The Mistake About Distributism

The following is an updated version of a talk I gave to the American Chesterton Society's annual conference on Friday, August 6, 2010.

Dear Friends in Christ,The title of my talk today is “The Mistake About Distributism.”What I would like to do is cover two areas in particular.

1. Some popular misconceptions about what Distributism is and isn’t.
2. I want to give all of you a brief about the state of Distributism today, where we are, and most importantly I’d like to talk about action and the future of this movement.

Now I don’t want to bore you with a long introduction to Distributism. Instead, I am going to bore you with a short introduction to Distributism. As doctors and executioners say, I will make this as painless and quick as possible.

The Founding of Distributism

Distributism was founded by writers G.K. Chesterton and Hilaire Belloc, in response to the Catholic social encyclical Rerum Novarum (trans: “Of New Things”), which was issued in 1891. This encyclical outlined the primary rights and responsibilities of capital and labor, government and citizens in the wake of industrialization, which had created social upheaval and disorder. It also attempted to protect the working classes from “the misery and wretchedness pressing so unjustly on the majority of the working classes.”[note]RN, no. 3.[/note]Recognizing the characteristic tension that existed between the separation of ownership from labor, three universal principles from Rerum Novarum stood out in the minds of the Distributists:1. That the State should rule with justice—distributive justice—towards the nation as a whole and regardless of class.

Among the many and grave duties of rulers who would do their best for the people, the first and chief is to act with strict justice—with that justice which is called distributive—toward each and every class alike.[note]Ibid., no. 33.[/note]

In other words, the distributists were concerned about the distribution of wealth, goods and services, the means of production and who controlled them, and how this impacted and conditioned the foundations upon which society is built, particularly in the wake of the industrial revolution.2. In order to transcend the contemporary problems inherent in economic Liberalism, the gap in wealth and the separation of ownership and work, the best foundation of a nation is one built upon an ownership society.

If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another.... Men always work harder and more readily when they work on that which belongs to them.[note]Ibid., no. 47.[/note]

Chesterton understood the importance of labor, the personal aspect of work which is intrinsic to man. To illustrate the difference between title ownership and employment, Chesterton often quoted the story of the Good Shepherd: “And the hireling fleeth, because he is the hireling: and he hath no care for the sheep. I am the good shepherd, and I know mine, and mine know me.”[note]The Gospel According to St. John 10:13-14.[/note]How can private initiative be geared to achieve the goals necessary for widespread ownership? The last of the three primary principles Distributists inherited from the good Pope Leo held the answer. We return once more to Rerum Novarum:

The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.[note]no. 46.[/note]

Chesterton and Belloc understood that, along with private initiative, the proper legal framework was needed to overhaul the present system and favor ownership for the family.Distributism finds its roots in the social and economic theories articulated in the documents of the Church’s social teaching, beginning with Pope Leo XIII’s Rerum Novarum. These social encyclicals raise imperatives on economic transaction and its relation to capital and labor, solidarity, wages, the wide diffusion of ownership, and the proper limits of technology. Distributism is an economic system compliant with the principles of these documents, and is centered on the widest possible ownership of property as the best guarantee of political and economic freedom. A family that owns its own land or its own tools can make its own way in the world without being dependent on someone else for a “job.” Thus, Distributism seeks to extend property ownership; both for private and social use, as widely as possible, and end the concentration of ownership by few capitalists or state officials; neither wage-slavery nor slavery to the State. To quote the late Archbishop Sheen, “History reveals that never has there been any tyranny, never has there been slavery, in a country where there has been a wide distribution of property.”I’ve called today’s talk “The Mistake about Distributism” because I want to address some of the common errors I’ve come across over the years since my involvement in Distributism. Some of these I call mistakes, while others may be best described as fairytales.

Distributism is Just Another Form of Capitalism

I’ve been asked repeatedly to admit that Distributism is just another form of Capitalism, and so I have decided to give in if this makes other people happy. 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 the legitimate exercise of the State, the meaning of subsidiarity, the subordination of economics to the higher sciences, our ends, our means, what money is, what wealth is, what “free” market is, production and consumption, regulation, free trade, the natural and Divine law in the social and economic order, and yes, even what liberty means.

Distributism is Just Another Form of Socialism

Take what I’ve said, make a few changes and just add: OBAMA.

