Economics for the Right – Ideas for the New Economy

1. Distributism as a Starting Point

After all this critique of theory and practice the question remains: what ought to be done?

The simple answers, from communism (socialization of the means of production) to capitalism (let the market sort it out), have failed or will do so, with well-known consequences. Other attempts (third-positionism, feudalism, corporatism) haven’t survived the course of history. Whether the non-existence of these systems in the present day is a final disproof or if a renewed attempt is due (as has been seen with various neo-Marxist governments) is left to the reader’s taste. If one opts for a reintroduction of historic political and economical systems, the theoretical work done before is huge in any case, and the author would be eager to read it.

The conclusion to be drawn from this is that there can be no simple answer: what is required is rather a constant struggle and re-evaluation of the success and failure of economic policy in practice.

That is to say, a common European or pan-Western (TTIP) market, left to the forces of domestic capital interests, will not solve anything; nor will a regionalisation of all economy. The Aristotelian middle (the return to national economies) is also not an effective answer.

For this reason the author would like to reintroduce the idea of Distributism (with its noteworthy exponents like G. K. Chesterton and Hilaire Belloc, as well as Catholic social teachings) adapted to present day challenges, toward preserving the economic well-being of Europe, as well as that of its peoples and cultures.

Distributism can be reduced to the idea that property, especially the means of production, should not be owned by a few (capitalism) nor by one entity, usually the state (socialism /communism) but by many. This is not to be mistaken with Syndicalism, as it doesn’t aim to make many people into shareholders of a small number of institutions, but rather desires to make a large(r) number of people into owners of their own means of production. This was best summarized by the agrarian, Distributist slogan ‘Three acres and a cow’. This sort of conception from almost a hundred years ago is not to be seen as an instruction manual but as a point of departure. This is combined with the idea of subsidiary: namely, that the smallest entity best equipped to the solution of problems and challenges is to be put up to the respective task.

Some of the goals such an economic idea strives for are:

• A re-personalisation of work as a result of a higher number of smaller owner-led businesses;

• A reduction of the political influence of capital (this, by making certain it does not concentrate in the hands of a few; it probably wouldn’t have been possible to push all the cultural changes of the post-Cold -War era from both coasts on the US Fly-over country, if the latter had been economically stronger);
• A reduction of monopolies and oligopols;
• A re-regionalisation of production and consumption; and
• A higher level of medical and technological developments due to a higher number of competitors.

It should be clear that these ideas cannot be implemented by one act of re-distribution of property, which could not be carried out even through the use of unabashed physical force. If one strives for change, the challenge is to reform step by step. In the following, ideas and measures are proposed which are to be seen as points of discussion and not as dogmas, because the author would like nothing less than to be the starting point for new historic failures like the aforementioned political and economic systems. Furthermore it is the author’s firm belief that all attempts at a Distributionist economic policy have to be intertwined with national and pan-European measures to prevent a further drifting apart of the European nations and regions, as every crack is a possible entry-point for foreign interests to take advantage of it.

2. Ideas for the New Economy

2.1 Heroic Payback and Re-nationalisation of the Accumulated Financial Debt

Every attempt to reform the economy will fail as long as every Western economy, on both sides of the Atlantic, is chained by its debt. This can be seen clearly each time the US citizens have to live through a governmental shutdown. Other examples are the economies of Greece and Italy, where every change in economic policy has to be permitted by external political entities (the EU, the IMF etc.).

The existing financial debt has to be analyzed; there are actually many different debts. There is a huge difference in these debts with respect to their creditors, interest rates, and payback deadlines. For a national government it is far easier to bail out its own national financial institutions and its citizens than it would be for e.g. the United States to default on the debt it owes to China, as the reaction of foreign governments can range from economic tensions to real military interventions.

The first goal has to be a restructuring of all debt to domestic domains. This can only be done by concentrating the debt from the community level to the level of the nation-state in one institution, e.g. the EU. No nation-state, not to speak of the regions of any nation-state, has the size or the power to negotiate on this level.

Then, financially profitable payback to the creditor has to take place. As much of the debt as possible has to be paid back to avoid the further accumulation of debt and compound interest. That has to be funded by all European citizens, whether willingly or unwillingly. Especially those individuals and institutions who have benefited for centuries from the financial markets should be held responsible here. A sort of unsocial flat tax like that in the Cyprus banking crisis is the worst thing that could be implemented.

In the end, the European Union should owe as much of its present debt (which is owed presently to foreign interests) to its own citizens as is possible, with a low interest rate and with a long running time. A recentralisation in private financial institutions has to be avoided, as it would mean a return to the same political dependency on those institutions we have seen expanding since the banking crisis of 2007/2008.

