In Defense of Distributism

A wonderful defence of Distributism against the Austrian School heretics.

From Complete Christianity

Some of the worst critics of Distributism are Catholics, and by that I mean Catholics who give a free pass to the Laissez-faire mindset of the Austrian school of economics. Among Catholics, especially Traditional Catholics, there are two schools of thought. The first is distributist. This is by far the oldest and the one most commonly supported by the social encyclicals of the popes during the 19th and 20th century. To be clear, the popes never put a stamp of approval on any economic system, but anyone who studies their encyclicals can clearly see that distributism is the system that attempts to most comply with papal teaching. The other school of thought among Traditional Catholics is the Austrian school of economics, which has the most money and backing promoting it. This is more of a modern capitalism approach, based on as little government intervention in the marketplace as possible, allowing big corporations to set the rules. The purpose of this essay is not to engage in a debate. I’ve tried to debate Catholics on this and I’ve found it to be a dead-end street. I can no more persuade them, than they can persuade me. Rather, in this essay, I’m going to engage in a clarification, which I hope will at least open non-distributist Catholics to the idea that distributism is not a monolith, not all distributists are the same, and that distributism does not always fit the stereotypes its detractors typically pin to it.

The first thing we need to understand is that there are two forms of distributism. There’s classical distributism (or paleo-distributism) which was the idealized version of G.K. Chesterton and Hilaire Belloc. It was highly centered on the agrarian model which was much more common in the Chester-Belloc time period. The idea of “three acres and a cow” is often used to describe this romanticized version of how distributism might play out in an ideal agrarian society. It’s been a century since that version of distributism first made its public appearance, and while ideal, it wasn’t even practical back then, let alone today. Then there is contemporary distributism (or neo-distributism), or what I just like to call “practical distributism,” which is how distributist ideals play out in the real world, with real examples, and a real history to prove it works. That’s the kind of distributist I am. I’m a practical distributist.

One of the classical signs of a practical distributist is that he sees distributismand capitalism as being able to work together, in a sort of friendly competition. Sometimes that competition is not-so-friendly, but it is competition nonetheless. Practical distributists have no intention of obliterating the free market, because it is within this free market that such competition is made possible. Perhaps here it’s time to define some terms.

I suppose many of my readers, like most people, don’t understand economics. That’s okay. I’ll simplify this to make it super easy to understand. The difference between capitalism, distributism and socialism is all about ownership of business…

Distributism = business is privately owned by people who are involved in the day-to-day operation of the business.
Capitalism = business is privately owned by people who may not have anything to do with the day-to-day operation of the business, such as stock shareholders for example.
Socialism = business is owned by the state.

Practical distributism is pretty simple actually. It’s based on the idea that people who own business should be the same people who are involved in the day-to-day operation of that business. So for example; if I start a business, and I work that business, and I hire people to help me with that business, I am behaving like a distributist. Why? Because the business is mine. I started it, and I’m working it. The fact that I hire some people to help me is of little consequence. Granted, they don’t have any ownership of the business, and I can hire or fire them as I need, but everybody has to start somewhere. Part of learning how to do a business for yourself is working for somebody else’s business.

Here’s another example of practical distributism in operation. Suppose I want to start a construction business that builds houses, rental properties, and small office buildings. I have some of the resources to do this, but not all the resources. Meanwhile, my two brother-in-laws have some resources as well, and they each have a few friends with more resources. Together we would all have enough resources to put together a very competent and competitive construction company. So, we decide to go in together with joint ownership. We form what’s called a worker’s cooperative company, which means we each share joint ownership of the company. This cooperative company has a charter, with rules that must be followed. One of those rules is to have an elected president from among us, and that matters be put to company vote from time to time, with each company member having a vote in the say of how the company is run. That’s a cooperative company. Such companies already exist all over the United States. Some of them are quite large. For example, Ace Hardware is one example of a cooperative retail company. Hy-Vee grocery stores is another example.