Distributists are Against Employment

Chesterton had a profound respect for the worker as do we. Man is not simply an individual but he is social in nature and, for the benefit of the common good, he should organize in order to protect vital common interests.Most distributists admire the work of economist Fr. Heinrich Pesch and the solidarity system of human work. In fact, we view solidarity not as foreign to Distributism, but rather complimentary. Distributism does not view the hiring of labor by capital as intrinsically immoral nor as something to be eradicated by the Distributive State. Rather, Chesterton himself and Distributists today hold that there should be harmony between capital and labor. However, in order for this harmony to happen I would like to raise certain conditions:

1. Workers cannot be seen as a factor or cost, but rather as essential partners in the production process.
2. Workers must be given a living wage and a just contract.
3. A good society is one where, for the sake of the individual and the common good, the worker has a choice whether to own or seek employment.

Chesterton said it perfectly:

We believe that unless the great majority of men in a country own their home, the ground it stands on, and their means of livelihood, the citizens of that country cannot be free. But we do not insist that a man must own. We insist that he shall be given the choice, and that at any moment it shall be easy for him to become an owner.

The conflict between employer and employee is not inevitable. We believe tensions will be relieved in a nation based on cooperative and self-ownership, where the worker has the choice to give his labor for a wage or own his business. However, so long as these tensions exist, so long as man exists in a condition where he is forced to work for a wage without the choice to decide whether he will use his talents as an owner or labor under an employer, we will continue to call our present system what it is: wage-slavery.

Distributists Do Not Believe in Competition

The theory of competition is defined as a contest between two or more forces, which cannot share the same space. Rather than a dog-eat-dog world divorced from the Gospels, Distributists would properly define competitive forces as cooperative—based on mutual survival rather than destruction; the natural forces of creativity and uniqueness rather than undermining of businesses in the same market or the monopolizing of the marketplace.Allow me to give you an example. I come from a town in Spain that has two bakeries on the same street; not only are they on the same street, but they also face one another. One bakery opened its doors in the 1950s while the other opened up in the 1980s. How have they lasted so long? Why hasn’t one gobbled up the other? Well, for starters they don’t exchange signs depicting the other bakery as “Hell’s Kitchen”. One store doesn’t reduce prices to lure the other’s customers. They are not subsidized by taxpayer funds. There isn’t some safety net against failure. No, they rely on their own natural talents and they enjoy a customer base that may like the baked bread in one store, but the croissants of the other.

Distributism Is Dying

Some think tanks say Distributism is a corpse; Distributism is on the decline because it is a fairytale. If Distributism is dying, as they say, what an odd spectacle it is to observe as a group of people devote so much energy to beating a dead horse. If their proposition is true, then it is also true that they have spent over two years publishing books, articles, pamphlets, and dedicated precious conference time just to prove that a “fairytale” is really an extinct fairytale.The reality is that being a Distributist in the 21^st century is more exciting than ever.In the publishing world, successful classics like Chesterton’s The Outline of Sanity and Fr. McNabb’s Nazareth or Social Chaos continue to be reprinted, while contemporary works like Joseph Pearce’s E.F. Schumacher renaissance Small Is Still Beautiful, Dr. Race Mathew’s Jobs of our Own, and John C. Médaille’s Toward a Truly Free Market bring Distributism up to date.The great Dale Ahlquist appears on EWTN and talks about Chesterton’s Distributism. In fact, he is the reason I am standing in front of you today. Whether or not this is a good thing I leave up to you.Online, hundreds of web pages, sites, and blogs explore Distributist thought: the Chesterbelloc, Wendell Berry, Alexander Solzhenitsyn, E.F. Schumacher, and Fr. Jose Maria Arizmendiarrieta, founder of Mondragón Cooperative.Overseas, the Sierra Leone Chesterton Centre, led by John Kanu, is applying distributist cooperative methods to an African economy.“Red Tory” Phillip Blond is taking the U.K. by storm. Mr. Blond isn’t shy about his advocacy for Distributism. In fact he unapologetically ‘name drops’ Chesterton and Belloc at every opportunity: at every press conference or talk. He has also played an influential role in the political philosophy of the newly elected Prime Minister, David Cameron.The country of Romania is interested in the Distributist model as well. John Medaille spent last summer working with the Romanians, appearing on national television and co-editing a book which will soon be translated into English. And his new book “Toward a Truly Free Market” is expected to be translated into Romanian and released soon.Finally, Thomas More College just last week announced a new Catholic medieval guild program so that students will learn skills and the inner workings of the guild system. According to the great distributist president of Thomas More College, Dr. William Fahey:

Not only will students learn skills they can use throughout their lives, they will have an opportunity to bake bread for the homeless, produce icons for local churches, create chairs, cribs, and other projects for the poor and needy in our community, and bring music to nursing homes and hospitals.

