Capitalism vs. Distributism

“A rising tide lifts all boats, ” we are told.  However, in the Third World the boats seem to often sail away, full of rich people and leaving the poor in sweat shops or as hungry as these people, who find that they can no longer afford the quinoa that was their staple diet now that trendy Westerners have raised the price for it beyond their meager means.  They get to work and starve.  We get to profit from it.  One of those Circle of Life things.

Or, as Chesterton said, the problem with capitalism is that there are too few capitalists.

Meanwhile, in happier news, the New Belgium Brewing Company is now 100% employee-owned.  These are the people who bring you Fat Tire Amber Ale.  This is what we call Distributism in action.

“But I thought Distributism was just Chesterton-speak for socialism!”

No “Socialism” is Chesterton-speak for socialism.  With capitalism, most people work for a few rich and powerful people but don’t own the means of production.  With socialism, most people work for the state, but don’t own the means of production.  With Distributism, you own the joint.  Amazing how simple that is, and how hard capitalists work to make sure that nobody understands that and mistakes it for socialism.  Socialism wants nobody owning property.  Capitalism wants a few people owning property.  Distributism wants everybody owning property and making their living from it.

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  • GudEnuf

    Capital is a “means of production”, but so is labor. In fact, the reason businesses hire workers is because they need labor in order to create their products. If businesses didn’t need labor in order to create wealth, why would they hire anyone?

    The proper term for machines, equipment, ect used to create wealth is “capital”. Capital can be a means of production, but so can labor.

  • TruthandFreedom

    There will be no distribution. There will be two casts, the wealthy elitists, and the poor – the slaves that do as they are told by there masters!!!

    • “joe”

      but that’s what we have now.

  • “Or, as Chesterton said, the problem with capitalism is that there are too few capitalists.”

    Coincidentally, that’s also the problem with distributism.

    • Jonathan Waldburger

      Yes, but in a completely different way.

    • ivan_the_mad

      Can you expand on that a bit, Tom? I’m genuinely interested.

      • I mean it in two ways.

        First, there are too few capitalists today for the distributist’s preference, which means that he is faced with the problem of creating new capitalists.

        Second, how many what I’ll call “natural capitalists” — meaning roughly, people who would succeed if staked three acres and a cow or the equiv. — there are in any given population is an empirical question. The distributist therefore has to deal with the risk of turning people into capitalists who don’t want to be, or shouldn’t want to be, capitalists.

        So, there are fewer capitalists than a distributist wants there to be, and there may well be fewer capitalists-at-heart than he thinks there are.

        • My mother in law has, I think 10 acres and 2 cows as her share from what they gave back after communism died in Romania. Close enough for distributism in action, right? Except that she’s a nationally ranked accountant, in her 70s, and completely unfit to farm at this point in her life. What do you think she does?

          Like much of the rest of the clan, she hands it all over to the one farm oriented guy (studied agronomy) in the clan and takes her share out in flour and meat once a year (though she has the option of cash). Which is, I believe, not distributist in result but capitalist.

          The kicker is, that she’s a natural capitalist. As soon as she wouldn’t go to jail for it, she started her own business and was successful and spent many years telling my wife (her daughter) that she was going to retire next year. It became a family joke, it lasted so long. She just couldn’t give it up.

          Yes, you are pointing out some very real difficulties with distributism. There are others you have yet to touch on, which is why this is a pipe dream that will make the world poorer without making it any more just.

        • ivan_the_mad

          Thanks for the reply, Tom.

    • Mark Shea

      Heh! Oh so true.

  • ivan_the_mad

    Heh, great news regarding NBBC. I already regard Fat Tire as a superior beer at my local grocer’s, and now I’ve one more reason to treat myself to it.

  • Jake

    Take the New Belgium news with a grain of salt. I used to live in Fort Collins and visited New Belgium occasionally. Its a rather liberal/hippie company (think Google) and seems more and more to be driven by profits rather than quality. On top of that it used to be led by a husband and wife team until they got divorced and the wife bought out her husbands share in the company. The whole “Belgium and bikes” image came from the husband who was inspired while touring Belgium on a bike. Now he isn’t even part of his own company! Its a pretty sad story.

  • ivan_the_mad

    “Amazing how simple that is, and how hard capitalists work to make sure that nobody understands that and mistakes it for socialism.” Quite true, although I think their self-applied label of “capitalist” is often misleading, since as Chesterton notes in The Outline of Sanity: “If the use of capital is capitalism, then everything is capitalism.” (This is from Chapter 1, and it’s certainly worth reading the whole chapter for more than just this quote).

