Distributism: a Primer for Orthodox Christians

by David Holden

above: The multiplication of loaves and fishes.

All of Orthodoxy honors St. Nikodemos of Athos for providing us with the Philokalia. Less well known is his Exomologetarion: A Manual of Confession. First published in 1794, it contains the following story:

A king once happened to confess to a farmer, who was discreetly a Spiritual Father, and after having confessed his sins, said to the Spiritual Father, “I don’t have anything else to say to you.” “How so, O king?” said the Spiritual Father. “How? Have we finished the confession? No. You have said the sins of Alexis (stating the king’s first name), say now the sins of the king.” That wise Spiritual Father wanted to show by these words that every ruler and head, foreign or domestic, must not only confess as an individual or be examined by a Spiritual Father as a common person, but in addition to the sins he committed as a person, he must also confess those things he could have done as a ruler unto the good of his people but did not do, and as many bad things as happened to his subjects on his account which he did not correct, for which he will have to give an exact account to God.

This story illustrates the Orthodox Christian attitude regarding the relationship between faith and life in the world. When Orthodox people are in positions of authority and power, they are expected to follow Christ in those positions just as they follow Him in their private lives.

But what does that mean? The task of people in positions of authority is not to create a “Christian state” or “Christian corporation” or “Christian theater.” Only people can be Christian. Christ came to make people partakers of the divine nature, not institutions, agencies or businesses. The task is to do all that is possible to create an environment that will help people to see Christ, seek Christ, and find Christ.

To be more particular: How then do we bring the domains of commerce and finance under the lordship of Christ? We know the fundamental principles of Orthodox ethics that pertain to economics: that the material world was created good and beautiful and that it is appropriate to have and to pray for “the abundance of the fruits of the earth;” that poverty is an evil, not a virtue – a plight to be eased, not to be worsened; that indebtedness is not good; that living simply is; that the love of money has been and can easily be a root for all kinds of evil; that God commands us to seek justice and right relationships at all times and with all people; that charging interest is morally questionable, and certainly wrong when it is charged to people merely seeking the necessities of life; that it is about as easy for a rich person to enter the Kingdom of Heaven as it is for a camel to go through the eye of a needle. We Orthodox know all these principles, or at least we have heard them and know that we ought to practice them. The particular question here is, How do we create an environment that embodies those principles? Knowing that we Orthodox, like all the rest of the human race, are fallen creatures, prone to all kinds of sins both voluntary and involuntary, and knowing that all organizations and institutions magnify and entrench our sins, what kind of economic structures might restrain our sinfulness and encourage justice?

In this essay I invite my readers to consider an economic system known as distributism. The system is ancient and widespread, but this term for it appeared only in the last century. The term and original definition came from Hilaire Belloc and G. K. Chesterton in the early 20th century. Both were devout Roman Catholics, highly influenced by the social teachings of Pope Leo XIII, but also disenchanted with the socialists. The term fell into obscurity after Chesterton’s death in 1936 and Belloc’s in 1953, but the ideas did not. They deeply influenced E. F. Schumacher, whose book Small Is Beautiful has had a profound impact on environmentalists around the world. In recent years distributism has been directly and consciously revived within Catholic circles. The Distributist Review is a website covering many aspects of old and new distributist thinking. IHS Press has republished many of the older texts. Some impressive new material is also now available, especially by John Médaille of the University of Dallas. He displays a grasp of recent developments in economics and its mathematical foundations, neither of which is found in the distributist writers of earlier generations.

What then is distributism? To answer that question we have to ask, How is distributism both like and unlike the three other major economic systems that have arisen in the course of human history? In point of fact, no society has any economic system in its pure form; every society, both past and present, has some mixture of the four. Any society with a system predominantly of one type will have some features of the other three. The four systems are, therefore, descriptions of tendencies and philosophy, but even so, these distinctions are instructive.

Four Economic Systems: The dominant economic system in the world today is capitalism. It has evolved into its present form over the past five hundred years. The discovery of America, the advance of shipping and trade during the colonial era, the progress of technology and the Industrial Revolution, and the increasing sophistication of marketing, accounting, computing, and mathematical models of economics all contributed to its rise. On the positive side, capitalism supports the private ownership of land and business, rewards the combination of intelligence and hard work, and supports democracy and limited government. Capitalism harnesses the (natural) inclination of people to compete with one another and the (fallen and therefore actually unnatural) inclination of people toward greed and acquisitiveness. In his Economics for Helen, Belloc said that in a capitalist system, “Every man, however poor, feels himself to be free and to that extent saves his honor.” Consequently, capitalism immediately appeals to Americans, who value freedom above just about everything.

