The Circular Firing Squad

Given the party's defeat in the last two elections—not to mention the spectacular incompetence of the Bush administration—it is not surprising that the Republican Party is going through a period of self-examination. This is proving to be a very painful process indeed.

In a two-party system, the parties tend to be broad-based alliances among interest groups and ideologies that might otherwise have very little in common. For a while they may come together for the purpose of gaining power, but they have difficulty in finding a common ground for actually ruling. Unless there is some over-riding ideal or perceived crises that can unite the factions, internal dissension is a greater threat to the party in power than is the party in opposition. Indeed, a president must often make alliance with the opposition party against his own in order to rule at all.

The last president to have a real unifying ideology was Reagan. However, his small government rhetoric was belied by his big government actions. He managed to triple the national debt and favored the financial interests over the industrial base, turning us from an exporting country to an importer and a debtor nation. The resulting financial difficulties doomed the re-election of his successor.

Carter, the quintessential outsider, found that he was outside his own Democratic majority, and the Congress controlled by his own party paid him very little heed. Clinton, for all his vaunted reputation as a classical liberal, ruled more like a classical Republican on such diverse issues as free trade, balanced budgets, welfare reform, foreign policy and financial deregulation. Indeed, the blame for the current crises lies as much with Clinton as with Bush. And his grand liberal initiatives, such as universal health care and global warming were largely failures, while his effective liberalism was confined to the social issues of gay rights, abortion, and “multi-culturalism.”

Bush II benefited from 9/11; in the fall of the Twin Towers he found the unifying theme of his administration, and all his efforts went into two wars, to building a “national security” apparatus of the most intrusive kind, and into cutting taxes even in the face of rising deficits. Everything else went to hell, and then the wars went to hell, followed quickly by the economy. It is the great irony that the first MBA President turned out to be an incompetent manager, and will likely be remembered as among the worst, if not the worst, of all our presidents, a singular accomplishment in itself.

Obama takes the reins at a time of crises, and this will likely give him an extended period of grace. If he can do something, or at least appear to do something, he has the opportunity to become the next Roosevelt. But I have my doubts. Economic stimulus does work, but it works best in an economy that is largely self-reliant or has balanced trade. The U. S. is not the former and lacks the latter; a stimulus package might just stimulate the Chinese economy and the Arab oil merchant. And his economic team, though super-competent, is largely drawn from the financial sector rather than the real business world, the world were real products are made by American workers. Still, I wish him all success, for my own sake and the sake of my children and grandchildren. He is a thoughtful man and may actually recognize the problems. We shall see.

But where does all this leave the Republicans? Success in American politics, at least since Roosevelt, has been rooted not so much in the triumph of ideas as in the failure of the other party. But even with the spur of failure, a party needs some semblance of ideas to present, ideas that the public does not regard as already discredited. What ideas does the Party have to offer, both to the new Administration and to the public?

The problem is not that they have too few ideas, but too many, and all of them at odds with each other. Of the groups that are willing (sometimes reluctantly) to identify themselves as “conservative,” there are traditionalists, neo-conservatives, social conservatives, libertarians, pro-life advocates and even (it cannot be denied) outright racists and jingoists. But The real question is, “What is it that conservatives seek to conserve?” The obvious answer is “liberty.” But the precise meaning of this term seems to cause a lot of dissension. For the neo-con, it means a strong central government with a strong military and supported by an intrusive national security apparatus and strong globalist corporations in an environment of doctrinaire free trade. For the many of the libertarians, it means exactly the opposite. For traditionalists, it is a concern with kith, kin, church, and country, but for others these healthy concerns have mutated into a fixation with race and nationalism. And so on. Perhaps the strongest element is that they tend to be church-goers. This is especially true of the pro-life groups. The party gains much of its strength from its anti-abortion and pro-marriage rhetoric, but abortion was named as a top issue by only 11% of Republicans in the recent election, according to Fox News' polls. Indeed, restrictions on abortion went down to a landslide defeat in South Dakota, one of the reddest of the red states.

But now all the factions formed a circular firing squad to eject the others from the party. The neo-cons attribute the failure to the Sarah Palin types, detecting a pure anti-intellectualism. While Palin may not have been the sharpest knife in the drawer, she did inject some life into what was an otherwise dull campaign. Indeed, the neo-cons may be the first to bolt the party, as if Obama didn't have enough problems already; their “conservatism” was a bit too new-fangled for the rest of the party. Electorally, they are the weakest group; not many people actually identify themselves as “neocons.” Nevertheless, the are institutionally important, since they control a number of important think tanks, such as The American Enterprise Institute, are well connected to the media from Fox News to the New York Times, run several important opinion journals, like The American Spectator and National Review, and they have a strong influence on talk radio and on such popular writers as Ann Coulter. It was due to their institutional strength—and their friendship with Dick Cheney—that they were able to capture the administration of a weak and incurious President.

But while the party is more Sarah Palin than David Brooks, Sarah has little appeal outside the base, and it is unlikely that even four years of reading all the newspapers in Alaska will make of her a thoughtful and effective candidate for 2012. Indeed, no one in the party has much power to reach beyond their own group. Ron Paul, for example, was well-funded and had a corps of dedicated followers, but his showing was disappointing.

