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Distributive Economics

Distributism is an economic theory developed in the late 19th and early 20th centuries advocating for the wide ownership of productive property instead of concentration in a state or small group. It is rooted in Catholic social teaching, and provides a middle ground between laissez-faire capitalism and socialism. Key facets of the system include decentralization, workers’ guilds, and subsidiarity.

Examples of Distributism in Real Life

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  • The Mondragon Corporation - Basque, Spain

Founded by a Catholic priest in 1956, this federation of worker cooperatives employs over 70,000 worker-owners who collectively govern the enterprise and share its profits.

 

  • The Catholic Worker Movement - New York City, United States of America

Founded by Dorothy Day and Peter Maurin in 1933, this movement operates on agricultural farming communes and hospitality houses to promote a distributive model of self-sufficient communities and decentralized aid.

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  • Credit Unions and Mutual Banks

These financial cooperatives are owned entirely by their members, with capital staying within the community to provide localized loans based on trust instead of corporate formulas.

Examples of Distributism in Media
 

  • J.R.R. Tolkien’s The Lord of the Rings

This 1945 book features a nation called the Shire with no centralized government, large industries, or monopolies. Property is mostly owned by families who run small businesses such as farms, breweries, and artisanal products.

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  • G.K. Chesterton’s The Napoleon of Notting Hill

This 1904 novel works as a direct outline of what distributism may look like, as it was written by one of the system’s founding contributors. It is set in a futuristic London where a small neighborhood stages a rebellion against a centralized bureaucracy to restore independent, small trade.

  • Frank Capra’s It’s a Wonderful life

This 1946 film is centered around conflicts regarding capitalism and distributism. The protagonist creates a system in which community resources are pooled to ensure every working-class family can own their home.

Strengths
 

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  • Worker dignity: Workers own their tools and profits. They work for their own interests.

  • Economic stability: Wealth is distributed to many small owners, making the system less vulnerable to large stock market crashes

  • Stronger communities: Businesses are rooted locally and have more interest in the town

  • Resistance to poverty: The widespread ownership of property prevents mass evictions and decreases poverty.

  • Family centered: Workers are not forced to put the needs of the company over the needs of their family.

Weaknesses
 

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  • Decreased efficiency: Small businesses are unable to achieve the level of efficiency that large corporations use to increase output and decrease prices.

  • Inability to scale: Widespread transportation and communication require complex technology that comes from large distances. 

  • Corruption in guilds: Mishandled workers’ guilds may artificially limit the numbers of certain jobs in a town to keep prices high. Furthermore, apprenticeships may become exploitative and nepotism is a real possibility.

Interpretation
 

The benefits of distributism greatly outweigh its drawbacks. While weaknesses like corruption in guilds are valid, they could be significantly lessened with proper regulations. Local governments could interfere when guilds become corrupt by mandating open entry and fair wages for apprentices. Another easy fix is to establish inter-guild councils. A system like this would result in lower poverty and stress. Thus, people would be happier and healthier. Moreover, stock market crashes like the American Panic of 1893 would be preventable since small groups of the wealthy could not drain the market in short amounts of time.

Relevant Literature
 

  • G.K. Chesterton’s The Napoleon of Notting Hill (1904)

  • G.K. Chesterton’s The Outline of Sanity (1926)

  • Hilaire Belloc’s The Servile State (1912)

  • John C. Medaille’s Toward a Truly Free Market (2010)

  • Alexander William Salter’s The Political Economy of Distributism (2023)

References
 

  • G.K. Chesterton’s The Outline of Sanity (1926)

  • Hilaire Belloc’s The Servile State (1912)

  • Hilaire Belloc’s An Essay on the Restoration of Property (1936)

  • Alexander William Salter’s The Political Economy of Distributism (2023)

  • E.F. Schumacher’s Small is beautiful (1973)

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