Creating a Family-Centered Economy

Toward a Truly Free Market:

A Distributist Perspective on the Role of Government, Taxes, Healthcare, Deficits, and More

  • John C. Médaille
  • ISI Books, 2010; 282 pages, $26.95

God’s Economy:

Faith-Based Initiatives and the Caring State

  • Lew Daly
  • The University of Chicago Press, 2009; 318 pages, $37.50

Recessionary times mean job losses, belt tightening, bailouts, and greater demand for government interventions. Recessions also cause citizens to question the efficacy of the nation’s economic system, a system that continues to be subject to uncomfortable and debilitating fluctuations that strain our social-services delivery system and adversely impact the support provided to those who lose jobs, houses, and hope. “Isn’t there a better way to organize our economy and get off this roller-coaster ride?” many Americans ask. “How do we improve the safety net for those that suffer through job loss or other calamity?” These two books offer perspectives that aim to empower the family and create a more human economic system.

Toward a Truly Free Market is an ambitious but intensely interesting book that, after identifying the shortcomings of classical economics, builds a case as to why distributism is a superior approach to organizing the economy. The book is wide-ranging, providing suggestions for expanding economic development, restructuring the tax system, reducing government expenses, increasing the productivity of American industry, and improving the health-care cost equation. In fact, the book tackles just about every problem having anything to do with the economy except the public administration of social services, which conveniently is the subject of God’s Economy. This second bookis a heady analysis of the history behind the faith-based and community initiative implemented during the first term of the George W. Bush administration. The book traces the origins of this faith-based approach to Christian political ideas originating in Europe more than a century ago, suggesting that Bush’s introduction of these ideas helped reorient America’s quest for improving the welfare-safety net. Moving from a period of tension between church and state, Bush’s faith-based approach became the centerpiece of a new era of church-state cooperation in the delivery of social services, a cooperation that continues in the Obama administration.

The two books differ in style and approach. Toward a Truly Free Market follows a textbook approach in which economic terms are defined, leading proponents are identified, and practical examples are provided for illustration. The first half of the book provides a basic theoretical background necessary to understand the recommendations developed and presented in the last half. Médaille proves to be an excellent storyteller, organizing his ideas in crisp prose, short chapters, and fast-paced analysis while never getting bogged-down in excess detail. It is an ideal introduction to distributism for the non-economist. God’s Economy, on the other hand, is a heavily documented analysis of the history surrounding the faith-based initiative, full of subtleties, connections, and academic-style prose. This book is intended for the serious scholar, not the casual reader looking for a succinct overview or a “good read.” Political analysis and interpretation are an important part of this story; Daly distributes the political accolades around so that liberal and conservative readers will both find something in their favor. For the most part, Daly minimizes his own political perspectives in describing events that had significant political overtones. His style is mostly dispassionate analysis, although he warns in the introduction that his book was written by one raised in a “predominantly Christian political culture”; consequently, his faith and politics are clearly evident in many instances in the book, especially in criticism regarding George Bush’s war policies and military spending.

A Primer of Distributist Thought

In Toward a Truly Free Market, John Médaille begins with the idea that it is wrong-headed to make economics into a hard science along the lines of physics, in which everything can be reduced to a number. Rather, economics should be a humane science since it is firmly embedded in human institutions, human values, and human justice. Unless built on basic human values, no economic system can distribute wealth justly. Médaille proposes that the nature and purpose of an economic system is to provide for the material needs of life within the context of humane social relations. Despite the fact that modern models used to make economic predictions or assess the health of the economy often ignore the family’s role, a just system would therefore develop economic solutions that foster the well-being of the family. Having set forth this standard, Médaille then depicts distributism as the economic system that best promotes the development, growth, and nurturing of families and communities.