    Or as the Church teaches in Centesimus Annus (section 42):

    “Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

    If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”. But if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.”

    • The Deuce

      Part of the problem is that “capitalists” didn’t make up the word “capitalism” at all. The modern usage of the term was invented by Karl Marx, who was inventing it as a foil, or a rival economic system, for his own “socialism.”

      In reality, it’s not an ideology like socialism, which has to be deliberately implemented by the government. It’s simply the state of affairs that obtains when the government doesn’t obstruct people from trading their property and services freely, but does punish fraud and violent coercion (which are bad in themselves, but also obstruct freedom of trade) equally.

      • ivan_the_mad

        I can certainly sympathize with your point, I feel much the same about contemporary usage of the word conservatism.

    • The article doesn’t actually say that the andeans are starving because all their quinoa is shipped out. They’re eating cheaper, imported foods instead. As soon as the quinoa craze dies out and prices go down, they’ll shift back. Net effect locally is an increase in material wealth, not a decrease.

  • The Deuce

    My main problem is, I haven’t been able to figure out how distributism is supposed to differ from “capitalism” *as a system of government*. It contains a number of fine sentiments that I share, such as the idea that it would be nice if a larger percentage of the population owned their own capital, but sentiments aren’t laws. Once you start trying to enforce the distribution of peoples’ property (by, for example, having the state tell people that they may not voluntarily buy or sell their property to someone else), it ceases to really be their private property, but is in effect the state’s, and then you have a form of socialism.

    Distributism, from what I’ve been able to tell, is simply capitalism as practiced by a highly moral people who work hard, plan for the future, and use their resources wisely.

    • ivan_the_mad

      One does have a right to private property, but that right is not absolute. That the state has a legitimate claim to activity in this area does not make it socialism by another form, since regulation is not at all the same as ownership. One must also bear in mind that distributism is an attempt to realize the social teaching of the Church, so the basis of a response to your concerns are to be found there.

      CotCC 2406: “Political authority has the right and duty to regulate the legitimate exercise of the right to ownership for the sake of the common good.”
      Rerum Novarum 47: “The right to possess private property is derived from nature, not from man; and the State has the right to control its use in the interests of the public good alone, but by no means to absorb it altogether.”

      • The Deuce

        It’s true that one doesn’t have a right to do whatever one wants with their private property, and all governments recognize this fact, including capitalist ones (after all, protection from fraud and coercion requires, at the very least, that people not be allowed to use the weapons they may own as property to threaten their neighbors and force them to give up their possessions for free).

        However, we are talking about the *distribution* of property specifically. The central idea of distributism is that it would be nice for property to be more widely distributed among the working masses. As it happens, this is part of the central premise of socialism as well.

        The difference is, socialism proposes to achieve this more even distribution by having the state take control of it, preventing individuals from buying or selling their property privately, thereby abolishing private property. Distributism, on the other hand, claims to respect the concept of private property, but this leaves it with no method of affecting the even distribution that it would like. If your answer on how to achieve this distribution is that the state in some way criminalizes, prevents, or punishes the private transfer of property, then you have effectively slipped into a form of de facto socialism.

        • ivan_the_mad

          I was reiterating teachings of the Church regarding the relation of the public authority and the market, not providing an exhaustive list of means for realizing the widespread ownership of property.

          The Church teaches us in CotCC 2425: The Church has rejected the totalitarian and atheistic ideologies associated in modem times with “communism” or “socialism.”

          The first of the social encyclicals, Rerum Novarum, categorically rejects the error of socialism. But this same encyclical from this same Church teaches in 46: “The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.” It immediately follows that in 47 with “Many excellent results will follow from this; and, first of all, property will certainly become more equitably divided.” And yes, this teaching later develops to include in the notion of property technical knowledge, knowledge of the means of production, etc in Centesimus Annus, not merely physical goods.

          So, no, the goal of distributism, which is also a stated goal of Church teaching, together with the legitimate involvement of the state, is decidedly not de facto socialism.

        • “As it happens, this is part of the central premise of socialism as well… Distributism, on the other hand, claims to respect the concept of private property, but this leaves it with no method of affecting the even distribution that it would like”

          Well, this is only true if you think of economic government as a centralized, top-down model, which is how we’re all pretty well conditioned to think of it. However, distributism is different in that it starts with communities of families and works its way bottom-up. This is how distribution of productive property is maintained – via communities. It isn’t imposed from the top-down. You might argue whether this model is unrealistic in the United States given our current circumstances, and you may be right, but there are still distributist principles to which a community may aspire.

