mercredi 12 mars 2014

Guilds and Distributism, Defined, Defended

1)Explaining Holy Roman Empire in terms of comparing to US. - Pt I, 2 a) Part II, more on Guilds than on Holy Roman Empire, 2 b) Guilds and Distributism, Defined, Defended, 2 c) What Did Social Aid Look like in the Middle Ages? (Link, Quotes and Comment) Or was it sth else?, 3) Holy Roman Empire explained for US, but we are heading back for Rome now, Pt III

Friend, status :
You cannot be pro-capitalism AND be a Christian (a follower of Christ).
To be a capitalist does not mean to be hardworking, but to be clever, selfish, and greedy, and gain wealth from the hard work of others.

I will shortly give you an example of capitalism.
PFH (giving quite another definition of Capitalism, and thus speaking of quite another thing) :
break it down. From what I can tell, capitalism means owning things and exchanging them. I cannot see what part of that is sinful, inherently.

Obviously some exchanges can be bad. I hire a hitman, for instance, but it is not the exchange that made it bad. Murder is a sin regardless of weather or not money changes hands.
JG (agreeing with PFH’s definition)
Capitalism can mean to gain from the work of others, but that is definitely not the only way to define capitalism. I think it would be more correct to say "a Christian cannot be a greedy, selfish capitalist."
gaining from the work of others just means you do not live in isolation. But for the work of others, we would all be dead.
CM (giving the definition of the thing my friend objected to)
capitalism I think is more tied to the pooling of capital by investors and its relation to labor it is related to many other economic things... but I am not sure it is the same as some of these thigns
the word was invented by Marx as a slur term. It has no consistent meaning.
that is always a problematic situation
Leo XIII condemned capitalism in his encyclical Rerem Novarum.

Pius XI also wrote against capitalism but I forgot the name of the encyclical.
Paul D (probably equating « Capitalist » with « one owning much capital » ?)
It's quite a judgemental slur to suggest that capitalists are greedy. Many of us are charitable and hard-working.
JP, that is not actually true if you read the encyclical.

He actually condemned distributism.

No Unity Is Possible unless Heretics Return to the Catholic Church

[Did he bluff or take the wrong link? Don't know.]
I have read the encyclical and it speaks damnably of capitalism. What is called for is an economic system similar to the medieval guild system, distributism, or fascism.
the medieval system was capitalism, they were just poorer at the time
Tradition in action are very wrong on economics, they also supported all the wars over the last several years, on some issues they show very bad will.

No the medieval system was not capitalism by any means. A modern day ayan rand capitalist would call them socialist probably. They had wage and price controls, they had government charity and most right wingers hate that.
HGL (=me, just so you know)
1) Rerum Novarum (Rerum, not Rerem, by Leo XIII)
2) Quadragesimo Anno (40 years after RN, by Pius XI)

As to the words "Capitalism" and "Capitalist" they are in fact of more than one meaning. The condemned version would be the kind that tries to amass more and more for a class comprising fewer and fewer and by exploiting the rest harder and harder.

And that was obviously NOT the medieval system, where ownership was accepted but restricted.

PFH, I will look into the claim that any Pope condemned Distributism, but I think not. Pope Leo XIII gave its basis by saying "more people should own property" (meaning thereby productive such). Eamonn DeValera was a very clear Distributist and never condemned by the Church as a Chief of State although he had been excommunicated while fighting for the IRB.
they did not have wage and price controls, maybe in the east. But not the west.

a guild was basically a franchise. they were not required but survived on reputation.

and please, I do not care about Ayn Rand. She would have heard they were christian and assumed they had socialism.... as would distributists. Regular people, and even pinkos are not that silly.
Sorry, but the heritage of Late Antiquity, which stayed in the East was Imperial wage and price control. The Guild system was localised wage and price control. It was locally decided whether a certain branch was or was not required to be guild members. The link you gave had nothing to do with Distributism, since Satis Cognitum is about and against Ecumenism. And local elections (including local representation to Parliament) was per guild in towns. Belloc voted in the Brewers Guild of London. This meant that the guilds that existed locally (and which could be compared to franchises exceopt such are usually infeuded to a central company, guilds arranged the rules democratically inside) were also the means of local democracy and as such the guilds were in a position to negotiate about relative price and wage levels.
The guilds were nothing like franchises, they were like workers unions, a person was required to be a member to operate in any trade. They regulated wages and prices. They would even support the widow of a deceased member.
so, you honestly think, in England in the 1600s, if I sold you a shoe and I was not in a guild, the crown would behead me or something?
Like workers unions, not quite. They were Employers' unions. The employers (called masters) agreed on not competing with certain bids when it came to wages, working hours or prices.

