I've said it before and will say it again. Distributism is a desirable condition, it is not a system. It is the arrangement of capital, it is not a method of trade. It is a quality that a society could have, not a process a society would use. It cannot be condemned or supported by the Church because it isn't a behavior.
God bless,
JoeZ
P.S. Distributism promises Utopia but doesn't say how to get there.
We know that Socialism is contrary to Catholicism.
Fundamentally, capitalism as a form of economy is not contrary to Catholic morality.
How does one define capitalism ? If we mean exchange of property for a just price or the exchange of promises or a detriment in a just contract, of course that is not contrary to the moral law. But that's not really what capitalism is, since that has always been practiced since the exclusion from the Garden. Capitalism, as a unique system, seems to be the state-sponsorship of a usurious banking system with a view towards as few restrictions on exchange and on the size of business ventures as is possible, even permitting licentiousness and immoral goods to be sold. Furthermore, capitalism seems to rest on the policy belief that competition as such is a good thing, that the destruction of pre-existing community standards through innovation is, within limits, per se a good thing.
Capitalists often try to equate exchange with capitalism, but if one actually looks at the economic history of the past several centuries, one can see that there was exchange long before Adam Smith and the other classical economists were even born. Before Enlightenment economics, the world was not socialist.
So is distributism, in principle, contrary to Catholicism?
No, I don't think it is, at least not in a direct or explicit way. I would say that it is a bit misguided, however, and shortsighted. Socialism is contrary to the natural law because it denies the right of a man to own property and to buy and sell it as he pleases (within the limits of justice, of course). Distributism, however, does not explicitly deny any right that can be found in the natural law, as far as I can tell. Indeed, it tries to expand property ownership to as many people as possible.
If anything, distributism might be opposed to Catholic morality only insofar as it tries to maximise individual property ownership and the cultivation of a sense of national citizenship, a goal which certainly seems to carry the bouquet of a certain Enlightenment vintage. In fact, society functions better and profits more when there are, as it were, less chefs seasoning the stew. Usury is one tool by which a lot of money for business ventures can be raised quickly, such that the economy becomes more fluid. In the process, though, the moral order of society is subject to the dictates of the profit-motive and the licence given to greed at the expense of tradition and custom. Besides, usury is unsustainable and is contrary to the natural law, anyway.
Distributism suffers, I think, from being overly democratic and populist. I think that is why some of its prescriptions can often sound naive. It also eschews any language of conquest, glory, victory, defeat in preference to terms and concepts like community, organic, cooperative, steward, etc. There's a certain reactionary imbalance to it, and it can come off as sounding socialist. The old way of doing economics was best, I think, but of course economics are always changing as political situations and resources change.
The true Catholic politics and economics, I think, is the vision of the Empire, with its cities, towns, guilds, great estates, peasants, common lands, great enterprises, humble market stalls, local industries and far-flung merchants' leagues -- and all of that variety being regulated for the common good of mankind (with respect to social stability and good customs), united under the complementary hegemony of the imperator-princeps and the Supreme Pontiff. That was the vision of Charlemagne and it was also the inspiration for the actions of Saint Louis and the great Popes. It was cast aside during the escalating power struggles between kings that have defined our past thousand years, but it remains the one way to true peace in the world, which might perhaps be kept for a few hundred years once achieved.