It’s been a while since I’ve reviewed an econ book though this is as much about politics and history as economics.
Essay: The Servile State, Hilaire Belloc, 1912.
I first came across the idea of distributism on Jerry Pournelle’s Chaos Manor blog. Distributism was one of those attempts at a “third way” between capitalism and socialism or communism. In England, it was put forth by two noted writers, both Catholic, G. K. Chesterton and Belloc. In America, it was associated with Dorothy Day and the Catholic Worker Movement.
My only previous exposure to Belloc was his alternate history essay “If Drouet’s Cart Had Stuck”. I got the vague impression that, like Chesterton, he longed for a return to the Middle Ages with the Catholic Church the predominant institution.
I still don’t know that much about Belloc, a very prolific writer. (You very well know some of his nursery rhymes and epigraphs without knowing it.) This short book, more of a pamphlet, is one of his books still discussed.
Distributism, of course, never caught on under that label though its tenet of decentralized economic power is still very much discussed. And, in this book, Belloc predicted it wouldn’t prevail. It’s a gloomy, concise bit of economic history which, despite some factors Belloc couldn’t see like massive immigration into western societies in the 20th century and automation, managed to be rather predictive.
Belloc doesn’t explain how distributism is to be done here. Rather he lays out a stark choice: either adopt something like distributism or you will get the Servile State.
What is the Servile State? It’s a society where so many people are “constrained by positive law to labour for the advantage of other families and individuals” that it marks a society’s character. They are slaves. They may not legally be owned but the element of compulsion exists for their labor. Nor does it make any difference if they have “free time”. That doesn’t alter their basic situation. It also doesn’t matter that people can fall in and out of the condition of slavery if the proportion of slaves in a society doesn’t significantly change. A slave must labor for others to exist.
That society is not servile in which men are intelligently constrained to labour by enthusiasm, by a religious tenet, or indirectly from fear of destitution, or directly from love of gain, or from the common sense which teaches them that by their labour they may increase their well-being.
The “indirectly” part is important there.
Nor is Belloc impressed by the libertarian moral reliance on contracts. A contract to labor for a week doesn’t mark a laborer as a slave. A lifetime contract or a contract binding a laborer’s offspring to labor for bare subsistence does.
None the less, there is a standard of subsistence in any one society, the guarantee of which (or little more) under an obligation to labour by compulsion is slavery, while the guarantee of very much more is not slavery.
Belloc looks at the history of slavery in European history from the Roman Empire on. While slavery was never declared immoral by the Church, it gradually died out. (And the Bible nowhere condemns slavery.) Christians began to balk at the idea of selling people to pagans. from the fall of the Western Empire to contemporary times. The latifundia, the vast estates, what Belloc calls villas, that sprang up in the wreckage of the Western Empire’s collapse were a system of slavery. But gradually, between the fifth and ninth centuries, the villa system altered into European feudalism. Custom dictated obligations from serfs, but they could keep surplus production. By the time of the Crusades, the serf was almost a peasant. Still legally bound to a particular piece of land, they could enter also other professions.
By the end of the 14th century, social custom had evolved to the point where a peasant could proclaim he owned a piece of land. Guilds had sprung up with their co-operative poolings of money for economic production. Economic production was widely distributed between the aristocracy, the Church, guilds, and peasants.
All this matches what I know of those historical times, particularly the state of peasants right before and after the Black Death.
We are not yet at capitalist England, and Belloc argues that England set the model for a capitalist state.
And what does Belloc mean by a capitalist state? A state where citizens are politically free but also divided between the proletarian and capitalists with the latter being in the minority, sometimes a small minority.
Belloc hammers the point, a crucial one, that it was not the Industrial Revolution that created capitalist England. It was Henry VIII.
Belloc’s gripe against the king isn’t religious – though I very much suspect Belloc lamented the Reformation. It’s economic. The crucial point of economic history is when Henry VIII seized the Church holdings in England. If he would have kept them, distributed the wealth widely among his subjects, that would have been all right. But Henry bought political support among the nobility by giving them a great deal of what he confiscated. The balance of economic power was upset. The aristocracy became economically dominate.
It was that aristocracy that had the best means of investing in industrial production. Workers from the country flooded the “dark satanic mils” for better wages. But their standard of living had been impoverished by the results of nobility gaining so much economic power.
By the time of his writing, Belloc notes that the vast majority of Englishmen were proletarians, those with no useful control over means of production.