Here’s another example of practical distributism a work, I bank at a credit union rather than a traditional bank. My credit union does not refer to me as a “customer” or “client.” It refers to me as “member.” What does that mean? It means that by banking at the credit union, I actually own a part of that banking institution. It’s a small part, because I’m not rich, but it is a part nonetheless. Rather than “interest” I receive “dividends” on my accounts, and I am given the opportunity to vote on certain matters for how the credit union is run. Here’s yet another example of practical distributism. I homeschool my children. I’m directly involved in the day-to-day education of my offspring. I use lots of things at my disposal to help me do this. I use computer programs, distance learning, local homeschool cooperatives, and private lessons from local teachers (music for my daughter who plays the harp). Here’s yet another example of practical distributism. My wife loves shopping for groceries at the weekly farmer’s market in our small city. She goes to Main Street (which isn’t very big by the way), and there she shops the booths of local farmers and Amish producers. She buys some of the biggest, juicy and most delicious fruits and vegetables you can find in the Ozarks. This is practical distributism. My family is living it, and we would like to see more of it. The fact that such companies/businesses and organizations exist proves that the cooperative position of distributism does work in the real world. As a practical distributist, I say we just need more of them.

Capitalism is defined when ownership of a business is acquired by people who have nothing to do with the day-to-day operation of that business. A good example of this is stock-holders. Now, as a practical distributist, I do dabble in a little capitalism here and there, and I don’t think there’s anything wrong with that. When I buy stocks in a company (which I do, on a regular basis, for my retirement savings) I’m helping other businesses get the financing they need to become (or remain) successful. As a practical distributist, I would prefer to do this more on a local level, but they don’t have a local version of Wal Street in the Ozarks. That’s unfortunate, because if they did, I would participate. It would be the distributist thing to do after all, because it’s more local, but that being said, I have no objection to helping out a big company in New York or California, as long as that company isn’t hurting people. Granted, I can’t know for sure if that’s happening, and that’s one of the drawbacks of capitalism, but I don’t think there is anything wrong or immoral about throwing some of my savings in the stock or bond market and hoping for a little growth. Capitalism, in and of itself, is a pretty good economic system, but it has some inherent weaknesses. One of those weaknesses being difficulty in policing itself against abuse of workers in the name of profit. The entire 20th century is a litany of one government intervention after another, because of this weakness. Another example of a weakness in capitalism is the tendency of a particular business to acquire more and more market share unchecked, to the point of driving the middle class out of business, and into an employee-employer relationship. In the past we saw this play out in the form of monopolies, resulting in strong antitrust legislation that had to be used to break up such monopolies. Today, we see the same type of problem in the form of oligopolies. This is when two or three companies completely control an entire market sector, so it’s not technically one company (monopoly) but it’s sort of the same thing, especially when these companies work together to set prices and fix wages. All this has resulted in the American courts getting deeply involved in regulating how and when large corporations are “allowed” to buy others or merge together. In the end, capitalism is okay, but it is flawed, and sadly needs government regulation to keep it in check. As a practical distributist, I have no moral issues with capitalism, and I do participate in it here and there, as needed. But my preference is distributist related small-businesses and worker-owned cooperatives.

Socialism is really very simple. It’s when business is owned by the state, regardless of who runs it. Socialism has always been with us on small levels, especially in public services run by local governments, such as the police and fire department for example. We could also include parks and recreation, etc. However, socialists (by nature) always want to take it a step further, beyond the local city level. They want government control of healthcare, higher education, manufacturing and retail. The result is always the same. The people who own the business (government) have absolutely nothing to do with the day-to-day operation of the business. So what happens to business? It goes to hell in a hand-basket! Everywhere socialism has been tried, the results are always the same — economic disaster! Socialism results in a totalitarian state, wherein people have to grovel for basic necessities, the economy is trashed, and personal freedoms are curtailed to keep the socialist state (and those running it) in power. We have a full century of historic examples now. Everywhere socialism has been tried, it has failed, and resulted in misery for the people unfortunate enough to live under it.

