Why Distributism, and why not?
There is less difference than many suppose between the ideal socialist system, in which the big businesses are run by the state, and the present capitalist system, in which the state is run by the big businesses.” – G. K. Chesterton
Distributism is an economic ideology that attempts to answer the serious fundamental problems with capitalism, particularly industrial era capitalism, while also not embracing the various issues with socialism. It’s an interesting concept, and it’s something of a response to English liberalism, combining several ideas from that school with the social teachings of Catholicism into a hybrid ideology. It was first ‘popular’ in around the turn of the last century, and slightly after with 1910s What’s Wrong with the World coming at it’s height. A hundred years later, it has seen a something of a resurgence, with the internet functioning to connect several distributist communities and introduce new people to the ideology.
This essay is not an attempt to dismiss the ideology, rather it is an attempt to look at my basic problems with some of the more common ideas within the ideology. I hope that it will explain the reasons on why I don’t consider myself a distributist despite strong interest in the ideology.
“The problem with capitalism is too few capitalists, not too many.” – G. K. Chesterton
The general concept of distributism is a simple twofold concept: spread the means of production in a market system onto a so that every person can create their own products, and then have that growth drive success to local communities, in a major attempt to rebuild atomized social networks and strengthen local bonds. It also has a major social component which it seems as goals linked to the greater economics. It sees itself as a practical, realistic ideology based around local realities.
Most major distributists have been essayists, who broadly argue in favour of this concept and state that it ought to be executed, rather then lay down specific blueprints to be followed (if you disregard ideas like anti-trust laws, which are linked but not necessarily a core part of a distributist execution.)
For the people on the libertarian left that don’t reject markets entirely, it’s a compelling argument. The best parts of capitalism, but with an ethical base that focuses on the restoration of community bonds and natural restrictions on government powers. It sounds interesting, so what are the problems?
If you agree with its goals, why is distributism not the answer? In short, distributism doesn’t actually do what it says it will. There’s no one distributist bible or manifesto, but the books and essays I’m choosing to examine are the 3 Papal Encyclicals, Chesterton’s ‘What’s Wrong with the World’, ‘The Outline of Sanity’, ‘Utopia of Usurers’, the major essay The Restoration of Property from Belloc, and differing theories from C. H. Douglass and Dorothy Day. I’m also going to be using looking at modern distributist interpretations of these works.
When it comes to modern distributism, there seem to be two main contemporary schools of thought. The first, presented most clearly in Jobs of Our Own by Race Mathews, is exemplified by the Mondragon corporation, and is a kind of hybrid shareholder mix. The second school of thought seeks to be more radical, relying on guilds as a way of providing a totally different alternative to global capitalism. I’m going to be addressing the second kind here, but the first is worth addressing as well.
“The means of production constitute two parts of this equation, namely land (facilities) and tools used to produce goods and deliver services.”
Ownership of property is a core discussion of any basic economic system, and distributism is no different. What is ownership then? Belloc defines ownership as “the right to utilize, and direct utilization of, an item, particularly in production of economic goods or services.” This is an eloquent definition, but misses an important element: ‘the right to utilize, without payment and without conditions.’ I don’t think that anyone who has rented an apartment has thought that just because they have the right to use the apartment therefore means that they have ownership of it.
In Britain, the distributist slogan was ‘Three acres and a cow’, and was used as a summary by Chesterton. It also highlights a core problem in distributism. How do you allow the use of advanced production methods while still having ‘democratic’ ownership? Renting these tools to use, even under a form of self employment, doesn’t actually count. A modern factory farm that sees a profit of a couple million dollars a year requires a minimum of 12000 acres, and for larger farm three or four times that. ‘Three acres’ is a non-starter to farms like that, but the major point is this: the concept of productive property is an intensely fuzzy one, and it often operates on a scale much larger then a single person. How then, should a distributist organise the hierarchy of production?
This challenge is one that distributist theory has asked since its inception. Some modern proposals for different hybrid systems seem interesting and have promise. However, an ‘old school’ distributist proposal that has regained popularity in the last few years is that of guilds. Whenever any form of hybrid model involving distributism is suggested, I have found, a distributist attempts to point out all the inherent problems of capitalism, and puts forth the idea of guilds. I wish to argue that after consideration, guilds are simply a fairly terrible idea.