For those unfamiliar with the concept, distributism is the idea that ownership of productive property—land for farming, tools for building, and machines for manufacturing—should be widely distributed so that every family has the means to earn a living. But distributism is not about the government redistributing wealth in the fashion of Robin Hood; nor is it about encouraging large corporations to take advantage of their scale to squeeze out smaller firms. Rather, distributism promotes policies that encourage broad-based innovation, development of small entrepreneurial businesses, and the break-up of monopolies and oligarchies into smaller independent units. Médaille believes that this economic system will result in greater justice because a greater percentage of the population will enjoy the power to provide for their own welfare, raise a family, and accumulate wealth for their grandchildren.

In a world where families are in crisis, divorce rates are increasing, and people are struggling to make ends meet, Médaille’s proposal falls on eager hearts and minds. If an economic system can strengthen the family unit, how does society scuttle the present system and implement a distributist one? To implement distributism in the United States, Médaille advocates significant and disruptive overhauls of components of the nation’s economic system, including changes in the way money is created, the banking system operates, and the federal taxation system is administered. He also calls for the break-up of large corporations and the downsizing of government. All these changes are necessary, according to Médaille, but none will be easy. The reader is left wondering whether any of these measures are possible, given the current political climate. If only Médaille had provided some clues on how to move the country to where he’d like it to go, then at least Americans would know what to pack for the journey. Perhaps this will be the subject of his next book!

His particularly provocative approach to downsizing the federal government is a breath of fresh air compared to the ineffective efforts to date. Médaille points out that the Reagan administration’s strategy of trying to “starve the beast” by cutting tax revenues was not successful—Congress continued to increase government spending as new needs were identified. The beast’s diet was merely changed from cash to credit! If we are really going to downsize government, Médaille argues, we must first specify the government’s proper role, which in his view would involve providing an economic environment in which families and communities can flourish. The government is not doing its job if families are barely surviving or are constantly in debt, if mothers are forced to work outside the home, or if families cannot attend to the education of their children. Accordingly, all decisions of a moral and just government should be based upon a recognition of their effects on the families and communities that make up the nation. Furthermore, Médaille argues that government should adhere to three principles, all borrowed from Catholic social teaching: 1) the common good, which helps counteract clashes of special interests; 2) subsidiarity, which helps counteract the tendency toward centralization; and 3) solidarity, which helps counteract the tendency toward favoring the rich and powerful. Next, he applies his family-promoting principles to slice away large chunks of the federal bureaucracy that conflict with these principles. Médaille claims that the federal government “can be easily cut by a third to a half over the course of ten years without impacting essential services.”

Redefining the government and cutting it down to size sounds like a laudable goal, but how can this be done? Would the electorate support such a downsizing or would special interests hold sway in protecting programs, earmarks, and entitlements? Undertaking massive changes in the way the federal government functions would be exceedingly difficult. Once again, a readable roadmap would have been helpful in showing where to start and how to proceed in implementing distributist policies. The reader is left searching for more details, more examples, and more citations regarding the topics and recommendations suggested.

Christian Democracy in the United States

In God’s Economy, Lew Daly reports that the “new” model of church-state relations implemented by George W. Bush during his first term is, in reality, very similar to the church-state model pioneered by Christian Democrats in Germany, the Netherlands, and other countries of Europe. So while government-sponsored faith-based initiatives are new in the United States, they are deeply rooted in the European tradition. Daly suggests that two concepts of political order, Catholic subsidiarity and Dutch Calvinist “sphere sovereignty,” not only helped to define European-style welfare systems but also had an undeniable impact on the design of the Bush version that emerged in the 1990s in the United States. Both principles favor empowering local enterprises with the responsibility, authority, and control necessary to solve local problems, rather than centralizing these activities at a national level.