That one was required to be part of it was different from town to town for any branch. And different from branch to branch within each town. A town with Jews obviously had one or two branches at least without obligation to Guilds since these were Catholic.
The 1600s was after the English reformation had destroyed the old social order, they were then capitalist.
In the 1600's Guilds were very much weakened in England by Capitalism. If you were not a member of a guild and in a branch where the town required branch members to be guild members, you changed town, or branch of trade or tried to join the guild. Penalties were against shop, not body.
so, it was still legal for me, a non-guild member to sell you a shoe?

If so, that capitalism. If not, well, thats obviously terrible.
Smith economics are a modern idea born of protestantism. Market control and social policies have been the tradition of the west all the way back to ancient Greece, just read Plato's Republic. Right wing ideology goes against the teachings of the Gospels.
If you make up definitions on your own, it is hard to have a conversation.

The Lord Himself told the one fellow 'You should have put my money to the usurers'. Hard to say that is un-Christian.
He said that in one parabole in which "money" stands for the talents given by God and "doing business" stands for getting merits for Heaven. Luther was more horrified than even Leo X at Usury.

PFH, in one town you could sell your shoe without being a guild member, in another you could not. In a town you could not, if the cobblers' guild abused their position the town could decide that a non-guild master cobbler could seel the shoes he made.
The story 'stands for' many things.

It is still a story in its own right.

The 'good guys' traded with their money, and made more.

The lazy guy should have at least put in the bank and drawn interest.
"interest" as in "within merits for Heaven" - when you apply the story. It is only within the story that it stands for interest as such. He took another parabole from an unjust Steward, does that mean cheating your master to get popular is a good thing to do?

What Our Lord thought of taking interest as such, he told us not even to expect to get the Capital back.

Haydock's Catholic Bible Commentary, 1859 edition. : DEUTERONOMY - Chapter 23

Ver. 20. To the stranger. This was a dispensation granted by God to his people, who being the Lord of all things, can give a right and title to one upon the goods of another. Otherwise the Scripture every where condemns usury, as contrary to the law of God, and a crying sin. See Exodus xxii. 25., Leviticus xxv. 36, 37., 2 Esdras v. 7., Psalm xiv. 5., and Ezechiel xviii. 8, 13, &c. (Challoner) --- The stranger means the devoted nations of Chanaan, &c., whom God authorized his people to destroy. "Exact usury of him whom thou mayst kill without a crime," says St. Ambrose., (de Tob. c. 15,) though this principle will not always excuse usury. This practice was always considered as unjustifiable, except when God gave permission to his people to get by this means the possession of the property of the stranger, the right to which he had already given to them; unless we may consider, that he only tolerates this practice towards the stranger, on account of the hard-heartedness of the Jews. Christ has now expressly declared it unlawful for any one. See Exodus xxii. 25. (Calmet)
As in a share of the profits from the sale of the shoes which my money facilitated through the loan that bought the leather to make the shoes.

When I give, I give.

When I invest, I invest.

Don't confuse the two.
When you give, you give. When you grant a loan, you grant a loan. When you invest, you invest. Don't confuse the three.

If you agree that your repayment follows in value the fortunes of the company you lend to, both up and down, then it is ok.

That means: when the cobbler asks to get a loan of money you must agree if it is a straight loan or an investment. A straight loan means, you lend 100 pounds, you get 100 pounds back, neither more nor less. An investment means you get a specified share of the gains OR LOSSES of who you lend to.

Neither way can you agree on lending 100 and agreeing beforehand to get 106 back after a year. In a loan you get 100 back. In an investent you could get either more or less back.
The loan is a means of investing Hans-Georg.

He has my money to use for a while.

Yes, losses are to be anticipated in investing.

Nothing wrong with 'a percentage of the profits not to exceed 6 percent of my capital investment, the remainder of the profits being retained by the one providing labor'
No, a loan and an investment are distinct. Confusing the two is the main sin of modern day Capitalism as such. Other sins have followed from it, which are worse, but only because Capitalists have other personal qualities than being that. Like Heresiarchs or Abortionists in some cases especially gruesome.

Nothing wrong with a percentage of either profits or losses not exceeding 6 percent in either direction.
Permanent loan, non-interest bearing loan, interest bearing loan, They're all loans.

The trouble with trying to limit the losses is that it might put you in the position of taking the money needed for food from the one who lost the capital.
Interest bearing loan is a loan, but a morally illicit one. Unless the interest - according to Pope Leo X - only pays for all or half the expenses of keeping a municipal office of loans to poor independents. Or other poor. He preferred that taxation pay the other half. And the expenses must be modest.

