What is Distributism? No, Seriously, What is it?

Since it is an election year, and I've been invited to contribute articles about the Church's social teaching to a secular web site, I've been reading up on all things Rerum Novarum and Quadragesimo Anno.  The problem, as I see it, is that when it comes to discerning the proper Christian attitude toward economics and government the Church has become polarized, at least here in the United States, along political and ideological lines.  The conventional wisdom states that you're either a big government liberal, and maybe out and out socialist, or you're a big business capitalist, with maybe a touch Ayn Randian social Darwinism thrown into the mix.  After we've figured out the ideology that suits us we then try to fit it into our faith life.  The trick is to start from the other way around.  If you do this it becomes clear that neither established economic system fits the Christian ideal perfectly.  But these two poles of socialism and capitalism are pretty much the only options we've been given.  Is their a "Third Way" the Christian can follow?

Enter Distributism, which was popular, relatively speaking, in the early twentieth century among the likes of G.K. Chesterton and Hilaire Belloc.  In truth I stumbled over this concept only yesterday as I was doing research on line, so I would not want to put myself up as an expert.  From what I can make out of it Distributists believe strongly in private property, but ownership needs to take place on a broad scale if people's rights are going to be protected.  The mantra is small communities, small farms, small factories, small schools.  They identified the same problems with capitalism as Marx, but saw direct ownership of the means of production, without the mediation of the state, as the solution.

Basically, from what I can make out of it, what's being proposed is something like a return to the medieval guild system or the creation of cooperatives.  But the key is that the farmer owns his land and his farming implements, the carpenter owns his shop, and the tools he uses.  The worker actually earnes money from his labor, with the goal being security and sustainability (to use a modern term) as opposed to economic growth.  In their view capitalism limits property rights to a few who take advantage of the workers' labor, exploiting them for profits that they do not share in in an equal way.  Socialism makes people dependent on the state who robs the worker of the right to enjoy the fruits of his labor or gain security that comes from private ownership.  In its beginnings the movement was agrarian in nature, but later adapted itself to address urban realities as well.

Dorothy Day, who is associated with city life and is often accused of being a communist, was really a distributist.  She was critical of Social Security, calling it an example of "Holy Mother State," that made people dependent on government, robbing them of their personal responsibility to act charitably.  On the other hand she supported President Truman's attempt to nationalize the steel industry in 1949, but only if the government served as a place holder until the factories could be sold off to multiple buyers (naive, if you ask me, but the point is that she did not see nationalization as an end in itself, or the state as being synonymous with the people). 
  
I still have more to read about this intriguing theory.  I'm not sold on it from my first reading, but I want to be patient and give it a chance.  When you see Chesterton mentioned you have to take the thing seriously.  I down loaded an anthology from Barnes and Noble and in the introduction the author-editor came off as defensive and a bit arrogant.  The defensiveness comes from the fact that Belloc and others supported Franco in Spain, and had some nice things to say about Mussolini in the '30's, so they've had to fight the fascist label ever since (its always been strange to me: you can cuddle up to Marx or Lenin and not raise an eyebrow, but mention Franco or Ayn Rand and people rend their garments...but I digress).  Then he went on about the evils of the Internet economy, which I thought was a bit ironic, considering I bought the thing as an e-book.  I'm eager to get into the primary source authors themselves and see what they have to say.   I don't know if I'll return to this with a full fledged critique, but I'm sure I'll mention things about it here and there.