Distributism Is the Future
Distributism is the rather awkward name given to a program of political economy formulated chiefly by G.K. Chesterton and Hilaire Belloc, two of the most prominent English writers of the early 20th century. Both Catholics, they sought to turn the social teaching of Popes Leo XIII and Pius XI into a concrete program of action. They rejected socialism, believing that private property was an essential component of human flourishing, but they also rejected the existing capitalist system as concentrating private property in far too few hands.
Distributism has garnered increased interest of late, due among other things to the social commentary of Pope Francis. Notwithstanding its Catholic origins, many non-Catholics have also embraced distributism over the years. Dorothy L. Sayers, E.F. Schumacher, and Christopher Lasch were influenced by its ideas, as has been the Spanish worker cooperative Mondragón.
Chesterton and Belloc shared a diagnosis for what they saw as the ills of the England of their day: the problem was not private property, as Marxists argued, but the fact that private property owners were scarce. As Chesterton put it in The Outline of Sanity: “The truth is that what we call Capitalism ought to be called Proletarianism. The point of it is not that some people have capital, but that most people only have wages because they do not have capital.”
When “Chesterbelloc”—as G.B. Shaw named the pair—talked about property, their focus was on capital goods, not consumption goods. They would not be impressed by arguments showing that, while American workers may be totally dispossessed of the means of production, at least they have 40-inch LCD televisions and smart phones.
Belloc understood what had occurred over the last several centuries of Western political development as a regression to conditions resembling those of the late Roman Empire, in which a few men owned great landed estates while the masses owned little or nothing in the way of productive property. In The Servile State, he wrote:
The two marks, then, defining the Capitalist State are: (1) That the citizens thereof are politically free: i.e. can use or withhold at will their possessions or their labour, but are also (2) divided into capitalist and proletarian in such proportions that the State as a whole is not characterised by the institution of ownership among free citizens, but by the restriction of ownership to a section markedly less than the whole, or even to a small minority.
Chesterton and Belloc were not the only ones thinking along these lines in the early decades of the 20th century. Karl Polanyi was a Hungarian economic historian and political philosopher who sought to highlight how an economy is always embedded in a larger social system. His 1944 book, The Great Transformation, detailed many of the ways in which the transition from the medieval economy to the capitalism of today occurred. While not every jot and tittle of Polanyi’s case has survived subsequent historical research, his basic thesis remains unscathed: capitalists often deliberately created a proletariat by legislative action.
A recent paper by David Meredith and Deborah Oxley in The Cambridge Economic History of Modern Britain, for example, provides evidence that “one-tenth of the English population in 1800 was slowly starving to death.” The authors describe how for the poor:
A few eggs, a cow for milk, a potato ground, all mattered. But over the eighteenth and nineteenth centuries self-provisioning came under serious attack. A padlock was placed on nature’s larder. First … traditional wage supplements such as gleaning and sweeping, and the collection of firewood from the forests, became criminal offenses; items of a ‘base nature’—rabbits, hares, fish—were redefined as private property, and their capture became a felony … Second, enclosure contributed to a class of ‘landless labourers’ without farming strips for growing household provisions, and they likewise suffered from a contraction of common lands upon which a cow might be kept or firewood harvested.
Their research into the relative heights of various occupants of the British Isles shows that in Scotland and Ireland, where the move towards modern capitalism lagged, people were taller—and thus, they conclude, better nourished—than in England, especially compared to English urban centers, where the creation of a proletariat had gone the furthest. London had the least healthy population of all.
Considering these facts, we might suspect that English capitalists, in need of cheap labor, passed laws to starve the English peasantry off of their land and force them into factories as the peasants’ only means of survival. If the proletariat was deliberately created by legislation and is not a spontaneous phenomenon, as many defenders of the status quo contend, that creation might also be undone by legislative action.
But if that is so, what direction should we head? The one recommended by the distributists sought to combine the best elements of various other visions of political economy.
Distributism shares with Marxism the goal of the workers owning the means of production and of eliminating the alienation of the worker from his product. (Of course, distributists meant that the workers should really own the means of production—not, as communists usually did, that the workers should “own” them through the intermediary of the state.) And distributist class analysis resembles Marxist class analysis in obvious ways.
Along with free-market economists, however, distributists recognize the importance of private property. Further, modern distributists recognize the crucial role of something that early advocates such as Chesterton and Belloc did not have the theoretical resources to articulate: namely, the vital role of true market prices in achieving economic efficiency. As Friedrich Hayek put it, market prices are able to incorporate knowledge of the “particular circumstances of time and place” into a worldwide economic system.