Even the term “conservative” is becoming problematic for some on the right. Take the right-wing gadfly, Taki Theodorocopulos, who provided the original funding for The American Conservative magazine, whose founding editor was Pat Buchanan. Taki also funds the popular website TakiMag and has asked his writers to avoid the term “conservative” in their work, because, according to Taki, the second someone reads the C-word the mind jumps immediately to Dick Cheney and Paul Wolfowitz. In Taki’s words, “Bush has done for American conservatism what Hitler did for the German variety—ruined it, ruined the very name!” Taki is on the far right (and I do not mean that in a pejorative sense) of the party, and when he won't use the “c-word,” you know that something is fundamentally wrong. Indeed, some writers at TakiMag have begun attacking The American Conservative as too “leftist.” TakiMag has recently banned all public commentary on its website, which will undoubtedly shrink the attention that it gets. The editors gave no reason for this, but it may be that the site had attracted far too many who saw conservatism in terms of racial purity. But in that, the posters were no worse than some of the writers.

Well, everybody seems to be to the left of everybody else. So what is wrong with the Republican Party? Let me suggest that the problem is that they have no idea of what they ought to conserve; they have no idea of what constitutes liberty. Indeed, the only common theme among the factions is economic, and in that what they are trying to conserve is economic liberalism, the doctrine of laissez-faire capitalism. They have forgotten that this was the very doctrine that destroyed conservatism in the 19^th century, and while it is now over 200 years old, it will never be conservative.

What conservatism ought to conserve is the proper scale of things; government at its lowest possible level, strong families as the foundation of society, small manufacturing, small farms, strong communities. Low taxes, to be sure, but taxes commensurate with the tasks we ask government to perform. We know that the key to lowering taxes is to localize government as much as possible and reduce its scale. But you cannot have localized governments in the face of commercial institutions that are bigger than most states—indeed, bigger than most nations. These institutions declare themselves “too big to fail,” when in truth they are too big to succeed without massive government support. Republicans since Reagan have tried to grow government, shrink taxes, and deregulate everything. Alas, they have been all too successful.

Distributists know that the key to shrinking government and ending oppressive taxation is to shrink the need for government. Great and global institutions require big government and large military and regulatory apparatuses. And these require big taxes. And while they create great wealth, for some, they create great dependency for the mass of men, a dependency that expresses itself as the welfare state. The small farm is better for food, but it is also better for community; the small manufacturer, tied by bonds of economy and affection to his locality is the basis of a sane economy.

Taki may with reason ban the C-word, since America does not have a conservative party, and perhaps never had one since the death of Jefferson. It has two liberal parties that squabble over details but agree on the larger principles. The right-wing liberals cling to the antique but failed economic liberalism; the left-wing liberals realize the failure of antique liberalism and want the government to bring the prosperity to all that laissez-faire never did and never could.

But because America has no conservative party does not mean she has no conservatives. Indeed, The left wing is scratching its head over the fact that the Black Obama voters in California voted solidly for a ban on gay marriage. At heart, America is a conservative country, not only in the South and Midwest, but in the Northeast, Northwest, and even in the great cities that are regarded as the strongholds of liberalism. Indeed, much of the new liberalism today involves a certain nostalgia for the land, for the community, and for a more human scale to the economy and to politics. It is a natural conservatism that spans race and age and gender. Indeed, the newcomers are more authentically conservative than many of the older population. But American conservatism lacks any real institutional support, and any real ideology. It picks up what older liberals have discarded and calls it conservative, and then is very surprised when it turns out liberal.

Distributists have no real party, though many feel a certain attachment or even affection for the Republican Party, largely because of its half-hearted stands on abortion and marriage. And while this is reason enough to support the party, it is not reason enough to take it seriously. We must always realize that while we welcome their support on family issues, it is the rest of their ideology that makes the family, and the community, difficult or impossible. But times are changing, and changing rapidly. We may be in a profound crises that will change the nature of America forever. We need to be keen spectators of the results of the circular firing squad, and find places where we can have influence. But mostly, we need to wait and work, and where possible, build local institutions and local farms and businesses.

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Merry Christmas!

We at the Review wish all our readers and their families a merry Christmas.

Felix dies nativitatis!

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The Health Care System and the Guilds

There can be no question that the American health-care system has tremendous problems. We spend almost as much per capita in public funds as do the Europeans, but we do not have universal service. We spend a greater amount in private funds, yet we do not have free market in medical care. It is almost as if someone deliberately designed a system that combined the worst features of socialism and capitalism into one Rube Goldberg operation. We spend more than any other country in the world on medical services, yet the results are near third-world levels.

The debates on this issue usually take place within this framework of “free market” vs. “socialized” medicine, yet the system we have is neither and both. It cannot be a free market system because the supply of medicine and medical services are limited by licenses and patents. Milton Friedman advocated abolishing the licensing of doctors altogether. Friedman argued that medical licenses restrict the supply of doctors and thereby raise the cost. He believed that the free market would judge medical competence better than any license board, rewarding the competent doctors and punishing the incompetent.

The problem with Friedman's argument is that we have already tried that. Right into the early 20^th century, doctors were unlicensed; they took perhaps one to two years at a local medical college, usually a for-profit institution run by local doctors who lectured at the college. After their course of lectures, and without ever having touched a microscope or a cadaver, they set up as doctors. The results were disastrous, as became evident in the great Spanish Influenza pandemic of 1918. After that, the move to improve education and require licenses gained public support to produce the system we have today, a system largely controlled by the American Medical Association (AMA).

