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Source link: http://archive.mises.org/11447/bellocs-puzzling-manifesto/

Belloc’s Puzzling Manifesto

January 13, 2010 by

The Servile State might have been adopted by all the anticapitalist intellectuals in the world. What saved it from that fate was the fact that with withering logic Belloc attacked also socialism. FULL ARTICLE by Garet Garrett

{ 26 comments }

Tom Usher January 13, 2010 at 9:05 am

Some way has to be found to limit economic power so that all the wealth doesn’t end up in the hands of the few while at the same time not creating a system that invests all the power in the hands of the regulators. A whole bunch of small, privately owned businesses is better for society and human freedom than a couple of really large ones. Belloc touches on this with his treatment of the guild system.

Capitalism is the best system we have yet I agree with Belloc that it will eventually lead to slavery without some sort of restraint.

The only system of restrain that would work would be moral restraint. This is the function of the Church and its teachings. If all people would live inside the rules established by God we would have freedom. In the end, I would imagine this is the crux of Belloc’s argument.

geoih January 13, 2010 at 9:24 am

Quote from Tom Usher: “If all people would live inside the rules established by God we would have freedom.”

Which god would that be?

Heathroi January 13, 2010 at 10:08 am

It seems to me Mr Belloc was clever man who didn’t really think all that much.

Mr Usher how is it better that a whole bunch of little businesses are better than just a few giant ones? who decides that? Obviously not the customer in your view.

As long as there are no barriers to entry into a particular market, it does not matter one whit about the size or number of firms.

Terry Hulsey January 13, 2010 at 10:36 am

Belloc is yet another Christian confounded by economics. Whether it’s St. Thomas on usury or C.S. Lewis on socialism (viz., in Mere Christianity) or G.K. Chesterton (also a distributist), or the latest papal bull (e.g., Populorum Progressio), the Christian has a moral soft spot for anticapitalism — and no amount of blatherskite apologetics can change this fact.

Mike January 13, 2010 at 10:58 am

“Some way has to be found to limit economic power so that all the wealth doesn’t end up in the hands of the few while at the same time not creating a system that invests all the power in the hands of the regulators.”

That way exists. It’s called the free market.

Yes, one effect of it is vast relative inequality of wealth between the highly successful and everyone else, but in a free market you can achieve this only by dramatically improving the wealth of the masses. Think Bill Gates. He’s filthy rich, but every day we use wealth that he created for us.

It’s big government that concentrates ill-gotten wealth in the hands of the few by declaring the few to be the de facto owner of everything. Freedom produces and spreads wealth, and raises all mankind to a level so far above barbarism that their children will take it for granted and obliviously advocate the destruction of everything their fathers have gained for them.

Sigh.

Terry Hulsey January 13, 2010 at 11:11 am

Regarding Mike’s comment:
I forget the details, but a survey was conducted that asked whether the person would prefer a REAL gain of $10,000 while everyone else got a real gain of $50,000, or, on the other hand, a real gain of only $2,000 for everyone. The vast majority chose the $2,000. Accepting the first offer would mean accepting the superiority of men like Bill Gates. That’s what we’re up against. Institutional moralists could contribute importantly by teaching that no happiness results from comparing oneself to others, but do they do this? Most of these moralists, Christians especially, aren’t defenders of the individual; they are defenders of the Untermensch.

Stephan Kinsella January 13, 2010 at 11:33 am

I never liked Belloc ever since he tried to rob Indiana Jones of his discoveries.

Terry Hulsey January 13, 2010 at 11:41 am

Stephan,
But Indiana Jones’ discoveries were _intellectual_ property, so there was no robbery, eh? :-)

Roy January 13, 2010 at 11:54 am

Belloc’s bit about the practical man rings true though.

Inquisitor January 13, 2010 at 12:33 pm

“Capitalism is the best system we have yet I agree with Belloc that it will eventually lead to slavery without some sort of restraint.”

Yes, until the government is abolished, it will.

mikey January 13, 2010 at 3:37 pm

“………..it will eventually lead to slavery without some sort of restraint.”

