What's Wrong with Thomas E. Woods, Jr. (at least, what's wrong with his logic)?

I recently wrote two articles on Distributism (three, if you count the Letter to the Editor published in the May edition of magazine US Catholic), which were published as letters to the editor in my local paper. Both articles were merely general outlines which, given the format, were intended to get people interested so that they could seek out further information for themselves. Out of curiosity, I googled Distributism, like I hoped those interested in the articles would do, and found, on the very first page of search results, the heading “What’s Wrong With Distributism?”, written by one Thomas E. Woods, Jr. Now, Mr. Woods has done some excellent work -- I’m particularly appreciative of his book, How the Catholic Church Built Western Civilization. I was somewhat surprised, and more than somewhat disappointed, therefore, when I saw this article (which is actually pretty old, dating back to 2002), and, though with a bit of trepidation, I feel it an obligation to offer a response.

First off, Mr. Woods says that Distributism is favored as an alternative to the free-market; thus right off the bat, I think he shows a failure to understand the distributist point of view. The very starting point of Distributism, the very thing it concerns itself with, is economic equilibrium, without which a free-market serves no purpose. If the majority of people earn an income from wages, which are increasingly losing power to clear the market thus constantly resulting in the need for bigger government - both to bail out capitalists whose products cannot be consumed and to provide subsistence to labor which cannot consume those products - then what’s the point of a free-market? It’s virtually self evident that there are political conditions, like those safeguarded by the Bill of Rights, that everyone agrees are necessary for a free market to serve a purpose. Distributism simply points out the fact that there are economic conditions as well, that, as Mr. Woods sums up the vision of distributism, “that social system is best in which productive property is widely dispersed rather than concentrated.” In short, the distributist solution is the very condition for an effective free-market.

Second, it’s not just that “smaller businesses have been swallowed up by larger firms,” it’s that government policies and subsidies have contributed to this process. It’s simply unfair to say distributists want to interfere in the free-market when the market has already been interfered with, making it in certain respects a controlled market, which controls, then, the distributists are aiming to counteract. Mr. Woods goes on to say, that it’s not always preferable for a man to own his own business or work his own farm - as if that is the extent of the distributist solution, and not the prime example of what Mr. Woods charges distributists of using -- a “crude generalization.” Due to the degree of Mr. Woods’ knee-jerk reaction, he’s apparently kicked from his vision the fact that Distributism isn’t confined to agrarianism, or to mom and pop stores and farmers markets (all good as far as they go), but can accommodate a layered and complex economy. As the authors of the Capitalist Manifesto, Louis Kelso and Mortimer Adler, put it:

What Jefferson said in terms of a laborist agrarian economy,
what Aristotle had said before him in terms of a similar economy,
holds true of a capitalist industrial economy. We need only transpose
the terms. In place of the slave-owning aristocrat who was the
ideal citizen in Aristotle’s day, or in place of the land-owning
farmer who was the ideal citizen in Jefferson’s day, we need only
substitute the capital-owning common man as the ideal citizen in our
own day. In all three cases, such men have the kind of independence
that is needed for self-government; and since they have their
economic and political freedom by right, not by might, they will try
to limit the powers of government to those necessary for the protection of their rights.

Next, Mr. Woods writes about the rise of Capitalism in 18th century Britain, that “Capitalism, and not distributism, literally saved… people from utter destitution and made possible the enormous growth in population, in life expectancy, in health, and in living standards…” Now we’re getting to the crux of the matter, for it’s the type of capitalism that began in the 18th century but did not evolve its own principles and therefore mutated into 19th century abuses, into concentrated capitalism, and into mixed socialized capitalism, to which Distributism is opposed. We need to be clear about a vital point here: all political systems are capitalistic, for even under Communism, capital, which is the means of production, is owned by the state, and is therefore State Capitalism. Distributism, it follows, is also capitalistic, but it is the antithesis of State Capitalism, as ideally the means of production, capital, is owned by the common man, not, in effect, by bureaucrats. In its infant stage, Capitalism certainly had its virtues, but so did earlier economies predicated on slavery -- in fact, slavery, historically speaking and put in purely economic terms, made for a quite stable economy. However, just as technology has evolved to make the means of production more and more efficient, and thus gives to owners of those means an increasing and disproportionate claim on returns (which eventually comes back to haunt them, though they can sustain the negative effects quite comfortably compared to labor), so must capitalism evolve into a distributist ownership society in order to maintain an economically workable balance. As G.K. Chesterton famously said, the problem with [concentrated] Capitalism is that it produces too few capitalists.

