What’s Right with Distributism

In the wake of the financial crisis of 2008, the school of thought known as distributism has raised a greater degree of interest among various Christians who have grown disillusioned with the modern economy.  Distributism is an economic and political theory originating in the writings of Hilaire Belloc and G. K. Chesterton in the early twentieth century.  Its inspiration was in a reading of Pope Leo XIII’s 1891 social encyclical Rerum Novarum and later encyclicals like Pius IX’s 1931 Quadragesimo Anno, as well as a particular (and romantic) view of history found in the nineteenth-century writer William Cobbett.  Other popular distributists surrounding Belloc and Chesterton include the artist Eric Gill, the Dominican priest Vincent McNabb, the American founder of the Catholic Worker Dorothy Day and her compatriot Peter Maurin.  While it fell out of popularity in the wake of World War II, distributism has been revived to some extent by modern writers like E. F. Schumacher (Small is Beautiful) and, in various ways more recently by Allan Carlson, John Medaille, Thomas Storck, English writer Philip Blond, and the Australian Race Matthews.  An online journal, The Distributist Review, as well as the Chesterton Review, Gilbert Magazine (where I am a contributing editor), and Chronicles Magazine publish pieces from a distinctly distributist bent, as does the Houston Catholic Worker and a number of other more obscure places.

Distributists and free marketeers are often at each others’ throats.  If you scroll through any website dedicated to free markets or liberty, you will find any number of critiques of distributist thinkers, and scroll through the Distributist Review or any other site dedicated to distributist theory and I think you will see that there is a sense that there is often little love lost between the two camps. But there is a great deal of common ground to be found among those who hold a more generally pro-market position and those who describe themselves as distributists.  I think there is much truth in many of the distributist positions—truths on which there can be broad agreement among people of good will.  But there are a number of points on which its own analysis fails in showing how it could get where it wants to go.  In this essay I wish to examine what’s right about distributism.  Next week I will detail what’s wrong with distributism and what we should ultimately take from it.

Is it Really “Socialism with Mutton Chops”?

Distributists like to describe themselves as an alternative or third way that avoids what they describe as the pitfalls of both capitalism and socialism.  They also claim that their system (alone, they sometimes say), is faithful to papal social teaching and the Catholic social tradition more broadly.  Their goal, they claim, is a society of widely distributed property and widely distributed wealth and power.  This differs, they say, from both socialism, in which the state owns the means of production, the vast bulk of wealth, and all power, and from capitalism, which is, they say, a system in which a very few private people own the means of production, wealth, and have the lion’s share of power.  The problem with capitalism, as Chesterton liked to say, was that there are too few capitalists.  Distributists advocate a family-centered economy, invoking the time before the Industrial Revolution as a time in which small family farms and family businesses were capable of providing a more humane environment in which people were healthy, happy, and not subject to the depredations of wealthy industrialists.  While some distributists acknowledge that not every business can be carried on in the home, that some sorts of business require too large an amount of capital to do so, they make it their goal that larger businesses operate as worker cooperatives in which all act as co-owners.

While many free market critics of distributism—and many distributists themselves—seem to think that under such a system every household will be a sort of complete world where Pa builds the house, farms the property, does the plumbing, electricity, and develops his own software while Ma cooks, cans, makes all the clothes, and practices medicine while homeschooling all the children, this does not seem to be necessary.  As Bruce Brommel emphasizes, the defense of widely distributed property does not mean that individual families must become perfect societies in which everything is done within the home; nor does it mean that there will be absolutely no division of labor.  While many distributists favor an agrarian society, it is not necessarily the case that distributism can be conflated with agrarianism.  While many modern distributists point to the more than 8,100 farm cooperatives in Emilia Romagna, the region of Italy including the provinces of Ravenna and Bologna, the success of this region includes a variety of other industries, not all of them agricultural and not all involving cooperatives.  Most distributist advocates like to point to the success of the Mondragon Corporation, a Spanish cooperative that includes 80,000 workers doing over $25 billion of business a year creating a variety of different items, in the process providing social safety nets, credit unions, and other options.  Brommel notes that Belloc’s hope was first for a suburban distributism. As Belloc wrote:

Each in a society will concentrate upon what he has the best opportunity for producing and, by exchanging his surplus of it for that which another has the best opportunity of producing, will increase the wealth of all; or what comes to the same thing, lesson the burden of labour for all …. For though the family exchanges its surplus, or even all its production, for the surplus of others, yet it retains its freedom, so long as the social structure, made up of families similarly free, exercises its effect through customs and laws consonant to its spirit:  the Guild; a jealous watch against, and destruction of, monopoly; the safeguarding of inheritance, especially the inheritance of small patrimonies.

This reference to the guilds needs further explanation.

While distributist Joseph Pearce calls Belloc’s distributism “essentially libertarian” and free market critic Todd Flanders refers to Belloc’s “opposition to state power and to the coercive power of laws that expropriate and transfer wealth and labor,” the fact of the matter is more complicated.  As the contemporary distributist Allan Carlson points out, Belloc loved liberty and would certainly be considered quasi-libertarian in respect to his distaste for the modern regulation of so much of ordinary life, but the term is “misleading given his massive resort to state intervention.”   As he wrote in his 1936 Essay on the Restoration of Property, “We shall find as we proceed in our search for Economic Freedom, that we cannot follow it for any distance without calling in the powers of the State, to contrast with, and as far as possible to destroy, the usurped powers of Big Business.”

