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In Defense of Distributism

Why Socialism and Distributism are Wholly Antithetical

Christopher A. Ferrara POSTED: 12/12/11

Distributism is just capitalism with morality. - Robert Laskey

( In recent years spokesmen for neo-liberalism who call themselves “conservatives” and libertarians have labored to take out of commission a growing movement for economic independence that goes by the name of Distributism. The neo-liberal attack on Distributism is in keeping with the process by which, for nearly two centuries, Catholics have been chased by the boogeyman of socialism into the domain of radical laissez-faire capitalism, where corporations peddle everything from pornography to human zygotes without restraint by law and Big Business allies itself with Big Government for the destruction of the moral order. Distributism is under attack precisely because it represents, in the economic realm, an alternative to the endless liberal game of heads I win, tails you lose.  

No, It’s Not Socialism

So, what is Distributism? Contrary to what our critics suggest, Distributism does not denote government redistribution of wealth, which is socialism, but rather the natural distribution of wealth that arises when the means of production are distributed as widely as possible in society.

Distributism essentially equates with family-owned enterprises of any sort (not just hobby farms, as sneering critics would have us believe) or firms owned by their employees (otherwise known as cooperatives) or small or even mid-size corporations operating on a local or regional scale. Small business and self-employment in general are distributism in action. So are the growing local produce movement (in which many traditionalists participate) and the widespread boycotts of Wal-Mart and other multinational giants that have annihilated small businesses and destroyed the commerce of neighborhoods.

Chesterton formulated the Distributist idea with his usual genius for stating the essence of things: “Too much capitalism does not mean too many capitalists, but too few capitalists.” Distributism looks to increase the number of owners of private property by encouraging individuals and families to acquire or create means of production for themselves instead of being dependent upon wages. In practice it might well mean Chesterton’s “three acres and a cow,” but in the modern economy it might just as likely mean “three computers and a home office.”

Because it seeks to restore microeconomic life—commerce between neighbors in neighborhoods—Distributism is a movement for liberation from the globalized, interlocking, government-dependent, and dangerously fragile economic order that laughably describes itself as “free enterprise” today. Anybody who thinks “free enterprise” means Wal-Mart, with its legions of Chinese wage-slaves toiling for the benefit of American shareholders while under the yoke of a Communist government that will not even allow them to have children, needs to consult Catholic social teaching immediately. Something is drastically wrong in the moral order when the founders of Wal-Mart sit on an $84 billion stock portfolio built largely on virtual slave labor while Wal-Mart’s “sales associates” cannot support their families or pay their medical bills, even though a small fraction of the Waltons’ billions could fund in perpetuity a self-insured medical plan for every Wal-Mart employee.

I am not suggesting government confiscation of the Walton family’s wealth. The point, of course, is that the Waltons should be doing justice to their struggling employees without any government mandate.  That is, they should be applying the law of the Gospel to the conduct of their business. In The Church and the Libertarian I show how Costco, whose co-founder and CEO is a Catholic steeped in Catholic social teaching, pays its employees a family wage along with 92% of their medical bills.

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The Church and the Libertarian obliterates every argument economic liberals think they have, while simultaneously mounting a powerful defense of the Church’s Social Teaching. With the wit and penetrating analysis Remnant readers have come to expect from him, Ferrara carefully considers all the arguments, even those advanced by radical libertarians, exemplified by the so-called “Austrian School,” to help you answer the one question that matters most: What am I -- Capitalist? Libertarian? Socialist? As a Catholic, where must I stand?

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Distributism succeeds to the extent people simply refuse to participate in the culture of mass capitalism. It is a way of life, not a government program. It is a form of peaceful secession from an economic order dominated by multinationals that scour the world for virtual slave labor, corrupt public and private morality by peddling innumerable vices, destroy domestic industry, receive government advantages at every turn, and demand treaty concessions and bailouts whenever necessary to prevent the collapse of their surreally bloated and otherwise unsustainable structures. Distributism is a justified reaction against moral and material excesses condemned by the Magisterium in encyclical after encyclical and summed up by that renowned Lutheran defender of the free market, Wilhelm Röpke, in one memorable phrase: “the cult of the colossal.”

Socialism and distributism are thus antithetical.  Let me repeat: socialism is the opposite of distributism. Whoever suggests that distributism is a form of socialism is either uninformed or dishonest. Even the Wikipedia entry gets it right: “Distributism (also known as distributionism, distributivism) is a third-way economic philosophy formulated by such Catholic thinkers as G. K. Chesterton and Hilaire Belloc to apply the principles of Catholic social teaching articulated by the Catholic Church, especially in Pope Leo XIII's encyclical Rerum Novarum and more expansively explained by Pope Pius XI’s encyclical Quadragesimo Anno... Essentially, distributism distinguishes itself by its distribution of property (not to be confused with redistribution of wealth).”  I hasten to add that to be a Distributist is not to endorse every practical suggestion Chesterbelloc advocated, but only the goal of widely distributed ownership of the means of production and with it true economic freedom for the individual and the family as the basic unit of society.

