This video remains the best piece tackling Distributism:
It takes Hillaire Belloc’s The Servile State, and it points out the contradictions and inconsistencies in it. I knew the man behind the video personally, enough to say that he is one of bad character. That is all I will say. The video remains good despite him.
However, a gaping historical blind spot remains in this piece. He repeats Adam Smith’s assertions that the guilds acted like regulatory cartels and labor unions. I will spare the details, instead pointing the reader to scholarship showing how the guilds were nothing more than voluntary associations and brotherhoods of likeminded workers in the bibliography below. History shows that the guilds became what Adam Smith said they were because of expanding State power when Absolutism became dominant in Europe. Ryan Mello has written about Absolutism at length, and the reader can read more about it.
With this historical context, we can finally learn what Rerum Novarum aimed to say. The encyclical summarizes its context early.
Nam veteribus artificum collegiis superiore saeculo deletis, nulloque in eorum locum suffecto praesidio,
cum ipsa instituta legesque publicae avitam religionem exuissent, sensim factum est ut opifices inhumanitati dominorum effrenataeque competitorum cupiditati solitarios atque indefensos tempus tradiderit.
Malum auxit usura vorax, quae non semel Ecclesiae judicio damnata, tamen ab hominibus avidis et quaestuosis per aliam speciem exercetur eadem;
huc accedunt et conductio operum et rerum omnium commercia fere in paucorum redacta potestatem, ita ut opulenti ac praedivites perpauci prope servile jugum infinitae proletariorum multitudini imposuerint.
Since the old associations of craftsmen/workers were done away with this past century, and nothing took their place giving aid/defense,
public laws and institutions having stripped away the ancestral religion, it came to pass that workers were left helpless to employers’ inhumanity and the greed of unbridled competition.
this evil increases from voracious usury, once condemned by the Church but now practiced the same way in another species by greedy men.
now it happens that worker management and all commerce in goods have been reduced to the few powerful, so that the rich and well-off few have laid an almost slavish yoke on an infinite multitude of proletarians.
I have added my own translation since I found the official English one on the Vatican website unsatisfactory1. Take note: Rerum explicitly says that its proposals are in the context of Medieval institutions being torn apart. What does History show?
The guilds received increasing regulatory privileges in Early Modern times - the English Statute of Artificers (1562) notably mandating seven years’ apprenticeship, journeymanship, and other practices stereotypically attributed to the guilds. Brotherhoods and associations on the Continent were not spared either.
European realms centralized law and justice, built standing armies, and established singular bureaucracies to maintain regularity in their operations.
The guilds became part of the Absolutist machine by receiving royal assent to be local monopolies in their jurisdictions.
The Medieval political consensus collapsed, to be replaced by the Absolutist one. Absolutist structure and institutions in turn would be co-opted by burghers and eventually the professional-managerial class as Liberalism.
Frederick Kempin summarizes how the context Rerum Novarum was written came to be:
The fact that corporations had not, historically, been the form of organization of manufacturing enterprises, and therefore were an innovation, must in itself have been a strong influence against the free granting of charters. Also, corporations had long been associated with the concept of monopoly. Indeed, the granting of corporate privilege, with limited liability, was itself considered to be a type of monopoly, by way of legal privilege if not by way of trade or product, that was anti-democratic in nature. If the small, unincorporated businessman was subject to total financial ruin in a business failure, the argument ran, why should the corporate stockholder be exempt from the same risk? (Frederick Kempin. “Limited liability in historical perspective.” American Business Law Association Bulletin.)
In short, Rerum Novarum saw the current reality and gave prescriptions about how governments can exercise distributive justice more effectively. We can also list what it does not prescribe.
