I used to use the term “distributist capitalism” as a way of presenting distributist ideas, believing this would make them more acceptable to capitalists. There is a certain sense in which Distributism could be argued to be a form of Capitalism. The basic definition of capitalism is the private ownership of productive capital. The reasoning goes that, since Distributism advocates the private ownership of productive capital, it is a form of Capitalism. The problem with this thinking process is that it employs an extreme reductionism which would make Distributism synonymous with Capitalism. For that matter, it would make Fascist Corporatism synonymous with Capitalism because, even with the controlling hand of government, the productive capital in a Fascist Corporatist economy is still privately owned.
The mere dictionary definition stating this basic aspect is not enough to define Capitalism. Dr. Rafael Waters (RIP) of the Aquinas School of Philosophy argued that there are two different forms of Capitalism. He stated that Capitalism can be completely just, but that there is another form which routinely engages in unjust practices. He referred to the just form as “true” Capitalism, but what is commonly understood to be, and is called, Capitalism includes and accepts as good the economic practices which he identified as unjust. Therefore, what he called the true form of Capitalism is really a different economic system than the form which exists and is practiced in the real world by that name. From this we may argue that what is advocated by today’s capitalists is not truly Capitalism, but then we are discussing theoretical Capitalism in opposition to what it is generally believed to be. That would only confuse discussions of Capitalism more than they already are.
Capitalism, as practiced in the real world, goes far beyond the private ownership of productive capital. Capitalism as it actually exists includes different forms of corporate ownership, different forms of investment and financing schemes, interest, the acceptance of greed as an objective good, usury, using capital for profit, using capital to prevent competitors from making profit, monopoly, free trade, involvement of the highest levels of government, and a utilitarian view of the worker. Any discussion of Capitalism which reduces the term to the basic definition of the word is unrealistic. In other words, the economic system actually operating under the name Capitalism is very different than the basic definition of the word, and with all due respect to Dr. Waters, what he described as true Capitalism is really a different economic system that also includes the private ownership of capital but actively rejects and prevents unjust practices. For the purpose of debate about our current economic situation, Capitalism must be considered as including all of the views and practices commonly accepted as part of the system.
Since both Distributism and Capitalism operate on the basis of private ownership of productive capital, we need to look beyond this one common root and realize that neither of these economic systems is wholly defined by it. Richard Aleman demonstrated this perfectly at the 29th Annual American Chesterton Society conference where he said, “Distributism is just like Capitalism, except that we differ on the nature of man, the purpose of economic activity, usury, the maximization of token wealth, the role and legitimate exercise of the state, empirical economics, the meaning of subsidiarity, subordination of economics to the higher sciences, our ends, our means, what money is, what wealth is, what a free market is, production and consumption, regulation, free trade, the moral and divine law in the social and economic order, and, yes, what liberty means.” In other words, while Distributism and Capitalism adhere to a basic principle of private ownership of productive capital, there is a vast chasm of difference which makes even the term “distributist capitalism” misleading.