01 March, 2018

Witt and Richards on Belloc: Part 2

Continued from Part 1

Witt and Richards accuse Belloc of committing serious economic errors—errors also committed by Marx (horribile dictu).  The two central such errors are that both Marx and Belloc “failed to understand that free exchange benefits both parties,” and that “both held to what is called the labor theory of value, roughly the idea that something is worth economically just how much it cost to produce it.”  (Both passages from p. 160.) 

Belloc does not accept the labor theory of value.  This, at least, can be settled definitively.  In his explanation of the nature of economic wealth, Belloc considers the example of a farmer who owns a horse.  “…consider,” he says,
how the value [of the horse] changes while the horse remains the same.  On such and such a date any neighbor would have given the owner of the horse from 20 to 25 sacks of wheat for it, or, say, 10 sheep, or 50 loads of cut wood.  But suppose there comes a great mortality among horses, so that very few are left.  There is an eager desire to get hold of those that survive in order that the work may be done on the farms.  Then the neighbors will be willing to give the owner of the horse much more than 20 or 25 sacks of wheat for it.  They may offer as much as 50 sacks, or 20 sheep, or 100 loads of wood.  Yet the horse is exactly the same horse it was before.  The wealth of the master has increased.  His horse, as we say, is ‘worth more.’”  (Economics for Helen, p 33-4)
Now, you might say that the owner didn’t produce the horse, so labor doesn’t enter into it.  But that’s false (there’s labor involved all over the place in raising and keeping a horse), and at any rate, the other farmers looking to trade goods such as harvested wheat or split wood surely have significant labor in those products—yet their value, relative to the value of the horse, has fallen.  So says Belloc.  This is a repudiation of the labor theory of value as explained by Witt and Richards in Chapter 8’s footnote 37.

Now, it gets a little hairy because Witt and Richards plunk their discussion of Belloc’s putative economic errors into the context of The Servile State, the argument of which is, they claim, strikingly similar to the argument of The Communist Manifesto.  The fifth section of The Servile State argues that capitalism is unstable: it can only be a transitory stage between more stable states of society, namely the collectivist state, the distributive state and the servile state.  Belloc’s argument in this section does make the assumption that capitalism as such involves exploitation:
You have private ownership; but it is not private ownership distributed in many hands and thus familiar as an institution to society as a whole.  Again, you have the great majority dispossessed but at the same time citizens, that is, men politically free to act, though economically impotent; again, though it is but an inference from our definition, it is a necessary inference that there will be under Capitalism a conscious, direct, and planned exploitation of the majority, the free citizens who do not own by the minority who are owners.  For wealth must be produced: the whole of that community must live: and the possessors can make such terms with the non-possessors as shall make it certain that a portion of what the non-possessors have produced shall go to the possessors.  (82)
You might think there’s an implicit acceptance of the labor theory of value in here.  Witt and Richards seem to think so.  They write that “both [Marx and Belloc] viewed profit as the result, not of customer satisfaction and prudent production, but of what Marx called ‘surplus value’, by which the capitalist exploits both the worker and the customer.  This follows by definition.  If a car is worth just as much as it costs to produce it, then any profit is essentially theft.”  (160)  We’ve already seen that Belloc rejected the labor theory of value—rejected the notion that a car is worth just as much as it costs to produce it.  Put that aside.

He also flatly rejects the notion that profit is theft.  Indeed, in Economics for Helen, he argues that even in a collective state, profit will still be present—“must always be present, no matter how the capital is owned and controlled, no matter who gets the profit.”  (54)  Profit cannot be done away with, and in itself, it is a laudable thing.  Profit, roughly put, is the motive for the gathering of capital.  Capital, he says, cannot come into existence unless someone saves.  And capital is always being consumed, so the savings must be going on all the time if the production of wealth is to continue.  But why save?  The answer is: profit.  I don’t know if Marx thought profit was theft, but Belloc did not.  At least, not by the time he wrote Economics for Helen

That still leaves open the possibility that while Witt and Richards have Belloc wrong on all this, they at least have The Servile State—or, Belloc at the time he wrote The Servile State—right.  (That is, he might have made these errors in his earliest book, and have remedied them by the later ones.)  They might have that right, but it doesn’t matter, for three reasons. 

First, and most importantly, their accusation is that Belloc made serious economic errors, and they make it in a wide-open way, unqualified, unhedged.  So it’s a false accusation even if he made those errors at some point in his career.

Second, the point of The Servile State is that the servile state is coming.  The last century has certainly borne this contention out, at least in the West.  True, we don’t have precisely the servile state that Belloc predicted.  We don’t at the moment generally compel people to work, for example.  But it doesn’t take long in looking through sections eight and nine of the work to see Belloc’s prescience.  What matters about The Servile State isn’t whether there may be an economic error or two involved in its argument, what matters is whether Belloc got things more or less right, and I’d have say he did. 

Third, The Servile State is not properly speaking a defense of Distributism at all.  It’s a criticism of capitalism, an explanation of the servile state, and a prediction of what was to come.  It’s not an apologia for Distributism.  No more is Economics for Helen, for that matter.  Belloc’s main work on Distributism is An Essay on the Restoration of Property (and even that, as we saw earlier, is not a systematic presentation, but a deliberately time-bound program of action).  The Servile State and Economics for Helen are at best supplementary works when it comes to Belloc’s defense of Distributism.  Witt and Richards are supposed to be dealing with the question of whether Tolkien is a Distributist: they write, “our purpose here is to consider distributism as Tolkien would have known it.  We are focusing on Belloc because he commended certain policies quite clearly.”  (209)  So, they were trying to get a grip on Belloc’s doctrine of Distributism: not, as such, his critique of capitalism or his prophecies about the rise of the servile state. 