Rerum Novarum does not encourage the welfare state2:
Man not only should possess the fruits of the earth, but also the very soil,inasmuch as from the produce of the earth he has to lay by provision for the future. Man's needs do not die out, but forever recur; although satisfied today, they demand fresh supplies for tomorrow. Nature accordingly must have given to man a source that is stable and remaining always with him, from which he might look to draw continual supplies. And this stable condition of things he finds solely in the earth and its fruits. There is no need to bring in the State. Man precedes the State, and possesses, prior to the formation of any State, the right of providing for the substance of his body. (Official English translation)
Rerum Novarum does not encourage Syndicalism3:
Just as the symmetry of the human frame is the result of the suitable arrangement of the different parts of the body, so in a State is it ordained by nature that these two classes should dwell in harmony and agreement, so as to maintain the balance of the body politic. Each needs the other: capital cannot do without labor, nor labor without capital. Mutual agreement results in the beauty of good order, while perpetual conflict necessarily produces confusion and savage barbarity. (Official English translation)
Suffice to say that Rerum Novarum does not encourage Liberalism as properly understood, or Giovanni Gentile’s variant in Actual Idealism. Most of all, Rerum Novarum does not encourage “Distributism”.
So what does Rerum Novarum want? I would say that this paragraph captures the encyclical’s essence:
Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however - such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. - in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection. (Official English Translation)
Because of the Medieval order’s collapse, the government has to step in and try to make arrangements as beneficial as possible. Much of Rerum Novarum does not explicitly call for Reaction and Return, instead focusing only on what the current order was and is.
The real “common good” cannot be attained in Modernity - a real reaction for a Localist order is the only way for a “common wealth” to exist in its proper sense. Reading Rerum in Latin shows that its real concern is res publica: the public affair. The official English translation no doubt has fed into misconceptions about the encyclical.
After prescribing methods for modernity’s realms to operate, Rerum Novarum then recommends that men organize in their own voluntary associations to take back even a semblance of the old order:
We may lay it down as a general and lasting law that working men's associations should be so organized and governed as to furnish the best and most suitable means for attaining what is aimed at, that is to say, for helping each individual member to better his condition to the utmost in body, soul, and property. (Official English Translation)
Labor unions are only one aspect of this prescription, yet are the most cited and most brought up. In all reality, Rerum Novarum wants a radical turn to the old order: a return to Localism and tightly-knit communities and associations. Rerum Novarum holds that voluntary associations are how both Christian men can live in modernity, and how the old order can be restored.
At the time being, the condition of the working classes is the pressing question of the hour, and nothing can be of higher interest to all classes of the State than that it should be rightly and reasonably settled. But it will be easy for Christian working men to solve it aright if they will form associations, choose wise guides, and follow on the path which with so much advantage to themselves and the common weal was trodden by their fathers before them. (Official English Translation)
However, many things have changed since Rerum Novarum’s publication. Part of its earlier prescriptions to governments was to not prohibit these organizations:
Private societies, then, although they exist within the body politic, and are severally part of the commonwealth, cannot nevertheless be absolutely, and as such, prohibited by public authority. For, to enter into a "society" of this kind is the natural right of man; and the State has for its office to protect natural rights, not to destroy them; and, if it forbid its citizens to form associations, it contradicts the very principle of its own existence, for both they and it exist in virtue of the like principle, namely, the natural tendency of man to dwell in society.
We have since come into a time when governments prosecute the right of voluntary association. Pandemic measures, Critical Race Theory, intersectionalism, and other regime doctrines ensure this. Aristotle warned about this in his Politics:
tyranny aims… for its subjects…to distrust one another completely, since a tyranny cannot be overthrown until some people have trust among themselves. And this is the reason tyrants make war on decent people as detrimental to their rule—not just because such people do not think they deserve to be ruled like slaves by a master, but also because they are trusted, among themselves and by others, and do not inform on their own kind or anyone else.
Even without overt government action, anarcho-tyranny and Liberalism have bred low-trust societies. Our Lord Himself warned about this:
Many false prophets will arise, and many will be deceived by them; and the charity of most men will grow cold, as they see wickedness abound everywhere. (Matthew 24:11-12)
As Saint Thomas says, grace does not destroy nature, but perfects it. The virtues perfect man, but the Holy Ghosts’ gifts perfect the virtues. No one is saved in isolation barring exceptional hermits.