2.2 Restructuring of the Banking System

The next point of action is the restructuring of the financial and the banking system. The financial industry has to be returned to its normal function: namely, to redirect unused capital into productive capital. Regulations in the spirit of the laws of the era from the 1950s to the 1970s have to be put back in place. It is clear that these rules must be adapted to globalization and to the technical changes. Long-term investment has to be preferred over investment into financial products, themselves the subject of taxation.

A first step in this direction could be the re-introduction of the Glass-Steagall Act with its separation of commercial and investment banking.

Also, the obligation of every banking institution to hold bank financial reserves has to be newly regulated. That would mean that with increasing size and with increasingly risky investments, reserves for loss of investments have to be disproportionately increased. Never again should it be necessary to bail out banks with public money.

Finally, the structure of ownership has to be redesigned, which is to say diversified, as much as possible, with possible local limits. A model for this could be cooperative banking of the Raiffeisen banks.

2.3 Size and Taxation of Businesses

It is well known that the tax burden is reduced the larger is the business. The author avoids specific examples here for judicious reasons and begs the reader’s indulgence.

This is a self-feeding circle of course. Since with big money comes great political power, not just through illegal corruption and campaign donations but also through the threat of moving businesses and thus withdrawing the tax revenue which follows from them, companies can easily bribe local political interests.

This sort of pyramid, where smaller businesses and their employees have to carry an increasing percentage of the tax burden, has to be inverted.

For this reason the author proposes a complete restructuring of taxation for business entities on the basis of three variables: the number of employees, annual sales and the structure of ownership.

It is necessary to keep in mind that with automation, many people will loose their jobs, and not all will be able to adapt to this challenge, so the necessity to support those companies that have hired a high number of employees in relation to their annual revenue is more than obvious.

Furthermore, as with increasing revenue the possibilities of investment increase, the danger of market domination and monopolies arises. This has to be combatted by a tax system which strives to create incentives to found new businesses capable of surviving without getting crushed by the big players. (Especially in IT and other new technologies, Europe is way behind the United States; the European infrastructure would break completely down if IT security updates for all Operating Systems were boycotted for a month by the US.) With a higher number of businesses, adaptability to new challenges and the development of new technologies improve as a result of more competition between an increased number of market participants.

The third point is the structure of ownership. Businesses that are owned and managed by private individuals or families (for generations) tend to take better care of their employees due to personal relationships and due to long-term planning, as the personelle and the family’s destiny both depend on the business. These small or private businesses therefore should obviously be preferred to impersonal structures of ownership.

2.4 A Re-localisation of Low-Tech Consumer Goods

In comparison with the era before WWI, genuine European culture lies with the common people rather than the (economic) elites.

That has not only been demonstrated by the online backlash to the comments of the French President Macron, in which he demanded that Notre Dame should be rebuilt in the image of multicultural France, but also in the lesser-known decision of the inhabitants of Frankfurt am Main to rebuild parts of their city in the image of pre-WWII-bombed Frankfurt am Main – a goal that was branded as historical revisionism by some architects and city officials.

But this general sense of culture and (regional) historical identity is under attack, not just by American(-styled) pop-culture and modern architecture, but also by consumerism as a whole. It is said that every tenth European was fathered in a bed of a certain Swedish furniture chain. Other examples in terms of food from fast food to cuisine, from clothes to farming can be seen everyday.

The loss of cultural identity that goes along with this consumerism is insidious and unseen to many. Short-term commodities and their appeal to the lowest human instincts (fast food with its high concentration of fat and carbohydrates being the best example) are killing European culture like an undiagnosed tumour.

Alain de Benoist once said that ‘It is better to bleed to death under a helmet of the red army than to die from heart attack caused by McDonalds.’ The author would like to add that he is also little inspired by industrially produced Russian-styled vodka or the cancerous herbicides used in industrial farming.

Therefore in the face of automation and increasing environmental problems, in the struggle to preserve culture, certain kinds of business (craftsmanship, organic farming, local cuisine, etc.) should attain the possibility of receiving protection (from industrial and foreign productions) in their nation states or even within their regions by means of strict trade regulations and a restructuring of EU and national subsidies aimed at protecting existing and newly founded businesses in craftsmanship, cuisine and of owner-led (organic) farming.

There is no reason why handmade furniture, clothing and other consumer goods that carry local culture as a result of being locally produced and sold, and which therefore appeal to local tastes, should not be protected from industrial, which is to say from soulless industrially produced, consumer goods. It is important to reintroduce here the insight that everything has not only a price but also a value. Through a more personal relationship between consumers and producers, a higher level of quality and sustainability of these consumer goods is to be expected.

