Monday, July 25, 2011


Distributism is built on the belief there should be a decentralized, wide spread ownership of the means of production in order to allow the majority of people to make their living without relying on using the property of others. It is the antithesis of Capitalism, Socialism or Communism.

Capitalism is at its roots a sort of an economic
Darwinism, either producing well paid workers or exploiting them while destroying their dignity and freedom.  Often it leads to a plutocracy.  G.K. Chesterton said it well, "The problem with capitalism is that there are not enough capitalists."

Socialism and Communism are even worse as economic systems and ideologies springing as they do from Marxism which taken to its logical conclusion invariably leads to totalitarianism. 

In the words of Winston Churchill, “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”  Throwing in the wit and wisdom of Alexis de Tocqueville for good measure, “Democracy and socialism have nothing in common but one word, equality.  But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”

Regarding Communism does it have any defenders left (no pun intended)? Really its failures are legion and so painfully self evident.

Distributism was designed by G.K. Chesterton and Hilarie Belloc in response to
Pope Leo XIII's encyclical, Rerum Novarum, but please don’t obsess over its Catholic roots.  Faith builds on reason. By all means subject this economic theory to logic and investigate the facts.

I challenge anyone to dispute the wisdom of these words from Rerum Novarum (over a hundred years old but as fresh as this morning’s sunrise) and their
application to reality.
“To labor is to exert oneself for the sake of procuring what is necessary for the various purposes of life, and chief of all for self preservation… 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; nay, they learn to love the very soil that yields in response to the labor of their hands, not only food to eat, but an abundance of good things for themselves and those that are dear 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. And a third advantage would spring from this: men would cling to the country in which they were born, for no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life.”
Truth and common sense are the foundation Distributism is built on.  This is true sustainability long before it became a buzz word
complete with the triple bottom line including genuine social equity!

Examples of Distributism would be not only farmers owning their own land and equipment or those skilled in the trades who own their own tools, but also Spain’s Mondragon Corporation a global industrial co-operative. 

It’s summed up concisely in their introduction on the company’s website:
“MONDRAGON Corporation is the embodiment of the co-operative movement that began in 1956, the year that witnessed the creation of the first industrial cooperative in Mondragón in the province of Gipuzkoa; its business philosophy is contained in its Corporate Values: Co-operation, Participation, Social Responsibility and Innovation.  The Corporation’s Mission combines the core goals of a business organization competing on international markets with the use of democratic methods in its business organization, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment. In terms of organization, it is divided into four areas: Finance, Industry, Distribution and Knowledge, and is today the foremost Basque business group and the seventh largest in Spain.”
In 2009, the United Steelworkers entered a framework agreement with MONDRAGON in order to create manufacturing cooperatives that married MONDRAGON’s worker ownership arrangement of “one worker, one vote” with collective bargaining principles, their goal being good paying jobs created by investing in workers and their communities. 

Employee Stock Ownership, Equity Compensation plans and co-ops where you belong, maybe even are employed yet without involvement with management, have similar elements but lack the key principles of Distributism which are ownership and management through the democratic participation and control of the workers plus a commitment to the common good.

Distributism has proved itself workable on both the micro and macro levels, where the jobs deliver good wages along with the dignity of ownership, employees are active and genuine stakeholders not only with a place at the table but together literally owning it.

