Commenting on the budget last night Jonathan Calder wrote: Tax credits are a way of subsiding bad employers from the public purse and are a move towards the intermeshing of the power of the state and the power of capital that Belloc warned about in The Servile State.
There is new interest in the ideas promoted by Chesterton and Belloc in The Servile State that became known as Distibutism. The list of Liberals who have been influenced by them includes Elliot Dodds (and the Ownership for All movement) Jo Grimond who launched many of the ideas that fuelled the Liberal revival in the collection of essays edited by George Watson entitled The Unservile State. Later E F Schumacher drew on his ideas in Small is Beautiful. David Boyle over on the Real Blog often champions distributism and most recently he made the case for a radical housing policy:
I've come to believe, as a modern Distributist, that the way forward has to be building new homes and then giving them away - on three important conditions:
- They do not go back onto the open market and fuel house price inflation (ownership need not imply the right to sell).
- They stay at the same nominal price they were originally sold for, ratcheting down the rest of the market, perhaps for a generation or so.
- They are built in sufficient numbers to satisfy demand.
There are many reasons why the reformist suggestions put forward by Belloc and Chesterton under the name of distributism were largely ignored when first published and have since been almost forgotten. The Pre Raphaelite outer garments of peasant smocks, the idealized mediaeval impedimenta of maypole and village tavern with which their proposed reforms seemed inextricably tangled, can only have discouraged 'political economists' from taking them seriously....
Nevertheless their ideas and those of Catholic Social policy were very influential in the Liberal Party in the inter war years. Dodds, a Congregationalist lay preacher, read widely the works of continental thinkers such as Jacques Maritain. This school of thought was the motivation behind Father José María Arizmendiarrieta who established the Co-ops in Mondragon that so impressed Jo Grimond and Robert Oakeshott.
But back to the budget. In 1983 at a meeting of the Policy Committee chaired by Richard Wainwright a paper was tabled that was written by James Meade- this was in the day when we took advice from Nobel Prize winning economists rather than self interested City folk. If my memory serves we well it was about a New Keynesian Approach to Full Employment.. Amongst other things it advocated Profit sharing (much beloved of the then Liberal Party) and now regrettably out of fashion, and taxing inflation (equally beloved of John Pardoe). The main focus was how you maintained full employment and fix wages and how that interacted with social security. I cannot remember all the details but it did look at how you took account of folks who required higher incomes to live decently because of responsibilities like caring, child care etc, which brings us back to tax credits. The trouble is that I can't remember Meades conclusion save that it did include the state picking up some of the cost