Towards a True Economic Third Position

There are at present many efforts to create a third position in economics, most of which go from the spectrum of kooky voodoo economics such as Social Credit Theory on the right and Participatory economics on the left, and essentially socialists in third position clothing such as syndicalism and fascism. The goal of this essay is not to deconstruct these false third position models, but to offer a true third position. This will essentially be similar to distributism, though I have some objections to distributism as it is now popularly formulated. For more on that see my essay “Rethinking Christian Economics.”

The Biblical Economic Model
When we discuss what economic model we should have we first need to discuss what is the nature and end of man. If man has no nature and/or no end, then any old system should work since man would be infinitely malleable and able to fit into any system with sufficient conditioning, ergo none would be better than another. This I reject. I agree with the Shorter Westminster Catechism that, “Man’s chief end is to glorify God and to enjoy him forever.” I will not attempt in this article to give justifications for this assumption, merely assume it as the first principle of anthropology.

If we accept this basic principle of anthropology, we then look to the Bible to see what end God directs us to. If we use biblical principles we see that many forms of economic action are condemned as sin. The most significant change would be the outlawing of usury. We see prohibitions in Leviticus 25:36-37; Nehemiah 5:7-10; Psalms 15:5; Proverbs 28:8; Ezekiel 18:8-17; Ezekiel 22:12. We see in Psalms 28:8 and Ezekiel 22:12 that God views usury as akin to extortion. There was an exception for Jews to lend money to gentiles at usury in Deuteronomy 23:20. I believe that Christ in his Parable of the Good Samaritan where the term neighbor is expanded to include not only Jews, but also gentiles closed that gap, since exchanging usury is not a form of love. We see in Luke 6:35 that Christ demands we do not lend expecting anything in return. With such evidences I think that the Gentile loophole has been closed to a complete prohibition on charging of usury.

We see in Psalms 24:1 that God owns the earth which implies that property taxes are immoral since the government has no right to extract profit from what it does not own. Eminent domain (legalized state theft of property) is immoral where we see Ahab and Jezebel in 1st Kings 21 first murdering Naboth and then stealing his property, which was given to him as a trust by his father. As we see in Proverbs 13:22 that one should leave an inheritance for one’s children which would imply that the death tax and inheritance tax is immoral. We see in Numbers 36 the right of women to inherit property. From 1st Timothy 5:3-16, in which Paul exhorts families to take care of their elders and if the widow has no family or their family is unable to care for them then the church should do so, we can derive the principle of subsidiarity: a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co-ordinate its activity with the activities of the rest of society, always with a view to the common good.” Socialism is fundamentally evil in that, insofar as it destroys private property and establishes a welfare regime, one is correspondingly less able to maintain one’s elders.

Private property is the bedrock of civilization, as Aristotle observed, men take better care of what they possess and that private property facilitates two virtues: continence and liberality. Based on the principle that no man can live in isolation for only animals and gods can live self-sufficiently in isolation, Aristotle argues that people come together to form families and families come together to form states (in his case city-states). We see that in capitalism the individual is the focus of the economy, in socialism the collective, and in distributism the family. The family is the smallest self-sufficient unit in society and thus is the wellspring of society. The word economics comes from the two Greek words Oikos (Household) and Nomos (Law). We see that historically economics was concerned with providing enough for each household to take care of its needs. This principle of self-sufficiency is the foundation of further civilizational development and as such the economy should seek to encourage self-sufficiency. In Joshua 14 and 15 we see that God desires tribes (extended households) to have land to be self-sufficient. In fact that land is not to be sold; for with the implementation of Jubilee every 50 years and the story of Naboth, we see that God desired the dispersion of property not its concentration.

How do we Get There?
Clearly our current economic model is not distributism and is a mixture of capitalism and socialism with seemingly the worst of both. I propose three possible methods used individually or in conjunction that could allow a transition from our current mixed-economy to a distributist economy: (1) prosecuting firms for criminal action and restoring to the victims fourfold (Luke 19:8); (2) the example shown in the Peasant’s Land Bank, and (3) the Land-to-Tiller Program.

