09 April, 2010

Distributism and the Possibility of State-wide Cooperative Ownership of Certain Production.

Are there some areas of production where collective ownership is compatible with Distributism? In The Servile State, Hilaire Belloc proposes that the remedy to the problems of the inequities of Capitalism are either to move ownership from the few to the many (toward Distributism), or from the few to none (toward Collectivism which is essentially Socialism). If toward Distributism, the process will be slower and more painful because it will involve the decentralization of the property into the hands of many small owners. The process toward Collectivism is easier because it is less disruptive to what already exists in Capitalism.

However, in his Essay on the Restoration of Property, Belloc also admits the possibility that certain forms of production might not readily be widely distributed because it cannot be broken up into small entities. In his early 20th century example, he opined that the process of steam power at the time necessitated central administration and limited use, but that the advent of the ability of smaller electrical power plants enabled at least some form of wider distribution of ownership as well as greater flexibility of the distribution of the use of the energy produced.
However, to the extent which there remains the existence of production that is not easily distributed widely, we must address how centralized the distribution must be and how the ownership of such production is to be determined and managed. I take for my example the drilling for oil and the production of the various oil products.

If I claim that I own the oil rights on my property, it is also true that my neighbor owns the oil rights on his. However, if I decide to drill for oil on my property, is there any way of ensuring that I do not take the oil that currently rests under my neighbor's? To the best of my knowledge, there is not. Likewise for off-shore drilling. Our current system seems to be that the State grants drilling rights to private corporations which then gain exclusive rights to the production – and the profits – of that resource.

The point is, if oil is to be considered a State resource because there is no easy way to effectively establish the wide distribution of private ownership and the right to drill for oil while ensuring that one owner does not take the oil that should rightfully belong to another, can the principles of Distributism be used to address this issue of how to effect the wide distribution of ownership without resorting to Collectivism? For example, John McCain proposed that the profits from off-shore drilling be taxed. The revenues from these taxes would be distributed to the coastal states to be used for public projects. Because the State not only collects the revenue, but also directs the way in which it is to be spent, this would not be compatible with Distributism. Are there other solutions?

In Alaska, the State grants the rights to oil drilling and production to private corporations, and then imposes a tax on the profits which represents that share of the profits to which Alaska citizens are entitled through their rights to the resources of their State. This involved a complete revamping of the laws governing the requiring the reporting of revenue to try and ensure that the private corporations didn't hide profits. At one time in Argentina, the State determined that collective ownership would be the answer to the issue and established what was essentially a state-wide cooperative company in which all of the people had an equal share of ownership and received and equal share of the profits, and those actually employed by the cooperative earned a salary on top of that. In both of these scenarios, the people as a whole profit from the production of natural resources.

In the case of Argentina, the government had direct oversight over the management of the cooperative. In the case of Alaska, the private company maintains private management and the government has oversight over the accounting process. In both cases, the people as a whole directly profited from the production and, because the profit was passed to them, they can be said to have a direct say in how the profit benefited them. Is that sufficient for Distributism even if they don't have direct say in how the production is managed? Even when organized in a cooperative or guild, Distributism generally requires that owners are able to directly manage the production they own. Can there be any exceptions to this?

The question is, would either of these solutions be compatible with Distributism? If not, would certain alterations to them make them compatible?

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