashion injurious to the profit motive in economic life. These are all, in general, and with room for exception and qualification according to circumstances, admittedly correct notions with regard to Distributism. The problem with Mr. Clark's position is that these aspects make Distributism conform more, rather than less, to the teaching of the Church regarding economic life. Perhaps that problem stems from unfamiliarity with truly Catholic economic ideals — a problem which we hope somewhat to remedy with what follows.

Catholic Economic Doctrine: free competition and the use of private property.

Mr. Clark suggests that capitalism, as an economic system, implies also a regime of free competition between economic enterprises. It may be surmised that the principal way in which Distributism militates against that notion of "free enterprise" is indicated later on in his article where he examines the notion of private property and its use. Taking these two ideas together, then, we may thus summarize his criticism of Distributism in this regard: "the institution of private property includes the notion that private property may be used without restriction by the owner of the property; Distributism destroys that notion by limiting the way in which owners may use their property, and it thereby eliminates (to some degree) the capitalist scheme of free competition." 7

Mr. Clark asserts that the Distributist ideal of private property is "actually antithetical" to it, because it limits how private property may be used. He then cites for us the definition of a modern professor of law, who maintains that private property includes "the right to use or not use the private property."

(1) Such a statement is so vague as to be almost useless. Should we assume that the professor means that property implies an unrestricted right to its use? Such an assertion would be surprising; one would not find it upheld in even the most liberal of societies. I am not allowed to commit murder with a knife that I own, simply because I own it, and am therefore entitled also to its use. Human laws and human institutions are limited by any number of considerations, both moral and legal, and sometimes both (as in this example). If it is correct, therefore, that even the professor would admit that the use of property may be limited in some cases, then the logic of Mr. Clark's position can be dismissed as flawed. It remains solely to consider whether or not the Distributists place such a degree of restriction on the use of private property that, according to Mr. Clark, "private ownership ceases to exist."

(2) It is unfortunate that not everyone has a copy of Belloc's fine book, because it is impossible in the short space of this article to accurately detail what kind of scheme he proposes. We have noted in a few places that he proposes to defend the small landowner, the family farmer, the small craftsman, the small retailer, from being eaten up by the larger. What he is proposing is the checking of competition to the extent necessary to reverse the current trend: the tendency under a regime of free competition — a tendency which cannot honestly be denied — towards the growth of bigger and bigger economic enterprises, at the expense of the smaller ones. Such a proposal by no means implies a stifling restriction on the use of property. Such a restriction does not even imply a limit on the amount of money that one can make, despite Mr. Clark's assertion to the contrary, through the enterprises and means of production that one already possesses. What it does imply is a restriction of the ability of a businessman to employ amassed wealth in an effort to eliminate his competitors, through outright purchase, or through "free market" competition. He is discouraged, under a Distributist program, from transforming — without their truly free consent — his neighbors into his employees.

(3) In conjunction with this objection Mr. Clark makes the rather heated assertion that traditional Catholic teaching is "trampled upon" by Distributism. Is it really?

Belloc said "that unchecked competition must ultimately produce the rule of ownership by a few." So did Pius XI:

Belloc thought that free competition was not sufficient to regulate economic life in a way that allowed the masses to be secure in their property. He thus refers, in Restoration, to the historical fact that mankind

The Popes also admitted that competition was not sufficient in regulating economic life; Pius XI said that "the right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualist economic teaching." 9 And Pius XII observed that "the demands of competition, which is a normal consequence of human liberty and ingenuity, cannot be the final norm for economics." 10

Belloc proposed to use the legitimate power of the State to regulate economic life according to the common good. Pius XI, following Leo XIII, also maintained that the role of the State in economic life was to foster the common good.

As we noted above, it is not only Belloc who sees the widespread ownership of property as an aspect of the common good, which the authority of the state not only may but must foster. Leo XIII hoped for a time when working people could "look forward to obtaining a share in the land;" 12 the Catholic Encyclopedia, under the heading "agrarianism," refers to not only the "uniform teaching and tradition of the Catholic Church on the lawfulness of private ownership of income-yielding property, whether it be named 'land' or 'capital,'" but also to the fact that Leo XIII "urged the diffusion of property as the mean between Socialism and Individualism, and that where possible each citizen should dwell secure in a homestead which, however humble, was his own." And even more recently, Pius XII has taught that

Finally, the Church, in a doctrine which Pius XI called "age-old," has always distinguished between the ownership and the use of private property; the former must be held as inviolable, and the latter as subject to the common good.