The irony of this statement seems to be lost on Mr Usher.

bowman January 13, 2010 at 7:25 pm

It is ironic that Mr. Belloc failed to ask himself the most important question, which is. What would be the result if he had written his manifesto in ” a distributive society”, the answer is, it would have been deposited in the nearest waste dump and would have never been published.

Capitalism (or some form of it) is the birthing mother of all that is created. Without some form of self gain or reward there can be no incentive to create anything or to achieve any goal.

I wonder how Mr. Belloc redistributed his gains.

Jeremiah Arn January 13, 2010 at 9:23 pm

Mr Garrett,
The only way “modern industrial capitalism has enabled the earth to sustain at least twice as many people as ever lived on it before” is by confusing capital with income. We have fueled “progress” with natural resources – oil and coal – that are sold for profit.

fakename January 13, 2010 at 9:31 pm

Jeremiah Arn, all income comes from capital and increases in income come from increases in capital.

Micah January 13, 2010 at 9:48 pm

Someone needs to re-read MESPM. Rothbard explains that “monopolies”, if you believe such a thing could exist in a free-market in any detectable, meaningful way, would be subject to the same calculation problems that socialism is subject to, thus limiting the size of corporations and how many levels of production they can control.

JAlanKatz January 14, 2010 at 5:41 pm

I think that, as is typical for opponents of “capitalism” two meanings of that word are being confused. One would more correctly be called corporatism,and describes our situation at present – and indeed, does lead to massive inequality and allow the rich to command others. On the other hand, capitalism is also used to mean free markets, which have none of these effects. The typical attack then is to say “free markets – that’s just capitalism – and capitalism leads to bad effects…” The other trick is to simply say “what we have now is capitalism – and look, the rich get handouts and have all the power!”

Jordan Viray January 14, 2010 at 7:38 pm

@ Terry Hulsey who said: “the Christian has a moral soft spot for anticapitalism”

Really? Rothbard says the Spanish scholastics, Catholic religious intellectuals, were the first capitalist thinkers. Lew Rockwell, founder of the Mises Institute is a Catholic as are other important figures in the Austrian School.

Terry Hulsey January 14, 2010 at 11:01 pm

Jordan,
Regarding Rothbard and the Scholastics: True enough. But all we really need to know about the personal beliefs of Mr Rockwell and others at the Institute is that these believers are uniformly fair-minded: There are no Randian extra-rational standards that I’ve noticed. I went to Catholic schools myself, and as others with that experience can attest, “Catholic” is a pretty loose-fitting garment, covering those who deny the divinity of Christ to those who don’t know the difference between Virgin Birth and Immaculate Conception to those who think Pius IX best defined Catholic practice. –And this is just in doctrinal matters… how much looser it is in matters touching economics! Pope Benedict’s encyclical _Caritas in Veritate_ (his update of Populorum Progressio) demands a “world political authority… vested with effective power” to right economic wrongs. Few Catholics think eternal damnation awaits the one who points out the error in that view. Now there are apologists, for example Father Sirico of the Acton Institute, who say that the Pope nowhere is anticapitalistic. To maintain this is to pervert the clear meaning of words, and to introduce “two truths” into the mind. This is absolutely fatal for any serious thinker. Faced with a contradiction, why not three truths, or four — or why not imperiously bestride the facts and choose to maintain any contradiction? No. I am not a theologian, and even as a believer I think that faith is weakened when it stands on a defense of rhetorical sleight-of-hand. In any collision between faith and reason, either reason decides or the facts are soft-pedaled for some misplaced spiritual need. Capitalism fulfills many of the desiderata faith, and it is no moral fault to point out that the Catholic thinkers above are mistaken in suggesting the contrary.
http://www.time.com/time/world/article/0,8599,1909020,00.html
http://www.acton.org/commentary/commentary383.php
http://www.nytimes.com/2007/05/14/world/americas/14pope.html

P.M.Lawrence January 15, 2010 at 9:35 am

In case people are interested, here is a link to Hilaire Belloc’s The Servile State.

“In the struggle between the state and the church for control of the individual the state won and confiscated the church lands — especially in England, and especially there for purposes of illustration because the modern industrial system began in England and spread from there — and then, having confiscated the church lands, the state gave them to the lords. Thus the means of production passed to the possession of a few evil men, and that was the origin of capitalism.”