Further, a free market solution depends on the availability of information and the ability to judge that information. In comparing doctors, information about them is hard come by, and even if I had such information, I would not be able to make an informed judgment. And if I am having a heart attack, I am in no position to do the comparison shopping that a free market requires.

Yet for all that, Friedman has a point. By limiting the number of doctors, we restrict the supply and raise the cost. Further, the education of a doctor is long, arduous, and expensive. New doctors are frequently burdened with huge education loans, and setting up a practice requires a huge capital investment. This forces doctors to act more like businessman than medical professionals; they have to turn a large profit just to break-even on both their costs and the amount of income forgone while they were getting their educations. And it has frequently been charged that the AMA restricts the number of “slots” in medical schools so as to further restrict supply.

I have previously dealt with the problem of licenses (see Sicko-phancy). Instead of a single license requiring many years, and hundreds of thousands of dollars, I propose a series of licenses: midwife, nurse practitioner, medical practitioner, medical doctor, medical specialist. This would vastly expand the supply of medical personnel and thereby lower the cost. However, this can only be a partial solution. Doctors, whatever their license level, still face tremendous problems with medical insurance. And likewise the public faces similar problems. The cost of medical care is so high that nearly everyone needs insurance, but the insurance companies do their best to limit the claims they will pay. And there is still the problem of who gets to grant the licenses, no matter how many levels there are. Would not the AMA exercise its influence on governmental agencies to keep the supply as low as it is today, and the price as high as possible? And how to address the problems of the high cost of medicine and medical equipment, like MRIs?

Can we take away the power from government and still have an effective medical system? Must we be mired in socialism, or should we return to the free-market chaos of the 19^th century? I believe that there is a better way. I believe that the answer lies in a well-tested institution from out past, and that institution is the guild. The guilds were associations of professionals in a given field who took responsibility for the training of their members and the quality and price of their products and services. They were the sole judge of the qualifications of their members, and had the power to set both standards and prices. What I propose is that we allow medical professionals to form guilds with the power to grant various licenses. They would be the sole judge of the qualifications required, and they would set the practice standards and prices. But most importantly, the guild would stand surety for its members. That is to say, when a patient had a complaint, he would sue not the doctor but the guild. The guild would be responsible for the competence and good conduct of its members.

You might ask, “why would one doctor stand surety for another?” But in fact, this is what already happens in malpractice insurance. Insurance is merely cost averaging. If the losses go up for one doctor, the rates for every other doctor in that insurance pool goes up. But doctors have no control over who is in their insurance pool; the quack and the competent get thrown in the same insurance system, with the later required to pay for the former. In a guild system, the guild would have a strong incentive to ensure the competence of their members and monitor their practice standards; they would want to weed out the incompetent or downgrade their licenses. The guild would purchase insurance for all its members, or even provide the insurance itself, thereby removing the profit motive and lowering the cost.

Since the guild would be the sole judge of the qualifications and practices of its members, there would be a greater diversity of practical approaches. The Guild of St. Luke, for example, might favor one approach to medicine, the Galen Guild might favor another, and natural competition and practical experience would be sufficient to discover the superior approach. And while it might be difficult for the public to judge one doctor against another, it would be easier to judge the performance of one guild versus another. Further, this also provides space for “alternative medicine.” I have no way to judge whether such things as acupuncture or Chinese herbalism are medically valid. But when joined in a guild and required to stand surety for each of their members, practices which do have some value would likely thrive, even if traditional medicine does not, as yet, recognize their value. And if they have no value, it is likely that such practices would simply disappear because the insurance claims would bankrupt them. Likely the government would still have some minimal role to prevent outright quackery; they would not likely allow a Guild of Peach Pit cure-alls.

The guild would also provide a career path for its members. As it is now, student spends the better part of their youth and a great part of their future earnings in getting an MD. But with a guild with a multiple license structure, they could enter as nurse or medical practitioners, practice medicine at some level while continuing their training for higher levels. This would give them both an income stream and practical experience in their trade. It would be a kind of “apprentice” program.

In addition to insuring their doctors, the guild could offer insurance to the public. That is, they could offer to treat people for a fixed annual fee. This would give the guilds an income stream, but also a great incentive to insure that small problems do not go untreated to become big problems. In other words, such health insurance would actually be concerned with insuring health rather than denying claims. Further, the guilds could be required to devote a certain amount of their resources to free or low-cost care for the impoverished or indigent. The government might play a role here in qualifying people as eligible for such reduced-cost treatment.

The guild would be empowered to establish its own clinics, its own training and education programs, its own pharmacies, labs, administrative structures, and whatever else is necessary to medical practice. This would also make it easier for medical professionals to enter practice without worrying about setting up the business and administration that consumes so much of doctor's time today.

Of course, the complete solution to the problem cannot be found without breaking the monopoly power of prescription drugs and medical equipment. I have already outlined an approach to this in the aforementioned Sicko-phancy. But I believe that the guilds can also play an important role here, especially in the testing new drugs and negotiating prices. Drug companies would no longer have an incentive to “bribe” doctors to prescribe their patent medicines, since it would be the guild and not the individual doctor who establishes standards for medicines and judges their effectiveness. The collective judgment of the guild is likely to be superior to the individual judgment of any given doctor, especially when that individual judgment is influenced by “gifts” from the drug companies, as it is now.

