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An Introduction to Distributism

Economics — Posted by Donald P. Goodman III on October 10, 2011 9:41 AM
Catholic social teaching is as old as Catholicism; the Scriptures themselves teach the basics of economic justice. Our Lord reminds us that the laborer is due a just wage for his work,1 for example; the Didache tells us that greed is wickedness,2 and that “advocates for the rich” shall be condemned.3 Christian thinkers from St. Augustine to St. Thomas Aquinas and beyond have dedicated themselves to political and economic thinking in light of the Catholic faith.4 However, formalized economic teaching from the Magisterium is a relatively recent thing; its pioneering document was that of the great Pope Blessed Leo XIII, Rerum novarum.
Rerum novarum has been received less than enthusiastically by modern economic thinkers; some, even Catholics, argue that it was based on ignorance5 or even that it has since been changed.6 Nevertheless, the correct attitude of the Catholic toward this great encyclical was enunciated early on by Pope St. Pius X, in his own encyclical Singulari quadam:

Therefore, in the first place, we proclaim that the duty of all Catholics is… to hold firmly and to confess fearlessly the principles of Christian truth, handed down by the Magisterium of the Catholic Church, especially those which Our most wise predecessor explained in the encyclical letter Rerum novarum.7

This is binding teaching, to which the Catholic owes faithful acceptance. Rerum novarum, and its daughter encyclicals from later popes, is the blueprint for Catholic economic thought, the schematic to which all our bricks and mortar must conform.
Rerum novarum was unpopular in some circles because it identified deeply rooted flaws in all the currently popular economic systems, particularly those called capitalism and socialism. Against socialism, for example, Leo XIII unequivocally defended private property8; against capitalism, however, he insisted that the state had the right and duty to limit the use of private property.9 Against socialism, he defended the legitimacy of the wage contract10; against capitalism, he insisted that wages must be just, and that the justice of a wage is not dependent merely upon the going market rate.11 He affirmed that the rights of individuals must be respected12; but he also held that the government should make a special effort to protect wage-earners against the richer classes.13 The great pope also defended many other practices condemned by capitalists, including the use of state authority to resolve labor disputes14; the mandating by legal authority of Sunday rest15; the injustice of unrestrained competition16; and the injustice of wage contracts, even if freely agreed to by the worker, which do not allow “proper rest for soul and body”17 or which are insufficient to support a frugal and well-behaved wage-earner.”18
Pope Leo identified four primary problems with the prevailing economic situation: the lack of workingmen’s guilds; unrestrained competition; usury; and the concentration of property into few hands.19 All of these problems, though, really point to the last; the lack of a reasonable alternative to the guilds, the unrestrained competition of our so-called free market, and the usurious practices of our business all result in the overconcentration of productive property into the hands of a few, wealthy capitalists. This remains the defining characteristic of our current system.
At first, this assertion seems counterintuitive. As one prominent Distributist has pointed out, “when we waltz into our local Wal-mart,” it appears that there is “a rich variety of products provided by a vast number of firms, a situation which affords entrepreneurs many opportunities to enter the market and workers many places to sell their labor.”20 But while our economy appears to be diverse in this way, in reality the producers’ club is quite rarified. Almost all beers, for example, are produced in factories owned by only two companies, Anheuser-Busch InBev, which holds 50% of the American market,21 and SABMiller, which owns a tad less than 30%.22 This takes up offerings like all the various Bud brands, Coors, Miller, Molson, Beck’s, Labatt’s, Busch, Bass, Stella Artois, and more (not to mention some Mexican beers owned by Grupo Modelo, of which 50% is owned by InBev). This is only one example, and not even the most egregious. Optical products|eyeglass and sunglass frames particularly|are almost all owned by Luxottica. You may buy some Ray-Bans, Chanels, or Oakley’s; but they are all owned by Luxottica. Lenscrafters? Luxottica. Sunglass Hut? Luxottica. Pearle Vision? Luxottica. And so it goes. The media–even on the Internet–are owned and run primarily by only eight companies: Google, Microsoft, Yahoo, News Corporation, NBC Universal, Viacom, Time Warner, and Disney.23 A whopping 93.5% of server processor microchips are made by Intel; another 6.5% are made by AMD.24 The list goes on and on.
And such market concentration is a definite problem, as the Pope himself pointed out. Indeed, the fact that “the hiring of labor and the conduct of trade are concentrated in the hands of comparatively few” is a problem so severe that it has laid “upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.”25 Nor is this mere hyperbole; as the great Catholic historian Hilaire Belloc observed, wealth is necessary to human existence, and “[t]herefore, to control the production of wealth is to control human life itself.”26 Capitalist society’s tendency toward the ever-increasing concentration of the means of producing wealth, then, is also a tendency toward the control of life by the owning few, exercised on the non-owning many. This limits the economic, and therefore political, significance of the bulk of the population while giving the few owners of productive property a great deal of power over the state.
The great pope ended his encyclical with an appeal to Catholics throughout the world:

We have now laid before you… the means whereby this most arduous question must be solved. Every one should put his hand to the work which falls to his share… Those who rule the commonwealths should avail themselves of the laws and institutions of the country; masters and wealthy owners must be mindful of their duty; the working class, whose interests are at stake, should make every lawful and proper effort.27

And Catholics responded, attempting to imbue their societies, so corrupted by the revolution, with the principles of a Catholic social order. They devised systems which would apply those principles toward definite goals in particular societies. One such system acquired the name “Distributism.”
Distributism attempts to resolve these problems by recourse to an ancient principle of social interaction, distributive justice, the concept from which Distributism takes its name. Justice in general is, of course, “the greatest of virtues, and ‘neither evening nor morning star’ is so wonderful.”28 More specifically, distributive justice is that virtue “according to which a ruler or steward gives to each one according to his own worth.”29 The importance Distributism places on distributive justice is supported by Leo XIII himself, who taught that maintaining distributive justice toward all classes of society is “the first and chief” of a ruler’s duties.30
Distributism applies the principle of distributive justice to property, particularly to productive property. Pope Leo taught us that “[t]he law… should favor ownership, and its policy should be to induce as many as possible of the people to become owners,”31 noting that “[m]any excellent results will follow from this; and, first of all, property will certainly become more equitably divided.”32 It is clear, further, that Pope Leo is speaking here of the distribution of productive property, not property simply, for he continues by arguing that this policy would greatly increase production, and the only type of property he specifically mentions is land, the epitome of the productive asset.33
The just distribution of productive property defines Distributism; indeed, one of its founding lights, Hilaire Belloc, defined what he called “the distributive state” in just those terms.34 While in a socialist society none are owners, and in a capitalist society only a few are owners, in a Distributist society most are owners of productive property. This is the defining characteristic of Distributism: the widescale distribution of productive property throughout society, such that ownership of it is the norm, rather than the exception. Such distribution is the best way of ensuring that the economic rights of man are respected; that men can pursue their livelihoods with the greatest possible independence; and that society can exist as a single harmonious whole, without the vicissitudes of class hatreds and constant economic unrest which plague all of our current systems.





An Introduction to Distributism II


Economics — Posted by Donald P. Goodman III on October 17, 2011 6:54 AM
(For Part I, click here.)
he widespread distribution of productive property is the primary goal of Distributism; however, other principles also inform Distributism’s pursuit of this goal. The first of these is the principle of subsidiarity. Pope Leo XIII speaks little about it; however, Pope Pius XI, in a daughter encyclical Quadragesimo Anno, teaches it very clearly. The principle of subsidiarity is the simple notion that

[J]ust as it is a crime to take away and hand over to the community those things which can be done with proper struggle and industry by single men, so also it is an injury, a grave fault, and a disruption of right order to summon to the larger and higher society those things which can be done and excelled by smaller and lower communities.35