Of course Luther - whom you claim to follow in Theology - did not agree with this exception.

"The trouble with trying to limit the losses is that it might put you in the position of taking the money needed for food from the one who lost the capital."

Having lending as your source of income is not a bright idea anyway. And when someone lost his money capital after a straight loan he was supposed to work until he had paid it off. The lenders having a right to supervise his working.

IN the guild system one so caught and being a guild member could count on helps from other guild members.
An interest bearing loan for necessities is morally inexcusable. One for 'potential increased profits' is an limited return investment (the remainder of the profits being retained by the one providing labor)

I don't follow Luther very well....
A limited return investment is only such if the limit is not just on the upper end but also on the lower end and if one cannot ask 6 percent of one who has only gained 5. You don't follow Luther? Well, he maybe had some Christian qualities you don't have.
I never suggested lending was a wise way to make a living.

I'd take the loss, and offer to help him get his act together.

No, you're confusing 'limited risk' with 'limited return'.
I am not. A return can only be proportional to the vicissitude of the one one is lending to and never exceeed it either up or downward. It can be limited so as not to go as far either way as 10 per cent if you agree on 6 per cent as upper and lower limit.

What you seem to be suggesting is someone telling beforehand "I don't know if you get to make five or ten percent out of the loan, I prefer being sure in advance, so we agree on 6 percent whatever your gains or losses" - that is Trinus Contractus basically and condemned by Pope Sixtus V.

The only thing that can stand "whatever your gains or losses" is either, basic idea, as much back as was lent, or, Pope Leo X - giving back so much more that the city can continue lending to the poor without paying all administration from taxes.
The 'nor downward' part is where you're missing it.

Limited return doesn't of necessity mean non exposure to loss.

I'll try again.

I don't know what you'll gain in profits. I do know the work will be yours, and I'm only helping by providing capital, so if you make a profit, I want half of that profit up to 6 percent of my investment. After that, the profits are yours. If you make 5 %, I get 2.5% if you make 50% I get 6%. If you loose it all, well, I knew that was a possibility going in, but money setting in the vault does no one any good.
And in such a case you should be prepared to take 6% less if I loose 50% and 2.5% less if I am on the loosing side for 5%. As for money sitting in the vault, if it was yours and you are not keeping it for others who must have a right to see it there when getting for it, you had a perfect right to invest it in some other way, including but not limited to buying a guitar, learning to play it, and be a streetsinger from the moment the money you had is no longer available to you since spent.

Now, to return to the other cobbler case, not how he should pay a lender, but how he should have a right to sell his shoes.

Even now, assuming he has shoes marked NIKE and tries to sell them, and NIKE is contacted and he has not bought the NIKE shoes from NIKE, nor from anyone they sold to, they are assumed to be counterfeit.

Selling shoes without being a guild member in the towns that required cobblers to be guild members was dealt with about as one would today deal with such an act of counterfeit.

One might argue that it is good for everyone if shoemaking is rationalised, if fewer men work fewer hours PER BATCH OF SHOES and anyone buying from them or their master who pays their wages can buy the shoes cheaper. Anyone who is sure of his job or business will appreciate the advantage. Cobblers will still be employed as a necessity in mending shoes before poor people buy another pair but also as a luxury by people who think Gucci isn't fine enough. But there will still be fewer cobblers. There are lots of towns with one or two men mending shoes and no one in the town making and selling his shoes; so for cobblers the outcome has been less security of work.

But even cobblers out of work can be thankful if the wheat is cheaper since tractors and petroleum replace farmers and horses. And ... and in the end this logic ends up with everyone looking for a new job.

And some new jobs are distinctly less pleasant and less conducive for an easy way of making one's eternity than cobbling or farming, the sectors, where among so many others, jobs have been lost. While others, with or without working also, are using food stamps or homeless shelters (yes, working people do use them too, it is rare but occasionally possible for homeless to get an employer, one morning in Aix the first one into the shower might be a man arguing "I need to get to work in time and clean").

What if producing shoes like NIKE does had been illegal, or so?

"One of capitalism's most durable myths is that it has reduced human toil. This myth is typically defended by a comparison of the modern forty-hour week with its seventy- or eighty-hour counterpart in the nineteenth century. The implicit -- but rarely articulated -- assumption is that the eighty-hour standard has prevailed for centuries. The comparison conjures up the dreary life of medieval peasants, toiling steadily from dawn to dusk. We are asked to imagine the journeyman artisan in a cold, damp garret, rising even before the sun, laboring by candlelight late into the night.