Now, I will not pretend to my long-suffering readers that I am an expert in medical economics. I welcome any critiques or refinements that those more qualified than I am can offer on these matters. But I will assert that there are some principles which hold no matter what the system, one of these being that the incentives will dictate the outcomes. And the current incentives—for doctors, insurance companies, the AMA, and others—are all wrong and cannot be repaired in the current system. Every solution now on the table in the public debate will likely only make the problems worse.

What I will assert is that sometimes our best future is in our long past; that methods that have been tried and worked, but for some reason were abandoned, can be re-worked to answer current conditions. I believe that it is the essence of both the progressive and the traditional to find what has worked, and to adapt it to the present moment.

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Sometimes Low Prices...Sometimes

Times being what they are, Christmastide has become a bargain hunt as people seek to stretch their hard-won and limited gift-giving dollars. In such circumstances, the image of the Wal-Mart “happy face” bouncing around the store and knocking down prices is particularly appealing. After all, shopping, even in good times, is about trying to get a good bargain. However, one might might ask if the prices are really all that low. They are indeed perceived to be low, but perception and reality are not always the same things. There is in fact a whole science devoted to creating the perception of low prices without having to deliver the reality.

One way to create this impression is the use of “signposts” and “blinds.” Signposts are items like milk and light-bulbs for which the average shopper is likely to know the going price. These products are often sold by the “big-box” stores below their cost. This accomplishes two things: it creates an impression that the whole store contains bargains and it puts pressure on independent retailers and helps to drive them out of business.

But signposts are only 5% of the merchandise. The rest are “blinds,” goods for which the shopper is likely to have only a vague notion of the market price. For the blinds, the buyer is likely to judge the price by the signposts and assume there is a bargain when in fact there is not. This is only one of the techniques used to divorce appearance from reality. These techniques are detailed in Stacy Mitchell's Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses.

The High Cost of Low Prices

Ms. Mitchell challenges the Wal-Mart swindle on grounds other than prices. These stores involve a high cost to our economy, to our communities, to the environment, and to the very fabric of out democracy. By concentrating retailing power in a handful of mega-corporations, we have created monopsonies. Monopsonies are just like monopolies, except that is applies to “one-buyer” rather than “one seller.” Most of those who produce products for the retail market are dependent on getting shelf-space at Wal-Mart, Costco, Lowe's, Office-Max and similar mega-retailers. This gives enormous negotiating power to the big-box stores. In fact, the discussions between the producers and these mega-retailers cannot be called “negotiations” in any real sense of that term; the power is all on one side. Hence, the big-box stores dictate to the producers; they dictate where their goods will be made, how they will be made, what price they will carry, what costs of retailing the producer will bear, and many other things besides, things that would never happen in a real negotiation, where the power between the sides was roughly equal.

The thing that the retailers most demand is that the producers off-shore their production. Wal-Mart and others maintain a list of Chinese and other foreign manufacturers that the producers are encouraged, or even required, to use. These stores have been a big force in the destruction of American manufacturing.

They have also been a big force in the destruction of American business. The stores destroy local commerce, built on a dense network of independent businesses. These businesses are part and parcel of their local communities; they participate in civic affairs, they support local projects, they buy the ads in local papers, they support the high-school football team, and enrich community life in hundreds of ways.

What About the “Free” Market

Despite all these problems, one might counter that this is simply the way capitalism works, and that no one can complain because some people have found a better business model for retailing. Alas, this argument fails on two grounds: one, the creation of monopsonies is counter to the free market, and; two, the big-box retailers are creatures of government subsidies. Concerning the first point, all free market theory depends on the “vast number of firms” assumption, the idea that no firm is powerful enough to affect prices; production (and retailing) is spread over so many firms that each one is a price-taker rather than a price-maker. But clearly, the big-box stores are price-makers, and thereby make a mockery of any coherent free-market theory.

But aside from that, the big-box stores are practically creatures of government power. Ms. Mitchell details the many subsidies they receive from cities desperate for development. These numbers are startling enough. However, the author actually ignores the bigger subsidies that these firms receive from the federal government and even foreign governments. Indeed, the big-boxes could not exist without the “freeway” system, a system which is actually a series of subsidies from the cities to the suburbs. (See Free Markets, “Free”ways and Falling Bridges.) Further, they receive huge subsidies as a result of Chinese currency manipulation (See Subsidizing Wal-Mart.)

Bad Business

It would seem that these stores are at least good business models; that is, they grow fast and make a lot of money for the investors. However, it often turns out that what is good for an investor is bad for the economy. Any business can make a lot of money by firing its workers and outsourcing production to low-wage countries. But if every producer does this, a conundrum arises: when the business fires its workers, it also fires its customers; as G. K. Chesterton points out, these are the same people, and you cannot pay a man like a pauper and expect him to spend like a prince. Now, it may seem as if we have been doing just that for the last 30 years, for while the median wage has stagnated, families are buying more “stuff” than ever.

How do we accomplish this hat trick? By two methods. The first was to put more family members to work. More and more homes became two-income households. But even that was not enough to sustain consumption. For the last 20 years, we have made up the difference between the stagnating wage and increased consumption by the extensive use of consumer credit. In other words, we have created a plastic economy, an economy built on credit cards. But this is a house of (credit) cards, and like all such houses, it is destined to collapse. That, in fact, is what we are witnessing at this very moment.

