Distributism: Economics Built On Revelation

Our recent economic woes have revealed the unstable foundations upon which our economy is built.

Divine Revelation illuminates all facets of man's existence and economics is no exception.  Economics must be enlightened by the moral teaching of the Catholic Church or run the risk of becoming dehumanized. Once the understanding of man's nature, dignity and destiny are removed from the foundations of economic theory and economic systems, those foundations will support nothing lasting or good.

EASLEY, SC (Catholic Online) - (Note from Deacon Keith Fournier, Editor in Chief: We are pleased to present Matthew Pelicano's first article for Catholic online. Our Mission is to "Inform, Inspire and Ignite". Within that body of teaching called Catholic Social Thought, there are principles for building an authentically human and just society, a culture of life, culture of the person and a civilization of love.

The Church does not espouse an economic philosophy. Rather, she proposes the principles which the faithful are invited to use in order to engage in the social mission. Matthew Pelicano presents a primer on such an economic approach, distributism, in this well written piece. We welcome more articles from him and from other faithful Catholics, pertaining to economic issues. We understand that will entail differing viewpoints. We welcome the exchange.)

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Turn on the radio.  Pick up any newspaper. Tune-in the evening news.  A high pitch of perplexity and anxiety permeates the economic news of the day.  Looming over us like a cantankerous, insatiable "god of the volcano," the economic Moloch demands, not just first-fruits, but the very substance of our livelihood. Somewhere along the way, economics ceased being the activity by which mankind provides for its material needs and became a creature existing of its own right.

Our recent economic woes have revealed the unstable foundations upon which our economy is built.  The "solutions" enacted by our government have proven ineffective and only broaden the reach of the crisis, laying upon the shoulders of our children and grandchildren the economic burden we have created and made more ponderous.  We cannot ignore the lessons this crisis is teaching us. We must realize that solutions and systems which attempt to meet the needs of the present, while compromising the ability of others to meet their needs in the future, are unsustainable and unjust.  We cannot expect to arrive at a stable and prosperous future while proceeding along the same path which led to disaster. But where do we turn for a solution?

Divine Revelation illuminates all facets of man's existence and economics is no exception.  Being a social science - concerned with human behavior - economics must be enlightened by the moral teaching of the Catholic Church or run the risk of becoming dehumanized. Once the understanding of man's nature, dignity and destiny are removed from the foundations of economic theory and economic systems, those foundations will support nothing lasting or good.

The Magisterium of the Catholic Church has outlined several principles upon which economic systems find their surest footing while safeguarding the dignity of man.  Most notably, in 1891, Pope Leo XIII issued the encyclical Rerum Novarum in response to the changing social landscape accompanying the Industrial Revolution. In it he speaks of the principle of subsidiarity which states that social and economic functions should, whenever possible, be managed by the least centralized or lowest order of society. The Holy Father also discussed the principle of distributive justice - strict justice applied evenly to each and every class of society - and the need for laws that favor and protect the ownership of the means of production by private owners.  These themes have been echoed more recently in Quadragesimo Anno, promulgated in 1931 by Pope Pius XI and Centesimus Annus, issued in 1991 by Pope John Paul the Great.

As a result of Rerum Novarum, during the 1920s and 1930s, great Catholic writers G.K. Chesterton and Hilaire Belloc defined an economic system constructed upon the principles described by Pope Leo XIII. Founded on subsidiarity and distributive justice (from which it derives its name), Distributism promotes: private ownership of the means of production; economic and social distributive justice; the intrinsic value of the individual; and the sanctity of the family. Belloc and Chesterton defined Distributism, but they did not invent something new in the process.  In fact, Distributism existed in practice, if not in name, for many hundreds of years.  During any time and in any place where society derived its living from privately-owned means of production, Distributism was afoot!  Conversely, any time and in any place where higher and more centralized forms of government deny the right to private ownership of the means of production - whether land, tools, capital or resources - Distributism and therefore distributive justice, subsidiarity and individual freedoms are under attack. 

So what is Distributism?  Let's begin by saying what Distributism is not. 

Distributism is not re-distribution of wealth, a staple of socialism. Distributism gets its name from distributive justice. Therefore, what Distributists seek is equal protection under the law for all citizens regardless of class or any other qualifier.  Distributists seek the widespread distribution of the ownership of the means of production to any who desire such freedom.  The most efficient means of accomplishing this is by defending and protecting the right to private ownership.  Clearly, defending and protecting the right of ownership is incompatible with the unjust redistribution of another man's property.

Distributism is not a form of capitalism.  Distributism is founded upon principles at odds with those upon which capitalism is founded.  For example, capitalism relies heavily upon usury.  Distributism is against the paying of interest on non-productive loans.  Capitalism differs with Distributism, most fundamentally, in its concept of the purpose of economic activity itself.  Capitalism seeks profit above all else, whereas Distributism seeks individual freedom in providing for man's material needs.

