Capitalism: a response to Dr. Graham and Regina Schmiedicke

by Martha L. Blandford

I believe that Regina Schmiedicke, Dr. Graham and I all share the same end with respect to the type of society in which we wish to raise our children. We are all seeking one in which we can best live out our Christian values. We part company when it comes to the means chosen to achieve this end.

First, I would like to thank Mrs. Schmiedicke for clarifying what is meant by distributism. I was not aware of its historical context, and the term does have a dubious connotation. One chief reason for this is the fact that most income is not distributed; it is earned. People paying for goods and services generate income. Other “income” is distributed from a central point as social security checks, welfare payments, unemployment compensation, farm subsidies or corporate bailouts. But that is not how most people get most income. (The term “capitalism” likewise is misleading, as I will try to show later.)

Having done some recent research on distributism, via the works of Hilaire Belloc and G. K. Chesterton, I understand that the term “distributism” originally pertained to land, as Mrs. Schmiedicke mentioned in her last article. Because each person was born into a fixed social class in England when distributism was originated, I can understand how it was viewed as a solution. I also learned that despite its name, distributism shares with capitalism the goal of reducing statism. But the way in which Regina Schmiedicke would have government implement distributism, makes me question whether that goal is taken seriously.

She writes: “distributists were calling for a voluntary distribution of land and resources, with no government coercion, just government incentives.” But later in the same article, she suggests that the government could be used “to set a tax on chains—a business that owned only one store would be given a tax break, where businesses that had several stores would be taxed accordingly, making mega-chains financially punitive.” Perhaps Mrs. Schmiedicke’s definition of government coercion is vastly different from mine, but punitive taxes certainly fits the bill as far as I’m concerned. In the words of G.K. Chesterton: “A citizen can hardly distinguish between a tax and a fine, except that the fine is generally much lighter.”

Perhaps her war on big business is fueled by a fear that large companies with a big market share will turn evil. In this regard, she writes: “But when Wal-Mart has put all the competition out of business, will it remain so cheap—or so moral?” It is precisely in a free market that the consumer can wage the battle against the “immorality” of big businesses—by shopping elsewhere. (It is only when big business is protected by the government that it is immune to market forces. Sadly this is often the case today in our mixed economy. Unfair government protection of big business renders Washington’s bureaucrats a more fitting target of Mrs. Schmiedicke’s criticisms.)

For those who do not believe that large companies are immune to market forces, consider the plight of General Motors. For decades GM controlled the market for automobiles until Toyota, Honda and other Japanese automakers proceeded to take away substantial parts of that market. By the early 1990’s, the largest selling car in the U.S. was made by Honda, and Toyota was producing more cars in Japan than GM was in the U.S. In the airline industry, what was considered the best known of many airlines, Pan American, folded. And a government bailout was the only thing that saved the Chrysler Corp. from extinction. These were not isolated flukes. In a period of just ten years, nearly half of the firms in the Fortune 500 went out of existence.1

My last point of contention with Mrs. Schmiedicke has to do with the term “capitalism.” Just as “distributism” can mislead one to think in terms of government redistributism, so “capitalism” can lead one to think in terms of material capital only. Mrs. Schmiedicke seems to couple the meaning of capitalism with “materialism” and “thoughtless consumerism.” The truth is that laissez faire was named capitalism by its opponents. It is misleading because it is not an “ism.” In other words, it is not a philosophy but an economy. Simply put, it is nothing more and nothing less than an economy which is not run by political authorities. In this sense, it is morally neutral. Of course, a person could choose to become materialistic in such an economy, but assigning a group of elected officials to limiting citizen’s choices is not the best cure for that. Should people forfeit their freedom to the state because they cannot stand up and say “No”? If the human conscience is our moral muscle, under such governmental controls it would surely atrophy.

Dr. Thomas Graham would rather call these government controls “checks and balances.”

In his article critiquing capitalism it seems he is alarmed by the division of classes a capitalist economy supposedly creates. He writes: “The poorest 20% own or control 1% of the wealth in the U.S. The top 20% of families with the highest earnings ($64,000 plus) receive 44.6% of all income…” But what his statistics fail to include are differences in age and income, making them terribly misleading, and would have people believe there is only a division of class. Younger adults, for example, usually earn less than that of middle-aged people. This fact can hardly be considered startling, much less sinister. When I was in my twenties I made far less than my father did in his forties, yet this is hardly an “inequity” to be “corrected” by the government—especially since in time I will likely earn at least as much as he, given the general rise of incomes over time in the American economy. Only by ignoring the age factor can income and wealth statistics be automatically translated into differences between classes. If a man were using a wheelchair due to a broken leg, should he be labeled handicapped even though in two months he’ll be walking again? Yet Americans are labeled “poor,” “middle-class” and “rich” based on their transient location in the income stream.

Despite the enormous influence of age on income and wealth, statistical disparities are often equated with moral “inequities” when discussing economic differences.

In conclusion, I realize that what concerns both Dr. Graham and Regina Schmiedicke are the grave injustices they see, and perhaps have experienced, in our society. As Christians, we are all striving to keep God’s commandment to “love your neighbor as yourself.” We look upon those who are suffering physically or mentally and we reach out to them with benevolence. Certainly the free market is not the solution to these problems; it does however provide the best environment for the common man’s material needs, leaving him the energy to seek out spiritual nourishment. In his book, Masters of the Dream, Dr. Alan Keyes writes concerning statism:

“...the welfare state has failed in the United States…the most obvious manifestations of this failure are economic. This has led many people to talk as if the reasons for failure are also economic. Yet the poor performance of the Soviet economy, for example, was not just the result of poor management or lazy workers. It resulted from the fact that the Communists tried to organize the Soviet economy on the basis of a bad concept of the human person. Similarly, the poor results of the liberal welfare state are not solely the result of legislation poorly conceived, or programs poorly managed and organized. The welfare state is based upon the same bad concept of the human person. It is a concept that emphasized human needs while neglecting human capacities. It stresses individual helplessness and weakness, undermining the sense of personal responsibility. It justifies ever greater concentrations of power in the hands of the state, leaving people each day more powerless to effect and improve their own condition.”2

With all its good intentions, distributism, as it has been so far discussed in the Concourse, will only serve to increase the power of the state, thus limiting man’s freedom.

Martha Blandford

Martha (Cotton) Blandford ‘89 and Scott Blandford live in Ft. Thomas, Ky. where Scott is a software engineer. They have one child, Katherine.

  1. Robert L. Bartley, The Seven Fat Years: And How to Do It Again (New York: Free Press, 1992), p. 140 ↑
  2. Alan L. Keyes, Masters of the Dream (William Morrow and Co., Inc., 1995), p.148. ↑