Hans Hermann Hoppe’s words now enter the picture:
The first obligation of any decent person is to himself and his family. He should—in the free market—make as much money as he possibly can, because the more money he makes, the more beneficial he has been to his fellow man.
But that is not enough. An intellectual must be committed to the truth, whether or not it pays off in the short run. Similarly, the natural elite have obligations that extend far beyond themselves and their families.
The more successful they are as businessmen and professionals, and the more others recognize them as successful, the more important it is that they set an example: that they strive to live up to the highest standards of ethical conduct. This means accepting as their duty, indeed as their noble duty, to support openly, proudly, and as generously as they possibly can the values that they have recognized as right and true. (Natural Elites, Intellectuals, and the State)
We must take Rerum Novarum’s prescriptions to their logical conclusion. Hoppe’s wished-for natural elites must become friends with each other. They must build new institutions, new firms, new schools, anything to parallel and counter the regime’s tentacles. They must show themselves as capable of being rulers in a new regime, that they may get popular support. Rerum itself touches on this last point:
Prejudice, it is true, is mighty, and so is the greed of money; but if the sense of what is just and rightful be not deliberately stifled, their fellow citizens are sure to be won over to a kindly feeling towards men whom they see to be in earnest as regards their work and who prefer so unmistakably right dealing to mere lucre, and the sacredness of duty to every other consideration. (Official English Translation)
See also:
For the reader
Gimbel, J. (1977). The Medieval machine: The industrial revolution of the Middle Ages.
Kempin, F. G. (1960). Limited liability in historical perspective. American Business Law Association Bulletin, 4(1), 11-34. https://www.bus.umich.edu/KresgeLibrary/resources/abla/abld_4.1.11-33.pdf
Lopez, R. S., & Lopez, R. S. (1976). The commercial revolution of the Middle Ages, 950-1350. Cambridge University Press.
Prak, M., Crowston, C. H., De Munck, B., Kissane, C., Minns, C., Schalk, R., & Wallis, P. (2020). Access to the trade: monopoly and mobility in European craft guilds in the seventeenth and eighteenth centuries. Journal of Social History, 54(2), 421-452. https://academic.oup.com/jsh/article/54/2/421/5644454
Reynolds, S. (1984). Kingdoms and communities in Western Europe, 900-1300. Clarendon Press.
Richardson, G. (2001). A tale of two theories: monopolies and craft guilds in medieval England and modern imagination. Journal of the history of economic thought, 23(2), 217-242. http://socsci-dev.ss.uci.edu/~garyr/papers/Richardson_2001_JHET.pdf
Richardson, G. (2004). Guilds, laws, and markets for manufactured merchandise in late-medieval England. Explorations in economic history, 41(1), 1-25. https://www.socsci.uci.edu/~garyr/papers/Richardson_2004_Explorations-in-Economic-History.pdf
Richardson, G. (2008). Brand names before the industrial revolution (No. w13930). National Bureau of Economic Research. https://www.nber.org/papers/w13930
Richardson, G., & McBride, M. (2009). Religion, longevity, and cooperation: The case of the craft guild. Journal of Economic Behavior & Organization, 71(2), 172-186. https://www.nber.org/papers/w14004
Salvestrini, F. (2017). Fraternilies, guilds, social welfare, and art in Medieval and Renaissance Florence. In L'assistència a l'edat mitjana (pp. 153-168). Pagès editors. https://web.archive.org/web/20220308091744/https://core.ac.uk/download/pdf/301573515.pdf
Official English translation: https://www.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html. Original Latin: https://www.vatican.va/content/leo-xiii/la/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html.
a form of government in which the state (or a well-established network of social institutions) protects and encourages the economic and social well-being of its citizens, based upon the principles of equitable distribution of wealth, and public responsibility for citizens unable to avail themselves of the minimal provisions for a good life.
bringing industry and government under the control of federations of labor unions by the use of direct action, such as general strikes, sabotage, or even State power as certain countries in the 1930s did.