I propose that firms that have engaged in criminal action be prosecuted and their assets be redistributed to the aggrieved parties fourfold, what I call the Zacchaeus Plan. This would work to divest the corporations of their ill-gotten gain and serve to chip away at concentrated wealth.
The Peasant’s Land Bank was an effort by secretary of finance Nikolai Bunge to give the peasants access to credit to purchase land from the Boyars (nobles) and in conjunction with this effort Stolypin realized that the lack of a middle class would only aid in the fomenting of rebellion and economic stagnation. After seeing the Revolution of 1905 he correctly identified the need for agrarian form. Seeing that a middle class is founded on independent property holders they sought to purchase land from the boyars to distribute the land back to the peasants. While marred by corruption and inefficiencies the process was largely successful, and by 1913 the bank had helped the peasants acquire 46 million acres. For more on the Peasant’s Land Bank and other Russian agrarian reforms see Russian Peasants and Village Lands, 1861-1917: A Summary Compiled by Alan Kimball.

In Taiwan’s Land to the Tiller Program, property was peacefully and lawfully transferred from the Chinese landlords to the peasants. Chaing’s land reform can be understood in four parts: (1) leasing to the peasants land owned by the government, (2) reduce rent to 37.5%, (3) selling government land to peasants, (4) Land to the Tiller Program. The Land to the Tiller program transferred land from the landlords to the peasants by compensating the value of the property from the landlords with 70% of the price being paid in rice and potatoes and the remaining 30% in stocks in rising government firms.

There are many possible peaceful and lawful means by which to transfer property in a more equitable way to the people without the needless bloodshed demanded by lunatic socialists and anarchists.

How Do We Stay There?
I have basically two means by which this property regime can be maintained. Firstly, I accept Aristotle’s notion that while man’s desires are potentially infinite, the number of goods available in the world are finite, and that man’s desires should be curtailed by education. So we begin by educating people to be content with what they need. As a practical legal method I argue for a return of biblical Sabbath year and Jubilee. We see in Deuteronomy 15:1-6 that every seven years (Sabbath Year) the tribes of Israel were required by God to free slaves, admittedly only Hebrew slaves, and forgive debts. In Leviticus 25:8-12 we see that land should be returned to its original owner. In practical terms Jubilee could be modeled in using the concept of usufruct. I will use the Investopedia definition of usufruct:

“A legal right accorded to a person or party that confers the temporary right to use and derive income or benefit from someone else’s property. Usufruct is usually conferred for a limited time period or until death. While the usufructuary has the right to use the property, he or she cannot damage or destroy it, or dispose of the property.”

If we consider limiting the time period to fifty years I think we have a rough approximation of usufruct-Jubilee contract.

I assert that third position economics on both the right and the left goes from either kookiness or socialism. I propose an alternative biblical/Aristotelian distributism model. I have provided a few possibilities by which our current property regime can be legally transformed into this new property regime, and how such a regime can be maintained, which is more than any anarcho-socialist on the Left or social credit theorist on the Right can do. favicon

32 thoughts on “Towards a True Economic Third Position”

  1. Excellent! You have clearly listed how to get there but how realistic is it? How many actually understand the Christian aspect of this?

  2. The Russian and Taiwanese examples show it can be done, but given our current state probably not to likely. We need men and women committed to Natural Law and the Gospel, we have precious few of either. Most Christians do not have a strong conception of a Christian economic order would look like, they are too busy accepting the “alternatives” of capitalism and communism.

  3. I find this interesting, and something I would like to look at deeper. At the same time, I am not an economist, nor do I have the patience to dig through numberless tomes, trying to find nuggets of value. So is there a good systematic discussion (preferable in book form) about this version of Distributism?

  4. Not that I know of. You can always read Aristotle and the Pentateuch for starters, that is what I did.

  5. Good Deal. This article has actually prompted active research on my part. I have read of your disagreements here with the more traditional distributists, and those are noted, but I have been learning quite a bit of the basic idea. To clarify in my own mind, is the topic of guilds your biggest contention?

  6. “To clarify in my own mind, is the topic of guilds your biggest contention?”

    Not really. If you read my Rethinking Christian Economics, I distinguish between two types of guilds merchant guilds (which were monopolistic) and craftsmen guilds were were more interested in competition. So not guilds per-say, but merchant guilds.