Fighting Back

The triumph of the Big-box stores may seem inevitable, but it is not. Rather, it is destined to fail, and that quickly. Our task is to decide how we will rebuild the economy along more sane and rational lines. In the meantime, these stores can be defeated. Once communities understand their real impacts, it proves to be very easy to keep them out. Ms. Mitchell recounts how many communities have defeated the great powers, and in the meantime rebuilt there own community retailing base.

The Big Box stores really are a government-sponsored swindle, but their days are numbered because the economic model that supported them was never sound to begin with. Distributists understand instinctively that such models will not work. Now the rest of the world will learn the same lesson. I advise everybody who wants to fight the power of these stores and to rebuild out shattered economy to read Ms. Mitchell's book.

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Distributism for the 21st Century

TEAR Fund is a Christian organization designed to provide long term solutions to the poor through community development, microenterprise, and disaster relief.

Microloans and small business for the poor are the right way to fight poverty. These are also quite distributist.

Frank Ritchie, a New Zealand radio announcer and Education Office for TEAR Fund, recently asked me to write a short comprehensive piece on Distributism. I thank him for the opportunity and wish the organization much success.

For the article please go to The Humanitarian Chronicles. Do not forget to post a comment!

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Building a Community of Trust

In late May of this year, I had the fortune of attending five days of intensive study at the E.F. Schumacher Society workshop, along with fellow Distributist, Tim Ehlen, founder of Building Catholic Communities. The Society, located in Great Barrington, Massachusetts, is well known for, among other things, the Berkshare local currency program, the Community Land Trust model developed by Bob Swann, and S.H.A.R.E. micro credit.

Susan Witt, Director for the Schumacher Society, was delighted to see Distributists attending the workshop. She didn’t hesitate to introduce me to the library’s broad selection of Distributist books. Like a kid in a candy store, I salivated at the sight of a nearly pristine copy of Harold Robbin’s “The Sun of Justice,” Cmdr. Herbert Shove’s “The Fairy-Ring of Commerce,” and two rows complete with the works of H.J. Massingham, Hilaire Belloc, and William Cobbett.

Our fellow students came from across the country. Among them were progressives, left-libertarians, cooperative and credit union representatives, and heads of nonprofit organizations. All of us were there for one reason: to experience the work of Schumacher and to learn how to incorporate the Society’s successes to our own movements.

E.F. Schumacher was a German economist who believed in small-scale economics, and, like Father Vincent McNabb, argued in favor of local production for local consumption. His book, Small is Beautiful, is considered one of the top 100 books of the 20th century.

On our first stop, we visited Indian Line Farm. Indian Line Farm has the distinction of being one of the very first CSAs (Community Supported Agriculture) in the country. The workers approached the E.F. Schumacher Society about maintaining the farm after the unexpected death of the original owner. Wishing to save the CSA, the Society, along with a nature conservancy group, decided to apply the Community Land Trust (tenant/landlord) model developed by E.F. Schumacher Society founder Robert Swann.

But what exactly are CSAs and CLTs?

Community Supported Agriculture

A simple definition may be “community farms with an established local clientele.” Basically, one pays up front for produce (flowers, plants, meat, vegetables, eggs, fruits, etc., in any combination) received on a weekly or monthly basis during the Spring-Fall period. The advance payment, usually in lump sum, ensures the following year’s operational costs, including the farmer’s salary.

The CSA is an investment and as with any sincere investment the farmer and consumer stand to gain or lose.

Community Land Trust

There are over 100 land trusts in America. CLTs are 99-year lease agreements recognized by the owners of the land (the Trust) and the tenant. Why 99 and not 100? Well, in the United States anything beyond 99 years is considered ownership. The Trust purchases the land, while the tenant buys any buildings on the land (house, barn, etc.), reducing the cost of land ownership for the tenant. The CLT collects a small monthly sum from the tenant throughout the course of the lease, and a portion of this rent is allotted for the establishment of future land trusts.

The lease may be bequeathed and renewed, and it may come with conditions. For example, if the tenant is a farmer, the contract may stipulate certain areas remain untouched to preserve the eco-system, or perhaps the lease may insist the farmer only grow organic food, etc.

A CLT isn’t limited to farms. Trusts may be incorporated for a variety of things, including residential areas like co-housing developments.

After visiting Indian Line Farm, our next stop was the local bank. There the friendly tellers exchanged our U.S. Dollars for Berkshares.

Local Currencies

There are over 80 local currencies across the U.S. Of course, all of them are backed by national fiat money, because it is illegal to produce and print competitive currency. In the case of the Berkshare program, for every $9 exchanged, 10 Berkshares are received. That is a 10% savings at the small shop, a nice incentive for the local community to support the program. However, Berkshares succeeded in sharpening the education of citizens regarding the importance of money flow within the community.



Perhaps Berkshares are only band-aids to the wider problems of monetary reform, but these short term fixes have had surprising results. Currently, in Great Barrington there are over 230,000 Berkshares in circulation.

While at the bank, Susan Witt shared with us a bit about the E.F. Schumacher Society microloan system.

SHARE Microcredit

The SHARE (Self-Help Association for a Regional Economy) was a program designed to build self-reliance in the Berkshire region. Microcredit accomplishes this by lending money to those considered “high risk” either due to poor credit or because of their unique business plans.