“My own reading of the evidence is that a common theme underlies guilds’ activities: guilds tended to do what was best for guild members.” – Ogilvie
Guilds are not a new institution, by any means. Most proponents of a guild system seem to want a more modern take on the older guild system. So, what does this mean? A guild system generally works like this: an organisation is formed at a local level to try and produce a single product, good or service where members of the guild share some level of resources, train and induct new members. They generally have some form of common ownership or method to acquire the tools to work, a concept of internal apprenticeship, and have a majority of the members ‘run the business’ which, to give a modern comparison, functions more like a restaurant chain where different members run different stores, with the number of stores is usually based around how many members it takes to make a particular product (and the demand, of course).
Proponents of guilds like to point out the positive economic effects that they had in some areas in the past. This ignores a massive amount of information we have on how organisations like guilds function. Guilds, like almost any organisation, will attempt to do what it thinks is best for its members. More then that, it will attempt to do what is best for its most powerful and influential members. This fact becomes a problem because once a guild is in place, it has an advantage of capital in a limited market and therefore becomes extremely hard to dislodge. The guild can then, as they did in the past, act to protect and enrich their members at the expense of consumers and non-members. One needs only to look at the various problems people had with public sector unions or other similar organisations to get an idea of what that could look like in a wider market. When someone can co-operate and take higher profits, if they can simply co-opt anything that could force them to compete, they will naturally attempt to act in their own interest and make the highest profit possible.
One may point out that a guild is not actually a monopoly but instead is an oligopoly, and oligopolies naturally like to collapse into competition. The reason why this isn’t the case can be found in game theory. In a relatively closed market with the same main participants, especially among co-workers and other guild members, people are no longer playing a ‘prison game’, where the rational decision is to betray the other participants, but are instead playing an ‘extended prison game’, where the rational choice is to co-operate and if betrayed, respond in kind. This means that while there would be occasional outliers (as people don’t behave rationally at all times, and there are other factors as to why they might not co-operate) and occasional price wars (as people find what actually is the rational choice through observation and testing) the oligopoly will trend back towards an exploitative monopoly style of pricing.
The natural problems of guilds get worse. Guilds are not only a collection of members, but an organisation onto its own, and will naturally attempt to protect itself. Because guilds are local to an area, a large guild will wield a proportionally larger amount of local political power. Like how corporations must naturally have the goal of maximising profits (in the short and/or long term) guilds must naturally have the goal to protect and enrich its members, since that’s the reason the entity exists in the first place. A guild cannot, by nature, diversify, so new technological innovations, that would force some of its members into frictional unemployment, would naturally be combated with the political and economic power of the guild. Innovation and technology cannot be delayed forever, but a guild can certainly attempt to delay the adoption or use of a new technology for as long as it can. The nature of an economy composed almost completely of actors who don’t want to see innovation in their field is therefore one that will struggle to both innovate and act in its best interest in the long run. As the individual actors only see the general benefit of a larger economy when things are innovated, and may see a loss of economic and political status within that economy, the cost vs benefits of allowing and funding innovation is discouraging to said individual actors. This forces a guild economy to be sluggish and resistant to change by nature.
In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely. – Pournelle
Guilds also have a natural problem for new members, namely the buying in and buying out problem. This problem is that guilds, by nature, have major issues with people both entering and exiting the guild. Guilds the world over have had different methods to enter the guild, but these guilds have often relied on the law to enforce their right to do business as a monopoly. To enter a guild, someone must either make a financial contribution equal to what the other members have contributed to the guild, eventually receive equal status after being an apprentice (and receive tools and training in return for years of service to the guild), or be allowed to enter the guild as a normal member without making the same contributions as normal members. These solutions (and several less popular ones, which I won’t go into detail here) have serious problems, which are inherent to them. Buying in requires a large reserve of capital, and would often place a less experienced member as if they were of equal experience and status as senior members. Apprentice training means that the senior members of the guild make decisions about the future of the guild without the influence of the youngest members, meaning choices that give the most benefit to the senior members will naturally first considered. It also means that rapid expansion of any kind to meet a rise in demand is very difficult, as rapid introduction of new members both dilutes the power of the current members and creates problems in both the training and power structure of the guild. Entering as a normal member with no buy-in means the guild is functionally damaged by new members, and if this is attempted to be diluted by a government program it simply functions as a way for the guild to exploit the greater public.