Mondragon’s model is practical and visionary.  I will not be able to do it justice in such a short article but I’ll try to lay out how it operates under a form of Distributism.  It is an industrial co-operative.
Here is the basic structure of Mondragon according to its website:  
“As a business association, MONDRAGON’s activity is structured into four areas - Finance, Industry, Distribution and Knowledge – which function separately within a group strategy, coordinated by the Corporate Centre.
“The Finance area includes the activities of banking, social welfare and insurance. The Industry area consists of twelve Divisions specializing in the production of goods and services. The Distribution area includes commercial distribution and agro-food businesses, and the Knowledge area comprises Research Centres, a University with 4000 students and several Vocational Training and Education centres.”
“Each individual Cooperative is one of the building blocks in the organizational structure of  MONDRAGON, with the Congress being the supreme body for joint expression and sovereignty, with its Steering Committee as the highest management and representative body, whose duties include the election of the CEO. Those Cooperatives that operate within the same business sector comprise a Sectorial Group, with this in turn being part of the corresponding Division.”
Each Division is headed by a corporate Vice-president. The President of the General Council and the 14 Vice-Presidents, together with the Departmental Managers at the Corporate Centre make up MONDRAGON’s management bodies. The General Council is the body charged with drawing up, coordinating and applying corporate goals and strategies.
“In turn, the Standing Committee of the Cooperative Congress is the governing body whose mandate is to oversee and drive the implementation of the policies and agreements adopted by the Congress itself, permanently monitoring MONDRAGON’s business development and the management performance of the General Council’s Presidency. The Committee has 19 members chosen in representation of the Corporation’s various Divisions.”
“The Cooperative Congress is the supreme expression of the sovereignty and representation of MONDRAGON, being the equivalent of a General Meeting. It consists of 650 delegates who represent all the member cooperatives and its decisions are binding for each and every one of them.”
Using Mondragon as a starting point we can build a theoretical Distributist industrial co-operative.
To become a co-operative the company must be owned and operated by the workers with open membership and the democratic principle of one person one vote.  Workers are members of the General Assembly holding the full sovereignty of the co-operative ratifying and approving all major procedures policies and finances.
When a worker joins a co-operative they must purchase a capital holding in the company. The company could lend the worker money for their share at reasonable interest rates; deduct it from their earnings, or both. Their shares increase or possibly decrease over the years and when they leave or retire the company buys them back and they are given that money along with any pension or 401K earnings. It is important that only active workers own shares in the company otherwise they lose control to remote and possibly disinterested investors.  
Annually the company’s surplus earnings could be divided in the following manner (though figures may change except the percentage to the community): 10% goes to the community for charitable or other purposes to help the common good; 36% is reinvested into the company or savings while 52% is distributed to the workers according to their salaries and positions. 
Under one worker one vote a General Assembly elects a Governing Council which is a non-paid board that appoints a General Manager and works with that person to run the company.  The Governing Council has one person from each department, creates some sub-groups and a Social Council meeting the concerns of the workers and community.  The General Assembly ratifies everything including joining fees for new members and method of payment, general polices and strategies, approving the rate of interest on capital contributions, etc.   The CEO who is not usually a member of the co-op is often limited to a salary no more than 3 to 4 times greater than the average worker but in good years could receive bonuses while others have their capital shares increased.
I probably have missed something but you get the point.  There are many hybrids to use or try.   State, federal, and local laws will have to be designed to encourage worker owned co-ops and remove tax impediments.  Right now small businesses could be adapted to Distributism and many partnerships might already be operating as such.
Principles of Distributism are also applicable to public policy merged with subsidiarity and solidarity.

Subsidiarity is another concept originating in the Catholic Church.  Simply put subsidiarity wisely mandates in social doctrine that organizations exist to serve the individual so they should not interfere with what an individual can do on their own and larger societies should not usurp authority capably held by smaller ones. In governance, subsidiarity requires decisions and actions must devolve to the lowest practical level into the hands of the least complicated and smallest competent authority. Solidarity unites those with common interests, purpose or responsibilities and serves as the touchstone to determine the appropriate size of  the organization or government needed to effectively address the concern or accomplish the common objective.

Distributism, subsidiarity, and solidarity could address immigration and foreign aid to name just a few of the major challenges facing our nation and others across the globe.

Citing again Leo XIII in Rerum Novarum, “no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life.” 
Obviously a strong Mexican economy with a stable government would curtail the need to look for jobs and a better life in the United States.  Regarding the 11 million or so people residing in our country illegally we should establish a path to citizenship coupled with an effective guest worker program with reciprocal benefits for each nation and our immigration problem would be solved.

In Caritas in Veritate, Benedict XVI reminds us,  
“Corruption and illegality are unfortunately evident in the conduct of the economic and political class in rich countries, both old and new, as well as in poor ones. Among those who sometimes fail to respect the human rights of workers are large multinational companies as well as local producers. International aid has often been diverted from its proper ends, through irresponsible actions both within the chain of donors and within that of the beneficiaries.”

