Neither socialist nor capitalist?

Is there a third way? Do we need one? If it existed, would it be superior to the two obvious ones? Two brilliant friends, GK Chesterton (1874-1936) and Hilaire Belloc (1870-1953) answered yes to all three questions.

Both men were Catholics. Belloc was one from birth; Chesterton converted from Anglicanism in 1922 largely under Belloc’s influence. Both of them were Catholic thinkers, not just thinkers who happened to be Catholics.

This means they were largely guided in their thought by Catholic doctrine and social teaching. Central to the latter were the concepts of subsidiarity and solidarity.

Subsidiarity means delegating all tasks to the smallest and lowest feasible unit, whereas solidarity represents commitment to the common good and shared collective responsibility for one another. Combining the two principles would prevent both statist oppression and atomising individualism.

Any society following these principles politically would inoculate itself against the rise of an omnipotent central state, that essence of socialism when stripped of its bien pensant cant. Localism would triumph over centralism, with most power devolving to local bodies. At the same time, the concept of solidarity would maintain social stability, preventing the appearance of an indigent proletariat.

That way the structural principles of the Church would be transferred onto society at large, preventing both political tyranny and economic exploitation. But how would a national economy function under this system, which Belloc and Chesterton called ‘distributism’?

In common with Hobbes and Locke (both rather the opposite of Catholics), they associated freedom with property ownership. Without owning property and disposing of it as they saw fit, people would never be able to act as free economic agents – even if they were free politically.

What Chesterton and Belloc understood by property was essentially land and other productive assets. As England emerged out of the Dark Ages and into the Medieval period, land in the country was roughly divided into three categories.

Lords, colloquially called squires, owned somewhere between 20 and 30 per cent, those who worked on that land de facto owned about as much again, paying the legal owner, the landlord, a minimal corvée in labour or in kind. The rest was common land.

The Crown, the monasteries and the Church were among the largest landlords, but their economic power was balanced by the squires and the peasants. This was what Belloc and Chesterton called the distributive state.

However, that balance was destroyed by the Reformation, which both writers regarded as the greatest and enduring catastrophe England had ever suffered – not only religiously, but also socially, economically and culturally.

Henry VIII seized monastic lands and the wealth accumulated by the monasteries. But that’s not where the confiscatory orgy ended. Also dispossessed were many guilds, cooperatives and small private holdings, which instantly destroyed the equilibrium England had enjoyed.

The intention was for that wealth to pass on to the Crown, but most of it in fact passed into the hands of the already wealthy lords, whose wealth and power effectively doubled overnight. Suddenly, rather than owning about a quarter of the productive assets, they got hold of half of them. Suffering in the process were not only peasants and artisans, but also the Crown itself – new property came packaged with new power.

The emerging dominant class took over most of the political, legal and military institutions, supplying MPs, ministers, magistrates and generals. The Crown was growing weaker, which set the scene for the revolutions in the next century.

The new class, which Belloc calls capitalist, became a mighty and divisive power in the country, depriving many dispossessed people of property, that foundation of liberty.

In France, the country of Belloc’s birth, transition from the Dark Ages to the Medieval and early modern periods was handled differently. Centralism there rode roughshod over localism.

More and more power was concentrated in the king’s hands, with aristocrats relinquishing their hold on the provinces and effectively becoming nothing but courtiers, the king’s entourage.

When their revolution came, a century and a half later than in England, aristocrats were culled en masse without affecting adversely life in the provinces. Tangible power there already was in the hands of the emerging middle class, with the upper class finding itself at a loose end and irrelevant.

Belloc and Chesterton regarded medieval England as their ideal of social, political and economic organisation. They saw correctly that history could have unfolded differently: the collapse of a distributive society wasn’t pre-determined.

In his 1912 book, The Servile State, Belloc bemoaned the rise of what he called capitalism, with economic power concentrated in few hands, and most of the people reduced to proletarian servitude – even though they could still act as political agents. But that liberty was hollow in the absence of property ownership.

Chesterton’s 1925 book, The Outline of Sanity, makes all the same arguments. Both writers, neither of whom was an economist, argued that it wasn’t the Industrial Revolution that produced capitalism in England, but roughly the other way around.

By 1700 or so England had already become a sharply stratified capitalist society, and new tools, such as the steam engine and the power loom, made the stratification worse. New tools and new industries required new investment, and that could only come from the already wealthy classes, whose power thereby grew exponentially.

Much of the terminology Belloc and Chesterton use, such as capitalism, socialism, private or collective ownership of the means of production, regrettably came from the Marxist glossary. This sounds grating until one realises that the two writers abhorred the Marxist ideal of an omnipotent central state lording it over a powerless people.

Their principal desiderata were individual liberty and dignity, and they didn’t see how these could be achieved with either political slavery to the state or wage slavery to the capitalist. They felt that some principles of a distributive medieval society could be transplanted into the modern soil.

I find their work both interesting and touching in its idealism. They were right in saying that the rise of a small propertied elite would inevitably lead to widespread resentment. As a result, people would become receptive to socialist fantasies, trading even their political liberty for some sort of collective security magnanimously bestowed by the central state.

However, at the moment some two-thirds of Britons own their homes, and about 60 per cent own shares (mostly through pension funds). Their standard of living is beyond anything Belloc and Chesterton could imagine.

Yet neither this property ownership nor a wide spread of relative prosperity has prevented the rise of a mighty central state passing and enforcing dictates over every aspect of public and private life.

The two writers believed that, as a society grows more capitalist (or more socialist), it becomes weaker, and so far I’ve seen little to disprove their observation. However, I can’t see how a modern economy could be organised along distributive lines, and neither, I suspect, would they.

Still, the outpourings of such powerful minds are always worth reading in search of the gems strewn about their pages. Such a search will always be rewarded even if some of their ideas sound naïve and out of touch with our time.

Or look at it the other way: much to its detriment, our time is out of touch with Belloc and Chesterton.