Are You a “Wage Slave”?

The state’s job in the distributist economy is to make sure that property is divided fairly and to run the state in tandem with the various guilds.  Most distributists argue that problems of inequality of power, and to lesser extent wealth, will be lessened by this division of property.  Concerning the guilds, distributists themselves are opposed to labor unions, though this is because they think that labor unions are ways of keeping workers pacified and thus preventing them from seeking the freedom of co-ownership in their businesses or starting their own.  Workers who accept wages they label “wage slaves.”  Similarly, many distributists believe that monetary welfare payments to people are dangerous, insufficient, and corrupting.

Instead of labor unions, distributists generally advocate guilds—mixed class syndicates (Belloc and Chesterton cooperated with other “syndicalists” and many who called themselves “guild socialists”) that govern a particular industry or craft, determining the rules for who gets to work in an industry, setting minimum prices, minimum wages and maximum wages, and various other regulations.  So, though Belloc did not propose that the state be able to micromanage business, it seems clear that he believed that the guilds, often in collaboration with various local to larger governments, could and should do so.   Most distributists acknowledge that not every business can be carried on in the home, that some sorts of business require too large an amount of capital to do so, so they make it their goal that larger businesses operate as worker cooperatives in which all act as co-owners.

What Distributists Can Teach Us

First, distributists are right to emphasize the place of morality and ethics in economics and our working lives.  We are called to be good stewards of time, talents, and treasure.  And the witness of Christian social teaching throughout the ages provides not only powerful incentive, but guidance in thinking precisely about how we should be stewards.  As John Henry Newman observed in The Idea of a University, too many economists believe there is nothing to be gained from the perspective of other disciplines, including theology and ethics.  Distributists rightly call out some neoclassical economists for considering the human being as simply homo economicus and thinking only about efficiencies and not about ends of action.  What can be frustrating is that distributists often talk about all free-market oriented economists as if they held this view.  Murray Rothbard, a twentieth -century Austrian school economist, could join right in with such criticisms, observing in an essay called “The Myth of Efficiency:”

Economists have been long engaged in what George Stigler, in another context, has called ‘intellectual imperialism.’ Economists will have to get used to the idea that not all of life can be encompassed by our own discipline.  A painful lesson no doubt, but compensated by the knowledge that it may be good for our souls to realize our own limits—and, just, perhaps, to learn about ethics and about justice.

Michael Novak, a theological and economic writer whom distributists think they hate, has written extensively about how a free enterprise system must be embedded in a healthy moral culture and political culture to bear fruit.

Second, distributists object to the concentration of power that is so endemic in modern Western economies.  Whether it is Chinese state capitalism or the type of crony capitalism that makes up so much of the West, they are correct to see this as abusive.  Again, what is so frustrating is that they seem to think that free market supporters favor this arrangement.  On the contrary, Milton Friedman himself once said that a choice often needs to be made between the interests of a free enterprise system and those of businesses themselves.  Michael Matheson Miller is sharply critical of “managerial capitalism” or “Davos Capitalism.”  Noting that Adam Smith warned of corporate collusion and its dangers to the public, Miller says we are “experiencing something much more insidious—not just businesses, but business and government and a host of others all meeting, and colluding, at the posh Swiss resort town of Davos.  It is Adam Smith’s nightmare.”  This “managerial economy,” he says, “has become equated with free markets” and so its 2008 collapse meant that though managers and technocrats lost faith in markets, they “did not lose faith in themselves, and now they want us to entrust even more of the economy to them.”

Third, distributists are right that a wider distribution of wealth is essential to a healthier society. They are rightly bothered by monopolies in business and the fact that too many people are kept out of what John Paul II called in Centesimus Annus the “circle of exchange.”  They are right to point out that large businesses often rely on the powers of the state to create hindrances to smaller entrepreneurial competitors, while also creating ways in which government coffers can come to them—corporate welfare is indeed a bad thing.  Distributists are right to point to a number of positive programs by which people might become active in entrepreneurship and ownership.  Cooperatives, employee stock option programs, community supported agriculture, farmers markets, and all manner of creative ways of doing business are indeed alternatives worth exploring.  The market-friendly Acton Institute’s Poverty Cure program is a solution distributists should flock to, which aims at empowering people in developing countries to become entrepreneurs. Let a thousand flowers bloom!

Fourth, distributists believe, and rightly, that too much of the modern welfare state hinders the moral and social development of the human person.  Like Hayek, Chesterton and Belloc castigated the beginnings of modern social programs under David Lloyd George’s government, observing that such things made people more dependent upon the state—a nation of takers, in the phrase of economist Nicholas Eberstadt—and less dependent upon mediating institutions and, indeed, their own labor.  Dorothy Day opposed Social Security and other manifestations of the New Deal, acidly referring to “Holy Mother State.”  While most people will agree that a government safety net is, on the whole, not the worst thing in the world, coming up with programs that do not demean and diminish people is essential.  And we can all agree that if Christians gave more time, treasure, and talent to the poor, the average person in most countries would not find welfare statism either necessary or attractive.

Next week I will explore the difficulties and confusions that arise in distributist thought, and suggest how its valid insights can be reconciled with a free economy.