Guilds within distributism as an ideology suffer a further, more conceptual problem which I like to call the capitalist problem. Distributism wishes to suggest that the problem is not too may capitalists, but too few. I would suggest that a tradesman that produces a single good within an existing framework, even if working for his own benefit, is not really a capitalist at all. He or she has little investment in the overall success and growth of the economy, and have few incentives to behave ‘rationally’ for the growth of the greater economy. Friedman said, “The overthrow of the medieval guild system was an indispensable early step in the rise of freedom in the Western world.” While many distributists may roll their eyes at Friedman, his point is not just one of social freedom, but also one of economic freedom. The guild system is a major block for people attempting to behave in a way that benefits the greater society, even tangentially. While perhaps the rich and the large corporations within capitalism need to be forced to ‘internalise their externalities’, actors within a guild system have near to no incentive at all to attempt to benefit the greater whole, because they, like a worker with no stake, is not enfranchised to the success of anything but himself and those directly connected to him.
The problems with a guild economic system are many, inherent and varied. Further, I fail to see how a guild system addresses most of the problems that are posed about a capitalist system. None of the problems presented here are insurmountable, but the number of problems ‘requiring surgery’ to fix, which can then lead to more problems of their own, lead me to think that guilds are not a good solution. The question I must pose about guilds is this: what problems do they suggest to fix? They seem to be designed to decrease the power of international corporations, and the supply chain mentality of capitalism, but guilds are, in my eyes, the unholy combination of some of the worst parts of both unions and corporations, in a system designed for political exploitation.
“By the pricking of my thumbs, something wicked this way comes.” – Shakespeare
This entire discussion, however, is somewhat moot. Much like most discussions of relatively fringe economic and political ideologies, it ignores the dragon in the room. This is the capitalist problem, the very existence of capitalism as a system. Capitalism exists, and what it is undeniably very, very good at disrupting traditional, sluggish and closed economies, because they are very much ripe for profit at the hands of the capitalists. To be very blunt, I have yet to see any aspect of a guild distributist system, that even if it managed to be implemented, would be able to resist the return and collapse to capitalism for more then a couple of generations. The guild capitalist system is building a system that’s almost as vulnerable as possible to capitalist takeover to the first political or economic collapse.
The alternative proposals of distributists are much more functional, and as I mentioned before, things like anti-trust laws, co-ops and the corporate model put forward by Mondragon all provide new avenues for the ideology. I question why, then, a reasonable number of distributists seem to shun these ideas despite their clear ability to improve the lives of people. I came up with two real answers that question. First, there are several distributists, and left wingers in general, who don’t seem to care much at all for the reality around us and instead want to build disconnected theoretical systems without regard for practical problems (such as, for example, the problem that the existence of capitalism presents). To this I can only ask that people look to real problems, and real solutions instead of ideological platitudes. Second, some feel that disregarding a near revolutionary attempt to modify capitalism goes against the social teachings of distributism.
Distributism is more then just a left wing economic ideology. It contains a major social component, and emphasises things like moral economics and strong community bonds. This social aspect is also what differentiates it from other ideologies in the same ‘political sphere.’ Partly because of this differentiation, the more practical side of distributism, the part with collective corporations and some social compromises can be sidelined in favor of a more ‘pure’ ideological expression of distributist social policy. In some ways, even this more practical side fails to propose usable solutions. With some adjustment and work however, I think this side of the ideology could turn into something useable. Like all things however, it will require compromise and hard work.