On the negative side, capitalism concentrates wealth in the hands of a minority. The claim that such a system had to develop because of colonial shipping or the need for vast sums of money to build factories during the Industrial Revolution is historically false. Capitalism developed because of the way that people – generally people already wealthy and powerful – have shaped laws and customs to their own advantage. In The Servile State, Belloc shows how England was already moving toward capitalism prior to the great age of colonization and long before the Industrial Revolution. It began with the closing of the monasteries in 1535. The same process – changing laws and structures to benefit the wealthy – still occurs. The present trend of CEO’s to earn as much as 600 times as much as the laborers in their companies is not an aberration. It is the natural and inevitable result of a capitalist system. If this process is left unchecked, capitalism eventually destroys freedom. While workers are legally free agents, they are economically powerless. Franklin Delano Roosevelt pointed to this in his State of the Union address of January 11, 1944. He said, “Necessitous men are not free men.” Furthermore, if left unchecked, capitalism destroys the legitimate power of government. When businesses and corporations become so large that the government cannot restrain them, they become the government. That is to say, democracy ends and plutocracy prevails.

In the past two centuries, the system proposed to replace capitalism was socialism. Its most famous proponent was Karl Marx. The essence of socialism is that the government of a state owns and controls all or almost all of the means of production and distribution. Rather than leave the economy to the greed and manipulation of private owners, or to be guided by an “invisible hand” (in the words of Adam Smith), the state would intervene. The great power of socialism, when it was merely a theory, was that its supporters were keenly aware of the injustices of capitalism. When countries put socialism into practice, however, its disadvantages were revealed in blood. Many lost their property, health, and even their lives to socialism. For all the promises made, socialism became one of the most tyrannical and oppressive systems in all of history, merely  moving the concentration of wealth and power from the hands of owners to the bureaucratic managers and leaders of the state. It proved to be much worse than capitalism.

Hilaire BellocAt certain times in history a third kind of economic system was employed. Belloc called it “the servile state.” It was fairly common in ancient times. Ancient Egypt was an example of this kind of economy. In ancient Egypt the Pharaoh owned everything and all the people were in fact his slaves. Ancient Sparta and the Roman Empire also depended on slave labor, as did the Confederate States of America many centuries later. Despite the obvious moral disadvantages, the servile state has a couple of very strong advantages: it is remarkably stable and people feel and really are secure, knowing that they will be fed and provided for. These advantages can be so strong that people have sometimes been known to support a servile state even if it means a loss of freedom and dignity.

Left Photo: Hilaire Belloc

Distributist writers speak of the servile state in two ways. On the one hand, some seem to believe that its essential element is that people actually and legally own other people. From this perspective, a servile economy differs from a capitalist and socialist economy in precisely a matter of law. Few if any capitalist economies have actually deteriorated into servile states, though Belloc argued that they eventually would. Chesterton even wondered whether brute force would return as a way of compelling people to work. It may well be argued, however, that the socialist economies did indeed devolve into servile states. On the other hand, others speak of the servile state more loosely, pointing out that people living under capitalist systems are treated like slaves. The term “wage-slave” is a figure of speech, but the intensity of feeling that it conveys makes it almost a literal term. The near-slavery of workers was egregiously obvious in capitalist England in the 19th century and was abundantly illustrated in the novels of Charles Dickens. In America today, we have a very high standard of living and even our poorest people live better than the poor of developing nations. But we also have now a global economy. The slaves of contemporary American capitalism do not live in America, but in countries where people work for less than a dollar an hour and where $60 dollars a week is not enough to live on.

The fourth system is distributism, but this is a strikingly misleading name. Belloc sometimes suggested calling it “the proprietary state,” which would be much less misleading. When people hear the term “distributist,” they often tend to think of a system in which money is taken away from the rich and distributed to the poor (who generally are thought not to deserve it). In other words, people mistake distributism for socialism. That is not the intention of the name.

Right photo: G.K. Chesterton

The idea in distributism is that the legal ownership of the means of production in the economy is distributed as widely as possible in the population. This implies a double comparison and contrast. On the one hand, as in capitalism, distributism honors private property and rewards intelligence, hard work, and entrepreneurialism. But simultaneously, and differing from the usual structure of capitalist governments, a distributist state takes measures to discourage the endless accumulation of wealth in the hands of a minority. While capitalism believes in private ownership, it also believes that only a few people should own what really matters, that is, the ways of producing money and goods. Distributism is not content, therefore, with great numbers of people owning their own homes or having shares in the stock market; they need to have real control over the land, farms, factories, and institutions that produce money and goods.  On the other hand, as in socialism, the state remains the most powerful entity in the country; the state does not permit plutocrats and corporations to usurp its authority, as they ceaselessly attempt to do in capitalist countries.  But simultaneously, and differing from the common ideal of a socialist economy, distributism is realistic enough to acknowledge that some are still going to be rich and some are still going to be poor. The rich are not automatically dispossessed, nor are the poor put on the welfare rolls.