The positive influence that a reintroduction of craftsmanship could bring about for the environment and for the long-term sustainability of consumer goods needs no further explanation.

2.5 Energy

While the rebirth of craftsmanship will in part save some energy with its return to manual production, it is clear that this will in no way solve the impending energy crisis. The need for fossil fuels will globally rise as China, India and also parts of Africa strive to achieve an opulent lifestyle identical to that enjoyed by the Western middle classes over the last centuries.

That the battle for these resources does not occur peacefully can be seen every day in Africa and the Middle East. Europe and the USA are no longer able nor willing to involve themselves in any of these conflicts, nor should they. One dystopian scenario involves the struggle over Iranian oil with the Western nations and Sunni-Arab interests on one side, and Iran, Russia and China on the other. How such a conflict would end is easily predictable. The same logic that goes here for fossil fuels can be applied as well to the materials used for nuclear energy or rare metals as well.

To solve this problem, it is however not helpful to put all one’s hope in new technologies like nuclear fusion. To strive solely for solutions which end this problem in a ‘deus ex machina’ fashion is more than irresponsible. Also, to hope for the insight of the general public into the necessity of a reduction of a consumer-based lifestyle to the size necessary is rather unlikely, despite present-day eco-activism, as seen in the ‘Friday for Future’ demonstrations.

Therefore the only solution left to us is investment in green technologies and renewable energies (solar, wind, bio-gas, water).

Right now all of them lack public acceptance; they are also not profitable enough to find major investments or backers. In Bavaria, a regulation has just been passed that prohibits the building of new wind turbines closer than two kilometres to the nearest village, due to noise complaints. This regulation now limits the territory on which these wind turbines can be built to 0.5 % of the space of the Bavarian state.

Every attempt to push through new attempts to change the structure of energy production will fail if they do not gather the support of large parts of the population.

Europe, with its lack of resources, is daily on the brink of an energy crisis comparable to that of the Oil Crisis in the 1970s; this comes as a result of its being dependent on the delivery of resources from regions that are either unstable (the Middle East and Africa) or which have their own agenda and are willing to use energy as a leverage (the Russian Federation).

Adding to this problem is a huge inconsistency in foreign energy policy between the various nations; disagreement here only accelerates the problem (e.g. NORDSTREAM II and the question how to deal with countries like Saudi Arabia and Iran).

This problem cannot be solved independently by every region or nation state if they want to keep their level of energy production as well as stability in delivery. The solution has to be pan-European; it has to come on the geographical level of the European Union and its political periphery (Norway, Switzerland, the Balkans etc.).

The challenge is to marry this effort and this level of planning with the Distributionist idea, so as not to develop a solution which is imposed on the people without their acceptance and (economic) participation.

The goal to be achieved, beyond the fulfilment of present-day energy needs, is ecologically produced, decentrally produced, and decentrally owned and operated energy production. A balance between central planning (from Norwegian dams, North Sea tidal power plants, to Spanish solar cells – as well as the grid linking all of it) and local interests and sensitivities has to be found.

A starting point could be a plan for a Green New Deal, in part inspired by the former Greek finance minister Yannis Varoufakis, combined with Distributist elements. It could look something like this:

• A central technical plan especially for the power grid to deliver energy from one end of Europe to the other;

• A fund, based on taxation of old energy sources and the financial markets, toward the sum of 100 billion euro per year to provide for the development of energy production;
• The possibility of receiving funding for green energy projects with preference for economically weak regions or with potentially high-yield energy production;
• Preferential funding for small projects (owner-managed) and mixed-owned projects (ownership by residents living close to the projects or in the same region);
• A limited possibility for company and private interests to invest (enough to make a profit, not enough to hijack management);
• Tight control of funding down to the lowest level, so as to preserve trust and transnational acceptance (e.g. the ‘four-eyed’ principle of the Roman Republic: one local manager for every foreign controller); and
• Direct monetary benefit from energy production as well as the amount of energy passing through the region for local residents to keep and increase acceptance (e.g. the individual permanent payout of the Alaska Permanent Fund).

2.6 Technological Race to Catch Up

As has already been mentioned, Europe is far behind technologically. And while there is at least some awareness of its lagging behind in relation to the US and China, the positive developments in other parts of the world are utterly lost on the Europeans. From South Korea to Africa, a positive trend in usage and the development of new technologies can be documented everyday, whereas Europe seems still to be stuck in its belief that it is still the centre of global science and technological progress. This sort of self-satiation has to be paid for daily.