Friends, Distributism is not dying ... some people are just getting nervous.

Distributism Cannot Be Done

How we do get started? How can we make Distributism a reality?We begin with the study group. Let’s look at local Chesterton societies as models, after all, branches already exist across the country. Think of what all of you have accomplished and how you’ve revived Chesterton in the public consciousness. Your efforts have been so successful you have even built a school: Chesterton Academy.Well, what if existing and new groups are formed, meeting once a week to learn the economic science and philosophy of Distributism? What if you asked your local parish if some space might be reserved on Church premises so your group can be a visible manifestation of faith, attracting others and building new leaders?How many of you are teachers? You know what it is like. Ten years down the road you discover a former pupil has grown to become a writer, a politician, a store owner, farmer, etc. There is satisfaction in knowing that you may have played an influential part in their lives. I receive emails from folks who say, “I am a political science major and once I finish my graduate studies I’m running for office as a Democrat or Republican on a Distributist platform.” Through the creation of a study group, you can help usher-in a new generation of leadership.What if, after six months of study you begin to examine the successes and failures of your local community? This can lead to the development of political and social activism, educational efforts, the creation of socially-conscious businesses and non-profits instrumental in the development of the Distributist program.What if homeschoolers, already ‘educational distributists’, teach their children Distributism? And what if an Outline of Sanity or Economics for Helen educational series could be adopted for homeschoolers of various ages?What are we doing at The Distributist Review? The Distributist Review is preparing a Distributist catechism. Once complete this will be available free for download so that distributists can finally have a “Q&A” or a “textbook” like the one promised in the early 20th century; something they can pass on to seminarians, parishioners, priests, family, and friends.

Micro Credit Lending

We have often heard of micro-credit programs used to help underdeveloped nations like India. But micro-credit lending is very Distributist and can work right in our very own communities.The E.F. Schumacher Society started a micro-credit lending program in Great Barrington, Massachusetts many years ago called SHARE. The Self-Help Association for a Regional Economy (SHARE) was a model community-based nonprofit that offered a simple way for citizens to create a sustainable local economy by supporting businesses that provide products or services needed in the region. Members of the micro-credit program made deposits at the local bank (where the account was located), which were used to collateralize loans for local businesses with a positive community impact. As micro-credit depositors live in the same community as the business owners they support, micro-credit brings a human face back to lending decisions.SHARE was probably one of those few experiments that were so successful it was discontinued. Banks and Credit Unions found micro-credit programs to be so advantageous that they began to adopt similar models of small business reinvestment across the entire Berkshire County.Micro-credit lending can make a difference for families and neighbors, and for our children’s future.

B Corp

In order to change how we conduct business it is important as well to take a second look at the business structure.The S and C corporations are two legal corporate structures under U.S. Federal tax code. One alternative to the S and C corporations is called the ‘B Corporation’ but for our purposes let’s call it the “Distributist Corp.” What would single out Distributist corporations from standard corporations are their articles of incorporation, which are expanded to include the responsibilities and purpose of the business. So, for example, should a publicly traded company become a Distributist corporation, purpose would become an integral component in the interest of the business and shareholders would become stakeholders. Upon selling the business, rather than a fiduciary duty to shareholders, the Distributist Corp’s fiduciary duty will be purpose-driven and laid out in the initial incorporation.A sample outline of purpose-driven extended articles of incorporation, in no particular order, may include and are not limited to:

1. Fidelity to Catholic Social Teaching
2. Primum non nocere – “First, do no harm” principle
3. Pro-life
4. Reinvestment into community for public benefit
5. Just or living wages
6. Dedication to eco-friendly and sustainable environments
7. Organic production
8. Application of E.F. Schumacher’s “Appropriate technology”

Distributists cannot meet our large-scale manufacturing and technological needs, nor can they rebuild the agricultural sector.