Put simply, subsidiarity dictates that whatever can be done by a smaller unit should not be done by a larger one. This principle clearly leads to the greater distribution of productive property. There is no reason for much of our production of wealth to be so concentrated; Distributism would encourage this overconcentration to be remedied, spreading ownership of productive property more broadly throughout the populace.
It’s important to remember that this principle works both ways. Pius XI notes that “it is rightly argued that certain types of goods must be reserved to the republic since they bear such great power with them, [power] so great that it cannot be permitted to private men by a sound republic.”36 Nuclear power, an extensive train system, or communications systems might fall into this category. Subsidiarity does not exclude higher authorities from all functioning in society; it simply ensures that lower authorities are not deprived of their rightful role. Distributists respect both sides of the subsidiarity coin; they seek to trust to the state those industries which are so powerful that they carry the potential to dominate the state, while at the same time ensuring that productive property is kept in the smallest possible units, which means that it is as widely distributed among families as possible.
It is true that modern industries are often not amenable to wide scale distribution in the traditional sense; after all, an aircraft factory is not a shoemaker’s shop. But this does not mean that the workers in such factories cannot become owners. Despite our living in a capitalist society, many workers have managed to gain a share in the productive property which they work, and these workers have often been very successful. Spain’s Mondragon37 and the many cooperatives in Italy’s Emilia Romagna region38 have proven to the world that worker-owned cooperative production can be just as successful, or even more successful, than the highly centralized production that has unfortunately characterized the industrial age. These and other models of worker ownership can allow productive property to be widely distributed throughout the citizenry even in industries which necessarily require large and centralized works.
The other vital principle which forms Distributism’s pursuit of widely distributed productive property is solidarity. Solidarity is the recognition that a state is a single whole that is possessed not only of many individual goods, but also a single common good.39 It recognizes the fundamental precept of traditional and Catholic social thinking that the man “who by nature and not by mere accident is without a state, is either a bad man or above humanity; he is. . . either a beast or a god.”40 Leo XIII taught that “[c]ivil society exists for the common good, and hence is concerned with the interests of all in general, albeit with individual interests also in their due place and degree.”41 The organization entrusted with ensuring that particular goods are kept within proper limits and directed toward the common good is the state.42 Therefore, keeping in mind the principle of subsidiarity, the state guides economic life, including its subsidiary corporations (such as workingmen’s associations43), toward the common good, while individual corporations pursue their own particular goods within that framework. This notion of many particular goods subordinated to and cooperating toward a single common good is what we mean by solidarity.
Solidarity has many repercussions in economic thought. It means, for example, that competition, though just within certain limits,44 cannot serve as the basis for a just economic order45; in other words, whatever benefit that businesses seek to obtain by competition cannot come at the cost of the public good. Truly, this is anathema in an age when corporations routinely justify their butchering of the national and even international economies by their obligations to make profits for their shareholders, but it is nevertheless the case. When we remember the singular nature of the state, and the fact that we are all parts of a whole seeking our particular goods within a whole seeking its common good, the proposition that competition is a valid defining principle for economic interaction is clearly untenable.
Furthermore, what has traditionally been known as the preferential option for the poor follows directly from the notion of solidarity. Leo XIII stated that “when there is question of defending the rights of individuals, the poor and badly off have a claim to especial consideration… wage-earners, since they mostly belong in the mass of the needy, should be specially cared for and protected by the government.”46 The Church has always taught that “in protecting these rights of private citizens, [the state] must have especially in mind those of the weak and the poor.”47 The state is one, and all parts of the state are parts of a whole working toward the same common good; it only makes sense, then, that special care should be taken by the whole for those parts which are least able to help themselves.
So how is a Distributist society to be established? That question is impossible to answer generally. What works perfectly in Rochester may be a disaster in Rome, Italy; indeed, what works perfectly in Rochester may be a disaster in Rome, New York. Means for encouraging widespread ownership of productive property, always respectful of the principles of subsidiarity and solidarity, will vary by place, condition, climate, economy, culture, government, and innumerable other variables. Catholics need to dedicate themselves to consideration of these measures in their own areas and situations, tailoring them to specific conditions. One condition, however, will be the same always and everywhere, a condition identified by Pope Leo well over a century ago:

[S]ince religion alone, as We said at the beginning, can avail to destroy the evil at its root, all men should rest persuaded that [the] main thing needful is to re-establish Christian morals, apart from which all the plans and devices of the wisest will prove of little avail.48