These images are backward projections of modern work patterns. And they are false. Before capitalism, most people did not work very long hours at all. The tempo of life was slow, even leisurely; the pace of work relaxed. Our ancestors may not have been rich, but they had an abundance of leisure. When capitalism raised their incomes, it also took away their time. Indeed, there is good reason to believe that working hours in the mid-nineteenth century constitute the most prodigious work effort in the entire history of humankind."

Pre-industrial workers had a shorter workweek than today's
from The Overworked American: The Unexpected Decline of Leisure, by Juliet B. Schor
If he losses it, it is gone.

I have the right to lend it as an investment too.
Yes, I never disputed that.

I was and am only upholding a distinction between lending and investing. I am refusing a certain shilly-shallying between the two concepts, where it is "investing" as long as one gets more back, but "loan" in case one should risk to get less back. If you invest, you share your investment's either profits or losses. That is what investment means. If five percent gained by your investment mean you get five percent more than you lent, then five percent lost by your investment mean you get five percent less. If 5 percent is the limit and 50% gained by your investment mean 5 percent more for you, then 50% lost by your investment mean 5 percent less for you.

If you "lend half, invest half" so that you get half the profit as percentage, then 14% gained by your investment mean you get 7 % more, 14% lost by your investment mean you get 7% less.

Guess in which cases both lender and borrower had a common interest in prolonging loans, sometimes? The one does one payment less when he is otherwise loosing, the other gets another chance of turning losses to gains. But that is what investment means. Risk nothing while someone else is working, gain nothing.
Fourth time Hans-Georg, I'm perfectly at liberty to loan (as investment) with a limited return and with no limit on risk, concurrently. That is one of the nice things about property, one can do with one's own as one pleases.
As long as the transaction is honest.

Or do you mean that if you have an upper limit on the gains you claim to share, you have no corresponding lower limit on the losses you are prepared to share?

In that case, of course, your contract would be not only honest but even generous to the borrower and is perfectly laudable (very much opposed to taking a fixed interest). I took you as meaning a total annulation of debt in case of insolvency, but no other alleviations of it (if losses occur) corresponding to the gains. In my mind that is not honest investing. It is wanting the gains of an investment without the risk taking of an investment.

If today I buy 100$ worth (present rather than nominal worth) of shares in Coca Cola and sell them in a year, if Coca Cola went up 10% I get 110$ and if it went down 10% I get 90$.

Same with a loan that is no pure loan but an investment.

Except of course, the investment loans include no dividents while not paid back and are redeemed by the borrower rather than by a stockmarket.

"That is one of the nice things about property, one can do with one's own as one pleases."

Holy Writ did not say an Israelite lending to another Israelite could charge the interest he liked, but that the loan was to be a straight loan without interest. Interest taking is either a Pagan or a pre-Pagan but impious (Nodians rather than Noah!) perversion of the sense of just investing. Israelites only were allowed to use it against Pagans, Canaaneans even and not less evil Pagans.
HGL (answering an earlier point)
JP - you said they had government charity in the Middle Ages, yes, but government and Church did not collaborate to make the poor dependent on exactly one system of pauper support, they were rather setting an example so that people who could but were not princes or priests should follow the example and also give to the poor. A very important distinction, I think, and one missed by some Distributists today.
HGL (dito)
PFH - the Medieval punishment for trying to sell shoes without being a guild member in a town requiring guild membership was not beheading but simply getting at best fined and at worst your things confiscated as any fraudulent business man. In the near century from Reformation to Charles I one could perhaps have been beheaded, like for being a Catholic, also for sympathising with the guild system.
Hans, what is your source? What your saying I have often heard from Randroids and never backed up. They just assume, "they must have had a crumby economy, because they were christian".

You realize to enforce such rubbish laws, you would need a standing army of sorts. Nobody had one pre-revolutionary france.

This business of selfishness.... that should be blamed on original sin more than any economic system.
In a medieval town a man trying to sell shoes without authorisation (i e where cobblers neededto be guild members and he was not) was fined, not because there was a standing army, but becayse there were twenty men with halberds, and two of them would suffice to deal with the guy.

If you call that a "standing army" there were lots of such previous to Revolutionary France.

My sources are entries in encyclopedias.

A law like that was not crumby. It ensured cobblers already established in the town had work. It was ensured by wine merchants and bartenders who similarily wanted to keep their business. It was ensured by bakers who wanted to keep theirs. It was ensured by tailors who wanted to keep theirs.

"how awful for those who need to buy on walmart!"

Well, those now needing to buy on walmart are people employed in big businesses that have rationalised production of shoes, of bread, of clothing, and of wine sail excepting the bartender part. Back in the days before industrialism, under the guilds, they would instead being employed in cheap production have been employed in somewhat more classy such and have been able to afford more classy consumption.

