With the latest round of “Wall Street Socialism” upon us, I found an encyclopedia article on distributionism, a little known non-capitalist/non-socialist form of economics growing out of Catholic Social Teaching, very revealing. Author John C. Medaille (click the link for an introduction to…for the quotation found on p.1):
[Hilaire] Belloc believed that Capitalism could never achieve economic equilibrium on its own. It is an unstable system for two reasons: divergence from its own moral theory and from insecurity of two kinds. The moral theory of Capitalism is based on freedom, but it tends to accumulate property in the hands of a few owners; as ownership becomes more and more limited, more and more power passes to a small capitalist class. The state increasingly becomes a tool to protect “wage contracts” which are increasingly leonine, that is, based on inequality. One side may refuse the contract (the employer), but the other side, the worker, generally has no choice but to accept it because the alternative is starvation. The state can no longer be a neutral arbiter between classes but becomes a defender of one class upon whom jobs and growth are increasingly dependent.
In addition to this moral problem, Capitalism also has two kinds of insecurity: insecurity for the workers and even insecurity for the capitalists. There is insecurity for the workers because the wage fetches less in old age, nothing in sickness, and jobs themselves are at the discretion of capitalists3 (e.g., “outsourcing”). But Capitalism also produces insecurity for the capitalist. Competitive anarchy makes the system as unstable to owners as it is to workers and results in gluts and underselling. Capitalism responds by becoming less capitalistic; it uses the law to raise barriers to competition and to limit liability; the corporation itself is an adjustment to the inherent instability of Capitalism that allows investors to limit
In other words, the system fluctuates between oligarchic monopolies (conservative Reaganite Revolution) who then go about after ensconcing themselves in power writing laws to their favor, breaking other laws, and de-legitimizing the market and the market ethos and undermining freedom in a governmental system that on paper puts so much emphasis on freedom (i.e. liberal free market democracies). For an example of this see sub-prime loan business and mortgage industry.
As a result in a Hegelian dialectical fashion (anti-thesis), a left-wing reaction on behalf of the workers takes place, but is funneled via a massive growth of governmental bureaucracy, thereby in one sense empowering (at least granting an ally to) the worker but on the other hand further embedding tyranny–what Belloc called the Servile State. The Servile State grows through greater expropriation of income (i.e. taxes if you’re a Democrat/ballooning debt if you’re a Republican) as well as manging the redistribution of said wealth (to the lower/middle classes if you’re a Democrat/to the upper oligarchic elites if you’re a Republican).
The rise in more populist economics from the Democrats–Hillary going so far as calling for wage controls in the housing market–is the sure sign of a different economic and governmental outlook and the inevitable backlash against the corporationist monopolistic right-wing economics over the last 30 years. [Recall Bill Clinton won in ’92 because of Ross Perot (populist backlash from the right) and the recession (against HW Bush) And the Dems won Congress in 2006 on Conservative Corporate Corruption.]
Looking at Belloc’s predictions (written in the 1910s!!!) I’d say, check, check, check.