“What embitters the world is not excess of criticism, but an absence of self-criticism.” – G. K. Chesterton
There is a social world idealised by distributist thinkers, and fundamentally many of the economic institutions are linked attachments to this vision. Like all men will, I find some aspects of the various theories that I disagree with, but others that I find more problematic in a general sense, in the sense that there are internal problems within them that will need to be addressed to at least make a best effort to avoid internal collapse. This is by no means a complete discussion or criticism of distributist social ideas, but more some simple problems that I find most social proposals face.
At the very core of the distributist social policy (I at least will argue) is an idea that comes from catholic social teachings. Subsidiarity, the idea that decisions should be made at the lowest level they can realistically be made at. This very concept is both difficult to implement because it requires balancing a constantly shifting power base wherein government must not be too strong nor too weak. It is however, interesting because it is a very good idea at the core of many western ideologies: the idea that by allowing people to make their own decisions, they are best able to see and address their own needs. More then that, the ability to use the ‘wisdom of the crowds’ or constant testing and adjustment from people making decisions and observing results allows constant improvements in efficiency. The larger problem presented is then how to protect that ideology.
But however extensive and far-reaching the influence of the State on the economy may be, it must never be exerted to the extent of depriving the individual citizen of his freedom of action. It must rather augment his freedom while effectively guaranteeing the protection of his essential personal rights. – Pope John XXIII
A system built on subsidiarity has a basic problem where economies of scale mean that large scale production is often more efficient, and that comparative advantage implies the way that something should be created. The second problem is by far easier to address. As has been said “If Brittan used comparative advantage to decide how to expand, it would still be farming sheep as it’s main industry.” In short, comparative advantage ignores a whole bunch of other aspects of production and society, and letting it dictate policy (China should make us goods because they do it cheaper, for example) has so many internal flaws that its hard to even cover all of them. The efficiency problem is a larger one. When the problem is raised, others are quick to decry the cause of materialism, talk about how we simply do not need all the goods we consume. This entirely misses the point, because the most dangerous part of economies of scale to a society on subsidiarity is the fact that it can apply to social and cultural phenoms. The internet is a very pertinent example: it is more influential and useful for it’s size, because more, better and cheaper information and goods are available. No ‘local internet’ can ever match it for it’s raw capability or production of any sort of culture. Material goods are related to materialism, but the mass production of attractive ideas is harder to deal with.
This is the multinational problem. Many of the most valuable companies on earth right now deal far less with physical goods and far more with social and cultural goods. A major portion of the value provided by smartphones and TVs is not the hardware, it is what they give access to. Multinational in general have for a very long time been better able to produce everything from culture to international polities. To give an example that may be somewhat on the nose, the Catholic church is the original multinational. Its production of ideas, culture and language acted as a unifying element in Europe while society was far more disunited. The Church however is no longer the only ‘kid on the block’ and partially by design, subsidiarity is badly vulnerable to a multinational culture engine. In the same way that the church may fill this role in society, so can Disney and with clearly worse intentions. Churches, for any disagreement with doctrine, are usually societies with the goal of helping people. Encouraging worship of the ‘mouse god’ has no such compunctions.
“To create what it does, Hollywood has to draw young people, often of unstable temperament, from all over the world. It plunges them into exacting work—surrounds them with a sensuous life– and cuts them off from the normal sources of living” – Max Lerner
A concept that seems to be popular to distributist is the ‘society of artisans’ as a solution to replace the ‘much-hated’ mass media. Distributist are almost by nature at least somewhat counter-culture and I think that nature has blinded the community to the reality of how culture and entertainment are produced. The promotion of local culture is something that should be celebrated, but there is no reasonable reality where a society of artisans are able to compete with mass culture, partly because culture is strengthened and improved (or ‘improved’) on by sharing and working with it. A fairly large number of cultural consumers are required to support an artisan of any kind, and just by nature not everyone will enjoy a local culture even when promoted. A society of artisans as a basic concept is an interesting idea that deserves support. A society of artisans as a tool to replace mass culture with local culture is a pipe dream. Local culture can be nurtured and supported, but in many cases, it requires a community to foster it, which is why there have been ‘cultural centers’ for hundreds of years. Hollywood and it’s ‘linked’ culture industries are not some weak, stupid entity that will simply be pushed aside by stronger social bonds. People study their art for years, and Hollywood is the worlds single largest cultural center. An actual (well designed, detailed and adaptable) social plan is required for any real attempt to deal with culture centers to have a chance of succeeding. We do not have one.