There is no evidence whatsoever people in towns were generally poorer than people in towns are these days, excepting of course the fact they lacked commodities not needed in smaller and slower towns but needed in modern NY.

Assuming they would have had coffee before the guild system was destroyed. The town hall would have had to decide:

  • 1) can coffee be sold at all in town?
  • 2) can it be served by the bartenders who are wine merchants?
  • 3) can there be a new guild for serving coffee but not wine?

Once that was decided, nobody who wanted to drink coffee at home would have needed a coffee machine, since nobody would have been in such a hurry as these days. So, they would still have had no coffee machines. And obviously neither cars nor trams for getting from one end of the town to the other, when one could easily walk the distance in an hour or less. ONLY in lacks such as coffee machines and cars were they poorer back then.
Hans, I think the distinction you are trying to make is between a productive loan (e.g., investment in a machine shop where if profits are turned the owner might agree to pay back the principle plus 10% of the profit for the year however if he went belly-up the principle would not have to be paid back) and an unproductive loan which a common day laborer might need to put food on the table for the week. It comes down to the purpose of the loan. Clearly anything above the principle for the loan to the day laborer would be usury. The same also goes for car loans, home loans, student loans, and most loans today as most of these loans are not for productive purposes but for things people use to get to work, live in when they are not at work, and educate themselves to hopefully find work. The car, home, or education produces nothing per se therefore asking anything over and above the principle is usury.

Truth be told I am still wrestling with the fact that an investment asking for more than the principle might be a clever way to conceal usury. After all, the person who invests say $100,000 into the machine shop that ends up turning a $1,000,000 profit for the year ends up with $200,000. Essentially his money just doubled itself without him lifting a finger. Now, one might say the owner of the machine shop is still happy with $800,000 profit and that he needed the $100,000 capital to be able to turn that profit however I still can't square it with Justice. It seems to me that the owner should simply pay back the principle. I suppose it might be justified if and only if the proviso was indeed added that if the business goes belly-up even the principle does not need to be paid back though to me it seems preferable to avoid these scenarios and just treat everything as a straight loan therefore the principle is always the only thing that is owed back and if our brother's business goes belly-up we should be willing to forgive the debt in charity. This seems to be in perfect harmony with the command of the God-Man when He said, "lend, hoping for nothing thereby." (Luke 6:35) To the canard which states, "if people were expected to lend hoping for no return on their investment than no one would lend," I would assert the commentary for Luke 6:35 as a reply: "Hoping for nothing, but merely impelled by a desire of doing good. They who only give when sure of having a greater return, do not give, but traffic with their generosity; in which there is no charity." (Rev. Fr. George Leo Haydock)
JB, your definition of productive loan is from Calvin.

It was not even accepted by the first generation of Calvinists.

As said, the moral of a productive loan with interest and the moral of contractus trinus (one contract for a loan that is an investment as I after St Thomas have defined it, one for a straight loan, one for swapping "10 % probable gain" + "0% whatever the gain" : 2 = "5% whatever the gain" - condemned by Pope Sixtus V).

It is pretty close also to the contract called "de la gruesa ventura" - a percentage of any gains, but losses leave the looser debt free. It was often applied to sailors, was condemned by one Pope and the condemnation led to some precursors of insurance policies. Later on it was however not applied, when that was the contract type famously signed between Isabela la Católica and Cristopher Columbus.
I actually got that definition from Hilaire Belloc. I doubt he knowingly got it from Calvin considering his disdain for all things Protestant, especially the Judaic-Calvinistic notion that wealth is a sign of predestination and poverty a sign of reprobation. I follow you, agree with you, and in fact believe Belloc was simply mistaken on this. I am reading a book on usury right now that you yourself would appreciate and in fact every Catholic needs to read. Fr. O'Callaghan refutes all the arguments of the usury apologists with tact and clarity while citing all the ancient canons, papal decrees, and teachings of the Fathers:

[Not exact same link, but better link to same book:]

O'Callaghan, Jeremiah : Usury, funds, and banks : also forestalling traffick, and monopoly : likewise pew rent, and grave tax ; together with burking, and dissecting; as well as the Gallican liberties, are all repugnant to the divine and ecclesiastical laws, and destructive to civil society ; to which is prefixed a Narrative of the author's controversy with Bishop Coppinger, and of his sufferings for justice sake (1834
But are you sure Belloc approved of it? As I recall him, he specifically attributes it to Calvin. I take that as he rejected it.

Of course, he made a point that usurers after Calvin did not fully apply the distinction.

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