    My real problem with distributism is that it tends to purse socialist means for distributist ends. Such as supporting the progressive income tax. State action can be the solution as seen in Taiwan, but it must be intelligent state action. They also seem to revel in a certain ignorance of economic thought which I find unhelpful.

  7. Thanks, Todd! I have actually been reading quite a bit since you posted this. I have several books to go through, as I wrap my head around this. I will definitely watch this video.
    I even got a copy of Aristotle’s Politics, so I could dig into that, as well as stuff from Chesterton, Belloc, etc. I am keeping your concerns on those works in mind, as well.
    Thanks for introducing me to this.

  8. Honestly, this has really shook me, in a good way. I have long considered myself an Austrian-libertarian, but have also always had some concerns with specific issues, especially when they are taken to their logical conclusions. Those conclusions did not match up with Christian ideals.
    This really seems to show promise for helping me find a suitable alternative.

  9. I think Feser takes the best of the Austrian school of economics, but tempers it with the understanding of Christian ethics.

    “I have long considered myself an Austrian-libertarian, but have also always had some concerns with specific issues, especially when they are taken to their logical conclusions.”

    Probably like allowing parents to starve their children?

  10. Yeah. That whole parental issue, from Rothbard and Block, just always drove me nuts. The way they turned abortion into a landlord evicting a tenant… just did not work for me.

  11. Clint I’m interested in what ways you rethought some of your earlier views on economics?

  12. Well, I was pretty hard core Rothbardian. I believed that the market could provide for all services better than government. In fact, government was not only superfluous, but actively negative and perhaps even evil.

    I am now seeing a legitimate role for government, though still limited and non-intrusive. Honestly, I am still reformulating my thoughts. At this point, it might be more of change in economic philosophy than in much specific details.

    Like you have mentioned, most of the Distributists out there hold onto some problematic socialist tendencies (progressive income tax, etc.) that I find abhorrent, yet there is much value in other aspects of what they say. Currently, I am reading Aristotle’s Politics (at your suggestion) and seeing what he has to say, but I am still just getting into that. I have read John C. Medaille’s “Toward a Truly Free Market” and it had some good, thought-provoking material, though some things that still trouble me.

    Anyway, I suppose at this point, the fact that government can actually provide something useful is the main change in my thinking so far. I suspect that I still have much to learn and my ideas will change accordingly.

  13. “Meh… I don’t agree with flat out dismissing Social Credit Theory with a rejoinder, kooky voodoo. M. Oliver Heydorn is the expert on SCT. His book is very informative.”

    Social Credit really is not a real economic theory, all they say is replace private central banks with state run central banks. Same poison different managers.

    Gary North pretty much destroys SC here:

  14. Gary North, a fanatical free trade cultist and open borders nut. North has also dismissed Chesterton’s distributism. Do youseriously want to go on a gold standard? Tell me who do you think owns all the gold? George Soros and his crowd, and you don’t think the value of gold will not be manipulated by him?

  15. ” Do you seriously want to go on a gold standard?”

    Hmmm Gold or government issued paper money is that really a question?

    “Tell me who do you think owns all the gold?”

    According to Social Credit who do you think prints the paper money?

    “Gary North, a fanatical free trade cultist and open borders nut.”

    So. Prove he is wrong on SC.

    “Of course pro-usury North would be against SC he’s also against Chesterton’s distributism too.”

    Again so. Prove he is wrong.

    I read Kerry Bolton’s the Banking Swindle and all I saw was advocacy of hyperinflation and economic collapse as seen in French Quebec, the Darien Banking disaster and the Mississipi Bubble, sorry SC is crack pottery. Show you have some knowledge and then we can talk further.

    “George Soros and his crowd, and you don’t think the value of gold will be manipulated by him?”

    Wait and you don’t think he already manipulates paper money, 1997 east Asian crash anyone?

    Actually no. The most stable currency in history was the Byzantine Solidus and it was gold. Gold is king get over it. Paper is for whipping after a dump.

  16. Why don’t you Prove North right? You posted a video and I posted a series by M. Oliver Heydorn againsts North’s claims.

    Of course Soros manipulates the current bankster system. However, you go to a gold standard and he’ll still manipulate currencies. By dumping his gold on the market the price will fall and he’ll just buy it all back.

    Here Bill Still explain s it…

  17. I get it you want toilet paper as money. Awesome!

    “Why don’t you Prove North right?”