Without a doubt Distributism started as an agrarian economy. But at the heart of Distributism is a decentralist system. Distributists wish to restore localism; the local economy; Local production for local consumption.Besides wages and the conditions of employment already mentioned, the reason the Distributists were critical about mass production is because mass production took away from decentralized production. For Chesterton, an economy dominated by mass-produced goods could never replace the strength of a decentralized economy because ownership diversification also meant self-reliance for small towns and for the small country. Local production for local consumption is a policy enabling the flow of an extensive variety of goods and services created by and sustaining the very community that makes them.Chesterton recognized how the powerful concentration of the mass production system severed widespread ownership, augmented the nation’s reliance on industry for its GDP, challenged the power of the State, and amplified the influence of these large firms in obtaining government subsidies and rescues (what we today dub “too big to fail”), so that when the factory collapsed we also collapsed with them. Unable to compete with the bargaining and lobbying powers of the factory, local production suffered as mass producers increasingly became the sole sources of wealth for local communities, paid unjust wages and offered unjust contracts to the worker, eliminated the ownership society and, without loyalty to King or country, these factories packed up and moved for greener pastures, leaving small towns in ruin as has become evident today in the United States.So what is the Distributist answer to our automotive, tech, and other large-scale manufacturing?

Worker-Ownership

Cooperatives are worker-owned businesses: multi-partnerships where the capital owner and the employee are one and the same. Whether the business suffers losses or gains, cooperative owners risk just like any other business.For example, say the five of you in the front row decided to open up a bar. You would prepare a business plan, determine how much capital investment each of you need (say $5,000) to start the firm, and operate the business democratically. Any and all decisions in a cooperative vary according to the business; majority rule or unanimous vote. In a nutshell, understanding how cooperatives are formed and run is that simple.Cooperatives are the distributist answer to utility companies, construction, the automotive industry, insurance, healthcare, and even law firms. Cooperatives are the answer to NAFTA and restoring the “Made in the USA” label; mobilizing workers whose jobs have been shipped overseas; raising American domestic production from the ashes. Cooperatives offer the widest ownership not only because of their structure but because of the tentacles of capital investment inherent in cooperative ownership. Instead of one person raising capital to incorporate and invest in overhead, the cooperative is a shared investment by several people injecting capital.The most successful cooperative in the world is Mondragón Cooperative in Spain with returns in excess of $16 Billion and with approximately 300 cooperatives under the Mondragón umbrella. Mondragón has also been instrumental in working with United Steelworkers for the creation of worker cooperatives right here in the U.S. Mondragón is a model for us, whether in retail or industrialization.The Emilia-Romagna region in Italy is full of cooperatives and perhaps because of this it is one of the richest regions in all of Europe, making up 45% of Bologna’s Gross Domestic Product.But for those who think cooperative success is limited to Europe, the history of cooperative accomplishment may also be found right here in America. There are hundreds of cooperatives united under the US Federation of Worker Cooperatives, and according to the University of Wisconsin, over 16,000 cooperatives in the United States are operating in various industries including fishing, farming, and education.Worker-owned businesses are a Distributist model for America in the 21st century.

You cannot change the present culture.

The late Dr. William Marra once said that philosophers define the world and this is also true of G.K. Chesterton. He understood the need for action and through his work and the organizational efforts of The Distributist League, over 24 branches of the Distributist League were founded across the United Kingdom. Other Distributist groups such as the Catholic Land Movement and the Ditchling Guild also took up the tasks necessary to build a practical Distributist culture.

Action and the Failure to Outreach

Coupled with prayer, fasting, the practice of virtue and the supplication for graces, action is a necessary ingredient for change.

People follow the leader, and if the principal political leader of a country is a devout Christian, the people tend to imitate his good example. His political power enables him to reform civil society in favor of Christianity and begin the construction of a Christian social order.[note]Albert C. Walsh, A Christian Political Party Now, 23.[/note]