The program works like this. A CD is set-up at a local bank. Passbooks, or their contemporary equivalent, are issued to all those shareholders who deposit money into the SHARE program. These are not your average investors. They are socially conscious neighbors who wish to become stakeholders in the community. To collateralize a loan, a board is set up to evaluate and approve loan requests based on character, reputation, and other areas usually ignored by lending institutions. The bank, with deposits of equal or lesser value already in the CD, grants the loan, takes 40% of the interest payment as an administrative fee, and the rest is deposited back into SHARE for future loans.

The size of these loans is small. They are usually no larger than $3,000 and are only awarded for projects that are productive, i.e. ventures bringing new wealth into the local community. Microcredit is on the cutting edge of rebuilding the cottage economy.

As Susan Witt recalls,

“Sometimes a modest amount of money can produce big benefits for the loan recipient and the community.”

The SHARE program ran in the region from 1981-1992, in response to insufficient financial support for small businesses. SHARE issued 23 loans without one deferral. Today, thanks to the efforts of the E.F. Schumacher Society and the success of the microcredit program, banks in the region offer alternatives to SHARE, at even lower rates.

Prior to the workshop, I had read about the Society’s work, but there was nothing like seeing it work in action. While most of the attendees had never heard of Distributism, they were interested, and the exchange of ideas during those few days was fruitful.

When asked how we can make Distributism happen, our readers should take note of the wonderful work being done by the E.F. Schumacher Society. The components outlined are relevant in the pursuit of our future goals. Community Land Trusts, local currencies, and microcredit programs are a step in the right direction towards the stimulation of Distributist communities.

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Fábrica Sin Patrones

Some of our readers may have stumbled upon a reference John Médaille and I made about Fasinpat, the "Factory Without Bosses" cooperative tile factory in Patagonia, Argentina. Over four years ago, the Zanón factory closed down, leaving the workers without jobs. Instead of walking away, these men and women recovered the factory and made it a complete success.

Here in the United States, we would do well to take notice.

Below is a trailer for the award-winning documentary, "Heart of the Factory" in Spanish with English subtitles.



For a copy of the DVD, go to the official website Corazón de Fábrica (in English and Spanish).

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A For-Profit Organization That Embodies Catholic Social Thought

Here is a comprehensive review of the mechanics of the Spanish Mondragón Cooperative, and how their system relates to Catholic Social Doctrine.

Two years ago, San Sebastián's Bishop Juan María Uriarte opened the cause for canonization of the founder of Mondragón, Fr. José María Arizmendiarrieta.

Mondragon Cooperative

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An Unsentimental Education

Like Coca-Cola, American game shows function as carriers of American “values” (and I use the term advisedly) around the world. Foreign versions of these game shows appeal to a global rising middle class, uniting them with their American counterparts even as they divide them from their own traditional values and social structures. Often, the middle classes in developing economies have more sympathy with our values and very little connection to their own poor.

It is the Indian version of the American game show “Who Wants to be a Millionaire” that provides the central metaphor for the movie, Slumdog Millionaire, directed by Danny Boyle (Trainspotting). It is the story of the clash of civilizations played out in the city of Mumbai, India, a city which recently has been the victim of more violent clashes. Yet that description might make it an “issues” movie, which is always the death of both good film, good literature, and good entertainment. And this movie is all three, because it is at base the oldest and most enduring of stories, that is, a love story.

We meet the hero of this story, Jamal Malik, as he is being tortured by the police. Jamal is a “slumdog,” an ignorant product of Mumbai's vast slums. But Jamal has wormed his way on to the game show, and answered every question. The Indian version of this show looks exactly like the American original, with the same music, set, graphics and shtick. Except that nobody is actually supposed to answer all the question. Brilliant and educated people fail before reaching the top prize, 20 million rupees. Yet Jamal is ready to answer the last question. The game show host suspects that he has found a way to cheat, and has had him kidnapped by the police. When the police inspector cannot torture a confession out of him, he reviews the game show tape and asks Jamal how he knew the answer to each of these questions, questions that range from Indian poetry to American money to French literature. It is in flashbacks to his life that we get the story of Jamal's education.

It is an education that begins as a young boy witnessing the murder of his mother in an anti-Muslim riot. He and his brother Salim become orphans, engaged in petty crime and dumpster diving. It is at this point that he forms his connection with Latika, another orphan of the riots. The three are “rescued” form this life by an unspeakably evil Fagin-esque character, who runs an “orphanage” that is a cover for a begging and crime ring. Some of the orphans are blinded to make them more pathetic. Jamal and Salim make their escape just as Jamal is about to be blinded, but Salim forces Jamal to abandon Latika. It is his struggle to find Latika that forms the heart of the story.

The movie alternates between the game show and the flashbacks, between the sleazy underside of Indian society, and the slick pseudo-American game show. It turns out that Jamal is not in the least interested in the money; he has wormed his way onto the show because he knows that Latika watches it. Latika is by now the consort of an abusive and violent mobster. But in the process, Jamal becomes a national celebrity, with all the underdogs and dispossessed rooting for him.

Jamal's brother, in the meantime, has become a hit man for the Latika's mobster. It is Salim who was responsible for losing Latika in the first place, and for her current life as an abused concubine. Jamal's 15 minutes of game show fame force Salim into finally acting with his brother in mind.