Distributism also contains aspects of communitarianism: with capital owned on a local level, owners are more likely to engage with the social and civic life of their community. Chesterton liked to refer to distributism as “real democracy.”
And finally—something that Belloc stressed—distributism has a conservative aspect: it posits as a laudable end not some utopian experiment in untested social arrangements but a socio-economic system that we already know is workable, from both historical and contemporary evidence. Furthermore, because workers themselves are the owners of capital goods, they are less likely to be forced to abandon their communities and extended families in order to keep a good job. There of course may be efficiency trade-offs in choosing to stay put rather than moving to some distant but more profitable location to find some work. But under distributism, workers would evaluate these trade-offs for themselves, rather than having some global corporate entity send them, willy-nilly, thousands of miles from their family and community—or finding themselves suddenly unemployed, as the modern corporation is loath to give its workers even a moment’s notice before they are escorted out of their workplace and onto the street by corporate security.
Our current system of global capitalism has its strong points. Capital can be moved around the globe swiftly in response to changing circumstances, something that would likely be much more difficult under distributism. And global capital has strong incentives to innovate, given that capital in one place is in competition for profits with all other capital around the world. Would a locally based manufacturer, favored by other local businesses, be as likely to embrace some risky new technology? Perhaps not.
When the workers of a given company are also its owners, evidence shows that they have a harder time adjusting their workforce to changing economic conditions. In fact, workers are liable to overpay for capital goods in order to preserve their jobs.
So what if we actually implemented distributist reforms and we found that large corporations continued to dominate our economic landscape for reasons like those above? If that happened, our situation would not have changed much from the status quo, but at least on the margin we would have a few more local businesses and family-owned farms.
Let us examine some existing instances of economic activities that are more or less distributist in character.
Mondragón is the world’s largest worker cooperative, with 74,000 employees, and the tenth largest company in Spain. Founded in 1956, its nearly six decades of continuous operation are strong evidence that distributist ideas are not utopian. Centered in the Basque region of Spain, the creative impetus behind the organization came from Father José María Arizmendiarrieta, who was inspired by Catholic social teaching.
Various cautions have been put forward about employing Mondragón as a paradigm that others might emulate. One is the unique, apparently quite charismatic personality of Father Arizmendiarrieta: not every potential worker-owned cooperative will have a similar figure to lead it in its early days. A second consideration is the special character of the Basque region, whose residents seem to have felt a greater sense of solidarity than is typical in a similarly sized locale due to their history as a linguistic and ethnic minority in a Spanish kingdom. Lastly, Mondragón grew and flourished in an era when the Spanish economy was highly protectionist. Could it have prospered in a Spain more open to world markets?
Mondragón’s history has not been untroubled. Despite worker ownership, the corporation experienced serious labor unrest in the 1970s. In 2013 one of its major subsidiaries, Fagor, declared bankruptcy and was sold by its parent. Other problems emerge upon exploring the company’s history in greater detail. In fact, they are the very ones that would be predicted to hamper distributist enterprises: a difficulty in radically changing course when necessary, an inability to adjust the workforce to properly reflect market conditions, and the tendency to invest capital to save jobs, rather than directing it to its most efficient use.
(The above material on Mondragón is largely drawn from William Foote Whyte and Kathleen King Whyte’s Making Mondragón: The Growth and Dynamics of the Worker Cooperative Complex.)
We next come to a very odd type of worker-owned enterprise—one that is not actually owned in the traditional sense at all, and in which the workers, at least directly, earn nothing in terms of cash compensation: open-source software projects.
These anomalous enterprises constitute a valuable part of our economic landscape. For instance, Linux, built and maintained by volunteers and freely available to all, is the world’s most used operating system, as the basis for the mobile-device platform Android, as well as for many embedded systems such as cable set-top boxes, networking components, robotics-control systems, and medical systems.
Python, also maintained by a volunteer workforce, has become an extremely important programming language and is becoming a mainstay in scientific computing. Git and GitHub, also open-source projects, are now the most popular way to maintain public software repositories. And there are numerous other examples of this phenomenon.
Rather than earning money for their products, the volunteers who develop open-source software work for reputation. Lists of who has contributed the most to various open-source endeavors are publicly available and readily translate into job offers from more traditional enterprises.