What is meant by a “third way”?  Simply that Distributism is neither socialism nor capitalism. As Thomas Storck has put it: “both socialism and capitalism are products of the European Enlightenment and are thus modernizing and anti-traditional forces. In contrast, distributism seeks to subordinate economic activity to human life as a whole, to our spiritual life, our intellectual life, our family life.” This is precisely what the Popes have counseled in their social teaching. 

The Sordid Love of Wealth

As Pius XI declared in Quadragesimo anno (1931), social and economic liberalism have a common root in abandonment of the precepts of the Gospel on account of sin:

The root and font of this defection in economic and social life from the Christian law, and of the consequent apostasy of great numbers of workers from the Catholic faith, are the disordered passions of the soul, the sad result of original sin which has so destroyed the wonderful harmony of man’s faculties that, easily led astray by his evil desires, he is strongly incited to prefer the passing goods of this world to the lasting goods of Heaven. Hence arises that unquenchable thirst for riches and temporal goods, which has at all times impelled men to break God's laws and trample upon the rights of their neighbors, but which, on account of the present system of economic life, is laying far more numerous snares for human frailty. 

It was nothing other than an “unquenchable thirst for riches and temporal goods” that caused the Meltdown of 2008. Indeed, Quadraegismo could have been written to describe the corporate climate surrounding that event:

For what will it profit men to become expert in more wisely using their wealth, even to gaining the whole world, if thereby they suffer the loss of their souls? What will it profit to teach them sound principles of economic life if in unbridled and sordid greed they let themselves be swept away by their passion for property, so that “hearing the commandments of the Lord they do all things contrary.”

Since the instability of economic life, and especially of its structure, exacts of those engaged in it most intense and unceasing effort, some have become so hardened to the stings of conscience as to hold that they are allowed, in any manner whatsoever, to increase their profits and use means, fair or foul, to protect their hard-won wealth against sudden changes of fortune.

The laws passed to promote corporate business, while dividing and limiting the risk of business, have given occasion to the most sordid license. For We observe that consciences are little affected by this reduced obligation of accountability; that furthermore, by hiding under the shelter of a joint name, the worst of injustices and frauds are penetrated; and that, too, directors of business companies, forgetful of their trust, betray the rights of those whose savings they have undertaken to administer.

The contention that the Meltdown resulted simply from the monetary policy of the Federal Reserve is ludicrous. It was a perfect storm of greed arising from the combined avarice of (a) mortgage originators and brokers who made loans they knew would fail in order to earn processing fees and commissions, (b) borrowers who borrowed far more than they could afford to repay in order to acquire far more than what they really needed, (c) usurious interest rates on variable rate mortgages and credit card balances, (d) the packaging of risky mortgages palmed off by the originators into bundles of worthless securities sold as hot investments by investment firms based on fraudulent AAA ratings by rating firms, and (e) the practice of hedging these toxic assets with credit default swaps that allowed the same firms that peddled the toxic assets to their clients to bet that the very investments they had recommended would go bust, triggering massive insurance payouts to the investment firms while the clients suffered catastrophic losses.  (Cf. The Church and the Libertarian, Ch. 13). 

All of this happened in a de-regulated environment in which depositary banks once prohibited from engaging in risky investments were no longer restrained from doing so, investment firms once limited to their partners’ own capital were allowed to amass vast pools of risk capital from public offerings of their stock, and credit default swaps were allowed to be traded as unregulated securities, creating a vast and unstable pile of pickup-sticks just waiting to collapse if someone pulled out the wrong one.

The Meltdown, in short, represents what Pius XI called “[t]he sordid love of wealth, which is the shame and great sin of our age...” The Fed’s lowering of interest rates did not cause the sordid love of wealth that led to a worldwide economic collapse any more than a pistol causes someone to commit suicide. In any case, the Fed—which of course should be abolished—is itself a creature of capitalist manipulation of state power: a quasi-private banking cartel that is not even accountable to government, which is why the same libertarians who deplore the Fed (while conveniently ignoring its seamy capitalist origins) demand an audit that Congress refuses to compel.

A Movement for Economic Freedom According to the Gospel

There could be no Meltdown in Catholic social order because in Catholic social order economic activity will be governed, as Pius XI wrote, by “the gentle yet effective law of Christian moderation which commands man to seek first the Kingdom of God and His justice, with the assurance that, by virtue of God’s kindness and unfailing promise, temporal goods also, in so far as he has need of them, shall be given him besides.”

