Capitalist? Socialist? Distributist.

by Bill Powell - October 27, 2008

Reprinted with permission.

Small is beautiful. Or, the bigger the business, the bigger the bailout.

Congress has promised over $1 trillion from our hands to "rescue" gargantuan businesses. When corporations demand the largest free ride in our history, it's time to rethink economies of scale. Socialism is a silly solution – there, everything becomes one gargantuan business. We need a real solution: distributism.

As G. K. Chesterton wrote, "the cure for centralization is decentralization. It has been described as a paradox." In contrast to both socialism and capitalism, distributism aims for a wide distribution of private property. G. K.'s brother Cecil explained:

[A Socialist] desires the means of production to be the property of the community and to be administered by its political officers. A Distributist… desires that they should, generally speaking, remain private property, but that their ownership should be so distributed that the determining mass of families – ideally every family – should have an efficient share therein. That is Distributism, and nothing else is Distributism.

Capitalism and socialism are theoretically enemies, but for the ordinary citizen, their results are remarkably similar: little or no power. In socialism, power centers in the few who happen to run the government. In capitalism, power gathers in the few who happen to run the largest corporations. They promptly turn socialist – for themselves. Corporate welfare is far older than the recent bailouts; Wal-Mart alone has bagged over $1.2 billion in public funds.

What can we do? First, we have to stop thinking in terms of income: How much will this job pay? How big a mortgage payment can I afford? Mere income is unreliable. A gear slips in the Fed, and your 401(k) collapses. You get laid off, and there goes your house.

Even a full-time job won't guarantee survival. In 2002, the Pittsburgh aluminum company Alcoa paid employees in Acuña, Mexico, a base wage of only $1.20 per hour, even though a gallon of milk cost $3.27 (70 cents more than it cost in the States). Less than ten miles from Del Rio, Texas, these employees had to make houses out of pallets, tar paper, and cardboard.

Distributive justice begins with a just wage. Does a legal living wage cost "jobs"? Absolutely. So do laws against fraud – in the short term. But we clear these bad jobs to make room for good jobs with good businesses – if you can't make aluminum without paying more than a buck an hour, move over.

Unions are an essential (though abused) tool for defending a living wage. But income is unreliable without ownership. Distributism focuses on who owns the tools that make wealth; a company should be owned by its workers.

The traditional and best model is the family business. Apparently Wal-Mart is a "family business," but I'm referring to a family working for themselves. Such families have the most power to meet their own needs, and thus the most freedom to choose how to live.

True, even the most generously endowed Catholic family might have trouble assembling an ocean liner, but life isn't all the Queen Mary. There are many economic needs that could be – and used to be – met by family businesses. Those "efficient" corporations might not be so if we were to cut their billions in public subsidies.

On a level playing field, family businesses would thrive. And furthermore, when needed, family businesses could join forces.This would still leave aside projects like ocean liners, but for such needs, there's another just model: the co-operative, or co-op, a "jointly-owned and democratically controlled enterprise." The International Co-operative Alliance (ICA) explains,

Only in the co-operative enterprise are all three interests [ownership, control, and beneficiary] vested directly in the hands of the user… Because co-operatives are owned and democratically-controlled by their members… [they] balance the need for profitability with the needs of their members and the wider interests of the community.

The basic mechanism is similar to representative government. As a worker, your committee sets tasks in your workshop or department. You also choose a representative for the next level up.

In practice, co-ops are far more nuanced. For the Mondragon co-operative for example, the highest authority is the general assembly of worker-members. This elects not only a governing council and the council president, but also an audit committee over finances and representatives to the social council, which "generally represents frontline workers' perspective." Mondragon is a co-op of over 260 smaller co-ops, so each also elects representatives to the Co-operative Congress. Power is balanced and decentralized, according to the principle of subsidiarity: Every function is controlled at the most local level possible.

Does it work? Yes. According to the ICA, over 100 million people work at co-ops in various industries globally – 20 percent more than those who work for conventional, transnational corporations. (Our entire American civilian labor force is only about 155 million.)

And distributists might take subsidiarity even further: Maybe certain co-ops could be decentralized into family businesses themselves. Either way, the co-op success shows that no project is too big for a just structure.

We can't all own our work today, let alone our mortgaged houses. But in choosing where we shop, we can help build a distributist economy from the other side. Many already do; 1 in 4 Americans are co-op members. Often, co-ops and family businesses save you money. When they can't, it's often because you've paid the corporate "discount" in subsidies on tax day, or else it's deducted from sweatshop wages.

A recession makes it painful to pay "extra" to support a just business, but it also highlights why we have to. We can't escape centralized corporations today, but we can spend our money in places we respect, whenever possible. Though the State has a role in a just economy, our own choices of how we work and where we shop are far more important.

As Catholics, we have guidance here. In 1891, Pope Leo XIII launched a frontal attack on structural economic injustice with Rerum Novarum. As John Médaille summarizes, Pope Leo also gave solutions: "the just wage, the distribution of land, and worker associations." This teaching inspired distributism.

We may disagree on specific methods, but these principles are as clear and binding as Church teaching on abortion. Almost every subsequent pope has reiterated and developed this social teaching. Read for yourself.

As Pope John XXIII put it in Mater et Magistra,

Now is the time to insist on… the widest possible distribution of private property: durable consumer goods, houses, land, tools and equipment (in the case of craftsmen and owners of family farms), and shares in medium and large business concerns.

Let's get to it.

Bill Powell is a freelance writer and creator of the 2009 Social Justice Engagement Calendar. Visit his Web site at www.billpowellisalive.com.