Let me briefly return to the second alleged economic error, which I passed over earlier.  To wit: “Both failed to understand that free exchange benefits both parties.”  You can see in what I’ve already said Belloc’s response to this: free exchange is no doubt beneficial for both parties.  But because in a capitalist society the exchange between owner and proletariat is not free but coerced, the point is irrelevant.  And you can no doubt imagine that Witt and Richards would here reject the claim that in a capitalist society the workers are unfree.  Indeed, they do: in Chapter 8’s footnote 36, the matter is dealt with as follows:
For example, if the owner of a Papa John’s franchise hires Sarah to deliver pizza, he’ll only do it if he thinks he, or his franchise, will be better off as a result.  In other words, he’ll only do it if he prefers having her deliver pizzas for him rather than keeping the, say, twelve dollars an hour he’ll pay her.  And Sarah will only accept the job if she thinks she’ll be better off.  By coordinating their actions, Sarah and the pizza guy are able to engage in a free and mutually beneficial exchange.  The point is simple enough to explain in one short paragraph, and yet some of history’s greatest intellectuals have failed to get it.
I don’t think Belloc failed to get it.  I think he failed to agree with it.  “The vast bulk of so-called ‘free’ contracts are today leonine contracts: arrangements which one man was free to take or to leave, but which the other man was not free to take or to leave, because the second had for his alternative starvation.”  (Servile State, section five)  In other words, since Sarah (by hypothesis) has no productive property of her own, she has no economic freedom: she must enter into an arrangement with a capitalist: or die.  (Things may be somewhat different now than they were in 1912, of course, due to the rise of the servile state.)  She enters into that contract “freely” in one sense, to be sure—she is not coerced by state power, or by someone who owns her as though she were a slave.  She remains politically free.  But she’s not economically free: it’s not truly a free exchange, because she wasn’t free to leave it.  (Though she may be free to leave that particular job, she’s not free to avoid selling her services to a capitalist, if she wants to stay alive.)  At any rate, that’s Belloc’s position on the matter.

I don’t mind Witt and Richards saying that he’s making an error.  Obviously, that’s the view of the capitalist.  But I do rather mind that they seem to pretend this substantive issue between them can be settled with a one paragraph footnote, as though Belloc simply hadn’t thought about such matters. 

Let me step outside of the strict bounds of Belloc for a moment and take up an additional supposed Distributist error.  Witt and Richards don’t like the notion of the family wage, which is of course (very roughly) the idea that a man ought to be paid enough to support his family.  They object:
John owns a pizza restaurant and needs to hire a chef.  For John, paying a chef is a cost.  Three equally qualified men apply for the position.  The first is single with no marital prospects, the second is married with no kids, the third is married with six kids.  If John hires the man with the large family, the law will require John to pay his employee a much higher wage than if he hires either of the other two men.  As a result, hiring the single man would be John’s most economical choice, since the single man’s salary and insurance premiums would be the least expensive.  So an enhanced minimum wage designed to help men with large families earn more would in fact to the opposite. (164)
There are plenty of things wrong with this passage.  For starters, one might note that it’s already, in most cases anyway, more expensive to hire a man with a family than to hire a single man due to the increased insurance premiums that Witt and Richards themselves mention.  Or one might suggest that it could be made part of employment law—indeed, I suspect it generally already is part of employment law—that employers can’t ask questions about the marital status of potential employees, any more than they can ask about their religion (except in isolated cases).

But that’s all just fussing at the margins.  The central problem is this: it’s long been understood by advocates of the family wage that it must go to all men, not just to those men who already have families.  For example, Fr. John Ryan—the father of modern living wage theory in Catholic circles—wrote in his seminal work A Living Wage that “…the right to a family Living Wage belongs to every adult male laborer, whether he intends to marry or not; for rights are to be interpreted according to the average conditions of human life, and these suppose the laborer to become the head of a family.”  So the objection fails.  If a family wage regime were actually imposed, whichever of the three candidates were hired would be paid the family wage, and hence there would be no economic motive—apart, perhaps from the insurance premium issue which, as noted, is already there—for preferring the single man. 

But there’s more.  Fr. Ryan continues that
There is, too, a good social reason for treating married and unmarried alike in the matter of remuneration.  If employers were morally free to pay single laborers less than a family Living Wage they would strive to engage these exclusively and perhaps to extract a promise that they should not marry.  (both quotations are from A Living Wage, p. 87) 
So here we see that this na├»ve defender of the family wage, poor economic illiterate, anticipated Witt’s and Richards’s obvious objection within the very formulation of his doctrine.  More than a hundred years ago.

Once again, we’ve got an objection that falls completely flat, because it does not involve proper understanding of what it purports to criticize.  I’m confident that Witt and Richards would have other objections to make against the actual family wage doctrine, if they should come to understand it, but that’s pure speculation at this point.  (In their defense, sort of, their only citation on the matter is to Allan Carlson’s Third Ways, and I don’t recall his being clear on the relevant point.  Don’t quote me on that.  But of course, they don’t purport to criticize Carlson’s position on the family wage, where they might have been correct: they purport to criticize the family wage.  And there, they failed.)

When Witt and Richards criticize Distributism’s economics, there’s a whiff, or more than a whiff, of amused condescension.  “There, there, economic moron, we will show you (with a brief paragraph any five year old could follow) how silly your little views are.”  Really not earned.

Continued in Part 3

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