Distributism is nothing other than free enterprise conducted according to the Gospel as summed up in Our Lord’s two great commandments: love of God and love of neighbor.  Subtract “the sordid love of wealth” and boundless ambition from free enterprise, add love of God and love of neighbor, and you will see emerging naturally the very economic order many of us are old enough to remember: the economy of the local grocer, hardware store, and savings and loan; an economy in which one could provision a household entirely on the basis of exchanges with one’s own neighbors in one’s own neighborhood; an economy conducted on a human scale by human beings rather than fictitious corporate “persons” created by government fiat that display all the personality traits of a psychopath. 

Nor is the recovery of what Röpke called a humane economy merely a question of “personal” morality a given capitalist could choose to observe if he wishes, as the libertarians would argue. The imperatives of the Gospel must be reflected in laws and institutions.  In the realm of economy no less than the realm of politics there is no disjunction between public and “private” morals, but rather one divinely ordained moral code governing the whole of society. A capitalist does not love God or his neighbor when he exploits his workers, sells pornography and otherwise pumps moral filth into society, provides abortions, engages in usury and price-gouging, recklessly speculates with his clients’ money, systematically defiles the Sabbath with the most vile commerce, extracts unconscionable bargains from weaker parties, discharges toxic waste into rivers or the ground, or commits a thousand other offenses against the moral order and the common good.

Civil authority—especially at the local level in keeping with subsidiarity—has every right to restrain the capitalist’s depredations with appropriate legislation, including penal sanctions. We are not, after all, at the mercy of corporate boards of directors who have not received any authority from God to govern us with decisions affecting the common good in its moral, spiritual and material totality.

Pope John Paul II was teaching in line with all his predecessors when he declared on the anniversary of Pope Leo XIII’s Rerum Novarum that the Church cannot approve capitalism if it means that “freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious...” Distributism, as a movement for a humane economy on a human scale—that is, an economy more in keeping with the Gospel—respects the ethical and religious limits on economic activity and naturally leads men away from the corporate cult of the colossal toward an economic order that subordinates the pursuit of material goods to man’s eternal destiny. 

Distributists at Occupy Wall Street

In an article for the Remnant Richard Aleman noted that he, John Rao and I went the site of the Occupy Wall Street demonstration in order to present the Catholic case for economic justice.  We did not go there to commune with the hippies or to lend support to any sort of Leftist ideology. We went there because we recognized that many of the wandering souls who had gathered in Zuccotti Park suspected that something was radically wrong with the modern economic order but had no clear idea of what it was.

We saw the Occupy demonstration as a neo-pagan search for the Unknown God.  We told those who would listen that the God for whom they seek is the one who gave us His Gospel for the good of both men and nations.  We handed them excerpts from Quadragesimo Anno and a flier containing the elements of what a humane and distributist economy would look like—without a single government intervention—if people would only order their pursuit of material goods to the highest good of eternal beatitude.  We felt compelled to tell as many of these people as we could that the fundamental social problem that had brought them together—unwittingly or not—is the apostasy of Western civilization, and that there could be no approach to social justice that did follow the path the Catholic Church has marked out for men and nations. As Pius XI put it:

All experts in social problems are seeking eagerly a structure so fashioned in accordance with the norms of reason that it can lead economic life back to sound and right order. But this order, which We Ourselves ardently long for and with all Our efforts promote, will be wholly defective and incomplete unless all the activities of men harmoniously unite to imitate and attain, in so far as it lies within human strength, the marvelous unity of the Divine plan. We mean that perfect order which the Church with great force and power preaches and which right human reason itself demands, that all things be directed to God as the first and supreme end of all created activity, and that all created good under God be considered as mere instruments to be used only in so far as they conduce to the attainment of the supreme end.

It is really very simple: to apply the two great commandments to the pursuit of material goods is to be, more or less, a Distributist.  A Distributist, trusting in Providence, will want for nothing his family needs, and he will be the first to defend private property as essential to ordered liberty—and not only against government, but also against the corporate hegemons that are relentlessly snuffing out the God-given right to make one’s own way in the world with one’s own means.

How ironic it is that Catholics who consider themselves libertarians defend government-assisted corporate collectivism on a scale so vast as to amount to privatized socialism, while attacking Distributists for their truly libertarian defense of economic independence for the individual and the family in an economy that does not depend upon the labor of Chinese wage-slaves. 

Let us have an end to this demagoguery. And let the Remnant help lead Catholics toward the humane economy the Magisterium has always had in view.

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