Mr. Woods then talks about distributists decrying the profit-motive, but he seems to use the term in an unbounded way. “Ambiguity in language leads to confusion of thought”; we might add to Aldous Huxley’s observation that it also lends itself nicely to cheap shots, low blows, and easy knockdowns, as this bit about the profit-motive demonstrates. Would Mr. Woods, for instance, abolish all laws, which ban the sale and use of all otherwise illegal narcotics, or which ban prostitution - how about child labor laws? According to an unqualified use and pursuit of the “profit-motive”, he must! Or perhaps Mr. Woods is just being selective, and for some reason won’t extend the use of his imaginative faculty to quite prudent, rational concerns that, as a consequence of his capitalism, he might have to ignore; concerns like so called free-trade, which dismantles our manufacturing base and sends people into lower paying service jobs, and like the exploitation of workers both here and abroad, which are things distributists really do decry. Mr. Woods, as he professes, likes to state certain points in a way that “suddenly appear… not only profoundly moral but actually obligatory,” and in general I think that’s a good goal, but perhaps he should first find someone other than a straw man -- maybe he has some irrational fear of agrarian scarecrows? – against whom he should try to score a TKO. Mr. Woods, for instance, might state the point in a manner more consistent with a fair use of profit-motive, one that allows for no self-contradiction, something along the lines of, say, Kelso and Adler --

It is the free play of the forces of demand upon the sources of supply that objectively and impartially determines the exchange value of whatever things are regarded as items of exchangeable wealth.

The assumption, as it takes but a simple explication to state, is that the market is “the free play of the forces of demand upon the legal, and legally produced, sources of supply…” To be sure, economics, by default, take place within a context, which includes moral guidelines. What those moral guidelines are is, the further you get from those that are more self-evident, a matter of degree, of prudence, and must be determined socially. But, since economics takes place within a political context, then it clearly must serve a political end; that end, according to the natural law, is political democracy. Economics, therefore, must support political democracy both positively and negatively. In other words, it must add something to liberty, and at the same time, it must not interfere with the outer, political context for liberty. Mr. Woods, if I may put his view into my own words, charges that Distributism somehow violates the political context for liberty. However, other than some vague “economic regulation”, against which he predicates the second half of his response, we’re left legitimately asking if he could just as well be attempting to destroy everything but libertarian anarchy! Indeed, the logically keen prostitute, drug dealer, and 19th century styled child-exploiting capitalist perhaps should be lining up behind Mr. Woods, eager champions of his apparent anarchical profit-motive.

The discrepancy in Mr. Woods logic thus leaves me unable to erase this image from my mind: For I see a curious line of people filing in behind him, all clasping his next book – as if they’re imitating lady liberty - titled, How Certain Catholic Laity Destroyed What the Catholic Church Built, and holding high, in their opposite hands, a torch representing the “light” and “wisdom” of anti-Catholic Ludwig von Mises. Meanwhile, oblivious, I’ll grant, to the anarchical profit motives trailing behind him, Mr. Woods, it seems, is shouting from a mega-phone, “we have the blessing of ‘Pope John Paul II’s Centesimus Annus’ ; come, therefore, and rail in our cause against those ignorant Catholic distributists.” Then I feel, as perhaps all ignorant distributists might, that I want to yell back, that I want to shout, “hey, John Paul II the Great called for associating the worker with his workbench”; and, “we are the true capitalists, who support economic democracy, not just political democracy”; and, “what right do you have associating us with Big Government when it’s the failure of your capitalism which assures we will have it!” Indeed, I want to shout these things and more. But then I notice something. I notice in this image that Mr. Woods and his string of Misesian acolytes all have something covering their ears, something which makes us ignorant distributists think they cannot hear us no matter how loudly we might yell; and it seems there’s writing on those things covering their ears, which, not incidentally, reads: P-r-o-p-e-r-t-y O-f T-h-e A-u-s-t-r-i-a-n S-c-h-o-o-l.