A Working Model of Distributism

As Medaille suggests in this essay, people considering an alternative system to capitalism ask for an example of where it works. Here is Medaille’s example of a cooporative corporation in Spain:


Founded in 1953 by students of a rather remarkable parish priest, Father José Maria Arizmendiarrieta, it has grown from a simple paraffin stove factory into a giant corporate conglomerate with several hundred worker-owned firms involved in the manufacturing of the most sophisticated products, banking, retailing, research, education, construction, business services, and insurance. Today, the Corporation has €33 billion in assets, does €16 in sales, employs 104,000 workers, 81% of whom are worker-owners to whom they distribute 52% of the profits. But Mondragón is more than a mere “corporate success story.” It is a business model that is completely counter to the modern corporation.

In the first place, Mondragón is ruled by the principle of subsidiarity; that is to say, the higher level exists to serve the lower levels. Indeed, the individual cooperatives have the right to leave the corporation; participation is voluntary. This makes it impossible for a centralized authority to “lord it over” the member cooperatives. The corporation itself is ruled not by outside investors (there are none) but by the workers themselves. You might call this an inverted model of corporate organization. The firm is built from the ground up rather than the top down.

But that is only part of the story, because Mondragón is more than just a business enterprise; it is a social one. It is of course a profit-making enterprise, but profit is not an end in itself. It is merely a means to a much broader set of ends. In addition to its normal business enterprises, Mondragón runs an education system, a university, social safety networks, retirement systems, research and training institutes—things normally provided by governments through taxes—and provides all on its own resources, without the help of government. The guiding principle is solidarity, people caring for each other with the help of formal structures and institutions.

Between these two principles, subsidiarity and solidarity, Mondragón takes the principles of Catholic social doctrine and turns them into a living reality. And a successful one at that. The fear of implementing a “morality-based” system is that it might compromise the necessary business goals. But the opposite seems to be the case; the cooperative model doesn’t merely work, it works to produce a strong and growing network of firms that are fully profitable and competitive in local and world markets. Moreover, it lessens the need for big government by providing social services from its own resources. But more than these successes, what Mondragón really builds up is community, that sense of mutual caring and obligation that must be the real point of any sane economic system.

I’m not convinced that hope of this lies afoot for America. Silicon Valley seems to be the closest we could come to that, and from what I hear, everyone there is obsessed with profit and individualism. As one writer responding to a story about the new Juicero (a juicing machine that presses the liquid from a bag of fruit), Silicon Valley is “a stupid libertarian dystopia where investor-class vampires are the consumers and a regular person’s money is what they go shopping for.” Sounds about right.

But one may still hope that Americans outside of that cesspool can see that we have enough common needs and goals to dedicate our lives to satisfying them together with those who are around us, which strikes at a principle distributists may certainly understand better than capitalists: locality is better for people than globalism. Working with those around you is more likely to result in having your needs met than is trusting either a far off government or corporation. Libertarians and those that argue for more local power get this to some degree. The trouble is they stick to criticizing the government’s long-reaching power. Government and corporations are equally capable of working ot the detriment of communities across a nation, and now the world.


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