Home / David W. Cooney / Is Distributism a Form of Capitalism?

 

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.

 

About the author: David W. Cooney

 

David W. Cooney serves on the Editorial Board of The Distributist Review. His articles have appeared in Gilbert Magazine and he has also contributed to The Hound of Distributism, a book of various authors. Originally from Southern California, he now lives with his wife and two children in Western Washington state where he works as a network administrator.

 

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15 Comments

  1. This is exactly where the conversation needs to be. I’ve always found it odd that when people talk about distributism, those who are listening tend to equate it with socialism. How could you mistake a system based on private property with socialism? On the other hand, a lot of social conservatives don’t always seem willing or able to draw the lines that need to be drawn between good capitalism and bad capitalism. They might not like things about corporate America, but they assume the system itself is okay.

  2. Thank you, Doug. That is exactly what prompted me to write this article. Please spread the word, and direct others to the site so the conversation can truly begin.

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  4. Good points that rarely get made–re the “common root” especially. For what it’s worth, though, Dr. Waters is not the only person holding to that “theoretical” kind of capitalism: I hold it myself, as do a number of Catholics I know. Admittedly, the number of people who call themselves capitalists under this definition is probably a very small minority, but we’re not non-existent!

  5. Actually, I agree with Dr. Waters as well, but it doesn’t help for conversations about Capitalism with professed capitalists. By my experience, introducing this view confused the conversation because it led to arguments over what can be considered Capitalism rather than the actual economic practices employed in its name.

  6. John Paul II shied away from the term “capitalism” in Centesimus annus because of its baggage, although he admitted a benign meaning of the term. Then again, Chesterton was right to say that the problem with too much capitalism is too few capitalists.

    I think it is useful to point out to the uninitiated that distributism can be seen as capitalism for the common man or small-scale capitalism as we see with family-owned firms. But I agree that the term is problematical because it connotes an illicit ideology (the primacy of capital over labor) as well as a licit economic arrangement (ownership of productive assets).

    Nevertheless, I believe your term “distributist capitalism” has its place in certain contexts (for example, addressing an audience skeptical of distributism).

  7. Yes, I agree that it could be used, but only along with the explanation of what separates it from “market capitalism” or “monopolistic capitalism.”

  8. David, Pius XI’s definition of capitalism in Quadragesimo Anno is an economic system in which some supply labor and others capital. I think it’s a better definition than one can find in a dictionary.

    Moreover, if a capitalist is someone who supplies funds but not labor, than Chesterton was inexact in his remark about too few capitalists.

  9. Tom, I agree, and this reinforces Dr. Water’s point that ‘capitalism’ is a very confusing term because it is not clearly defined. I don’t think that capitalists will readily accept Pius XI’s definition. They would counter that small businesses and even cooperatives are capitalist.
    My problem has been that both Capitalism and Distributism accept and would use many of the same forms of ownership. After all, even under Distributism employment for a wage would not disappear.
    The issue is not that capitalists reject cooperatives or the small locally owned business, it is that they also accept monopolies putting them out of business. The issue is not that they reject the just treatment of labor, it is that they also accept the utilitarian view of labor. The issue is not that they accept the profit motive, it is that they accept outright greed. The issue is not that distributists accept the investment of funds by outside parties, it is that capitalists also accept usury.
    Those who call themselves capitalists do not reject many of the economic practices we endorse. The problem is trying to get them to truly see – and ultimately reject – those unjust economic practices which Capitalism accepts and we reject. I have reached the conclusion that it is precisely where we differ that the definition can be found.

  10. David wrote, “The problem is trying to get them [capitalists] to truly see – and ultimately reject – those unjust economic practices which Capitalism accepts and we reject.”

    I think this is true, but I also think that capitalism has a built-in pressure or logic which pushes people toward such unjust and anti-social behavior. The separation of ownership and work, as Belloc pointed out, creates a class of people disconnected from the actual creation of useful things and this class tends to become preoccupied simply with money. Hence all the things you mention follow easily, greed, usury, unjust wages, etc.

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  12. What foolhardiness obfuscation is being written here. Distributism at its core is anti-capitalist. When one distributes property, one ceases the existence of private ownership. It becomes shared, cooperative. The core meaning of capitalism, the individual and his motivation for liberty and his pursuit thereof. Read Adman Smith’s tome for granularity on the subject. This philosophy is what birthed the 18th century Americas & Britain striding the giant leap to modernity. Why has your recent history been forgotten? What shame I feel for you.

  13. Klink, no disrespect, but you don’t know what you’re talking about when you say Distributism equals “ceasing the existence of private ownership.” Distributism is more people owning productive property (i.e., private ownership), capitalism is few capitalists owning productive property.

  14. Klink,
    You seem to be assuming that, because the movement is known as “Distributism,” it involves the state taking and redistributing property. This is not the case. Instead, it involves a greater number of individuals throughout society freely buying and privately owning productive property and by actively disallowing currently accepted practices which thwart that objective (e.g., usury and monopoly) and actively promoting practices which would promote it (e.g. local ownership and decentralizing political authority).

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