Distributism, also known as distributionism and distributivism, is a third-way economic philosophy formulated by such Roman Catholic thinkers as G. K. Chesterton and Hilaire Belloc to apply the principles of Catholic Social Teaching articulated by the Roman Catholic Church, especially in Pope Leo XIII's encyclical Rerum Novarum and more expansively explained by Pope Pius XI's encyclical Quadragesimo Anno According to distributism, the ownership of the means of production should be spread as widely as possible among the general populace, rather than being centralized under the control of the state (indirect socialism) or a few large businesses or wealthy private individuals (capitalism). A summary of distributism is found in Chesterton's statement: "Too much capitalism does not mean too many capitalists, but too few capitalists."
Essentially, distributism distinguishes itself by its distribution of property (not to be confused with redistribution of capital that would be carried out by most socialist plans of governance). While socialism allows no individuals to own productive property (it all being under state, community, or workers' control), and capitalism allows only a few to own it, distributism itself seeks to ensure that most people will become owners of productive property. As Hilaire Belloc stated, the distributive state (that is, the state which has implemented distributism) contains "an agglomeration of families of varying wealth, but by far the greater number of owners of the means of production." This broader distribution does not extend to all property, but only to productive property; that is, that property which produces wealth, namely, the things needed for man to survive. It includes land, tools, etc.
Distributism has often been described as a third way of economic order opposing both socialism and capitalism. Some have seen it more as an aspiration, which has been successfully realised in the short term by commitment to the principles of subsidiarity and solidarity (these being built into financially independent local co-operatives and family owned, small businesses), though proponents also cite such periods as the Middle Ages as examples of the historical long-term viability of distributism.
Under such a system, most people would be able to earn a living without having to rely on the use of the property of others to do so. Examples of people earning a living in this way would be farmers who own their own land and related machinery, plumbers who own their own tools, software developers who own their own computer, etc. The "co-operative" approach advances beyond this perspective to recognise that such property and equipment may be "co-owned" by local communities larger than a family, e.g. partners in a business.
In Rerurm Novarurm, Leo XIII states that people are likely to work harder and with greater commitment if they themselves possess the land on which they labour, which in turn will benefit them and their families as workers will be able to provide for themselves and their household. He puts forward the idea that when men have the opportunity to possess property and work on it, they will “learn to love the very soil which yields in response to the labor of their hands, not only food to eat, but an abundance of the good things for themselves and those that are dear to them.”  He states also that owning property is not only beneficial for a person and their family, but is in fact a right, due to God having “...given the earth for the use and enjoyment of the whole human race”. 
Similar views are presented by G.K Chesterton in his 1910 Book What’s Wrong with the World. Chesterton believes that whilst God has limitless capabilities, man has limited abilities in terms of creation. As such, man therefore is entitled to own property and to treat it as he sees fit. He states “Property is merely the art of the democracy. It means that every man should have something that he can shape in his own image, as he is shaped in the image of heaven. But because he is not God, but only a graven image of God, his self-expression must deal with limits; properly with limits that are strict and even small.”
The kind of economic order envisaged by the early distributist thinkers would involve the return to some sort of guild system. The present existence of labor unions does not constitute a realization of this facet of distributist economic order, as labour unions are organized along class lines to promote class interests, whereas Guilds are mixed class syndicates composed of both employers and employees cooperating for mutual benefit.
Distributism favors the elimination of the current private bank system, or in any case, its profit-making basis. This does not necessarily entail nationalization, but could involve government involvement of some sort.
Distributists look favorably on credit unions as a preferable alternative to banks.
Distributism appears to have one of its greatest influences in anti-trust legislation in America and Europe designed to break up monopolies and excessive concentration of market power in one or only a few companies, trusts, interests, or cartels. Embodying the philosophy explained by Chesterton, above, that too much capitalism means too few capitalists, not too many, America's extensive system of anti-trust legislation seeks to prevent the concentration of market power in a given industry into too-few hands. Requiring that no company gain too great a share of any market is an example of how distributism has found its way into US government policy. The assumption behind this legislation is the idea that having economic activity decentralized among many different industry participants is better for the economy than having one or a few large players in an industry. (Note that anti-trust regulation does take into account cases when only large companies are viable because of the nature of an industry, but favors many participants over few, whenever possible.)
-The human family
Distributism sees the trinitarian human family of one male, one female, and their children as the central and primary social unit of human ordering and the principal unit of a functioning distributist society and civilization. This unit is also the basis of a multi-generational extended family, which is embedded in socially as well as genetically inter-related communities, nations, etc., and ultimately in the whole human family past, present and future. The economic system of a society should therefore be focussed primarily on the flourishing of the family unit, but not in isolation: at the appropriate level of family context, as is intended in the principle of subsidiarity. Distributism reflects this doctrine most evidently by promoting the family, rather than the individual, as the basic type of owner; that is, distributism seeks to ensure that most families, rather than most individuals, will be owners of productive property. The family is, then, vitally important to the very core of distributist thought.
Distributism puts great emphasis on the principle of subsidiarity. This principle holds that no larger unit (whether social, economic, or political) should perform a function which can be performed by a smaller unit. Pope Pius XI, in Quadragesimo Anno, provided the classical statement of the principle: "Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do." Thus, any activity of production (which distributism holds to be the most important part of any economy) ought to be performed by the smallest possible unit. This helps support distributism's argument that smaller units, families if possible, ought to be in control of the means of production, rather than the large units typical of modern economies.
Pope Pius XI further stated, again in Quadragesimo Anno, "every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them." To prevent large private organizations from thus dominating the body politic, distributism applies this principle of subsidiarity to economic as well as to social and political action.
Society of artisans
Distributism promotes a society of artisans and culture. This is influenced by an emphasis on small business, promotion of local culture, and favoring of small production over capitalistic mass production. A society of artisans promotes the distributist ideal of the unification of capital, ownership, and production rather than what distributism sees as an alienation of man from work. This does not, however, suggest that Distributism favors a technological regression to a pre-industrial revolution lifestyle, but a more local ownership of factories and other industrial centers. Products such as food and clothing would be preferably returned to local producers and artisans instead of being mass produced overseas.
Distributism favors the elimination of social security on the basis that it further alienates man by making him more dependent on the Servile State. Distributists such as Dorothy Day did not favor social security when it was introduced by the United States government. This rejection of this new program was due to the direct influence of the ideas of Hilaire Belloc over American distributists.