The exaggerated growth of government, ballooned by powerful corporate interests, has reached its tipping point. As the United States grapples with “financial Armageddon” and emotional debates follow over what to do about America’s debt ceiling, or which government programs to cut, our preoccupation with the veil of finance is a distraction from the grinding halt of our nation’s production and accelerated outsourcing. For now expect political preachers to quote chapter and verse of tired formulae that have failed to reverse our course. We can anticipate progressives to campaign for uniform corporate tax increases that only discourage the creation and survival of small businesses unable to compete with Big Business. Conservative opposition to tax hikes, which only pass along debt burdens to our posterity, and social benefits for needy families, exacerbates a disastrous climate both parties helped create.
Finally, neither party acknowledges how reckless and untenable lifestyles, products of financial magic, affect societies within and beyond our borders. Our task should be to rebuild our economic foundations on terra firma, and for that we will need to once again revisit G.K. Chesterton’s “democracy of the dead.”
Immigrants Often Revive Local Economics
Without start-up capital, immigrants historically drew upon the resources and strengths of their unique communities and traded among themselves. Irish immigrants started newspapers, opened up shops, took up trades, and built associations to help them face future hardship. Italians set up eateries, bakeries, produce markets, and made everything from olive oil to tableware in working class neighborhoods like Little Italy, Philadelphia, made famous by the Rocky movies. Today, Indians pool money among extended family and friends to create successful business partnerships and to purchase homes without resorting to usury. Once profits are split, Indian families move to their own properties and invest in their own projects.
Local Production for Local Consumption
Albert Einstein once said insanity is doing the same thing over again and expecting different results. While other social systems operate under the pretense of choice, a road trip across the United States reveals how Capitalism fails to deliver the goods. Eventually, chain stores substituted for family-owned businesses, which were, in turn, replaced by commercial malls filled with Old Navy, GAP, McDonald’s, and Home Depot. Planned obsolescence replaced quality. Neighbors went from owning their businesses to receiving paychecks from corporate juggernauts a continent away. But this model increasingly grows less by means of the false advertisement of “market forces” than by public policies designed to woo multimillion-dollar businesses while denying assistance to local merchants.
Local production for local consumption, on the other hand, is a decentralized economic policy enabling the flow of an extensive variety of quality goods and services, created within and sustaining the very community that makes them. In this model, families and communities are driven by the ideal that we should provide for our needs as close to our front door as possible with the goal of increasing the number of owners.
Local production for local consumption is the commerce of neighbors. It is a patron economy made self-sufficient by family-owned and cooperative businesses that dynamically keep trade circulating in their communities.
Microcredit for the Family
Microcredit is the lending of small loans with the purpose of generating entrepreneurship. Readers may have heard of successful microcredit programs in developing nations, but examples exist in other parts of the world, including Sweden, where the cooperative JAK Bank is remarkable for offering non-interest bearing loans. Community-based projects help fund regional or local small businesses like the E.F. Schumacher Society’s SHARE program, which gave out 114 loans under $3,000 each to applicants in Great Barrington, Massachusetts.
For the high school graduate or the college student, a $2,000–3,000 sum is all they need to get started. Because microfinance works on any scale, microcredit presents opportunities for middle class and poor households. Families can pool their money and lend or invest small portions to get started, helping to spark a culture of entrepreneurship.
Land share is a scheme reminiscent of the Distributist land movements in G.K. Chesterton’s day. Groups like the Catholic Land Movement sought land lots, either through parcel donations or purchase, in order to revitalize local agriculture and steer new generations “back to the land.” Land Share is a similar model with potential for town and country. This scheme takes landowners and connects them with farmers and gardeners in order to parcel land, forge partnerships, and create social enterprises. In urban areas, schools, parishes, and companies partner with local residents to feed the city by setting aside land for residential use or charitable work.
With or without the cow, land share programs are an excellent way to bring people and God’s green earth closer together.
Redefining the Corporation for the 21st Century
Every small business at some point will have to decide whether they will organize as an “S” or “C” corporation. S and C are two legal corporate organizations under federal tax code. But there is a new model in town and it may redefine corporate order.
The B Corp (Benefit Corporation) is a mission-aligned (versus profit driven) corporate structure. What singles out B corporations from standard corporations is their primary dedication to purpose (telos) in solving social and environmental problems over the traditional model with its relaxed legal accountability to either. In a manner of speaking, the B Corp is a hybrid for-profit-non-profit. Because most companies have a fiduciary duty to profit and are bound legally to that trust, alternatives for companies interested in other primary considerations in their decision-making are rare. This makes the legal structure of the B corporation attractive, especially in an age when investors are growing socially conscious.
Some problems exist for the B Corp, like its failure to address the importance of developing moral along with socially-conscious corporate organizing. However, a modified B Corp with distributist-specific foundations and objectives could assist us in drawing up purpose-driven statutes. These may include the defense of the common good, including the widest ownership of the means of production, adherence to political non-negotiables including abortion, advocacy, and practice of the spiritual and corporal works of mercy, socially and morally conscious reinvestment in the local economy, commitment to using local materials, just wages for employees, and so on.
A radical problem requires a radical solution. While we cannot afford to restore the economy by fracturing our society into ethnic groups, it would be myopic to ignore the lessons learned from the immigrant experience. Indeed, “the immigrant solution” could help reignite the Distributist model as it has recently in the United Kingdom, Romania, and the Philippines. Perhaps if we build a practical Distributism culture, citizens of the world can look forward to Chesterton’s first option for finding one’s way home: never having to leave it.