Belloc offers a similar argument as Schumpeter on the development of capitalism into what, for lack of a better term, Marx called "late-stage capitalism." As the modes of production, Belloc argues, inevitably become concentrated in the hands of the few, there will be a strong incentive for the rest of the population to attempt a transformation from this capitalist state to a collectivist one. Here, he creates a distinction between socialism and collectivism. Socialism, for Belloc, is the common ownership of production, while collectivism is the redistribution of wealth. This redistribution in which productive members, in effect, subsidize unproductive members will therefore result in what Belloc deemed the "servile state," ending the unstable system of capitalism. Schumpeter, on the other hand, paradoxically argued that the downfall of capitalism was its strength. As entrepreneurs, managers, and the wealthy become more adept at arranging human capital, they will seek greater influence in politics, and overall the state. They will thereby convince the people to subsidize business and in other ways rent-seek, arguing that such policies will reflect in the betterment of welfare for the economy and society, while in reality this will result in a poorer society (economically, as the society will generate less wealth and socially, as the society will engage in harmful, rent-seeking behavior in order to concentrate benefits to a small group while harming the larger community). The two arguments, as we see, are similar but distinct, and both thinkers conclude capitalism is inherently unstable over the long run.
Belloc has some Marxist influence but also some influence from the liberal thinkers of his time and of the past. If he were alive today, he would most likely to have aligned close to Russell Kirk. He does not recognize the Industrial Revolution as a time of betterment for the average man but as a time of social upheavel and turmoil, falling prey to the Victorian view promoted by Dickens and the like. Moreover, while he uses the language of exploitation and hints at the labor theory of value, he nonetheless recognizes the tremendous benefits of economic freedom and liberty in general, noting how the elimination of compulsory labor (slavery) resulted in one of the greatest creation of wealth in human history, allowing impoverished individuals to feed and clothe themselves.
Indeed, Belloc starts his book with a historical overview of continental thinking on slavery, labor, and production; arguing the main economic driving force was forced slave labor. This view is essentially correct and cannot seriously be contested. There was, however, and over an extended period of time, an evolution from slavery to serfdom and servitude whereby these slaves gradually gained greater and greater ownership of land and the freedom to use it however they desired. Students of Hayek will notice the progress highlighted here is gradual and builds upon knowledge and rules which these individuals did not consciously know or change but, in effect, tacitly evolved into a system which resulted in more mutually beneficial outcomes. In short, Belloc provides a very Hayekian explanation about the change in roles of slaves, and overal freedom.
Towards the end of the book, Belloc presciently understands the issues contained with the project of redistribution. He categorizes two types of reformers: the confiscatory reformer and the "buying out" reformer. The first type, those who do succeed in confiscating the means of production, must choose how to distribute, who to distribute, and the amount of distribution to the recipients. Such a problem cannot provide the entire society with an equitable outcome. This reformer, in spite of his or her ideal of a socialist and collectivist state, will inevitably move away from his or her goals and towards a system in which the mass of people will produce for the benefit of the few, as in the decision, there will exist possessors and the dispossessors. In an attempt to create security and sufficiency, the reformer--the collectivist idealist--will instead perpetuate the evils of insecurity and insufficiency. Indeed, as Belloc notes, price controls and enregimentation exercised the by the wealthy and the reformers will lead to an increasing degree of benefits to the wealthy.
In some pages, Belloc comes close to the concept of regulatory capture. For example, when he talks about the minimum wage and compulsory labor, policies which have not yet been adopted at his time, he rightfully realizes certain industries will benefit from the passage of such legislation, securing greater profits and labor, and thus generating greater surplus value for the businesses. In such a world, men are no longer free to bargain with each other but are held captive by positive laws created in part by the law maker and in another part by the business owners. Therefore, Belloc correctly sees the state upon inserting itself between the laborer and business owner as removing the freedom of bargaining between both individuals.
As a final word, while I may not agreed with some of Belloc's thoughts, particularly his views on the evils of capitalism and his understanding of the Victorian era, he does highlight and explore the tendency of wealthy countries to practice greater and greater cronyism and harmful paternalism of the state, though this state of affairs is neither inevitable nor necessary. Men are affected by ideas, the extent and manner still currently unknown--and may never be known. Morality and ethics within business may still come to fruition as the ideas of Adam Smith, particularly his work The Theory of Moral Sentiments, was expounded to combat the potentially dangerous road of self-interest and false individualism. The ongoing evolution of ideas, patterned behaviors (manners), ethics, kindness, and other virtues have and will continue to adapt. Countries with greater amounts of liberty--social and economic--are kinder, gentler, and more tolerant. There is no reason, as such, to be pessimistic, like Belloc or Schumpeter.