But capitalism is not stable, Belloc argues. You can argue the capitalism is free, and it is in a political sense. You can argue that the labor arrangements are legal, and so they are. But the proletariat doesn’t perceive this as a moral order. It is anxious for its security.
And, in a state with so much concentrated economic power, does political freedom really exist? And is England really a perfect capitalist country? The questions are related for Belloc.
Completely free men would die in such large numbers in a perfect capitalist state that labor would dry up. That’s why, starting with Elizabeth’s Poor Law, England began legistlating for the relief of the poor.
At this point, Belloc makes some typically socialist arguments about the wastefulness of capitalism: competing firms and advertising. He also subscribes to the idea of the “surplus value of labor”.. Capitalism also creates monopolies and collusion. (Remember that Adam Smith said the first thing businessmen in similar ventures immediately discuss is collusion.)
So, primitive welfare and state granted monopolies are the result of capitalism instability.
So, capitalism has some unstable features. It wants to change into something else. Belloc argues a capitalist society can only evolve into three things: slavery, socialism, or a distributive state, what he calls “Property”.
Slavery would solve capitalism’s problems. But no one is going to argue (or prevail if they did) a return to slavery. That makes the choices two: socialism or private property. If you think private property is the problem, you have to grasp the nettle and control the means of production. The choice is stark: private property or public property.
Belloc’s whole thesis is that capitalism breeds “Collectivist Theory” but actually produces something else, the Servile State.
Socialism seems the easiest solution to capitalism’s problems. But, unlike the distributive state which actually existed in European history, socialism is just a theoretical solution. (And, of course, in the intervening century, various communist countries ran the experiment, and the theory was found wanting.)
But, while traditionalists and conservatives may favor the practicality of distributism, the socialist has a few advantages, some appealing arguments. Don’t public utilities show socialism can work? Why, in a public enterprise, isn’t the public like someone owning shares in a private company, “stakeholders” as modern bureaucratic parlance has it? Socialism seems a moderate reform and way less work than distributism. It’s the difference, Belloc says, between a doctor telling a sick man to take such and such exorcise to get back the function of limbs or the doctor telling the sick man that he is going to have to totally rearrange his way of life.
Belloc freely acknowledges some of the practical problems of instituting a distributive state.
But the biggest problem is a moral one. Does the proletariat really want to own things? If they are given property, would they squander it? If they got a piece of a large business, could they find men to run it?
Socialist reformers use the modes of thought, the language of capitalists. It doesn’t seem alien to the public. Capitalists can maneuver to earn even more money under supposed reforms.
Belloc’s book is very concise and ordered in its arguments, and he next looks at the two types of socialist reformers: the kind who genuinely thinks it is a solution to capitalism’s problems and the kind that really likes the idea of ordering and regularizing society. The two groups are, ultimately, antagonists.
The genuine reformer speaks of abolishing property altogether. The English public still retains the moral idea of property ownership though. They aren’t keen on confiscation, but they may accept “buy outs”.
The capitalist, short of a gun pointed at him, isn’t going to go along with confiscation either. But what if he promises to ameliorate the conditions of his workers? No resistance to reforms and the reformer’s goals are met, right? The genuine socialist is neutered in his goal of seizing property. He’s gotten what he wants after all, a better life for the proletariat.
In this way the Socialist whose motive is human good and not mere organisation is being shepherded in spite of himself away from his Collectivist ideal and towards a society in which the possessors shall remain possessed, the dispossessed shall remain dispossessed, in which the mass of men shall still work for the advantage of a few, and in which those few shall still enjoy the surplus values produced by labour, but in which the special evils of insecurity and insufficiency, in the main the product of freedom, have been eliminated by the destruction of freedom.
You have arrived at the Servile State.
As for the control freak version of socialist,
Let laws exist which make the proper housing, feeding, clothing, and recreation of the proletarian mass be incumbent upon the possessing class, and the observance of such rules be imposed, by inspection and punishment, upon those whom he pretends to benefit, and all that he really cares for will be achieved.
(As an aside, you have arrived at the sort of person talked about in James Burnham’s The Managerial Revolution, the appartchik that runs the modern world in business and politics.)
And what of the “practical reformer”, the man who just wants to help the proletariat but isn’t bound to collectivism? (Belloc has particular scorn for this sort.) This sort is a trimmer who will adopt the policies of his “intellectual superiors”. To this sort, the bit-by-bit destruction of freedoms in the name of practicality will always prevail. Unfortunately,
He is to be found as he never was in any other society before our own, possessed of wealth, and political as never was any such citizen until our time.
