The Home of American Intellectual Conservatism — First Principles

December 18, 2017

Humane Economics
Andrew Abela - 07/01/11

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 (Wilmington, DE: ISI Books, 2010)

John Médaille is an experienced business manager with a graduate degree in theology and a passion for distributism, the economic system proposed by Hilaire Belloc and G. K. Chesterton that promotes widely dispersed property ownership. His book Toward a Truly Free Market, which is being released this month in paperback, is an ambitious attempt to present an exposition and defense of distributist economic theory. While it is expressly “not the great tome that distributist political economy deserves,” its nineteen chapters cover a very extensive scope.

The first two chapters set up the main thrust of the book, which is to demonstrate the important insight that distributism, unlike alternative theories, is an economic “theory that combines both justice and freedom.” Chapters three to five explore whether political economy should be considered a science, and whether we have a correct understanding of our current economic malaise. Here Médaille makes a most notable point, that “those who wish to scale back the extent of government involvement in the economy must first analyze the failures in the economy that make heavy government involvement necessary.” The central failure, explains Médaille, is the lack of justice.

In chapter six, he makes the case for the necessity of justice for political economy. Here, he provides a very forceful criticism of contemporary economic theory, which, “lacking a coherent notion of distributive justice, is not, and cannot be, a complete description of an actual economy.” This is why our economic theory fails us so often: “Clearly, you cannot accurately predict the behavior of a system you cannot accurately describe.” In chapters seven to nine, he extends his criticism of economic theory by exploring, in turn, what he refers to as the “fictitious commodities” of money, labor, and land.

The next four chapters explore in turn: property, just wages, taxation, and government. In chapter fourteen, he explains the harmful impact of the costs of big government on the economy, and proposes ways in which distributism could lead to a dramatic reduction in the cost of government, including eliminating agricultural and transportation subsidies and abolishing the U.S. Department of Education. The next three chapters provide suggestions for changes to taxation, industrial policy, and health care, while chapter eighteen attempts to show that distributism can work in practice, by profiling four cases: the Mondragon cooperative, the Emilia-Romagna regional economy, the Taiwanese “Land to the Tiller” program of the 1950s and 1960s, and Springfield ReManufacturing Corp, an Employee Stock Ownership Program (ESOP) company. In the final chapter Médaille makes Philip Blond’s political agenda his own: to remoralize the market, relocalize the economy, and recapitalize the poor. To this, Médaille adds a fourth point: to reinvigorate and relocalize the political order.

Toward a Truly Free Market is a worthwhile read for anyone interested in learning more about distributism, and what the theory could contribute to current economic debate. The book is “intended to give the nonspecialist reader the intellectual arms and armor necessary to enter the [economic] debate on more equal terms.” Its success in achieving this intent, however, and in appealing to an audience wider than committed distributists, is limited by a number of serious flaws.

First, given its broad scope and therefore necessarily cursory treatment of each of its many topics, the book doesn’t give the reader much guidance as to where many of its insights come from, and where the reader should go next to continue his exploration. In other words, it doesn’t provide nearly enough context for the many important ideas it discusses. Its chapter notes are thin and somewhat idiosyncratic, referring variously to classics of political economy, blog posts, and academic articles. Often, the reader is left with the (false) impression that Médaille is the first person to propose a particular insight, given his lack of references. For example, in chapter three, he criticizes the positive/normative distinction in economics, and rightfully so, because it bares much of the blame, at least in its current conception, for the removal of issues of justice from economics. But Professor Andrew Yuengert, past president of the Association of Christian Economists, has written extensively on the topic in ways that are congenial to Médaille’s line of argument,[1] yet there is no reference to that work or any other on the topic at all. The reader being armed to “enter the debate” needs to be provided with such references and opportunities for further reading, else he is entering the lists only partially clad.

The absence of a proper grounding would not be so serious in what is intended to be a popular, not scholarly, work, except for the book’s second flaw, which is that it is written with a tone of confidence in its arguments that at times is almost cavalier. The book takes on the weighty and important topics of property, wages, taxation, government expenditure, industrial policy, and money, in one volume. It would seem that such an ambitious attempt should be made with caution and humility, but that is not Médaille’s way. For example, in chapter fourteen, explaining how the deficit could be reduced, Médaille writes, “By recalling our army to our shores and investing only in what is needed for a modern army, I believe that we could easily cut a third of the budget.” Perhaps that was a throwaway line, but to toss out a proposal with such vastly complex political andeconomic implications, and to associate the word “easily” with it, weakens the book’s attempt to make the case that its proposals have practical value.

In chapter eighteen he attempts to address the issue of practicability directly. He states correctly that “it is easy—too easy—to come up with abstract systems which are perfection itself; it is much harder to make them work.” He therefore dedicates the chapter to showing how distributism could work in practice. But all he offers here are the four examples I noted above, which unfortunately are too easily rebutted by critics of distributism as exceptions that prove the rule that distributism is not practical. The examples stand out because they are so rarely replicated. The success of Mondragon, in particular, appears to depend very much on the clannish nature of the inhabitants of the Basque region, where it is based.

Finally, the book appears to neglect important work that is going on currently in the same area, most especially those works published within ISI Books’ Culture of Enterprise series, to which Toward a Truly Free Market is the latest addition. This series represents a brilliant idea and a great opportunity to promote discussion of economics from a perspective of subsidiarity and ordered liberty. Therefore it is more than a little bit disappointing that Médaille’s book makes so little use of the earlier books in the series. John Mueller’s Redeeming Economics, which provides a sound empirical basis for addressing issues of distributive justice, receives only a few passing references, while Edward Hadas’s Human Goods, Economic Evils and Allan Carlson’s Third Ways aren’t addressed at all. How are we ever going to make any progress in this area when even those who putatively are working toward the same goals continue to ignore one another’s work?

Toward a Truly Free Market is nevertheless a welcome contribution to a very important topic, especially if it encourages rising economists to follow Médaille’s lead and take seriously the role of distributive justice in the economy, and to explore more deeply the economic insights of distributism.

And if any of those are reading this review, here are two projects suggested by my reading of Médaille’s book:

First, documentation of the many examples of distributism in action would be a great contribution. At the end of chapter eighteen, Médaille mentions microfinance, mutual banks and insurance companies, and producer and consumer cooperatives as other examples; you could add to these the resurgence of local farms and the Community Supported Agriculture movement; the growth of freelance work, especially among computer programmers; examples of successful small retailers; and so on. It would be wonderful if someone (perhaps Médaille himself) would produce a book-length treatment cataloguing and describing these phenomena in detail—with hundreds of examples, not just three or four, because they exist and deserve to be better known and understood.

Second, an annotated bibliography of the important works from the past hundred years or so that address broadly the topic of “humane economics” would be a useful way to ensure that further scholarship in this area builds on all the good work that has already been done. This would include the authors mentioned in this review as well as many others, and could be organized by the topics identified in the chapters of Toward a Truly Free Market.

[1] Andrew Yuengert, The Boundaries of Technique: Ordering Positive and Normative Concerns in Economic Research (Lanham, MD: Lexington Books, 2004).

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