We cannot reclaim society for Christ unless we first reclaim ourselves. To that task, first and foremost, distributists, like all men, must devote all their strength.
Notes
1 St. Luke 10:7.
2 Didache: The Teaching of the Twelve Apostles(Peter Kirby, trans.; 2001), available at Didache. The Teaching of the Twelve Apostles (translation Roberts-Donaldson)..
3 Id.
4 A superb example of such thinking is St. Thomas Aquinas, De Regimine Principum; vel De Regno, available at Goretti Publications's Books.
5 See, e.g., Dr. William Luckey, The Intellectual Origins of Modern Catholic Social Teaching on Economics: An Extension of a Theme of Jesus Huerta de Soto 9 (speech given to the Austrian Scholars Conference at Auburn University, 23-25 March 2000) (arguing that given research “which ought to have been available to [the pope],” “it is hard to excuse Leo XIII”).
6 See, e.g., id. at 1; see also Rev. Maciej Zieba, O. P., From Leo XIII’s Rerum novarum to John Paul II’s Centesimus Annus 5:1 Journal of Markets & Morality 159 (Spring 2002) (arguing that part of Rerum novarum‘s “tendency is brought to a halt and partly turned around in the first two social encyclicals of John Paul II”).
7 Pope St. Pius X, Singulari quadam (24 September 1912) (“[i]taque primo loco edicimus catholicorum omnium ocium esse. . . tenere rmiter proterique non timide christian veritatis principia, Ecclesi catholic magisterio tradita, ea prsertim qu Decessor Noster sapientissime in Encyclicis Literris Rerum novarum exposuit”). All translations from the Latin in this work are the author’s, unless otherwise noted.
8 Leo XIII, Rerum novarum, no. 47 (teaching that “[t]he right to possess private property is derived from nature, not from man”). All citations from Rerum novarum are from the English translation available at Vatican: the Holy See.
9 Id. (teaching that “the State has the right to control its [private property's] use in the interests of the public good”).
10 Id. at no. 45.
11 Id. at no. 20 (teaching that “before deciding whether wages [are] fair… wealthy owners and all masters of labor should be mindful… that to exercise pressure upon the indigent and destitute for the sake of gain, and to gather one’s profit out of the need of another, is condemned by all laws, human and divine”); see also nos. 43{45.
12 Id. at no. 37.
13 Id. (teaching that “[t]he richer class have many ways of shielding themselves,… whereas the mass of the poor have no resources of their own… for this reason [ ] wage-earners, since they mostly belong in the mass of the needy, should be specially cared for and protected by the government”).
14 Id. at no. 39.
15 Id. at no. 41.
16 Id. at no. 3.
17 Id. at no. 42.
18 Id. at no. 45.
19 Id. at no. 3.
20 John Medaille, Neo-Feudalism and the Invisible Fist in The Distributist Review, available at The Distributist Review.
21 Duane D. Stanford, InBev to Buy Anheuser-Busch, Gains Top Market Share in Bloomberg (14 July 2008), available at http://\-www.\-bloomberg.\-com/\-apps/\-news?pid=newsarchive\&sid=aDm1PPbwrdHc.
22 Tom Daykin, InBev looks at SABMiller in JSOnline (May 29, 2008), available at InBev looks at SABMiller - JSOnline.
23 Dmitry Krasny, And Then There were Eight: 25 Years of Media Mergers, from GE-NBC in Mother Jones (March/April 2007).
24 James Niccolai, Intel grabs server market share from AMD, says IDC in Network World (19 August 2010), available at Network World.
25 Leo XIII, Rerum novarum, no. 3.
26 Hilaire Belloc, The Servile State (The Liberty Fund, 1977).
27 Id. at no. 62.
28 Aristotle, Ethica Nicomachea in The Basic Works of Aristotle 1003 (Benjamin Jowett trans., Richard McKeon ed., Random House 1941).
29 St. Thomas Aquinas, Summa Theologica Ia, Q. 21, Art. 1 (“secundum quam aliquis gubernator vel dispensator dat unicuique secundum suam dignitatem”).
30 Leo XIII, Rerum novarum, no. 33.
31 Id. at no. 46.
32 Id. at no. 47.
33 Id.
34 Hilaire Belloc, The Servile State (The Liberty Fund 1977).
35 Pius XI, Quadragesimo Anno, no. 79 (“sicut qu a singularibus hominibus proprio marte et propria industria possunt perci, nefas est eisdem eripere et communitati demandare, ita qu a minoribus et inferioribus communitatibus eci prstarique possunt, ea ad maiorem et altiorem societatem avocare iniuria est simulque grave damnum ac recti ordinis perturbatio”.
36 Pius XI, Quadragesimo Anno, no. 114 (“Etenim certa qudam bonorum genera rei public reservanda merito contenditur, cum tam magnum secum ferant potentatum, quantus pravatis hominibus, salva re publica, permitti non possit”)
37 See, e.g., Dr. Race Matthews, Mondragon and the Global Economic Meltdown in The Distributist Review (6 June 2010), available at The Distributist Review.
38 See, e.g., John Restakis, The Lessons of Emilia Romagna (30 April 2005), available at Grassroots Economic Organizing | News & ideas from the frontlines of the solidarity economyles/BolognaVisits Lessons ER.pdf.
39 For a lengthier discussion of this, see the author’s Individualism and the State (23 July 2010), available at The Distributist Review.
40 Aristotle, Politics 1131{32 (Benjamin Jowett trans.) in The Basic Works of
Aristotle (Richard McKeon ed., New York: 1941).
41 Leo XIII, Rerum novarum, no. 51.
42 Pius XI, Quadragesimo Anno, no. 49 (“[o]cia vero hc singillatim denire, ubi id necessitas postulaverit neque ipsa lex naturalis prstiterit, eorum est qui rei public prsunt”).
43 Leo XIII, Rerum novarum, no. 49.
44 Pius XI, Quadragesimo Anno, no. 88 (“[a]t liberum certamen, quamquam dum certisnibus contineatur, quum sit et sane utile”).
45 Id. (“rei conomic rectus ordo non potest permitti libero virium certamini”).
46 Leo XIII, Rerum novarum, no. 37.
47 Pius XI, Quadragesimo Anno, no. 25 (“in ipsis protegendis privatorum iuribus, prcipue inrmorum atque inopum rationem esse habendam”).

Download PDF About Donald P. Goodman III

Donald P. Goodman III is a practicing attorney in the Commonwealth of Virginia, a graduate of the William and Mary School of Law and of Christendom College with a degree in history and a minor in classical languages. He is married to Catherine Goodman, also a graduate of Christendom College, and has four children.


Tags: Aquinas, Aristotle, Donald Goodman III, Leo XIII, Pius XI, Quadragesimo Anno, Rerum Novarum, Solidarity, subsidiarity