The following is a review of Toward a Truly Free Market: A Distributist
Perspective on the Role of Government, Taxes, Health Care, Deficits, and More, by John C. Médaille, published in
2011 by ISI Books of Wilmington, Delaware, USA.
When in my wife’s home town of Weirton, West Virginia, it is almost
impossible not to notice the words “WEIRTON STEEL – AN ESOP COMPANY” written in
giant lettering on the roof of the steel mill that dominates the town. Weirton Steel was, for a long time, West Virginia’s biggest
employer. But these days, the mill is
operating at less than a third of its total capacity and that mantle has been
passed to Wal-Mart, a company, owned by the obscenely wealthy Walton family,
which pays its employees so little that new entrants are given guides on how to
claim welfare benefits in order to supplement their wages. It brutally illustrates a theme running
throughout this important book from John Médaille, namely that capitalism, far
from being socialism’s polar opposite, inevitably leads to it when left
unchecked.
Médaille is one of the leading advocates in America today of distributism, a
political philosophy rooted in Catholic social teaching. Whilst he can in no way be accused of running
away from his Catholicism, Toward a Truly
Free Market is written for a general audience, so the smell of incense is
not as overpowering as it can be with some distributist works.
The first section of the book provides a general overview of
economics. Médaille prefers the term 'political economy', the name by which it was usually known until some time in
the last century, when it changed as a result of economists’ desire to paint
their discipline as a natural science like physics, rather than the result of
conscious choices by governments and societies.
Speaking as someone for whom the business pages of the newspaper may as
well be written in Estonian, it is testament to Médaille’s skills as a teacher
that I was able to understand most of it.
There then follows a series of chapters on specific topics relating to
the problems caused by morality-free capitalist economics and how to fix
them. The key doctrine, on which all the
rest hinge, is that of the just wage.
Médaille avoids giving a specific figure for this wage, as that will be
different in different times and places.
Rather, he bases it on general principles: that it should be enough to
support a family’s basic needs on a single full-time income; that it should be
enough to also allow that family to save money instead of living pay cheque to
pay cheque; and that it should give them security against enforced periods of
unemployment (sickness, layoffs etc) with minimal recourse to welfare benefits.
Finally, the book considers in detail two examples of distributism in
practice: the region of Emilia-Romagna,
on which more shortly; and the Mondragon co-operative. The latter is a network of workers’
co-operatives in Spain
with over 100,000 members and €33 billion in assets. The survey of its activities provides the
launch pad for a more general overview of the co-operative movement and of ESOP
(Employee Stock Ownership Program) companies, which give workers a stake in
their ownership. Médaille warns that
there exist fake ESOPs such as Enron, created primarily as a tax dodge, but
commends the real thing (I’m afraid I don’t know which category Weirton Steel
falls into). He also sees strong unions
as vital for worker participation in the economy, though as he is writing
within an American milieu, the restoration of the guilds doesn’t play as large
a part in his thoughts as it traditionally did for English distributists such
as G.K. Chesterton and Hilaire Belloc.
There isn’t space in a review to do justice to the full range of
Médaille’s arguments, but two things particularly commend it to Wessex
Regionalists for me. The first is the
chapter on the role of government. Médaille
vigorously defends the ability of government to provide for the common good, as
against the current political orthodoxy, which sees it as an impediment to the
ultimate goal of capitalism without democracy (hence the current round of
secret trade negotiations seeking to give corporations the right to sue
governments for any regulations they deem too onerous). His philosophy of government revolves around
what he terms a horizontal and a vertical axis, represented by the principles
of solidarity and subsidiarity respectively.
Solidarity means the creation of networks between different sectors of
society, and different governments. It
particularly means the ‘preferential option for the poor’, examining all
policies in the light of how they affect the most vulnerable in society. Subsidiarity means that no decision should be
taken at a higher level of government that could be implemented at a lower
one. It means both local control and
local funding, since funding dispensed from central government to local
communities can appear to be 'free' money, leading to irresponsibility in the
decision-making process. These
principles have always been at the heart of Wessex Regionalist thinking, and it
is a pleasure to see them so eloquently expressed.
The section on Emilia-Romagna, the
Italian region centred on Bologna,
will also be of interest to readers of this blog. 35% of the GDP of the region is supplied by
co-operatives, but unlike Mondragon, where the co-operatives operate like
divisions of a single company, the Emilian co-operatives are independent firms,
of varying sizes, all supported by a regional development agency (ERVET) and
the National Confederation of Artisans (CNA).
Unfortunately, the questions that Wessex Regionalists will naturally be
asking themselves at this point are not ones that the book really concerns
itself with. How did co-operatives
become such a large part of the economy?
How big a part did Italy’s
decentralised system of government, with strong regions, play in allowing them
to flourish in this way? Which parties
and political groupings supported the development and which opposed it
(Médaille does mention that the Fascists suppressed the co-operatives in the
1930s)? Nonetheless, I commend this book
as a starting point that will hopefully lead Wessex Regionalists towards
further investigation of Emilia-Romagna as a
potential model for our region’s economy, rather than Wessex becoming
one more plantation in the global slave state.