Therefore to regulate private property, in a scheme such as that proposed by the Distributists, is not to destroy the institution of private property, but to ensure both that it is implemented in society in a way consistent with the common good, and that the widest possible number can enjoy its fruits. To so regulate that institution is not to destroy it, but to preserve it:

Catholic Economic Doctrine: profit.

The last of Mr. Clark's objections which bears refutation is the accusation leveled at the Distributists that they would remove the "profit motive" from economic life, thus bringing it to a halt. He maintains that Belloc's philosophy is founded on the notion that "men must be legally restrained from owning more property than their families need for support," and that such a notion has been "rejected by great traditional thinkers of the Church."

The first problem with such a position is that no where does Belloc condense his scheme to such a neat and tidy proposition. We have sufficiently seen, up to this point, that Belloc is seeking to protect the small economic enterprise from ruin at the hands of the larger ones. His purpose is not to restrict the amount of wealth that one can possess, but rather the amount of productive property one can employ when that employment directly affects the ability of the smaller operation to survive. It is crucial to bear in mind the distinction, which we have examined above, between the simple possession of property and its use in the public sphere — a distinction which Mr. Clark seems determined to forget.

A second distinction that we ignore at our peril is the one between wealth for consumption, such as food, clothing, luxuries, and "capital" (generally speaking) destined for personal use (such as land, automobiles, etc., which are not rented but used), and the wealth of capital (strictly speaking), which is employed in order to produce more wealth and generate income. It is the latter that is used by the great corporations to "get ahead" and defeat the small businessman, and it is the latter that must be regulated if a widespread distribution of ownership of income-generating property is to survive. No one is suggesting that it is sinful to be rich (though it may be noted in passing that, compared to warnings and condemnations, praise of the rich is rather scanty in both Scripture and the writings of theologians); what the Distributists condemn is a use (intentional or otherwise) of riches which deprives smaller property-owners of their ability to generate income without having to work for a wage. Regardless of whether it is permissible or praiseworthy to be rich, we would be at a complete loss to explain, without understanding this real nature of Belloc's objection, why Leo XIII and Pius XI (to name just two) denounced so vehemently the "immense power and despotic economic dictatorship [that] is consolidated in the hands of a few." 16

A final note on this last of Mr. Clark's objections to Distributism is that the "profit motive," as it is imagined by modern economists, is a concept which is hardly acceptable to Catholic theologians.

We do well to glance quickly at the teaching of St. Thomas on the role of material goods in man's life. First, they are ordained to a specific end, which is the upkeep of himself and his family: "Temporal goods are subjected to man that he may use them according to his needs, not that he may place his end in them." 17 Furthermore, the fulfillment of man's needs does not serve its own purpose but rather facilitates the practice of virtue, which itself is ordained to the attainment of Heaven: "That a man may lead a good life, two things are required. The chief requisite is virtuous action... The other requisite, which is secondary and quasi-instrumental in character, is a sufficiency of material goods, the use of which is necessary for virtuous action." 18

Based upon these principles, St. Thomas explains the licit motives for commercial activity as follows:

The "profit motive" is licit, then, only insofar as the motive for the profit is the becoming upkeep of a household, the support and care of the poor, or as a just wage in exchange for a productive service rendered, which is good in itself.

Can it be honestly maintained that such a concept is the motive that economists have in mind when they speak of "maximizing profits"? That this is what Mr. Clark has in mind with his vague defense of the "profit motive"?

No doubt the determination of what is necessary and what is excessive in the upkeep of a household is largely a matter of conscience. No doubt that many Catholics are satisfied with a reasonable wage, which they then employ in the upkeep of their households. But the legitimate increase in income and property which results from the practice of an honest trade is not what Distributism seeks to limit. Rather it is the massive concentration of capital and financial wealth, that results from unrestricted economic competition,20 which Distributism seeks to control. It is the personal craft, the independent retailer, and the homestead which Distributism seeks to defend, by placing Home Depot, WalMart, and agri-business under reasonable economic control. If such controls militate against the "profit motive" of modern economic man, then perhaps economic man must reevaluate his motives in light of the teaching of the Church.