This situation does not fit comfortably into mainstream economic analysis, but to be fair it is certainly not the kind of business model that the founders of distributism envisioned either. Nevertheless, it more closely resembles a distributist model than a traditionally capitalist one, as the means of production are the programmers’ own computers.
The communications revolution has made distributism more feasible in other ways as well. What is called the “sharing economy” has been a hot subject in the news, and in city councils, as companies like Airbnb and Uber have cut into the business of traditional hotels and taxi services, respectively. Both companies can be characterized, to some extent, as distributist enterprises.
Airbnb, by allowing homeowners to treat their property as small hotels, turns ordinary homes into capital goods, something of which Chesterton and Belloc would have approved. Uber does the same with people’s automobiles.
I have personal experience as an Airbnb host, having rented out my cabin in the Poconos for a few months through the service. I essentially worked as a hotel maid for that time, but I am sure my experience was very different than that of an employee of a hotel chain: I was working at my own pace, under my own direction. Making beds or mopping floors is much less onerous when you are doing it for your own business.
Many critics of the sharing economy complain that companies like Airbnb and Uber should count the people providing rooms and rides as employees rather than independent contractors. These companies, critics contend, are exploiting their workers by not providing minimum-wage guarantees, overtime, healthcare benefits, unemployment insurance, and so on.
I have two responses. First of all, I can state for a fact that “working for” Airbnb was nothing like being an employee at a traditional company: I never met a single person from Airbnb and only once corresponded with someone from the company, to resolve a payment issue. Airbnb did not set my hours, prevent me from subcontracting, or tell me anything about how to do my job, other than demanding that I fulfill the promises I made on their website about rates and accommodations. And more importantly, things like minimum wages and employer-provided benefits are the very sort of provisions that for Belloc marked the return of servile conditions, in which the proletariat would lack all independence but would be “well cared for” by its corporate masters. (The fact that the proletariat is now considered unable even to secure its own contraceptives without a company providing them is a sign of how far down this road we have traveled.)
More traditionally structured worker-owned businesses have also succeeded in the United States. The state of Vermont actively encourages worker-owned cooperatives, and the most prominent one, Cabot, is probably familiar to many buyers of cheese and other dairy products. And PBS Newshour recently detailed how New Belgium Brewing in Colorado became employee-owned and is achieving high levels of job satisfaction as a result, with workers “pouring their hearts” into the business on account of their stake in it.
Finally, I will mention another worker-owned enterprise with which I was involved: OTA Limited Partnership, a stocks and options trading company where I worked for several years around the turn of the century. I began as a consultant but was soon asked to join the company as a regular employee, which also meant becoming a part owner since the employees owned the company. I accepted, and not long after starting full time I went to a colleague’s office and asked him what the company vacation policy was. He looked at me oddly. “There is no vacation policy: you’re one of the owners. You take vacation when you feel you can afford to.”
I left his office with the odd feeling of being treated as an adult at work.
For anyone attracted to the distributist model as one that respects the dignity and freedom of the individual, the obvious question is how to proceed in achieving it. This is one arena in which Chesterton, in particular, came up short. Understandably adverse to simple confiscation of property from existing owners—for how, exactly, could the confiscators decide exactly which holdings were amassed through “crony capitalism” and which through honest innovation and work?—he recommended that the state compensate large landowners for their land and distribute it to small ones. The problem with this idea is that the funds to pay the compensation have to be taxed away from somebody: if from the large landowners, then they are just having their property confiscated by a different route. But if the people to receive the land are taxed to pay for the public-domain seizures, then it would have been more sensible just to let them buy the land themselves.
I recommend that the way forward here is to recognize that markets always exist within some institutional framework. (This is a fact that Belloc recognized in his recommendations for advancing the distributist vision.) For the last couple of centuries, that framework has favored large concentrations of capital. If we change the tilt of the playing field to favor small proprietors, family farms, and worker-owned cooperatives, then first of all we are undoing a past injustice, and, secondly, we are not forbidding larger enterprises—which will still flourish when they truly have a significant edge in an industry over smaller ones.
I suggest the issue comes down to one of vision: do we see the common person as essentially a passive being, happiest giving up control of his or her own life to corporate and government experts, who will care for us with benefit packages and guaranteed levels of consumption goods? Or is the ideal for each person to exercise judgment over his or her life’s course to the maximum extent possible, accepting the risks that go along with independence? If the latter, then shifting our legal framework to enable more people to live independent lives is a risk worth taking.
Gene Callahan teaches economics and computer science at St. Joseph’s College in Brooklyn and is the author ofOakeshott on Rome and America.