    • Jon W

      Why not tax companies in proportion to their size? If a company wants to be as big and powerful as Wal-Mart, then they can, but the state taxes the hell out of them, if for no other reason than to enable society to repair some of the damage they do to local communities. Small businesses would be taxed hardly at all. This would encourage small, personally-owned businesses and discourage insanely huge, out-of-control capitalist endeavors.

      Is there a reason not to do this?

      • Hezekiah Garrett

        I’ve long called for this.

        Let a man or family engage in business almost completely free of any type of government regulation, oversight, or tax. If he wishes to enjoy legal fictions created by government, such as limited liability, let him be regulated into the ground.

        Isn’t ‘capitalism’ supposed to be about risk anyway?

      • I’m all for revisiting corporate lax law, given the anecdotes that make the news, but if large companies are bad per se, might it not be better to make them illegal than to tax the hell out of them? And if they *aren’t* bad per se, then would it be just to tax the hell out of them?

        • Jon W

          It would be just because their outsized power in the marketplace and the community creates problems that can’t be solved by standard market-based solutions. When companies are small, the damage they do is so small that the individuals and the society can absorb it without too much trouble; then consumers can punish them by taking their business elsewhere. When companies are big, they can do a lot of damage all at once and still be the only game in town. While some kinds of damage (environmental pollution) are easier to diagnose and treat (suing for cleanup costs), a lot of damage is incalculable. Therefore, we need a way to discourage that kind of centralization of power and provide the community with the resources it needs to address the problems large companies create. Taxes seem like a pretty good solution to me.

      • The Deuce

        Is there a reason not to do it? Well, employment for one. What makes a company big is how many it employs, so in effect you’re talking about punishing a company for providing too many jobs, which certainly doesn’t seem right to me. Perhaps in some cases, there are multiple companies competing in the same industry in a given area, so any potential employee who doesn’t join one will be snatched up by one of the others. But that’s not always the case, and I don’t think it’s right to punish companies for lots of hiring as such.

        • Jon W

          Nobody’s punishing a company for “lots of hiring as such.” We’re punishing it for being “big as such.” True, with being big comes lots of hiring, which is a nice thing. But with being big comes lots of other problems as well, e.g. outsized political and economic power that is rarely used wisely. I think the benefits of putting a governor on the engines of largeness outweigh the disadvantages of not having a gigantic job machine.

  • Mark S. (not for Shea)

    A rising tide does lift all boats.

    The problem is that a sinking ship drowns all passengers

    And over the past 50 years our leaders have instituted policies that got rid of all the little boats in favor of putting the majority on big boats.

  • Scott

    Regarding the issue of demand pricing Quinoa out of reach of its native eaters, there seems to be some disagreement on the point:

    Second, I haven’t interviewed a single farmer from the Altiplano region this week, or in my previous time
    in Bolivia, that has admitted to having given up eating quinoa due to the inability to afford his own grain.
    This is a myth and a falsehood. Quinoa farmers in Bolivia grow it for commercial gain. They set aside
    some grain, sometimes of lesser quality, or they sow a separate batch for personal use. I know this
    because I have spoken directly with many farmers on their land, in their quinoa fields…as recently as two
    days ago.

    As farmers become more well off, their eating habits become diversified as they can afford to eat other
    foods. They CHOOSE to eat pasta or rice because of its increased availability and, to them, because of
    its novelty. In Bolivia, the social stigma is that quinoa is still a poor person’s food, not a Whole Foods hot
    commodity. Though, efforts are being made to educate them on quinoa’s increasing popularity in the first
    world…something that they themselves are also figuring out due to the unprecedented deluge of cash
    flow coming their way. So as they gain more wealth, they look to eat the foods of those who they perceive
    as having a higher social standing. The situation is far more complex than simply saying “they can’t
    afford to eat their own grain”.

    — taken from

    • puzzled whom to believe

      This concurs with my family’s experience as poor dirt farmers in the 20th century. By poor I mean no indoor plumbing poor. The family consumed and put aside for the winter their own subsistence first, then sold the remainder for cash proceeds. Who in the world would do the reverse? If the farmers are using their increased cash to buy different foods, that is a choice they make, much like my family used their cash proceeds to buy what they wanted … shoes or whatnot …

      Clicking through the above link to a further embedded link from 1/14/13 yields this quotation: “They have westernised their diets because they have more profits and more income,” says Mejia, an agronomist. “Ten years ago they had only an Andean diet in front of them. They had no choice. But now they do and they want rice, noodles, candies, coke, they want everything!”

      Exactly. May God bless them every one.