Distributism- A Different Approach to Politics and Economy
Most people will admit the prevalence of two opposing thought systems regarding political and economic sciences. On one end you’ll find…
Most people will admit the prevalence of two opposing thought systems regarding political and economic sciences. On one end you’ll find communism or socialism, which promote the redistribution of wealth in hopes of preventing the gap between rich and poor from becoming too large. Socialist theories also tend to require larger, more bureaucratized governments to adequately regulate businesses and the economy.
On the other end of the spectrum, you will find laissez-faire capitalism, which argues that the opposition is far too restrictive of freedom and that the economy should be allowed to progress naturally with little to no restriction. Capitalism requires considerably less governing efforts because fewer legal restrictions and regulations exist and therefore need far less governmental enforcement.
These two systems have been battling each other for primacy for the better part of 300 years (or more), with no end in sight. There is a third option. However, that has been gaining in popularity in recent years; and that option is called distributism.
Instead of attempting to distribute wealth evenly to an entire population (which presents certain issues such as the unwise expenditure of funds) distributism proposes to equitably distribute the means of production, such as land, equipment, and co-ownership of business entities. Where capitalism defends a corporation’s right to grow in an unrestrained, unregulated way, distributism strives to shrink the gap between rich and poor while defending and maintaining personal freedom and private property.
Distributism is neither capitalistic nor socialistic in that it neither allows the economy to proceed without restriction or limit nor does it restrict all economic freedoms to equalize wealth across the board. In practice, capitalism tends to gravitate towards an insurmountable gap between poverty and wealth, as the powerful and wealthy automatically rise to the top while the poor remain stuck in an inescapable wage-slavery. Socialism, on the other hand, tends to over-regulate industry to a point where most incentives to strive for excellence are, practically speaking, removed to the point of staleness and mediocrity. In sharp contrast, distributism results in thriving communities like that of the Mondragon Cooperative Corporation in the Basque Region of Spain.
The best way to describe the benefits of distributism is to provide an example, from start to finish, of a business’s creation within the context of a distributed society. When a person opens a new business in this context, rules are put into place regarding the company’s profits. As a rough example, 30% of the profits could be kept in the company’s capital account for future improvements and expansions, and as a rainy-day fund. Another 30% of the profits could go to the community for infrastructure improvements, public parks, hospitals, orphanages, etc.
Yet another 30% could be distributed to the employees/part-owners according to their pay-grade and contribution to the running of the business. The remaining 10% can be retained by the primary owners or board of directors, or redistributed as the company sees fit. Cooperative arrangements can be entered into by any number of businesses to strengthen the profitability of the cooperative as a whole.
For example, a luxury car manufacturer can form a cooperative corporation with an economy car manufacturer. In this way, the cooperative can excel during both periods of recession and economic prosperity. The profits from both companies are pooled together, and the distribution of those profits can still follow the guidelines described above.
In Spain, the Mondragon Cooperative Corporation and the surrounding community has been described by experts in the field of economics as a place where “there are no signs of either extreme wealth or extreme poverty.” Rather, the community itself is close-knit, and mutual benefit is something that is prioritized by all.
There are more than 70 independent businesses operating under theMondragon Cooperative’s umbrella, all contributing to the overall profitability of the company. Some of those businesses do poorly as others thrive, and when the economy changes those that performed poorly start doing better and those that performed well start to slip. The result is stability and security. The economy in the Mondragon region is one of the most stable in the entire world, and their entire society is based on the distributist teachings of a visiting Catholic priest back in the early 1940s. At that time, the surrounding area was still suffering from the devastating effects of the Spanish Civil War. Father José María Arizmendiarrieta brought the teachings of Catholic Intellectual Renaissance writers (such as G.K. Chesterton, Hillaire Belloc, and others) to the Basque people. These teachings took hold, and their economy recovered surprisingly fast.
A distributist government exists to defend the populace against foreign and domestic aggressors and enforces the distributist model on the region’s economy. Beyond that, freedom of private property is maintained to afford the population with the opportunity to excel in each citizen’s chosen industry. In some cases, guild systems are put into place to allow the people to self-regulate industries in a mutually-beneficial way alongside other industries’ guilds. Those monies which distributist corporations contribute to the funding of their surrounding communities may, on a large enough scale, be subject to the recommendations of governing committees designed to allocate funds where they are most needed.
This arrangement is neither capitalist nor communistic in its approach.The distributist government is naturally prohibited from over-regulation and prevented from increasing in size and power to oppressive, dictatorial proportions. It is also naturally barred from becoming so disinterested in economic processes that the economy takes on an anarchistic, free-for-all mentality.
The thoughts and ideas behind distributism are gaining in popularity all over the world at present, although sometimes under different names. The current movement of “democratic socialism” actually implements many of the types of reforms which distributist economists have been suggesting for years.
Fair distribution of the means of production is now being viewed as a reasonable compromise between the extremes of socialism and laissez-faire capitalism. Despite its common sense, moderate approach, one of the main hurdles for distributism in the modern world is religious in nature.
The authors of distributist theory were largely influenced by Vatican papal encyclicals, especially those by Popes Leo XIII and Pius XI. Catholic social teaching in the late 19th and early 20th centuries strove to remedy the seemingly endless conflict between the right-wing and left-wing elements of society at a time when communism, socialism, and capitalism escalated to horrifically catastrophic heights (Bolshevism, Nazism, and the Great Depression). Because of this, Distributism is often (unfairly) seen as an exclusive club for Catholics only. However, as the world around us spirals out of control in every imaginable direction, many of the key elements to distributism are finding their way into proposed public policy out of sheer necessity.
The left versus right, liberal versus conservative, communist versus capitalist dialectic we see present in every political, economic, or social discussion is essentially one, gigantic false dichotomy. Most of the world is slowly learning that it is practically impossible to categorize oneself completely under only one of these labels. For example, Boston Catholics (statistically-speaking) are by-and-large registered Democrats. But how can this be? Their religion teaches them that the poor must be provided for, which is one of the primary issues of concern according to the Democratic Party platform.
But their religion also teaches them that abortion is wrong, which goes directly against the pro-abortion stance of the Democrats. On the flip side, you’ll find homosexual atheists who are registered Republicans because they support capitalism and/or gun rights, despite the fact that the Republican Party is largely Christian and opposed to issues like gay marriage.
There are Democrats who own giant, multi-national corporations and there are Republicans who take issue with too-big-to-fail corporate behemoths and Wall Street banking practices. The left versus right dichotomy has utterly failed to adequately represent the majority of the world’s population. Perhaps it is time to increase awareness and educate the population on political/economic alternatives like distributism.