The movie is by turns funny and horrifying, but it is always moving and suspenseful. Be sure to stay for the final credits, because underneath them there is an homage to Bollywood which, though out of character with the movie itself, is still great fun.

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The Rise of the Trade Unions?

The great breaking news of the weekend comes from Chicago where window workers have opened wide the door to our Solidarity Trade Union past.

The employees of Republic Windows and Doors, 1333 N. Hickory Ave., are keeping their factory open by seizing it.

I am working on a trek to Chicago to thank these Brothers and Sisters for this Christmas gift, one that would make Chesterton and Dickens proud. We will do our best to pass the example onto the good autoworkers we know.

The factory phone number is 312-932-8000 but I got the corporation's recording. It does contain directions to the plant. If you live in Chicago, you may want to drop by and thank these heroes.

God bless these True Trade Unionists!

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A Seat at the Table?

Abortions, our liberal friends insist, ought to be “safe, legal, and rare.” Safety is, at best, a comparative term. As for legality, that is firmly established in this country, much to our shame. But rare? Alas, we have one of the highest abortion rates in the world. I bring this up in light of an initiative by the Obama Transition Team to solicit public comment on issues for the new administration. The transition team has set up a website, Change.gov, which allows the public to view policy documents which are being submitted by outside groups and to comment on them.

One of these documents has been submitted by a coalition of left-wing of feminist groups which calls for, among other things, increased access to—and public funding off—abortion and contraceptives. The proposal even goes beyond the so-called “Freedom of Choice Act (FOCA).” All of the usual suspects are have signed the document, Planned Parenthood, Catholics for Free Choice, The Guttmacher Institute, The National Abortion Rights Action League, etc. The proposal goes beyond just calling for federal funds for abortion, but will force private institutions that receive government support, such as colleges and hospitals, to provide abortions even in violation of their own consciences.

I believe that we should all protest this document, and let the Obama administration know the depth of the opposition to such radical pro-abortion policies, policies that would not only commit tax dollars to immoral policies, but which would force private citizens to subsidize abortions from their own funds. It is inconsistent for the left to treat this as a matter of conscience and then outlaw any dissent, which is what this document calls for.

But what should be our response? Obviously, what we would like is that all abortions be banned and all children be cared for. However, this is possible even with a Republican administration. According to a Fox News Poll, only 9% of Republicans consider abortion as an important issue. Indeed, according to a poll done for the Knights of Columbus, 50% of nominal Catholics consider themselves to be pro-abortion. And it is simply unreasonable to think that a Democratic administration would even consider outlawing abortion. Indeed, mild limitations on abortion failed in the last election in the Red State of South Dakota. So even among Republicans in Republican states, there is little chance of getting abortion outlawed.

However the President-elect has promised to be “the president of all the people” and pledged to listen to those who disagree with him even more closely than those who do agree. And while all politicians make similar claims, we should at least take him at his word on this and register both our objections and present alternative policies. With that in mind, here are some suggestions for a considered response to this proposal.

• While most people support limited rights to abortion, almost 84% want some restrictions. This proposal is undemocratic in that it ignores the will of the people by making abortion an unrestricted right.

• This proposal forces the government to fund all abortions, which is bad, but also forces institutions which oppose abortions to violate their own consciences; this is, self-evidently, unconscionable, and a misuse use—a tyrannical misuse—of government power.

• Abortion, whether one supports it or not, should always be considered a tragedy; and as with any tragedy, we should do our best to limit it. Instead, we have one of the highest abortion rates in the world.

• The problem is not a limit in access to contraceptives, as the document claims, since they are freely available, and carry no social stigma.

• If these policy recommendations are put in place, the rate of abortions, already one of the highest rates in the world, will increase. This is contrary to the President-elect's stated policy of reducing abortions.

• The culture of death implied by such a high rate of abortions cheapens life and cheapens the unique role of women; indeed, it is not merely anti-life, it is anti-women. If abortion really is a women's choice, something she can freely refuse, then it is difficult not to put the blame on women entirely if they choose to carry a baby to term. This creates social pressures on women to have abortions were the father does not wish to contribute to support of the children.

• The proper response to a culture of death is a culture of life. At a minimum, this means:

  • All children are welcome in the world

  • Women who find themselves “in a family way” should be supported. Currently, a poor women has a choice between inadequate pre-natal care, expenses that run between $30,000 and $50,000 dollars for carrying a child and delivering it, or a $1,000 operation that relieves them of all of these burdens. Economics alone favor abortion. This should not be.

  • There should be welcoming institutions for children, such as orphanages and adoption agencies. It is a strange phenomenon that we adopt so many children out of China while we abort so many children at home.

This is just my initial reaction. I am sure that the readers of this review can come up with more objections, objections that will be meaningful even to the new administration, and some more positive policy suggestions. What I suggest is that readers go the the “A Seat at the Table” section of Change.gov, review this terrible document, and post their suggestions here so that we can come up with responses that we can all share in drafting our own. I would hope that the transition team gets at least 100,000 responses from pro-life supporters. This would let them know how serious we are about working on this issue, and how much we intend to hold the President-elect to his pledges.

There are those on the left who do oppose abortion, however, they are a distinct minority. Nevertheless, we do agree with the nominal goal of the left that abortions ought to be rare. While this goal may be no more than a publicity stunt, we should hold them to account. While the public does not yet agree with us on outlawing abortion, they do agree with us on restricting abortions, and this we must re-iterate over and over again. Let us take our “seat at the table,” and even do a little table-pounding.