I have met people who call themselves “distributists” but are actually socialists in a practical sense. They advocate large state control of the economy, and revamping the American system from the top-down and bottom-up. I am forced to conclude that such people don’t really understand distributism, at least not in the way I understand it, and are either horribly confused, or else they’re socialist moles trying to repackage their brand of economics using different terms.

What makes a practical distributist different from a classical distributist is the understanding that “three acres and a cow” is just a romantic idea, that has no more basis in modern times than it did in the times of Chesterton and Belloc. Only a small number of people could have lived that way back then, and certainly fewer could now. A practical distributist takes the principles of the Chester-Belloc mandate, and applies them to the real world, the real market, right here and right now. A practical distributist lives them out regardless of current market laws and economic structures, understanding that real changes happen from the bottom-up, not the top-down, and no institution (especially the government) needs to “help” us live according to practical distributist principles. We can do that all by ourselves, thank you very much, and it would be most appreciated if they would just leave us the hell alone.

Catholics, especially Traditional Catholics, are most suited to live this kind of life, because it agrees with our sensibilities in so many ways, as well as the teachings of the popes. However, it’s not limited to Catholics. I personally find that many Evangelical Christians are also well-suited to the distributist life also, especially here in the Ozarks where I live. Practical distributists don’t attack capitalism, namely because we don’t need to. It’s not an immoral system, in and of itself. It’s just an inherently weak system that is prone to easy manipulation by the fallen, sinful state of man. That’s why government is always stepping in to “tweek” it here and there. It’s unfortunate that it has to do that, but we can fully understand why it’s occasionally necessary. You won’t find such “tweeking” necessary in distributist business models, organizations and cooperatives. If anything, the only “intervention” that is ever needed is the intervention to loosen laws and regulations, so that such business models, organizations and cooperatives can grow and flourish more. I’m proud to live in the State of Missouri, where the government usually recognizes this, most of the time. I’m also proud to live in an Ozark’s town where my own distributist suggestion, for a solution to a city problem, stopped a socialist attempt at a market takeover cold in its tracks. I made the suggestion to the city council. The mayor wrote it down. The townspeople in attendance applauded, and the socialist idea was shelved. That was ten years ago. It hasn’t re-emerged since. Distributism works! That is, when it’s practical distributism, and practical distributists don’t need anyone’s help to engage in it.

Some have suggested that practical distributism can only work inside of capitalism. Once again, I think people fail to understand both capitalism and distributism here. The difference between capitalism, distributism and socialism is just a matter of who owns business. The market doesn’t really care who owns business. The only thing capitalism and distributism need to thrive is the right to own private property. As long as this right exists on the books, and in practical application, any kind of economic system can exist within this legal framework. It can be totally capitalist, or totally distributist, or some kind of mixture of the two (like we have in America right now!). The one thing capitalists and distributists should always be able to agree on is that private property is a human right. The one and only people who don’t agree on that are socialists. This is why the Catholic Church has consistently condemned socialism for over a century.

Now having said that, I think both capitalists and distributists agree that the right to private property is not infinite. I think both capitalists and distributists would agree that no one man, some hypothetical multi-trillionaire, should be allowed to privately own the entire planet. That would be tyranny. I think where capitalists and distributists disagree is where the right to private property ends. Is it at the level of a continent? Half a continent? A few countries? One country? Half a country? Maybe a city? Half a city? I don’t even think capitalists know the answer to that, and for that matter, neither do distributists. The right to private property is obviously not infinite. There is a limit, but I don’t think any of us know where that limit is yet. Capitalists tend to say it’s larger, while distributists tend to say it’s smaller. I think that is a matter of legitimate debate that civilized people can engage in without disparaging or characterizing each other. Sadly, I haven’t seen a whole lot of that kind of civilized discussion lately. Capitalists and distributists are natural allies against the currents of socialism in the world today. It’s truly a shame we can’t act like it. Maybe that’s been the socialist strategy all along — divide and conquer? The socialists turn the capitalists and distributists against each other, then when we’re bogged down with infighting, they mow us down in elections. It’s something to consider.