In this, Belloc was wrong. That process began even earlier, with the church itself involved; Sir Thomas More commented on it, in his Utopia. And, of course, there were similar developments in Spain and Portugal at about the same time without the church forfeiting its lands.

“If the distributive state had not already been destroyed the Industrial Revolution might have been financed by the guilds, pooling their little parcels of wealth, whereas, because by this time capital was in the hands of a few, only the few could find the capital. This is bad history. What people might have done in place of what they did do is not history at all.”

It’s not bad history, it’s not history at all. It’s analysis, starting from a basis of actual historical fact but then going on from that.

“With all industry in the hands of the guilds who limited freedom of competition to protect their own warm little world, it was not likely that they would run small parcels of wealth together as risk capital to finance the Industrial Revolution that was going to destroy them”.

Now what’s counterfactual? He’s assuming the same sort of Industrial Revolution as actually happened, and that the actual one really did do that. In point of fact, the remaining people who did have small parcels of wealth did actually put them to use then in just that sort of way.

‘Secondly, the statement that “when any one of the new industries was launched it had to be capitalized” is misleading. At the beginning of the Industrial Revolution new industries were not launched, as we think of it today. They grew from strange and hazardous beginnings, generally against the ridicule of all observers. They were not capitalized. The amount of actual money capital that went into them at the beginning was almost nothing, and of what little there was there is no trace left in the world. The original capital was idea, personal privation, despair and disappointment. The fact is that the Industrial Revolution financed itself, making its capital as it went along.’

Now, that is plain wrong. Granted, the amounts were small by modern standards – but getting them took diverting just as significant a proportion of available resources, which were also much smaller. For instance, food had to be set aside to feed coal miners first, before there was any coal to sell – the process didn’t make its capital as it went along, it made each succeeding round of capital as it went along (which was how such a small base could grow so large).

“Modern industrial capitalism, with all the ugliness and cruelty he finds in it, has nevertheless enabled the earth to sustain at least twice as many people as ever lived on it before”.

That simply isn’t true. The opening up of new lands and (later) the scientific advances that made artificial fertiliser possible did that; all modern industrial capitalism did was be in place at the time – which was rather Belloc’s point. Any other form of productive base could have done the same. “And if Mr. Belloc’s ideal distributive state were re-established — all industry in the hands of guilds, every man owning his own little spring of life — probably half the people now living in the world would perish for want of food, clothes and shelter” is false, because it presumes that those methods couldn’t do it (although, of course, a bad transition might have such a price).

Heathroi wrote “Mr Usher how is it better that a whole bunch of little businesses are better than just a few giant ones? who decides that? Obviously not the customer in your view. As long as there are no barriers to entry into a particular market, it does not matter one whit about the size or number of firms.”

This is forgetting the very thing that Hilaire Belloc and G.K.Chesterton were pointing out, that people can never be just customers, that they need to be plugged in as producers to be able to earn and buy anything. If they get crowded out by firms being fewer, they only get a look in as wage earners – as much as that lets them. Chesterton’s work The Outline of Sanity goes into this aspect quite well.

Terry Hulsey wrote “Belloc is yet another Christian confounded by economics. Whether it’s St. Thomas on usury or C.S. Lewis on socialism (viz., in Mere Christianity) or G.K. Chesterton (also a distributist), or the latest papal bull (e.g., Populorum Progressio), the Christian has a moral soft spot for anticapitalism — and no amount of blatherskite apologetics can change this fact.”

Then let’s try it without “blatherskite apologetics”, and consider it in the light of Chesterton’s remark that “Too much capitalism does not mean too many capitalists, but too few capitalists”. They were in favour of capitalism – only, not with it organised to squeeze people out of ownership roles.

Mike wrote of “Some way has to be found to limit economic power so that all the wealth doesn’t end up in the hands of the few while at the same time not creating a system that invests all the power in the hands of the regulators”, “That way exists. It’s called the free market.”

No, that way does not exist, although something that does exist but does not do that is wrongly called that and although a real free market really would do that but does not exist.

“Yes, one effect of it is vast relative inequality of wealth between the highly successful and everyone else, but in a free market you can achieve this only by dramatically improving the wealth of the masses”.

