Plutocracy Left and Right - Intercollegiate Studies Institute

Plutocracy Left and Right


Plutocratic Socialism: The Future of Private Property and the Fate of the Middle Class
By Mark T. Mitchell
(Front Porch Republic Books, 2022)

Mark Mitchell has written a brief and interesting book arguing that the widespread ownership of productive property—what economists would call “capital goods”—is an essential support for political liberty. As he puts it: “The thesis of this book is simple: democracy without private property is fundamentally unstable and will not survive.” (I wish he had addressed Plato’s case that democracy, even with private property, is fundamentally unstable.)

In the introduction, Mitchell, citing a poll, makes a distinction as to whether people believe the most common future form of government will be “democratic” or “socialist.” Yet there is almost certainly a great overlap between the two beliefs. Perhaps Mitchell holds with Friedrich Hayek that in the long run democratic socialism is unstable and will cease to be either democratic or socialist, and perhaps that view is correct. But this is an opinion poll, and if people think future governments will be both democratic and socialist, well, that is what they think.

Mitchell spends a good amount of the book discussing the history of attitudes towards private property, beginning with the Bible and continuing with Plato, Aristotle, Aquinas, Locke, the American founders, Tocqueville, Marx, Chesterton, Wilhelm Röpke, and more. His emphasis on private property might prompt a suspicion that he is a free-market ideologue. That this is not the case is made clear in his approvingly citing the limits on private property in Mosaic law:

For instance, harvesters are commanded not to reap to the very edge of their fields, and owners of vineyards are commanded not to go over the vineyards a second time or pick up the fruit that has fallen to the ground. These are to be left behind for the poor and the alien. In short, ownership of property includes responsibility to the community, which entails limits on the use of one’s own property.

But neither is Mitchell a socialist, and he quotes with apprehension the World Economic Forum’s prediction that by 2030, “You’ll own nothing. And you’ll be happy.”

He makes a persuasive case that the American founders were quite concerned with how property was distributed in their new republic. None of them were for complete equality in property ownership, understanding that such a condition would be almost impossible to create, and once created would be highly unstable. But they also were very concerned about “too great” a degree of inequality in property ownership. For example, he quotes James Madison advocating laws that “without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort.” 

Of course, the devil is in the details: How much wealth is “extreme”? How much indigence is “extreme”? And how exactly can laws eliminate these extremes “without violating the rights of property”?

Mitchell misinterprets one contention of Madison’s. He first notes that “Madison [suggests] that unstable laws create an advantage for the ‘moneyed few’ over the ‘industrious and uninformed mass of the people.’” Madison goes on to explain that this is because those with money and financial savvy can pay close attention to how the laws will affect relative prices and thus gain by speculation, a pastime not available to, say, a farmer preoccupied with his crops and herds. Mitchell then sums up Madison’s argument: “In other words, laws that create an advantage for the wealthy and disadvantage the poor are unjust and are a sign of public instability.” 

Mitchell’s contention that laws that deliberately favor the rich are unjust and will create instability is certainly true, but it is not what Madison was saying. Rather, Madison was pointing out that rapidly fluctuating laws, whatever their supposed intention, in fact will favor the wealthy, since the rich have the time and resources to carefully track those changes in the law. (Think of how large corporations today favor complex and ever-changing regulations and tax codes, which their smaller competitors find difficult to navigate.)

Refuting Karl Marx, Mitchell writes, “history has clearly shown that the dictatorship of the working class never materializes. The revolution is invariably hijacked by a plutocratic minority intent on securing power and wealth.” But he recognizes the truth in Marx’s theory of alienation and quotes Tocqueville to illustrate this: “‘What should one expect from a man who has spent twenty years of his life in making pinheads?’ Ultimately, ‘the man in him is degraded as the worker is perfected.’ A society of perfect workers and degraded man is not one conducive to freedom.”

Arriving in the twentieth century, Mitchell turns his attention to the distributists and ordoliberals. Distributism is an intellectual movement founded by Hilaire Belloc and G.K. Chesterton, based on Catholic social teaching. The ordoliberals were mainly German, market-oriented economists who nevertheless rejected laissez-faire, believing that markets need regulation to produce good social outcomes. They shared a concern that “too little consideration is given to human scale in our economic arrangements.”

The increasing dominance of giant private firms and giant government bureaucracies over social life means that workers become alienated from their product and no longer find fulfillment in their work. As the ordoliberal economist Wilhelm Röpke put it: “Work instead of being a satisfaction and fulfillment of life becomes a mere means and the hours spent at work a mere liability, whereas normally these ought to represent an asset in the balance-sheet of life.”

In contrast to Röpke’s concern about the satisfaction found in work, we find “the sort of unattached worker championed by many libertarians.” Here Mitchell quotes the Austrian economist Ludwig von Mises: “if workers . . . ‘changed their locations and occupations according to the requirements of the labour market, they could eventually find work.’”

This quote offers an extremely important insight into the libertarian view of the human being: a person is a capital good, and as such should be available to be picked up and moved anywhere in the world that capital needs him to be. The fact that this person might have family, friends, a church, and a community in a place that he feels affection for is, in this view, simply a barrier to higher productivity. All of those things can be replaced by a bigger flat-screen TV and a nice new leather recliner.

Mitchell describes two very different alternatives presented to us by globalist liberalism and what we might call localism: in localism, people are expected to work and be productive members of their community. But the community also recognizes those truly in need and helps them out of the spirit of neighborliness. On the other hand, in globalist liberalism, “The generous and creative spirit of neighborliness is replaced by the cold bureaucratic functionary whose responsibility to distribute aid to the poor lacks the creative and personal element that neighborliness affords.”

As we move from neighborliness to bureaucratic “care,” “We witness a steady decline: from productive property to income for the sake of purchasing consumables to, finally, the elimination of the necessity of work and the replacement of any notion of property ownership with the re-allocation of publicly funded and publicly administered services.”

In his conclusion, Mitchell makes a number of recommendations for how to move towards a situation in which productive property is widely owned. Here I find myself agreeing with many of Mitchell’s suggestions, in that I believe they are good ideas, but simultaneously thinking: “This does not have a snowball’s chance in hell of going anywhere.” 

Consider his proposal that, to encourage entrepreneurship, “Excessive regulations that create barriers to entry should be eliminated.” Yes, they should be, but under the current regime, they are not going to be. Should some lawmaker propose a measure that would truly lower barriers to entry, the proposal would be denounced as allowing businesses to trash the environment, evade taxes, and exploit workers. The mere fact that Mitchell’s suggestion is a good idea will not protect it from the storm of propaganda that attempting to implement it would invoke.

Or contemplate something as obviously harmful as our nation’s subsidizing of huge mono-crop fields of corn and soybeans: the environmental destruction of the soil and the water (from chemical runoff from the fields) is immense, it makes our farm economy vastly less diverse, it increases the risk of economic catastrophe should a disease strike either crop, and the benefits accrue mostly to wealthier farmers. But there is no significant movement to scrap the subsidies. How much less chance would a far more easily attacked bill like one dropping business regulations have?

Mitchell’s fundamental thesis is correct: we would have a healthier polity if productive property were much more widely distributed. In fact, that thesis is so important that Mitchell, or someone, should follow up with three books. One would show how our thoughts about property have evolved, which would help us understand how we got where we are. The second would lay out the distributist case for broad ownership of productive property. And the final one, rather than simply offering some high-level suggestions as to how to get there, would tackle the concrete difficulties we face in getting any such reforms passed and suggest what we might do about those barriers.

Gene Callahan is the author of Economics for Real People: An Introduction to the Austrian School and Oakeshott on Rome and America.

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