Companies operating under Distributism would have the ability and guiding principles to deliver international aid efficiently and compassionately utilizing subsidiarity and solidarity.  Once emergency concerns were met the country in question could be empowered through education and a fair assessment of their economic strengths and natural resources.  Training them in Distributism would help build a sustainable local economy along with an international market when ready, under their own control stopping the exploitation by richer countries and breaking the cycle of ignorance and poverty.  Yes it would be a long process but anything worth doing is and restoring the dignity of a people ought to be the objective of every country in true solidarity of the human race.

Imagine a Haiti rebuilding itself into a sustainable, economically vibrant, and stable country.   Billions have been poured into it to little avail, but if a portion of those funds went into education, and training programs operating under principles based in natural law and applied through Distributism, progress would be made and dignity with economic justice restored!    And if it could happen in Haiti it could happen anywhere!

When I was young buying local, subsidiarity, and solidarity were a fact of life in our city neighborhood just like in other areas, urban, suburban and rural throughout the United States and other parts of the world.

We walked to local schools watched over by neighbors we knew and played in city parks supervised by caretakers whose names were as well known as the park.  Corner grocery markets abounded in our neighborhoods along with butcher shops, dairies, barbershops, beauty parlors, five and dimes (who remembers them), pharmacies with comic books and soda fountains (soda jerks were nice then, now too often there are real jerks in many big box stores), cleaners, tailors, gas stations (with real mechanics and pop machines), hardware stores, bait shops, and sometimes the doctor’s and dentist offices.  We could walk to the movie theaters and farmer’s market and every other day in summer, the ice cream cart and the singing farmer would come by with his truck packed with the fruit of the month.   He would sing “Strawberries, Strawberries, Chhheerrries!”  Local factories supported bars, restaurants, all of the other establishments and their employees raised good sized families. Obviously in those days we were sustainable.  Our city ran like clockwork operating its parks, pools, police, and fire departments fully staffed and repaired the roads all before the 1967 income tax was created.  Subsidiarity was the rule whether people recognized the term or not and efficiency the order of the day.  It had to be or things wouldn’t have worked.

Nascent Distributism lived in the partnership of small businesses operating on handshakes and honor.  Solidarity had families taking in the children of burned downed houses into their homes until the new house was ready or rebuilt. People fed neighbors as acts of friendships when they knew they needed it but preserved the recipients’ dignity by thanking them for taking the surplus food off their hands so it wasn’t wasted.   Anti-Labor Republican small businessmen created “work” for Democratic union members on strike. 

 Charity in Truth was always lived by many.

We look to the past and learn as the challenges of the future face us.

Distributism is a Third Way offering hope to America and to our Global brothers and sisters.  I have not done it justice in this article, but I believe it is the justice we need to do if we want prosperity, freedom and even peace.

Imagine the success of China, Russia and India if they embraced Distributism, built internal markets, created labor intensive industries producing quality goods, cleaned up their pollution, focused on sustainable agriculture, fishing and food production.  Distributism would also require ministering to their vulnerable, building real community by respecting human rights and defending life from the womb to the tomb. It would enhance the beauty of their ancient cultures and make them economic giants on the global stage.  Tourists flocking to their countries spending lavishly could fund a renaissance of arts returning them to the historical preeminence China, Russia, and India once enjoyed.

Instead if they keep imitating the worst of our materialism and continue to wallow in greed, incompetence, and corruption while poisoning their land and air, they will fall into an abyss of poverty, violence and disorder.  Without changing its current path and policies I give China less than 10 years to self destruct pulling neighboring countries down too including India.  Russia will not last much longer. War is often the fruit of such a fall.

Distributism must receive serious consideration from all concerned about our future. Economic vitality, justice and peace are all on the line if we ignore it.

I end with the words of Pope Benedict VI from Caritas in Veritate.

“All our knowledge, even the most simple, is always a minor miracle, since it can never be fully explained by the material instruments that we apply to it. In every truth there is something more than we would have expected, in the love that we receive there is always an element that surprises us. We should never cease to marvel at these things. In all knowledge and in every act of love the human soul experiences something “over and above”, which seems very much like a gift that we receive, or a height to which we are raised. The development of individuals and peoples is likewise located on a height, if we consider the spiritual dimension that must be present if such development is to be authentic. It requires new eyes and a new heart, capable of rising above a materialistic vision of human events, capable of glimpsing in development the “beyond” that technology cannot give. By following this path, it is possible to pursue the integral human development that takes its direction from the driving force of charity in truth.”

Therein lays the hope of Distributism.  

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