In an entirely different direction, the society that distributists imagine is one with great social capital. This social capital will be a driving engine of the distributist society. There have been a good number of studies covering the benefits of high social capital, but there are also a few noted drawbacks. The one that is concerning here is a basic problem when a society trust all its members. In a society where there is a great deal of trust, the society begins to be less able to judge the risk of both economic bubbles, and of social extremism. In a society where this trust is core to the very bonds of society, a dangerous scenario for collapse appears. An asset class or investment begins being overvalued by the community. It becomes tied to things like civic pride, and national adventure, and even as some people realise that heavy investment may be a bad idea, community trust keeps the assets propelled forward. The asset, as it was doomed to, then collapses. Angry and unwilling to blame themselves (as most societies are), a form of political extremism promising to fix the problems they have is presented, and is able to take hold. The distributist society is damaged, and may never recover parts of its former social capital. This is not a random scenario. I would characterise a more common example of this being the Scottish colonial expedition to Darien, which bankrupted the country and eventually lost both Scottish independence to the Articles of Union and damaged the social capital of the country so badly that is has never fully recovered. The rise of fascist states is another example, if a very tired one at this point. A distributist society need some major plans to help deal with this potential, and while it is by no means impossible, I have seen little to no discussion about it. No one wants the collapse of the distributist experiment to the Darien of Mars.
Others welcome the teaching on the “option for the poor,” the duties of government to protect the weak, the warnings against unbridled capitalism, but seem to ignore the centrality of family, the emphasis on economic initiative, and the warnings against the bureaucratic excesses of a “social assistance” state. – National Conference of Catholic Bishops
The problem of social security is one that must be asked about distributist societies. I have seen several good suggestions for what should be in place when we have finished building a distributists society, but the actions of the now there seems to be far fewer good suggestions about. Clearly, different elements of welfare do not function as one would want them too. Modern suggestions of different kinds all show up, but as I first read about them the distributist suggestions seemed strangely lacking. I later realised what was missing: distributist were making a usually implicit assumption that the church would be the main instrument for local charity. This problem doesn’t show up everywhere, but some thinkers seem to ignore both the fact that some places do not have a strong church to fill this role, or the problem (one that can be accepted or ignored, but still a problem) that charity from organisations like a church is highly variable, and that’s dangerous to those most in need. Past however you want to implement further charity, there is an absolute minimum that needs to be maintained, and just ‘remove and replace with a variable system’ may not fill that gap. While a dependency on the ‘servile state’ maybe be very much less then optimal, the solutions presented and embraced by distributism do not seem to yet fill that gap.
In many cases, I don’t really disagree with the stated aims of distributism. Every ideology has inherent problems within, and implementation is a matter of ‘picking your poison’ and doing your best to mitigate the known problems and find solutions to the new ones as they arise. Distributism however, seems to have a fundamental problem wherein those within the ideology both refuse or fail to understand the strengths of the system they are combating, and give desired results instead of proper policy suggestions. This flaw is by no means unique to the ideology, but distributist literature consistently (partially, probably because the authors are influenced by one another) fails to provide an actual account of what should be done, though it enjoys talking both about where we should go and how we got here.
For example, distributists often wish to see a proliferation of “people’s banks” in place of the larger institutions, and enjoy giving examples like their expansion in Lombardy or the attempted programs in eastern Canada. What seems far less common is actual accounts of how to do this. The solution is clearly not easy, in part because one must play a balancing act between what the government must do without giving government too much power to do it and at the same time decrease reliance on the very government required to execute this plan. This type of solution will therefor by nature must be one of compromise and tailored to a local environment, and may lack most to all the elegance normally in distributist writings.
