The evils of capitalism are real (namely, not enough capitalists)
“. . . If we do not restore the Institution of Property we cannot escape restoring the Institution of Slavery; there is no third course.” — Hilaire Belloc, The Servile State
Peter Thiel has a saying that a startup messed up at its foundation cannot be fixed.
“Thiel’s Law” applies to all human enterprises built on a shaky structure — micro or macro — from families to our crony-capitalist economy.
Karl Marx thought that capitalism was the base of society, supporting an unstable political and social “superstructure” above it.
Workers under capitalism, Marx predicted, wouldn’t be able afford the goods they produced for their bosses, so he predicted that an organized workers’ movement would inevitably overthrow the bourgeoisie.
Marx was partly correct: the October Revolution of 1917 did happen, but the subsequent 70-year experiment in tyranny and misery of the Soviet Union has thoroughly refuted most of Marx’s prescriptions.
Marx’s error was two-fold:
1. He didn’t foresee capitalism’s knack for addressing its critiques (such as worker insecurity) through piece-meal reforms that redistributed wealth from the owner-class to workers to keep the revolt at bay.
2. He misidentified the economic relations as the foundation of society, when the real foundation goes much deeper — to the land.
But what about Marx’s diagnosis about the inherent instability of capitalism?
I believe that Hilaire Belloc is the thinker the honest Marxists are seeking. Belloc more accurately diagnosed the inherent instability of capitalism and predicted how it would collapse into something that is neither capitalist nor socialist, but fundamentally servile.
Belloc’s answer to “wage slavery” is not communism but private property, widely distributed.
Writing in the early 20th century, the Catholic historian and “distributist” tells a counter-history to the narrative of industrial progress and European enlightenment in his 1912 treatise The Servile State.
We often hear that everything started to brighten once a rational, skeptical society threw off the yoke of superstition and left the stagnant Dark Ages behind. The Servile State, however, casts the Middle Ages as a time of moral and social progress. It was the time when the ancient ideas of slavery and permanent servility were finally abandoned in favor of more humane relations between the owners of capital and their workers.
Before coming to his critique of servile capitalism, Belloc notes that the mass of people have been compelled by law to labor for the advantage of a few for most of human history.
In other words, slavery has been the fundamental institution of civilization:
“There was upon the one hand the citizen who had a voice in the conduct of the State, who would often labor but labor of his own free will and who was normally possessed of property; upon the other hand, there was a mass dispossessed of the means of production and compelled by positive law to labor at command.”(p. 42)
This condition was considered a fact of life because of the poverty of the ancient farming world. Thus there were few complaints or even a sense that progress was possible.
The apathetic acceptance of slavery as an undignified inevitability was founded on a set of Pagan spiritual beliefs about the nature of the world. It was not “until Europe engaged upon that considerable moral experiment called The Faith” that the original servile state could be transformed, gradually, into the more just arrangement of a society of owners — i.e., the distributive state.
The Distributive State
It’s strange to see the word “Serf” used with positive connotations, but Belloc shows that compared to the agricultural slave, the Christian serf of medieval times had a great deal of freedom:
“The Serf of the early Middle Ages, of the eleventh and early twelfth centuries, of the Crusades and the Norman Conquest, is already nearly a peasant. He is indeed bound in legal theory to the soil upon which he was born. In social practice, all that is required of him is that his family should till its quota of servile land, and that the dues to the lord shall not fail from absence of labor. That duty fulfilled, it is easy and common for members of the serf-class to enter the professions and the Church, or to go wild; to become men practically free in the growing industries of the towns.
With every passing generation the ancient servile conception of the laborer’s status grows more and more dim, and the Courts and the practice of society treat him more and more as a man strictly bound to certain dues and to certain periodical labor within his industrial unit, but in all other respects free.” pp. 53–54
Nearly a peasant? Indeed, the peasant (even more so than the Serf) was the product of a moral evolution that essentially granted workers ownership of their Lord’s land in exchange for a fraction of the produce.
At the same time, European towns began to develop their industries through the Guild system, in which “well-divided capital worked cooperatively for craft production.”
The guilds made sure that no single member amassed his business fortune at the expense of another. Restraints on liberty were designed to preserve liberty such that the overall “stamp of society,” in Belloc’s words, was one of ownership — not a world divided between capitalists and proletariat or slaves and masters.
Thus, the state under this arrangement was not an elite caste of landowners (although such a caste did exist), nor the Church exercising temporal authority over all of Christendom, but rather “an agglomeration of families of varying wealth, but by far the greater number owners of the means of production.” (p. 56).
The Road to Capitalism
Belloc’s counter-history rests on the land, just as all wealth rests on a foundation of fertile soil and food produced in it. Although today the value of agricultural production is a tiny fraction of total output, a few hundred years ago it was closer to half of output.
Up until the 16th century, the land in England was held mainly by the Catholic Church and the lords. The Church owned around 1/4 to 1/3, and the lords owned another 1/4 to 1/3 outright.
The rest was was effectively possessed by the peasantry, along with the houses and implements used to maintain it. The peasants paid dues to the lords, who administered justice through the courts but otherwise basically left the peasants to their own devices.
In 1535, the monastic lands of the Catholic Church were seized by King Henry VIII and over time receded into the hands of the large land-owners, who came to own closer to half of the land. These “land-lords,” already in control of the courts, became an ascendant political and economic class — an oligarchy that would eventually eclipse the Monarchy in wealth and power.
Within 100 years, the British Parliament was filled with a nouveau rich comprising the heads of “country houses,” mirroring the Roman villas of old, which had employed slaves as their primary employees.
Against this backdrop, Belloc takes us into the Industrial Revolution, the period in which the progress towards distributed ownership would be interrupted and substituted with “the dreadful moral anarchy against which all moral effort is now turned, and which goes by the name of Capitalism.” (p. 58).
Part II picks up with Belloc’s ideas that the development of industrialism along capitalist lines was not inevitable — it just as easily could have come about under a more equally distributed regime of property — and why it will either give way to a collectivist state, return to a servile state, or revive a distributive state.