As Daly tells the story, the Faith-based and Community Initiative went through a long evolution on intellectual, political, and constitutional issues before it was implemented. Whereas religion and government were previously viewed as competing sources of public welfare, the initiative was designed to focus attention on how religious and governmental services might be coordinated to deliver needed services while restoring families and communities to their proper place of dignity. Statutory foundations for the initiative began with the charitable-choice law established as part of the welfare reform act of 1996. Charitable Choice required that faith-based institutions be treated on an equal basis with secular nonprofits in the competition for social-service funds. Then George W. Bush, after experimenting with faith-based approaches as governor of Texas, began endorsing the faith-based idea in his presidential-campaign speeches. He described a moral mandate for a next stage in the nation’s fight against poverty, a stage that would require deployment of the “weapons of the spirit.” Bush appeared to be inspired by a biblical and moral vision of social restoration, one that would help the country transition to a new era of church-state cooperation. In his first inaugural address, Bush proclaimed, “Where there is suffering there is duty. Americans in need are not strangers, they are citizens; they are not problems, but priorities.”

In 2001, Bush’s executive order effectively designed the federal procurement process for social services by creating a coordinating agency in a new White House office of faith-based and community initiatives. This model has since become well established in constitutional law, federal and state legislation, and government contracting. Daly claims that support for the program continues to be strong on many fronts as members of Bush’s faith-based team and their acolytes have become established in leadership positions in think tanks and advocacy networks, as well as media and academic institutions. Daly is quick to assert—contrary to what many liberals assume and what conservatives would like to achieve—that the rise in faith-based social policy has actually strengthened public welfare in the United States, not dismantled it. The approach, Daly claims, demonstrates the potential for transforming policies that justify low support for welfare despite rising levels of poverty into a mandate for significant new investments in poor communities and new social protections for struggling families.

The strength of God’s Economy is its in-depth descriptions of how George W. Bush and his allies implemented the faith-based and community approach so quickly and effectively into both federal and state social-services sectors. Yet as Daly concedes, objective research measuring whether these initiates have really improved the delivery of social services is minimal. Without objective metrics, Daly’s claim that the new approach to welfare is more caring or cost effective is a stretch. While most Americans would like to believe that faith-based solutions are better than merely secular approaches, without empirical data they have to make that supposition based upon faith!

Relating the Two Books

The two books relate in three ways. First, Daly’s book provides an antidote to what is so troubling about Médaille’s work—how can distributist policies be implemented in the United States? Daly shows how a committed president who maintains steadfast allegiance to a controversial idea can implement that idea so well that it quickly becomes an ingrained part of the welfare state’s DNA. The implication is that a president who believes in distributist policies can implement those policies that improve life for families and have a lasting and positive impact. What is needed are a coherent strategy and a sufficiently approving electorate. Conversely, Médaille’s work provides integrating principals and directions that could be applied to Daly’s work to develop prescriptive recommendations for the future of social-service delivery. Are there opportunities to apply distributist principles to further improve social services? Historical analysis often fosters a desire to understand what is likely to happen next.

Second, Médaille demonstrates that passion and humor can enliven a subject as dismal as economics. If only Daly had borrowed a little of this formula in his treatment of the faith-based initiative, God’s Economy would be a much more interesting adventure for the reader.

Finally, both books advocate policies that improve life for the family and the communities in which families reside. Both works recommend Catholic social teaching as an effective theoretical underpinning for solutions to the problems that affect society while Daly also praises its Protestant corollary. Specifically, Médaille proposes using common good, subsidiarity, and solidarity as three key principles for good government, while Daly chronicles how the architects of the Bush initiative made subsidiarity their conceptual foundation. Without much difficulty, the principles of common good and solidarity could also be integrated into that foundation. Catholic social teaching—like the Protestant concept of “sphere sovereignty” that acknowledges the limitations of government to regulate human activity outside of its area of competence—can provide helpful insights that have been hidden from secular audiences for too long. Readers would be well advised to learn more about these integrated principles, their support of the family, and their broad applicability to the social and economic problems America faces.

Dr. Engelland is professor of marketing at the Catholic University of America in Washington, D.C.