“Somebody said to me, ‘But the Beatles were anti-materialistic.’ That’s a huge myth. John and I literally used to sit down and say, ‘Now, let’s write a swimming pool.” – Paul McCartney
I expressed the fact that distributists do not appear to recognise the main strengths of both globalism and capitalism. The strength of ‘global capitalism’ applies in three main places. First, it allows vast concentrations of capital to be applied to places where they will be most ‘efficiently used’ through things like the stock market. Even if unequal or imperfect, the growth driven by capitalism is undeniable, and the material gains offered by the system are tantalising. Second, the rapid exchange of ideas brought by immigration, working together and shared assets which allows improvement. At any time and with a relatively nominal amount of effort, an American can invest or do business in a Japanese company if they feel that new ideas, practices or concepts are better and may learn from that experience. Thirdly, it offers these major systematic gains (of material resources and new, efficient ideas) to the individual as apart of their participation in the system, without strings attached. Gains in the system are unequal, by nature and this allows someone to regardless of problems, traditions or circumstances a chance to fully participate in the system.
A most recent example of this, and why I think the basic proposition of traditional distributism without alteration is doomed to failure happens in Mongolia. Socialist society in the country was never truly able to take hold in the face of nomadic individualism. Global capitalism, on the other hand is rapidly evolving the culture. Capitalist expansion there is mostly unplanned and spontaneous, but material goods and global ideas are changing the culture. Shepherds are using motorcycles instead of horses, and the Bukhanka is becoming the preferred way to travel the steppe. While business was once done entirely with people you at least may have trusted and sealed with a handshake, more and more the nature of capitalism is substituting capital for relationships. Consumerism and the allure of new goods has taken hold in the country, driven partly by mass media and partly by observation of societies with more things. This transformation is able to happen because society doesn’t have to fully change to allow these modifications: if a former horseman wants to buy a motorcycle, he can. Traditional culture of a business by handshake, just like in the west and like promoted by distributism is under slow but inevitable siege by capitalism. I don’t see a distributist policy that can stop this spread.
When talking about protentional solutions that could be embraced, I think you cannot ignore the major catholic component to the philosophy. The very nature is intertwined with Catholicism, as it really is half of the basis for the ideology. This is not an inherent problem, but it is something that must be noted. Major portions of the suggested implementation that to just have holes. These, in reality, are not holes but instead places where a strong catholic church would fit into. The international connection, much of the charity, one of the main uniting forces for the much talk about community trust roles that are left to be filled by the church. If you are not catholic, or more distrust any church having that much social power as they once did, this must present an problem. More, I feel that this gap can be filled to less ‘wholesome’ intentions by different kinds of international organisation, which the ideology is by design quite vulnerable to. This presents another major issue when trying to combat global capitalism, who is defined by it’s powerful international organisations.
“All the exaggerations are right, if they exaggerate the right thing.” – G. K. Chesterton
My problem is one both of distributism, but more then that, of distributists. Nearly all distributists live and write about the west, the very heartland of capitalism. For all the rhetoric, western states have a high standard of living, mostly functioning institutions, complex economies and a falling number of Catholics. Distributism was born ‘once upon a time in the west’ and has developed with (at least a form of) western values and ideas. I fear radical distributist are picking just about the hardest battle they could fight, against what is probably the world’s most successful ideology to it’s most fortunate children in its homeland. There are other places in the world however, many places in both Latin America and Africa with many Catholics, vulnerable governments and a population base that has been damaged badly by the different forms of international capitalism. Yet I see almost no work, no ideas on how the ideology could be adapted to both the places that need it most, and the places where it has a chance to be attempted. The ideology is restricted by its nature. To restrict it only to its places of birth is to prevent it from having anything near its best chance to succeed.
Distributism is not a dead ideology by any means. Before a problem can be fixed, it must both be identified, and it must be decided if it is the problem that needs to be fixed at all. To me, the number of problems I see within the ideology, and the only solutions that I can suggest probably would no longer make me a distributist at all. I am not, however, the most brilliant thinker or do I believe I have even a basic portion of the possible answers. For distributism to move forward however, it must recognise where it has failed in the past, and where it is likely to fail in the future. Like most fringe political communities, many distributists have become more attached to the rhetoric and romance in the ideology then the reality of trying to build a distributist state. If distributism is ever going to be more then a collection of very pretty essays, and a footnote of capitalist policy, it needs to change that.
