An Economic Alternative
The two dominant economic theories vying for supremacy in the modern world are Capitalism and Socialism. Capitalists believe a country’s trade and industry should be controlled by private owners for profit while socialists believe that property should be owned by the state. Although the two economic frameworks seem to be diametrically opposed, the distribution of power is relatively the same. A capitalist society is controlled by a small number of wealthy elite who use their economic power to influence those who wield political power. Under a socialist regime, those who control the overwhelming majority of economic power are the same as those who wield the political power. In both cases, we see a consolidation of power for the few who benefit off the labor of the many.
“Capitalism concentrates wealth in the hands of a few capitalists, and communism in the hands of a few bureaucrats, and both end in the proletarianization of the masses.”— Ven. Fulton Sheen, Communism and the Conscience of the West
There is however a third option or “Third Way.” This alternative is called distributism. Distributism advocates for the most widespread private ownership of productive property. Ownership would be private like Capitalism, however, the distribution would be spread across the widest number of owners possible. Unlike laissez-faire capitalism, which leads to the concentration of power and ownership in the hands of the few, and socialism, in which private ownership is non-existent, distributism supports the idea of a society of owners.
“Distributism means every man is his own master. Socialism means no one is their own master but the state is the master of all. Capitalism means a select few are their own masters, the rest of us are their servants.”—K.L. Kenrick, What is Distributism
Distributism is an economic system built on a foundation of ethics that prioritizes the citizenry over monetary or material gain. The current prevailing economic systems of socialism and capitalism attempt to separate economics from ethics which has led to the formation of plutocracies and bureaucracies and the acceptance of rampant greed and economic injustice in our society. Distributism, therefore, favors the cooperative business model and the principles of an industrial democracy as well as the ethical framework of Catholicism.
“Too much capitalism does not mean too many capitalists, but too few capitalists.” —G.K. Chesterton
The 7 Pillars of Distributism
Subsidiarity:
The idea that no larger unit, whether it be social, economic, or political, should perform a function which can be carried out by a smaller unit. Therefore, the means of production, instead of being industrialized on a massive scale, would be performed by the smallest possible unit on a local level. The nuclear family is a prime example of such a “unit” who would take ownership of the localized means of production for a specific need or service rather than the large units typical of modern economies.
The Family:
Although not a requirement of distributism, distributists see the traditional family structure of a husband, wife, and children as the ideal unit. Distributists therefore believe that an economic system should promote the success of the family as the family is the ideal smallest unit to own productive property. This however is not meant to alienate single individuals who would like to live within a distributist society as they too can be private owners.
Private Property:
With ownership comes power, therefore, distributism promotes the idea of private ownership and self-sufficiency. Within a distributist framework, the majority of the population would be able to live comfortably off of their own property and would not require assistance from others or the government to survive. For goods or services that cannot be completed by a singular small unit, distributists can employ a “cooperative” approach. This approach allows citizens of a distributist society to work on much more advanced ideas and processes through the co-owning of property and equipment by a large number of smaller units. This is different from a corporation as control and ownership is in the hands of the employees and their operations are intended for the benefit of its members and not outside investors.
Society of Artisans:
Distributism puts an emphasis on the importance of small business, the promotion of local culture, and favors the use of small, localized production over global, mass production. This however is not to say that distributism favors a technological regression to a pre-Industrial Revolution lifestyle, only that said ownership of factories and other industrial centers is done on a more localized level. Under distributism, the production of goods such as food and clothing would come back into the hands of local producers and artisans instead of being mass-produced overseas.
Guild System:
A guild is an association of people, primarily artisans and merchants, which is formed for the expressed purpose of the protection, mutual aid, and furtherance of said groups’ professional interests. Unlike labor unions, which are organized along class lines to promote class interests and frequently class struggle, guilds are composed of a mix of classes cooperating for mutual benefit, which in turn promotes collaboration amongst the classes instead of dividing them.
Banks:
Distributist aim to reshape the current private banking system, which seeks to profit off of high interest bearing loans. As an alternative to our current banking structure, distributists favor the use of credit unions. A credit union is very similar to a bank, however, it is a non-profit organization owned by its members. Members of credit unions enjoy lower fees and lower interest rates compared to our current banking system.
Antitrust Legislation:
Antitrust laws increase competition in the market by limiting the power of any particular firm. This helps prevent the formation of cartels and practices such as price-fixing and price-gouging. These laws also prevent the formation of monopolies and have the power to break-up a monopoly if one were to arise. Both capitalists and distributists agree that greater competition creates a fairer and more ethical marketplace for the consumer. These laws help motivate firms to operate more efficiently, lower prices, and improve their products, as well as create a better experience for the consumer.