Although is sounds utopian, a distributist economy was a common reality in the past. It is the natural form an economy takes when its societal structures are relatively simple and local. Imagine a primitive society. In such a society people accumulate wealth by the work of their own hands either on farms or in small industries. Some people do get wealthy, through the combination of hard work, intelligence, inheritance, and divine providence (usually but wrongly called “good luck”). But when trade is limited to an area the size of a county (a few hundred square miles), even the wealthiest people will generally not become vastly wealthier than their neighbors. Vast accumulations require theft, slavery, war, or some other form of exploitation. Numerous examples from history illustrate this kind of simple, local economy. The Roman Republic had a distributist economy before the rise of the Roman Empire. A distributist system gradually developed out of the ruins of the Roman Empire in the Middle Ages in Western Europe. When England began to colonize North America, people thought that England’s economy was still distributist, though they never used such a word for it and the dispossession of the monasteries had already steered their economy on the course toward capitalism. In early America, the economic system of the English colonies in the North was largely distributist; in the English colonies in the South, it was mixed with a servile state. Today, with the coincidence of modern technologies and the tradition of law and polity for the past century and more, capitalism has eclipsed distributism in the United States. But distributism is not forgotten. Remnants of the old distributist order remain in practice, in law, and in the collective memory of the nation. The importance given to personal home ownership, the “family farm,” and small business; the current movement toward eating locally grown food; the continuing appeal of arts and crafts as full-time occupations – all are living remnants of distributism.

Distributism’s goal is not to overthrow and destroy the capitalist system. It is too obviously successful and productive. Besides, the socialists tried that and failed. But the limitations and injustices of capitalism are real. The goal in contemporary distributism is to promote, enact, and entrench distributist ideals. The distributist hope is that at some point the scale will tip, and what is now a capitalist system will become a predominantly distributist system with capitalist elements still remaining within it. The goal is not to establish socialism, to give undue power to the state, or to play Robin Hood, but to change laws, especially regarding taxation, so that it becomes very difficult for money and power to become concentrated in the hands of the few and easier for ordinary people to own their own farms, workshops, businesses and industries. Distributism is economic democracy.

Sergius Bulgakov was one of the greatest, and one of the most controversial, of modern Orthodox theologians. He was reared in the faith, but lost it in his youth. He then studied political economy in law school, was a Marxist for a while, and published his first books on the subject of economics before regaining his faith and writing the many and profound books for which he is now remembered. Perhaps his best known book is The Orthodox Church, first published in English in 1935. In this brief introduction to Orthodoxy, Bulgakov included a chapter entitled “Orthodoxy and Economic Life.” He seems to be bound to the dichotomy of capitalism and socialism that has paralyzed discussion of economics for the past couple of centuries. Furthermore, the essay betrays no knowledge of any of the distributist writers or even of the Roman Catholic encyclicals that criticized both capitalism and socialism. It is therefore quite significant that Bulgakov should say: “Concerning distribution, the Church is called to be a social conscience which should raise its voice, speaking to the hearts of men and mingling in their public life.” And further: “The best economic form – whatever its name, and however it combines capitalism and socialism – is that which, in any given circumstances, best assures personal liberty, protecting it from natural poverty and social slavery.”

That is precisely what Belloc, Chesterton, Schumacher, and Médaille have called for. No doubt a distinctively Orthodox articulation of economic ethics would differ from the ways that Catholics and Protestants have responded to economic issues. Bulgakov suggested a few such Orthodox differences, noting that economic life falls within the scope of the Holy Mysteries, that agriculture, industry and commerce are aspects of the transfiguration of nature, and that democracy parallels the principle of conciliarity in Orthodox ecclesiology. It would be a great gift to the Church and to the world if Orthodox ethicists and economists would elaborate these suggestions. Nonetheless, the differences between distributism as it has developed in the West and distributism as it might be articulated in the East would be merely matters of detail. Both of them are seeking to beat swords into plowshares – and to find a way for all of us to live in peace and safety under our own fruit trees.

Suggested Readings:

Can distributism be grounded in Orthodox tradition? Read C. Paul Schroeder’s translation of St. Basil the Great: On Social Justice.

Hilaire Belloc is perhaps the primary writer to consult, though all his work dates to before World War II. For starters see: The Servile State and An Essay on the Restoration of Property. Belloc also wrote Economics for Helen, an introduction to economics for his niece, still strikingly helpful even though dated.

His friend G. K. Chesterton was prolific and hilarious. On this subject see The Outline of Sanity.

The British economist E. F. Schumacher taught the distributist message without using the term. See his classic, Small Is Beautiful.

John Médaille has written books for serious students of economics, superb for use in college and university settings. If you perceive the morality but question the real-world practicality of distributism, his works are the ones to read first. See The Vocation of Business and Toward a Truly Free Market.

Larry Burkett, a respected evangelical Protestant, was not distributist and his work may be faulted for being focused on individuals and not on systems and structures, but his Business by the Book is an excellent summary of ethical guidelines for commerce and finance.

Susan Pace Hamill has done some serious thinking about the moral implications of the existing American tax codes. See her The Least of These: Fair Taxes and the Moral Duty of Christians.

Tobias J. Lanz has edited a collection of essays, Beyond Capitalism and Socialism, that would be a great starter text for a discussion group.  Though distinctively Catholic, Orthodox and other Christians will find the book worthwhile.

David Holden studied Biblical languages at Duke University and received a Master of Theology at Southern Methodist University in Dallas, Texas. His spiritual journey brought him to Orthodoxy in August 1999. He is a professional counselor and clinical addictions specialist. He and his family live in the country outside Boone, North Carolina.

❖ IN COMMUNION / FEAST OF ST. ANASTASIA OF ROME / FALL 2010/  issue 58