That happens not to be the case, if you are referring to the current misnamed approach.

“Think Bill Gates. He’s filthy rich, but every day we use wealth that he created for us.”

Wrong. He is indeed filthy rich, although he created no wealth but merely diverted it – and many of us don’t touch it anyway.

“Freedom produces and spreads wealth, and raises all mankind to a level so far above barbarism that their children will take it for granted and obliviously advocate the destruction of everything their fathers have gained for them”.

While that might be true if it ever did happen, that sentence really shouldn’t have been written as though it were actual, present fact.

Terry Hulsey January 15, 2010 at 11:27 am

P.M.Lawrence,
Well done… but the direct quotes from Servile State clearly illustrate anticapitalistic bias. I don’t think anybody earns any _defensor fides_ bonus points by trying to deny this bias. Therefore:
Ho γεράφα, γεράφα!

Jordan Viray January 16, 2010 at 11:43 am

@ Terry

As you say, the descriptor “Catholic” is a very loose fitting garment which is why I wanted to point out your mistake in generalizing; and the easiest way to do that was via the incisive counterexamples of the Spanish Scholastics and Rothbard, Rockwell and I’d add Thomas Woods.

I also did not suggest “Randian extra-rational standards” by those counterexamples so I don’t know why you read it that way.

Barack Obama II January 16, 2010 at 1:45 pm

Zealots,

Unfortunately, there are too many zealots who refuse to admit that once capital is in the hands of the “few,” they would be selfish and end up cheating.

This can happen with a government, as exemplified by John Morgan. If one actually could prevent the sate from happening, reliance on free markets would make sense. However, this can happen without a government:

Markets always have and always will corrupt into mercantilism and corporatism. Notice how there’s never been an anarcho-capitalist society for long, even though it’s been in the back of many great minds since Enlightenment. Rothbard tried, but was never successful in logically preventing the illogical. Power may be the root of all evil, but bad people exist and there’s ultimately nothing we can do to stop them. There’s ultimately nothing we can do to prevent collusion and the construction of barriers to entry. Here is where anarcho-capitalism dies.

Markets require the assumption of perfect information. This cannot happen if there is a group of aristocrats intentionally withholding, distorting, or otherwise manipulating information. That is to say in the long term, there are no free markets. Individuals would not be able to set up competing firms to balance the power of the oligopoly.
Yes, there is a natural consumer demand for regulation. Yes, regulatory bodies could soon be established within the non-state to protect the people and would-be competitors. However, they can only get you so far. If they really get in the way, they’d either be infiltrated or simply murdered in secret.

It’s an unfortunate solution, but yes we do need a government. It’s essentially impossible to maintain, but we do need a government that only enforces property rights and contracts and is controlled by the majority to prevent control by any single selfish interest (a “good” government and a democracy). It’s unfortunate, but life is hard and paradoxes happen. Yes, the government can also be infiltrated, but all that means is that we need to be able to check the government’s power as well — to regulate the regulators. It means that we need to get over the fact that mistakes are going to happen. At least with a government, we have a way out — however painful and hypocritical it may be.

This is no reason to disregard the principles of the Austrian school. Marginalism, Say’s law, quantity theory of money, etc… are all still true. This is no excuse for interventionism. The only way to reach the ideal of liberty, equality (“equality”), and peace is still through property rights and contracts, but a stateless society could not support this ideal.

Belloc was therefore correct in all of his propositions, but incorrect in his solution (non-solution). A decentralized federalist democracy, somewhat of a cross between the Articles of Confederation and the European Union — a little more extreme than Switzerland — is the real answer. When oligopolies form, or NYC outlaws sodium, and individual would take his friends and family and all of their total property and move to a different district. This destroys the market and by extension the wealth of the oligopoly. If extreme collusion occurs and there’s nowhere to go, there would be some Elliot Spitzer to find the fraud in the distorted market conditions and bring them to justice without a violent revolution. The reason why this couldn’t happen in an anarchy is. Those are the choices, periodic revolution (which would be carried out by fools, probably Marxist) or doing our part in working with a democracy and relying on education.

