I agree that increasing the percent of business owners is a good goal and that we should make it easier for individuals to start businesses.
Under distributism, who does the distributing?
Hilaire Belloc gives several suggestions for that in Section 7 of “The Servile State”:
[1.] “If I desire to substitute a [large] number of small owners for a few large ones in some particular enterprise, how shall I set to work?”
[2.] “I might boldly confiscate [the large property] and redistribute [it among many].” But this would involve “enormous and innumerable separate acts of injustice.” Plus, “[this] would so disturb the whole network of economic relations as to bring ruin at once to the whole body politic.”
[3.] “I [could] proceed more slowly and more rationally and [direct] the economic life of society so that small property shall gradually be built up within it.”
[4.] For example, “* benefit small savings at the expense of large.”
[5.] I could encourage people “[to] build up small property through thrift.”
[6.] “Or, let the policy be pursued of [taxing] undertakings with few owners…and of subsidising with the produce small holders in proportion to the smallness of their holding.”
Hilaire gives a few other general suggestions in that section of his book. But it should be pointed out that #2 above explicitly rejects the Communist model where the government confiscates large property and redistributes it.
In a seventh quote that I’ve reproduced below, Hilaire considers whether it would be slightly better if the government
bought out large properties and then redistributed them, because at least no one’s property would be stolen in such a scenario. But he identifies that idea as having numerous problems. I think an obvious one is this: a government couldn’t buy large properties and give them away for very long before running out of money. Plus, that would still make the government a distributor of property, and Hilaire seems to think that is dangerous.
I think suggestions 3-5 make more sense. #5 seems to be a project of education. If you educate people toward building up their own property through thrift, the hope would be that people would eventually transition from thinking of themselves as dependent on large companies for their livelihood. Gradually, with a project of education about the benefits of small ownership, including in business, the norm might change to where people generally make their livings off of their own property rather than off of someone else’s.
I also think there’s something to #6, except I don’t like the government subsidizing things. Instead, perhaps the government could make the taxes on small owners and cooperatives lower than the taxes on large corporations. Then, people would be more likely to start up their own companies or work together with their community to start a cooperative.
I think cooperatives are better than corporations because they are more accountable to the community than a corporation is, and because the workers in a cooperative often collect the profits from their collective labor, rather than letting it go to a corporate office and trickle up into large bonuses and down to anonymous stockholders. But people need education to run a cooperative. Hilaire points out what would happen if you suddenly turned every corporation into a cooperative:
[7.] “* the works of one of our great Trusts, purchase it with public money, [and] bestow, even as a gift, the shares thereof to its workmen.” “[But] can I count upon any tradition of property in their midst which will prevent their squandering the new wealth? Can I discover any relics of the co-operative instinct among such men?” “[T]he strongest force against the distribution of ownership in a society already permeated with Capitalist modes of thought is still the moral one: Will men want to own?”
I also think a major difficulty with starting cooperatives is that your average worker doesn’t know how to run a company. For a business to work, you need leadership, and so the cooperative needs to vote together to create a board of directors and an executive. But once the executive starts getting bonuses and larger paychecks than the rest of the workers, you’re back to a corporate model. If you rotate the executive through the ranks of the workers, though, you could avoid turning him into a corporate-style CEO.
This is why education is so important: if people are taught the benefits of small property ownership, of working for yourself, and of how to run a cooperative, and if there is more support for cooperatives and small businesses than for large corporations, I think gradually society will shift away from a model where most people work for large corporations (Hilaire’s understanding of capitalism) to a model where most people work for themselves and in cooperatives. And that’s the main difference between distributism and capitalism.**