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A Really Grand Duke

Public Television recently ran a series recently on the Queen of England. Now, as a monarchist, you'd think I would be interested in such a series. I am not. Elizabeth II may be a queen, but she is not a monarch, a “single ruler.” In fact, she has no substantial connection with political power in England whatsoever. From the snippets of the show that I caught, he role seems to be giving garden parties for those who have done good works, and such like things. A worthy endeavor to be sure. Or rather, it would be worth it if the queen were really connected with power, which she is not. I leave it to the English to debate whether her function is worth what they pay for it; I am not much interested in the outcome of that debate.

I am a monarchist because I am a democrat (small “d”, let us note). I believe the people are sovereign over their own daily affairs and the disposition of their own funds. But there are issues over which they have no sovereignty, and over which they should never rule. Paradoxically, this democratic vision requires a strong monarchy, if a highly-manipulated majority is not merely to become a tyranny. Kings work best in a society of subsidiarity; that is, when there are strong institutions that have their own defined rights and privileges which hem in the Monarch, or any other power that would disturb the subsidiary powers. Institutions like guilds, cooperatives, the Church, free municipalities, and many others besides. A proper political order requires a host of countervailing powers well distributed throughout the social order.

But of course that vision does not hold anywhere today. Aside from the Pope's monarchical control of one-square mile in Rome, the only actual monarch in Europe is the Grand Duke of Luxembourg, who retained the power to veto acts of the legislature that violated good order and right reason. Or at least he did until a few days ago, when he was stripped of that power. His crime? He vetoed a bill allowing euthanasia. For the crime of defending the culture of life, he lost the power to defend the culture of Europe.

He was a minor prince on a minor throne in a tiny country. But the Grand Duke was right to make one last Grand Gesture in the name of life, in the name of Europe, in the name of his own people. The best way to protect the power of the people is to see that the people do not exceed their powers. For once they do, they are open to every sort of tyranny, and are likely to get it. The Duke is accused of violating democracy; in fact he has defended it by attempting to stop its illegitimate use. Now the Duke is like the Queen a England, an expensive and living tourist attraction. Come see the wreck of Europe in their worthless crowns, in the tyranny of a democracy that is largely a sham of big money and powerful corporate interests. The last shred of monarchy, and therefore the last shred of real democracy, is gone.

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Brad Shorr's Cartoon and Article

Brad Shorr, from Word Sell, Inc. published a small piece on Distributism for his blog. Brad has been a sales rep, corporate exec, sales coach, and he currently writes on his blog about business solutions. Brad is also a cartoonist.

On this occasion, Brad chose to take a peak at Distributism as a viable third way. We think our readers will enjoy his insight, and his recent drawing of a particular heavyset Distributist we all know and love.

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Democrats for Life: November Newsletter

DFLA Newsletter November 2008

In This Issue: Call to Action! Share Your Vision!

Listen to Science on Stem Cell Research
Freedom of Choice Act
Call to Action! Share Your Vision!

The Obama Administration's transition website includes a section where you can "Share Your Vision" (http://www.change.gov/page/s/yourvision). Please take a moment to complete this section thoughtfully and to urge President-Elect Obama to:
1.) pass the Pregnant Women Support Act which will drastically reduce the abortion rate in this country;
2.) allow funding only for stem cell research that does not involve the destruction of human embryos;
3.) listen to and work with pro-life Democrats and people who have differing opinions on abortion before making any major policy changes; and
4.) do not sign or promote the Freedom of Choice Act.

SUPPORT DFLA AND PRO-LIFE DEMOCRATIC LEADERS.
We need your help today. 202-220-3066
Greetings!
In his acceptance speech, President-elect Obama stated that, regardless of whether or not you voted for him, "I will be your President, too." Obama will be your President, and it is time to let him know how and where you would like him to lead. Please see our "Call to Action!" to learn about how you can share your pro-life vision with the new Administration.
Listen to Science on Stem Cell Research: Congress plans to debate the use of stem cells from human embryos early in the 111th Congress. Science has proven that there are moral and ethical alternatives to using stems cells from human embryos. Now is a crucial moment to educate the Obama Administration that it is time to end the debate on funding embryonic stem cell research and put our limited funds toward research that cures diseases and saves lives. Funding Adult Stem cell research could be an important part of an economic stimulus plan to create jobs and save lives.

Pro-life Democrats can stop the Freedom of Choice Act
A majority of Americans belive that there should be restrictions on abortion and if they knew how detrimental the passage of the Freedom of Choice Act is they would vehemently oppose it. According to the National Organization for Women, "FOCA will supersede laws that restrict the right to abortion, including laws that prohibit the public funding of abortion." They further state that FOCA would free women from what they deem "improper governmental interference with their right to choose a pre-viability abortion" and "who require a post-viability abortion in order to preserve their lives or health." FOCA would apply to "measures enacted or implemented before, on, or after the date of its enactment." Passing FOCA would result in more abortions and more danger to women.
Fortunately, we will work with our pro-life Democratic leaders in Congress to ensure that FOCA, which has been introduced in every Congress since 1989, will not be on the legislative agenda for the 111th Congress and beyond.

Please donate to DFLA today to help in these efforts, http://www.democratsforlife.org/

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