The practical reformer isn’t his own man either. He is merely the ally of others.
Belloc is pessimistic, though, that the public has a whole is suitable for the reforms he desires. In the last 40 years, they have lost the idea of property. Many don’t want to own it. The propertied class is one they are hostile to but have no idea how one becomes propertied. They are incorrigible “wage earners”. That is the only life they can conceive of.
Bluntly, he suspects that the bulk of the English proletariat would accept a life contract at their current wage. No matter that such a contract is the mark of a slave.
There is also the factor that the proletariat is muted in their dissent by fear of losing their jobs.
After the long terrors imposed upon them through a freedom unaccompanied by property, they see, at the expense of losing a mere legal freedom, the very real prospect of having enough and not losing it.
Mentally, the Servile State exists already in England argues Belloc.
It exists in other forms too. The state already has laws, and Belloc cites examples including minimum wage ones, that regulate property use. They promise the proletariat things and limit the actions of the capitalist. Thus, we have left true capitalism already.
With minimum wage laws, the proletariat has basically agreed to security and to give up the surplus value of their labor. (Belloc has been criticized for adopting this notion form Marx – though it actually predates Marx.)
To pay for unemployment insurance, workers are taxed. They are not allowed to practice the right of property in how much they will save for such an eventuality or the management of it. And, of course, hordes of managers will be required to collect and manage the laws to assure that the distribution of payments comports with some agreed upon value of good.
Belloc concludes this section with:
The future of industrial society, and in particular of English society, left to its own direction, is a future in which subsistence and security shall be guaranteed for the Proletariat, but shall be guaranteed at the expense of the old political freedom and by the establishment of that Proletariat in a status really, though not nominally, servile. At the same time, the Owners will be guaranteed in their profits, the whole machinery of production in the smoothness of its working, and that stability which has been lost under the Capitalist phase of society will be found once more.
I’d argue Belloc was prophetic. After his book, most countries in the West did adopt what he terms the Servile State. The proletariat lived under capitalism and didn’t like it.
As to the mental insufficiency of the proletariat to own property, I would say, since I’ve dealt professionally with many on its lowest rungs, that he was right. The conservative utopian idea of “enterprise zones” which argued the proletariat at the lowest rungs wanted to be, could be, property owners didn’t work in America. Indeed, it didn’t get many takers among the proletariat.
The Servile State has recently adapted more sinister aspects, particularly in America. Employers firing employees for their private opinions is now routine. Loss of a job can mean loss of a place to live, maybe even health care. The slave must mute himself. His comfort, perhaps survival, is at stake.
In the West, so-called public-private partnerships serve the Servile State. The U.S. government employs private organizations to sanction and silence and surveil its citizens. Monopolies in tech and retail are allowed to exist because they are useful means of achieving things forbidden by the state: restricting financing, censoring speech, intimidating dissidents. Capitalists mouth and enforce state sponsored political orthodoxies in exchange for a blind eye on their violations of the law and that no serious effort will be made to take their property.
Belloc overstated things in arguing that the Servile State would compel labor. Millions live on just public assistance with no work required – and sometimes never done – by the recipients. There are no press gangs rounding up office workers. However, one can wonder how long the dole will last before a Great Default occurs in the world economy, when millions find out that they are never going to be paid what governments and companies promised them.
The compulsion of those who chose to work as well as reducing their wages has been effected by the destruction of private unions and mass immigration that lowers wages. Economic mobility in America has lessened. (Remember, the Servile State can still have economic mobility for individuals. It’s just that is for the minority of individuals.)
Automation has created calls for a universal basic income. Such public assistance will come, no doubt, with a social credit system. After all, our version of the practical reformer will insist on both aiding people unemployed by automation and attaching strings to that aid.
And some among our governmental and business elites, really want us to get out of the habit of property: “You will own nothing.” Well, you may not. They no doubt still will. (The notorious World Economic Forum video selling that notion seems to have been purged from Twitter. But there’s another one soft-selling the same idea.)
There is less reason for optimism now than even in Belloc’s time. But, as Belloc argued, what choice do we have, if we want to preserve our dignity, but think of ways to bust up the economic centers of power, to bring them back under our control and the control of those who share our value?
It’s a compelling, short book. Read it and decide for yourself.