You might not have heard of it, but distributism is a proposed third way economic system meant to mediate between capitalism and socialism. I don’t think there’s a lot of feasibility to the endeavor in general, but for now, let us focus on distributism as represented by Mark Gordon of Vox Nova.
One of the primary principles of distributism is encapsulated in this paragraph;
Ultimately, human-scaled means achieving the widest possible social distribution of the ownership of productive property. This includes land, but also homes and family-based cottage industries – including crafts, transportation, retail and light manufacturing – as well as cooperatives, guilds and trade associations, with ownership spread equitably among the men and women who participate.
However, I think there is something problematic with the idea that the means of production ought to be as widely distributed as possible. Let me outline what I think is the problem through a simple scenario.
In our scenario, John is an effective and productive farmer. He produces each season, by himself, 100 bushels of wheat and 50 bushels of corn. His neighbor who has the same amount of land and a tractor, Ron, only produces 50 bushels of wheat. After several growing seasons, John uses his profits to buy Ron’s land, employing Ron as help for his own production. In this season total production between the two increases. Now, John and Ron-under-John’s-employ produce 200 bushels of wheat and 75 bushels of corn. This is because John happens to be a better farmer than Ron, and was rewarded by the market because of it. As such, he was able to put a greater part of the available land and resources under his control, which he used to make even more wheat and corn for society than he could before with less land. This is a good thing. Higher supply = cheaper prices = higher standard of living that can be afforded by more people.
We should see, in this scenario, that because we allow the market to work, the economy naturally allocates more capital control to those who have proven themselves capable of using it with greater utility. John is richer, and even Ron becomes richer, all while there is more wheat and corn that society can partake of. Society, as a whole, is richer.
What should be noticed in this scenario? The fact that the means of production became less widely distributed. John at first owned only so much land and 1 tractor; at the end, John owned even more land and 2 tractors, and even had Ron under his employ. However, we can say that the means of production became more optimally distributed.
And this seems preferable. Where we have the option of wider social distribution vs. more optimal social distribution, we should choose the optimal social distribution, because this means there is more wealth to be enjoyed by society. If we were to prefer wider social distribution, then we should want John to not buy out Ron’s farm, even though this would mean society is deprived of greater wealth.
What can the distributist say about this? Would they really prefer that there be wider social distribution of the means of production, rather than a more optimal social distribution? If so, then they are really arguing that we should poorer, in order to serve some vague ideal, whatever that may be. Or, if they were to argue that the scenario was actually a presentation of distributism at work, then why not just admit that a free market is what they are arguing for?
I can understand the sentiment that we have lost something by coming through industrialization, but I think ultimately the sentiment is misplaced. What should be noticed is that we are richer as a society because we allow the free market to work in rewarding people with greater ability or desire to work to have greater control of the available capital. It only makes sense; after all, if you were building a dream sports team, you would pick the best players and give them the most play time. In a free market, this is exactly what would be achieved.
I can see nothing, in principle, wrong with the notion of all the world’s available capital being controlled by a single individual. Granted, that individual would have to be God in order for for that allocation of capital control to be socially optimal (since only God could overcome the problem of economic calculation), but my point is really that there is nothing in principle wrong with capital control being concentrated in a small segment of the population, provided this were the distribution achieved by a free market. This is because, after all, the free market, by its very nature, achieves the socially optimal distribution of capital control, which leads to the greatest amount of wealth in society.
So that is the problem I have with distributism, insofar as it is meant to oppose free markets.