    Shifting the burden of proof. Are you a coward? Answer my question.

    Easy Says Law. Get over it. Economics is a science to which you seem uneducated in.

    ” You posted a video and I posted a series by M. Oliver Heydorn againsts North’s claims.”

    What does that prove? Simple you don’t know anything about economics. Clearly. Nobody prior to 1913 would have taken anything other than precious metals, if available, as a viable store of wealth.

    “However, you go to a gold standard and he’ll still manipulate currencies. By dumping his gold on the market the price will fall and he’ll just buy it all back.”

    You know that did not happen in Byzantium right? Again you avoid the quesiton do you want the state to print money? That problem is no different than we have now.

    Every single example posed by SC theory failed from Quebec to Scotland to John Law. Sorry real economists don’t wast time on it. Also Still is an economic ignoramus he denied that Romans used gold and silver for coins. Byzantine soldius, the best coin in history, also a gold coin, get over it.

    Ok I get it you love hyperinflation and economic recession. Nothing to see here. So stop bothering me. Unless you have the cajones to debate economics then contact me on skype at todd.lewis1987.


    You clearly did not listen to Gary North, so why should I listen to your illiterate economic propaganda?

  18. Well, if there was a proper gold standard, whereby gold is the means of exchange, exactly how would Mr. Soros sell all of his gold, and depreciate the price of gold to buy it back? What would Mr. Soros sell his gold for in a gold standard system? Gold? So he sells all of his gold in exchange for some amount of gold, in order to depreciate the price of gold (which is gold), so that he can take that gold and buy the gold he sold back for some profit in…gold? Now, I am not privy to mathematic dark magic, but exactly how could he profit from such an exchange?

  19. The short answer, he would use credit. Say, money was on a gold standard, it would still cause inflation or deflation by releasing more gold on to the market. Say manipulators (Soros types) own 1/2 the gold on the planet. They unload a large portion on the gold market, the price of gold just lost purchasing power and your gold standard money has now experienced inflation. The manipulators, then purchase the gold back at a the less expensive price.

    Here’s an example of how states manipulate the value of gold…

  20. So at no point did you even listen to Bill Still. The paper money Still is talking about isn’t issued with debt. Here watch Mr. Still’s Money Masters:

    “Shifting the burden of proof. Are you a coward? Answer my question.”
    Are you moron? I submitted a rebuttal to North’s position with Dr. Heydron’s videos on social credit theory. However, you clearly will not listen to anything Dr. Heydron says. And what is your fascination with Gary North? Are you some neck-beard atheist, wild-eyed for a libertarian utopia? From the article, I believed you leaned toward Chesterton’s distributism? An economic North dislikes also.

  21. “So at no point did you even listen to Bill Still. ”

    So at no point did you listen to Gary North.

    Already listen to Still years ago, he is a crackpot. Take econ 101.

  22. “The short answer, he would use credit. Say, money was on a gold standard, it would still cause inflation or deflation by releasing more gold on to the market.”

    Hmmm. How? He cannot make gold appear out of thin air. If he wanted credit he would have to pay the creditors in something to keep them happy such as, oh I don’t know GOLD?

    “Say manipulators (Soros types) own 1/2 the gold on the planet.”

    No we resort to hypothetical nonsnse?

    Ok lets say that Soros runs the government, ergo he runs the government bank, SC epic fail.

    ” They unload a large portion on the gold market, the price of gold just lost purchasing power and your gold standard money has now experienced inflation.”

    You know that the toilet paper you call money is always inflationary right?

    You clearly are an ignoramus when it comes to economics, have nothing interesting to say and are only wasting every bodies time.

    From now on troll your going to have to go hungry.

  23. You’re a total fool when it comes to economics and markets. Has the price of gold not went from a high of $1700 an ounce to a low of $1000? Gold is influenced by supply and demand as any other good. The supply can be manipulated, if you had read the accompanying linked article, you would see China has been manipulating the gold market. Russia has done it to the plantium market in the past.

    Seriously, how stupid can you be? As a hypothetical, if a meteor full of gold landed on the Earth, what do you think that additional supply of gold would to the current price of gold? It would fall due to increase in supply.

  24. I know this is about a year ago, but I realize I got too heated in my responses I apologize for that.

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