Sincerely,
Elliot Spitzer

(Had you going there, eh? No, I’m not really sure why disgruntled competitors couldn’t purchase a prosecutor of that nature in an individualist anarchy. However, I truly do wonder why having a sworn enemy of the markets is such a bad thing. Why can’t distortion happen in an anarcho-capitalist society just the same? How can we be sure the competitors would know if or when to begin such an investigation? Maybe I’ve read Alchemy of Finance too many times. Maybe I’m easily amused by bright colors and cartoons, but every time I see literature similar to Belloc’s, it paralyzes me. If this issue has been settled in the forums, I would appreciate a link. If I’ve missed it in the literature, I would greatly appreciate a polite direction to that too.)

P.M.Lawrence January 17, 2010 at 7:39 pm

Terry Hulsey wrote “…but the direct quotes from Servile State clearly [emphasis added - see below] illustrate anticapitalistic bias. I don’t think anybody earns any _defensor fides_ bonus points by trying to deny this bias.”

That comes down to the confusion in this area between what really would be capitalism and free markets, and the things that aren’t really those but which really do occur and do get called those. If we were talking about Kevin Carson, say, we could call him an anticapitalist because he deliberately describes himself as a free market (in the former sense) anticapitalist (in the latter sense) to try to highlight the distinction and clear up the confusion arising from conflating the two senses (which he calls “vulgar”, as in “vulgar libertarianism”).

But Belloc and Chesterton weren’t willing to give up using “capitalist” in the ideal sense, as illustrated by my quotation – which is the point of providing it. Chesterton and his ilk were not anticapitalist – they were just against that “evil thing with a holy name”, that is called capitalism but not properly called such, that existed and then and exists now. For you to write as you have, in Chesterton’s case, is to persist in the conflation and make confusion worse confounded. Contrary to what I emphasised in your wording above, there is nothing truly clear here, at any rate once the conflation has been imposed; rather, important distinctions are hidden and so an illusion of simplicity is produced. Consider the faulty syllogism “a penny is a coin; a shilling is a coin; therefore a penny is a shilling”; the fallacy is easy to spot, but suppose through obscurity of language the same word were used for each and required context to make any necessary distinctions: it would have the apparent clarity of “a rose is a rose is a rose” (which has precisely that fallacy embedded in it in languages that use “rose” as a generic word for flower as well as the name of a specific flower).

“Ho γεράφα, γεράφα!”

Why quote Pontius Pilate in Greek? Quod scripsit, scripsit – atque quod dixit, dixit. I suspect you are quoting scripture for your own purposes.

Jordan Viray January 20, 2010 at 9:52 pm

@P.M. Lawrence

You suggest that “ideal” capitalism is not “organised to squeeze people out of ownership roles”. In a free market, how could you preclude such organization?

Jordan Viray January 26, 2010 at 5:19 pm

Well PM Lawrence, I’ll give you the answer:

You can’t preclude organization to squeeze people out of ownership roles in a free market. The free market even goes so far as to *promote* the very competition that “squeezes” many people out of ownership roles.

You cannot suppress that unless you suppress the free market. Terry Hulsey was right in regard to the uselessness of defending Chesterton and Belloc’s philosophy as ideal capitalism.

Eric Grosch March 10, 2010 at 9:10 am

Belloc’s prediction was evidently accurate that a government that sought to become collectivist would have to confiscate the means of production to accomplish its goal. Either that or Stalin may have read The Servile State. In any case, in collectivizing Soviet agriculture, he confiscated the land of the Kulaks and starved them to death in their millions.

Belloc’s prediction that workers would become slaves, forced to perform compulsory labor, was in error, at least to date. We speak of wage-slaves but that is not an accurate characterization, since one may still choose to work or not.

His claim that a sign of the servile state occurs in tort-action against the employer of the employee who actually caused the injury to the third-party plaintiff also seems off the mark, since the employer, sued by the third party. is still free to sue the employee who caused the injury to recover the damages the employer has paid, though the empolyer may not do it, since the employee, in his relative penury, is pretty much judgment-proof.

Belloc’s omission of any discussion of the income-tax, as an instrument of enslavement, given his loose concept of slavery, seems anomalous. Certainly, the income-tax is the main means of perpetuating and expanding the Nanny State, in all countries.

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