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The Theory of Distributism
More than a hundred years ago, two literary giants developed an economic theory that resonates today when the inequality between the mega-rich and everybody else is growing wider and wider.
G.K. Chesterton and Hilaire Belloc developed the theory of distributism, a concept that favours the encouragement of small businesses over subsidizing gigantic corporations.
It is based on the premise that the best social order is one in which the ownership of the means of production and property is widely held.
Theory Grounded in Catholic Social Teaching
Many Christian leaders observed that the Industrial Revolution had created a society in which a tiny number of extremely rich people owned disproportionately large parts of the economy while vast masses of others possessed nothing.
This disparity was noted by Pope Leo XIII, who wrote in the 1891 encyclical De Rerum Novarum, "If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another. A further consequence will result in the great abundance of the fruits of the earth. Men always work harder and more readily when they work on that which belongs to them [ . . . . ] That such a spirit of willing labor would add to the produce of the earth and to the wealth of the community is self-evident."
Both Chesterton and Belloc were devout Roman Catholics (Chesterton as a convert), and Christian social philosophy informed their distributist theory.
Creating a New Political Theory
The author of the Father Brown books and much else besides, G.K. Chesterton, was inclined to be a little absent-minded. In her 1943 biography of the man, Maisie Ward recounts how he sometimes got lost on his way to appointments.
Finding himself one day standing on an unfamiliar railway station platform, he sent a telegram to his wife, Frances. Ward writes that the telegram read, " 'Am in Market Harborough. Where ought I to be?'
"Desperate, she wired, 'Home,' because, as she told me later, it was easier to get him home and start him off again. That day’s engagement was lost past recall."
Perhaps G.K. Chesterton’s mind was preoccupied with other matters, such as unravelling a complex political notion that had come to him.
He didn’t like capitalism, and he didn’t like socialism either, so he set about developing a political ideology he could live with. He enlisted the services of his friend and fellow writer Hilaire Belloc, and together they came up with an idea they called "distributism."
The notion, which was born at the end of the 19th century, continues to have its adherents today who express their views through The Distributist Review.
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Small Is Better
Distributism sees the widespread ownership of productive property as essential for human progress. In a series of essays called The Uses of Diversity, G.K. Chesterton puts it as follows: "Too much capitalism does not mean too many capitalists, but too few capitalists." So, that means developing small family-run businesses, small farms, and a realization that technology cannot solve all of society’s difficulties.
Instead of capital being concentrated in a few hands or owned by the state, it should be distributed into the hands of many.
The Humanist Society of New South Wales states, "Opposed to laissez-faire capitalism, which distributists argued leads to a concentration of ownership in the hands of a few and to state-socialism in which private ownership is denied altogether, distributism was conceived as a genuine Third Way, opposing both the tyranny of the marketplace and the tyranny of the state, by means of a society of owners."
Government Encouragement of Distributism
Chesterton and Belloc (George Bernard Shaw coined the word "ChesterBelloc" to describe the two friends) said:
- Governments should pass laws to help small businesses rather than large ones;
- People should shop at small, family-owned businesses and not in retail chain stores;
- Trade guilds that supported skilled craftspeople ought to be revived;
- Big corporations should be taxed more heavily than small ones; and,
- Free legal services should be available to the poor to protect them in property disputes.
The two men believed that ordinary people could alter the way in which society functions and that, through distributism, the extremes of affluence and poverty could be eliminated. They did not seek to create a society in which everybody had equal wealth but one in which wide inequalities were banished.
“Under capitalism, man exploits man. Under communism, it’s the other way around.”
— Attributed to John Kenneth Galbraith
Distributism in Practice at Mondragon
Don Jose Maria Arizmendiarrieta was a young Catholic priest who was assigned to the parish of Mondragon in the Basque country of Spain in 1941. He found a town that was still suffering from the aftermath of the Spanish Civil War, where unemployment was high.
He gathered together a group of out-of-work oil lamp makers and formed the Mondragon Co-operative. It has grown to become the seventh largest industrial group in Spain. The 100,000 workers employed by the many co-operative companies that make up Mondragon are also the owners.
The group operates on broad distributist theories. According to the Humanist Society, the aim is "To consistently improve living standards through sustainable development and to rebuild community and culture as opposed to promoting dog-eat-dog adversarial individualism."
Giles Tremlett of The Guardian visited Mondragon to see how it was weathering a severe economic storm. He found an enterprise that was doing far better than other Spanish businesses.
By agreement, the wages of workers were dropped by five percent to ten percent so that layoffs could be avoided. "But, unlike other companies where wages are cut while executive pay soars,” wrote Tremlett, “managers are taking the biggest cuts. Their salaries are already capped at eight times the lowest paid worker."
- According to a 2021 report from Business.org, "The average CEO earns $21.45 million dollars a year. That’s 400 times more than what an average employee earns ($51,394)."
- In January 2017, Oxfam reported that the world’s eight richest people owned assets equal to the wealth of the poorest half of the planet’s population.
- According to one story, Father Jose Maria Arizmendiarrieta fell afoul of the dictatorship of General Francisco Franco and was scheduled to meet up with a firing squad. However, through some sort of bureaucratic muddle, he was released from prison instead.
- “Gilbert Keith Chesterton.” Maisie Ward, Sheed & Ward, New York, 1943, republished 2006.
- “The Uses of Diversity.” G.K. Chesterton, Methuen and Company, 1920.
- “G.K. Chesterton’s Distributism.” Dale Ahlquist, Distributist Review, August 11, 2011.
- “Distributism as a Means of Achieving Third Way Economics.” Richard Howard, Humanist Society of New South Wales, undated.
- “Mondragon: Spain’s Giant Co-operative Where Times Are Hard but Few Go Bust.” Gile Tremlett, The Guardian, March 7, 2013.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2018 Rupert Taylor