Distributism is broadly thought of, by its advocates, as an implementation of the Social Doctrine of the Church. It is so because it is a program that is consistent with the natural law and, because, in the final analysis, it will help man along the path to heaven rather than throw him off it.

The essence of the Social Doctrine is that society is a means to an end. The temporal common good — the moral and material goods of this life — which it is society's duty to protect and foster, serves ultimately another end: the Eternal Salvation of men.21 As a result, every law, every custom, every ordinance of the earthly community is salutary insofar as it makes man's journey to heaven easier, and is disordered whenever it makes that journey more difficult.

In light of that most important of all truths of Catholic Social Doctrine, it should be easy to see that Distributism is consistent with the Catholic economic vision insofar as it subordinates economic life to the ultimate purpose of man's life. It does not curtail the right of a man to own and use his private property; its entire program is designed to safeguard and defend that right, and to ensure that most if not all I society are able to benefit from it. But defending private property assumes that there is something to defend it against: which is the notion that private property is an end in itself, to be amassed and multiplied and owned without limit.

"The art of amassing wealth," said St. Thomas, "which is solely concerned with money, is infinite." 22 Where that art is pursued for its own sake, where it is governed by a "profit motive" which possesses no built-in limit but is rather an end unto itself, it leads simply and directly to yet further desire for wealth: "Hence he that desires riches, may desire to be rich, not up to a certain limit, but to be simply as rich as possible." 23 The incarnation of that mentality is the modern economic system which not only encourages (by its philosophy) the unlimited acquisition of wealth, but sanctions (by its practice) an expanding field of ownership by a few at the expense of widespread and distributed ownership by many. It is this scheme of things that Distributism opposes, and for which it offers a remedy. That by the Restoration of Property to the non-owning masses it might also effect a restoration of economic life in its proper place, subordinate to the real needs of man and to the just decrees of God.

1 Cf. Fr. Edward Cahill, S.J., Framework of a Christian State, Chapter 25, Article 2; see also Charles Devas, Political Economy (1891), Chapter 7.
2 Quadragesimo Anno, 100.
3 Mr. Clark must have overlooked a number of passages in this regard, for Belloc makes the point several times: "...the Proprietary (or Distributist) State neither can, nor should be, complete; for it cannot of its nature be mechanical. There will be many comparatively poor, and some comparatively rich. There will presumably be some proportion of dispossessed. But Property, and its accompaniment, Economic Freedom, will be the mark of society as a whole."
4 Cf. Cahill, Chapter 17, Article 2: "...the ideal, at which great statesmen from Solon of Athens to Leo XIII and Pius XI have aimed, is a State made up principally of flourishing and self-contained communities of small proprietors, and especially of small farmers or peasants." See also the Catholic Encyclopedia, s.v., "Agrarianism."
5 Quadragesimo Anno, 114.
6 Published by The Catholic Truth Society, London, 1925.
7 Had Mr. Clark possessed either the space, or the inclination, he no doubt could have detailed for us the other standard objections against an economic system that limits competition. Those objections can be dealt with in another forum, at a later date. Let it suffice for the present to concern ourselves with the objection he actually described.
8 Quadragesimo Anno, 107.
9 Quadragesimo Anno, 88.
10 Address to International Foundry Congress, September 28, 1954.
11 Quadragesimo Anno, 25.
12 Rerum Novarum, 47.
13 Christmas Message, 1942.
14 Quadragesimo Anno, 49.
15 Quadragesimo Anno, 49.
16 Quadragesimo Anno, 105.
17 Summa theologica, II, ii, Q. 55, Art 6, ad 1.
18 On Kingship, I, xv.
19 II, ii, Q. 77, Art. 4.
20 Both of which the Church has condemned, as we have seen.
21 "...civil society, established for the common welfare, should not only safeguard the well-being of the community, but have also at heart the interests of its individual members, in such mode as not in any way to hinder, but in every manner to render as easy as may be, the possession of that highest and unchangeable good for which all should seek" (Leo XIII, Immortale Dei (1885), 6).
22 Commentary on the Politics of Aristotle, v.
23 II, i, Q. 30, Art. 4.
© Copyright 2001-2006 Seattle Catholic. All rights reserved.