From electronic consumer goods produced in China to lack of any control on private and governmental data in IT, as seen in the NSA scandal, the monetary, not to speak of geopolitical cost can hardly be overestimated. There is no European Apple, Microsoft, Facebook, Google or Huawei. Whatever one might think of these specific companies, their products, services and connections with their national governments, it has to be acknowledged that no European company has developed equally competitive products or enjoyed them same level of success on a global level. What will happen to Europe if, following the US and China, even India with its high-level demographics and emphasis on good education rises to a new level in development of technology and surpasses Europe? This is a question that is presently coming dangerously close to an answer.

The challenge is not to slow down or prevent the technological rise of non-European parts of the globe. It is not possible to effect this through trade measurements (as Trump has demonstrated), nor is it a goal to strive for, as the technological and economical growth of the parts of the world is the best long-term prospect for defusing the demographic bombs these places presently present to the Western World.

The challenge is rather to catch up to the present-day global technological leaders and to surpass them. Even if one despises technology as a whole from an environmental or Traditionalist perspective, it is the author’s deep conviction that it is still better to ruined as a European by European technology than to be dominated by foreign technology. It is one thing to stay true to one’s own beliefs and ideals as long as one has to carry the consequences alone; the question here is about the consequences for others, and for the people(s) one feels the closest too. Vae victis tends to be the last of the fallen warrior’s worries. Especially in military technology, standstill and hesitation in pursuing new technologies is equivalent to treason. If the flame of European culture is extinguished by its people being even more subjected through foreign, technologically supreme interests, than its culture will not recover. The example of the diverse pagan cults is a historic example of precisely such a process – although the author admits that this subjection was not due to technological inferiority alone. Once the chain of initiation and heritage – a chain that is already more a thread than a chain – is cut, it will not be reforged, or else it will be transformed into something unrecognizable.

Another reason for the author’s support of technological development is a strategical one. The support of technology seems to be one of the last ideas that are shared across the political spectrum. So far no iPhone burning or any other attempt of neo-Ludditism has taken place in Europe, neither from the left from the right, nor even by any religious zealots. A new front in the present struggle with the Zeitgeist is unlikely to lead to any success on a larger scale. Even the most total techno-sceptic will not deny himself the privilege of an MRI or of high-tech surgery if needed. The question is rather which trends and technologies should be embraced and which should be slowed down.

Europe does not have the same founding culture that is present in the US in the private sector. But what Europe does have is a well-functioning educational system in the materialist, one could also say productive sciences (MINT, medicine etc.).

This strength can be utilized. Once again writing from a German perspective, it can be seen that with a rising number of German-studies students, an adequate number of new Goethes, Schillers and Brechts has not yet been produced. In comparison, the technological and monetary benefit of those students in the productive sciences is quite measurable. The author is not to be mistaken here; he doesn’t hold the Humanities in low regard per se, nor does he wish for their abolishment. He rather believes in quality over quantity and is therefore rather unsatisfied with the kind of thought that is taught in universities today, as well as the intellectuals who are produced by these institutions. If someone like Armin Mohler or his informal successor Karlheinz Weißmann enjoyed the same appreciation and resources as Jürgen Habermas, the situation would clearly be different in the Humanities, at least in Germany.

Therefore the number of those studying the Humanities should be reduced, not just by a re-adjustement of study positions, but by a completely new scholarship and student loan system. What the author proposes is a scholarship system that does not merely grant expense-free access to education itself, but which pays for all living expenses of study years, including those of having a family.

While this is not to be regarded as a hand-out, the payback should not to be linked to financial criteria either. Instead, it would be interesting to see a catalogue of criteria whereby the fulfilment of politically defined standards can help to reduce the burden of student loan debt. Such standards could be the foundation of new companies, especially in one’s own homeland or in economically weak regions, could provide incentives to migrate to unattractive regions and work there (especially parts of the European countryside are always in need of good medical professionals), could increase the number of children born in matrimony, and could direct the preference of certain fields of occupation e.g. military, space, energy and IT over consumer goods or entertainment etc.

That these criteria have to be adapted from a continental level to the regional is self-evident.

It is the author’s hope that a combination of a new founding culture within the framework of high politics could help to reduce the immense challenges Europe is facing right now in its technological struggle.

3. Conclusion

Bill Clinton famously said, ‘It’s the economy, stupid’, and he wasn’t wrong. As long as true conservatives, as well as people to the right of them, are unable or unwilling to provide new ideas for the fulfilment of the economic needs of those they seek to govern, they will either repeat the errors of the past or be driven by ideas that do not coincide with their values, and which bring them therefore to lose on every other field. The challenge for new economic ideas and theories as a result of this is as urgent as the need for new political theories; both are inseparably intertwined, for one cannot exist without the other. To start the quest for both is the goal of the day. Let us not make the mistake of thinking that it is below us.