Distributism is not socialism. Socialism sets itself apart from Distributism in its conception of the role of government; the nature, dignity and destiny of man; the right to private ownership and the status of economic freedom as a good in and of itself. Distributism does not support the unbridled competition of dog-eat-dog capitalism, nor does it support the managed economy of socialist systems.  Distributism supports freedom, cooperation and subsidiarity.

So what does Distributism look like in practice?  Perhaps these examples will help answer that question.

A man I know owns the means of producing a livelihood for his family. He is a Distributist, though I doubt he'd think of himself as one.  He possesses a talent.  He owns the tools necessary to employ that talent.  He sells the work of his hands and supports his family in the process.  So, how is this any different from the man who employs his talents working for a Fortune 500 company and supports his family in the process?  The difference is in the ownership of the tools (the means of production) and the freedom that ownership bestows.  At the Fortune 500 company, the means of production can be taken away from its employees in the act of termination.  Loss of the ownership of the means of production constitutes an abridgment of economic freedom.  If the employees owned their own means of production, their economic freedom would be more secure.

Another man I know owns the means of producing his own biodiesel fuel.  He collects used cooking oil from a local restaurant and converts it into fuel for his modified car engine.  What started as a science experiment has turned into a money-saving solution to rising fuel costs.  He has achieved greater economic freedom by owning the means of production.

A young couple I know own the means of producing their own poultry.  In a backyard the size of their living room, they raise chickens for slaughtering (which they do themselves in the same backyard).  They have achieved greater economic freedom by owning the means of production.

A man I know owns his own web design business.  Another owns his own frozen yogurt restaurant.  Yet another owns his own video production company.  They are all attaining greater economic freedom by owning their own means of production.  This is Distributism.

It doesn't end there.  Large cooperatives, employee-owned companies and corporations exist throughout the United States and around the world, most notably the Mondragon Corporation in Spain (founded in 1956 by a Catholic priest).  These companies do not simply offer Employee Stock Ownership Plans (ESOPs), the employees own a stake in the company and, most notably, have an equal say in the direction and management of the company.  They own the means of production in a cooperative fashion and they enjoy greater economic freedom as a result.  Indeed, as Leo XIII points out in Rerum Novarum, "Men always work harder and more readily when they work on that which is their own..."

Therein lies a large part of the solution: Ownership.  Turn to the Magisterium of the Church and what do you find? The God-given right of private ownership.  Turn to the founders of our republic and what do you find? The God-given right of private ownership. Subsidiarity, distributive justice, ownership of the means of producing a livelihood: these are rights given to man by his Creator and they must be protected by law. 

The solution to our economic woes includes decentralization and a return to subsidiarity and the true "wall of separation" (as Thomas Jefferson termed it) between states rights and the constitutional role of the federal government. The solution to our economic woes includes distributive justice for all citizens under the law.  The solution to our economic woes includes the promotion and protection of individual ownership rights and the fostering of an environment in which small businesses and cooperatives can thrive under the law. The solution is Divine Revelation enlightening all aspects of man's existence, economics included, and the economic system built upon revealed principles: Distributism. 

Lasting change begins with the must foundational unit of society: the family. The domestic church must foster freedom as it fosters faith.  The faithful living of our Catholic Faith in all aspects of our lives and the influencing of the hearts and minds of those around us through good example, just dealings and the efficacy of grace won through prayer can change the character of our communities and ultimately our nation.  Besides, are we not called to be leaven? Even if we cannot start our own business, grow our own food or produce our own biodiesel fuel, we can live by Distributist principles as much as possible and support others who do the same.  Hence, the Distributist Exchange! 

The Distributive Exchange (www.DistributistExchange.com) is a virtual marketplace enabling a network of skilled craftsmen, service-providers, family-owned companies, worker-owned cooperatives and small businesses to provide their products and services to a wider clientele.  The Distributist Exchange exists to bring together those who subscribe to the principles of subsidiarity and Distributism for the furthering of these principles in the most practical of ways: the facilitation of commerce for the support of the family and the good of our nation.  The Distributist Exchange is being marketed to like-minded people through channels such as Catholic Online. Though currently in its infancy, it seeks merchants nationwide to become members.  What we are building is an alternative economic system to meet the material needs of those involved in a manner conforming to the principles set forth by the Magisterium of the Catholic Church.

We cannot expect to arrive at a stable and prosperous future unless we divert our course from the path which led to economic disaster.  Divine Revelation alone can guide us to the establishment of economic foundations which support man's material necessities while safeguarding his God-given rights and freedom. Distributism fits the bill.

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Matthew Pelicano is the founder of the Distributist Exchange (www.DistributistExchange.com) and owner of a web design and content management company.  He has over 12 years experience working in management within the financial, technology distribution and government reseller industries. He lives in upstate South Carolina with his wife, Jennette, and their three children.

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