I know I’ve mentioned a few book titles this morning, but if you can read any book about action I recommend Dedication and Leadership by Douglas Hyde. The late Douglas Hyde was a famous British convert to Catholicism from the Communist Party. In this transcript from a lecture given at the University of Notre Dame in the 1960s, Hyde meticulously described the tactics used by the Communist Party in the U.K. to achieve a level of membership unmatched by the Catholic Church within the same span of time. With few exceptions, such as the Catholic Truth Society, the Catholic Church in the U.K. had grown disinterested in building solidarity with the homeless, the poor, and the disenfranchised. Communists used this to their advantage and swept the nation by specifically targeting the poor through a successful outreach program.I was invited to a pre-conference lunch one year ago. At this lunch an esteemed priest lamented the abysmal failure of the Right to Life Party in the State of New York. He didn’t understand why, with so many Catholics in New York, the party failed to capture a significant number of votes. So, like the good Distributist and Catholic that I am, I raised my hand and asked if the Right to Life Party had an outreach program. He shook his head but did mention that in order to attract locals, the organization did offer Prayer Breakfasts and Conferences. I asked, “Did you grab a table, stand in street corners and hand out pamphlets and flyers? Did you go to the malls and talk to people?” “No,” he answered.This is why the Party failed to gather a serious amount of votes.Nurturing the base of any movement is important. But friends, it is not enough to preach to the choir. It is not enough to look within. One must be willing to reach out and capture their imagination.I come from a military background so I will not ask you to do what I am unwilling to do. And so, this Fall I will grab a table and our literature, and park myself in front of the colleges and universities – on the sidewalks of New York City. No doubt some will argue and some will just pass me by. But some people will listen and this method will increase awareness about Distributism.I’ve been told my writing is at times clinical and doesn’t come from the heart. So let me speak from it:I came back to New York, after serving four years in the Marines, and I found my mother losing her small business to the politics of the Left and the Right. I returned and found an economic philosophy that shrugged its shoulders as small businesses—the lifeblood of this country—collapsed under unfair regulations, outsourcing, and Big Business. Capitalists and socialists often either pontificate about how flaws in the system are “the nature of the beast” rather than an organic consequence of their basic assumptions about man, his environment, and the “primacy” of trade, or they smile at you and say, “hey, it’s better than Communism.”Instead of choosing the lesser of two evils, I believe we have a duty to provide our people with something good. I do not mean Utopia. Distributists recognize Fallen Man while theorists of the invisible hand let God sort it out in the end. For too long we have allowed ourselves to be guided by man instead of building the inner workings of a system worthy of the children of God.No, I’m sorry, not this time. We reject the age of the Enlightenment and societies divorced from the Gospels. We want something more, something better, and we are going to build it. We choose to be leaders in our communities because we believe in the future of our people and we insist on a state of affairs which acknowledges the visible hand of God. We want something true for our children not so they can have more, but so they can be more.The defensive posturing of the 20th century will not do. No war has been won on the defensive. We must be cautious but we must never fail to see that our present disorder stems from philosophies and groups that are never overly cautious. Think about it. Either we can allow others to dictate our future or we can rise to the challenges before us and lead this nation. Indeed, Christians should be the leaders of this 21^st century popular movement.It is unrealistic for us to continue to be separated politically by tribal ideologies which have failed us.This movement will champion the rights of the unborn, rally against torture and euthanasia, and it will stand up for economics as if families—and more importantly–as if God mattered, because we believe that justice is not only owed to one another and to the dignity of peoples, but above all to God.We urge the pro-life movement to adopt Distributist economics so that, while never diminishing the intrinsic evil of abortion, the pro-life apologist may be well-rounded and capable of providing an economic defense for social reform which can persuade those presently opposed to life.No man is an island. We must recognize that true self-sufficiency means we cannot simply fend for ourselves because man is a social animal by nature. Localism and the cottage industry are about our households and communities; the rural towns; urban dwellers; real life and real people. Thus, we seek political reform based on independence for the family and social interdependence, subsidiarity and solidarity, distributive justice and the favoring of the widest distribution of title ownership, whether individual or cooperative.Friends, the 21^stcentury should be the beginning of an old and new procession – one that raises the scarlet flag of our Savior, recognizes His authority, and champions his weakest - the poor, destitute, and the propertyless in the name of the Social Reign of Christ the King. This new movement will not stand for prejudices against the poor, the unemployed, and the destitute; make no mistake about it we will not let them rot. Instead we will support the creation of new organizations–new houses of hospitality for the naked and hungry in the tradition of Dorothy Day, giving the disenfranchised material and immaterial blankets.This nation doesn’t have to be the place where the farmer loses his dreams, but where he can feed, and teach us how to feed, the future; thus, we will build the facilities to teach husbandry, stewardship, political economy, and provide the knowledge to attract a new generation of farmers, environmentalists, and good stewards.To those academics activists out there, join us. Help us draw the blueprints from which we can build a new tomorrow.For the common man: become leaders in your communities.Families, march with us so that one day you can tell your children that you played a part in a movement of mothers and daughters, fathers and sons, small business owners, cooperative owners; thousands, millions, who might one day stand in front of Congress with signs that read, “WE CREATED JOBS OF OUR OWN.”Finally, I choose a visible manifestation of faith over the armchair. I choose not to walk away as Nero burns Rome, but to turn around, and follow my Master as He walks back toward the flames. Join us, there is a fire and we intend to put it out.