“Predistribution”: powerful idea or window dressing for austerity?

by Chris Bertram on September 24, 2012

This is a cross post of [a piece I’ve done for New Left Project](http://www.newleftproject.org/index.php/site/article_comments/predistribution_powerful_idea_or_window_dressing_for_austerity).

Back in 1875, Karl Marx had the sorry task of perusing the programme of the young German SDP. There was quite a lot he didn’t like, much of it due to the – as he saw it – bad influence of his rival Lassalle. One thing annoyed him immensely: the focus of the new German party on what he saw as the symptoms of capitalist class society rather than on the most basic structural features of that society. First among his targets was inequality, which the SDP was making a big thing about. Marx was scathing:


“Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power.”


One doesn’t have to buy into all the details of classical Marxism to see that he had a very good point. Since the early years of the 20th century, left-liberals and social democrats have been scrabbling around using the tax and benefits system to try to temper the gross inequalities that capitalism generates. Like Robin Hood, or maybe Robin Hood on prozac, they’ve cast themselves as taking from the rich and giving to the poor, without doing too much to address the question of how some people got to be rich and others “poor” in the first place.



This standard social-democratic response to capitalist inequality – welfare-state capitalism – has a lot of drawbacks. Not only does it fail to address the basic causes of inequality; it also puts in place, on a permanent basis, a politics of envy and resentment in which “makers” (tax-payers and self-styled “wealth creators”) are pitted against “takers” (scroungers and “welfare Queens”). Rentiers and coupon-clippers, the very people Marx saw as parasites, can form political alliances with hard-working ordinary people against “dependency culture” as an all too human reaction to the state seeming to come along and take away their money to fritter on the indolent and wasteful. Nor does the litany of plutocratic moaning stop there: by taking money off “entrepreneurs”, the state takes away their incentives and makes it harder for them to make the right investment decisions. The ideologists of the free-market right – people like Nozick and Hayek – are successfully tapping into some deeply embedded images of how our societies work.

You don’t have to be a Marxist, though, to realise that there are other ways to think about things and other ways to go about tackling inequality. John Rawls, the foremost liberal political philosopher of the late 20th century, rejected the standard model of welfare-state capitalism. Far better, he thought, to tackle the problem at root by designing the “basic structure of society” so that great inequalities in consumption power would not be generated in the first place. Maybe some tax and spend would be needed to correct things at the edges, but, by dispersing capital ownership widely through society – an ideal he called “property-owning democracy” – we might combine markets with much greater equality and realise the ideal of a just society of genuinely free and equal citizens. In such a society, the state wouldn’t be coming along and continually taking from the better-off and giving to the “poor”, with the resultant resentment and stigmatisation. Rather, democratised economic institutions would keep inequalities in check from the off.

There was plenty to be excited about, then, when Labour leader Ed Miliband announced his commitment to a new “big idea”: predistribution. Maybe, just maybe, a Labour leader was seizing the opportunity of the worst capitalist crisis since the 1930s to get past the politics of tax and welfare so ably exploited by Thatcher and her heirs in order to focus on an economic order that works for all. I’ve no doubt that Ed Miliband knows and understands the arguments here. How could he not, given his background as a policy wonk and his training in Oxford PPE? He’s read his Rawls and his James Meade and he surely imbibed some Marx at his father’s knee (even if he now accepts the indispensability of markets and says he wants to “save” capitalism).

Sadly, but perhaps inevitably, the reality of Labour’s version of “predistribution” is vague and unradical. Introduced in a speech that genuflects towards right-wing Democrat guru Larry Summers, it is at best a warmed-over version of New Labour’s “education, education, education” adjusted for tougher times and less money. The recognition that inequality is a consequence of structural features of society and that those need changing is accompanied by policy prescriptions about a “living wage” and a better trained and educated workforce together with sundry labour-market interventions, “proper” regulation of the bankers and vague hopes for “responsible” capitalism. Miliband’s critics on the left, such as Richard Seymour, are correct to ridicule the sheer inadequacy of Miliband’s prescriptions and to worry that the costs of his proposals will be met by those who have least: austerity-lite or austerity-smart, but still austerity. But other critics, also disappointed by Miliband’s concrete proposals, such as Martin O’Neill, are right to take some comfort from the geneaology of the “predistribution” idea. In Miliband’s recognition of the failures of “trickle-down” economics, in his overt acceptance that we can’t just fix inequality belatedly but have to build a society that needs less fixing, there is plenty for the left to get to work with. Miliband’s “predistribution”, conditioned by Labour’s need not to frighten the horses, is feeble stuff. But the idea of predistribution can be powerful.

{ 42 comments }

1

bob mcmanus 09.24.12 at 12:49 pm

Another column on “predistribution” because I am having a little trouble understanding it. I’ll study further, I suppose.

http://www.guardian.co.uk/commentisfree/2012/sep/12/ed-miliband-predistribution

From the Miliband, just a small section

” If the Government really wanted to get infrastructure moving they would follow our advice.

Bring forward long-term investment projects like schools, roads and transport, not just tinker with the planning rules.

If they really wanted to make a difference to housing they would tax bankers’ bonuses and as we recommended, build tens of thousands of new homes.

Not simply fiddle with the social obligations of developers.
And as we face a crisis of youth unemployment, they should be offering young people a Real Jobs Guarantee.”

As I envision steps toward Marx and social democracy, the start is with the communal ownership and control/socialization of infrastructure:healthcare, transportation, education, utilities, etc to make as many basic social needs equally accessible to all before transfer payments and subsidies.

2

Katherine 09.24.12 at 1:04 pm

Thank you for this. I seem to spend half of my time when reading things about redistribution wondering why most people seem to have forgotten the initial distribution bit. It’s not even pre-distribution to my mind.

Maybe co-ops (and LLP’s, if we want to keep a limited liability model in play) could be a way forward.

3

RobW 09.24.12 at 1:16 pm

Hard to see what’s to like here. Basically the point is, “Gee. The present system sucks. Wouldn’t it be nice if we had some alternative (that’s not blatantly Marxist but accomplishes the same thing and likely by similar read: the same means as those would be the only way to make this work).”

Armchair philosophers of the world, unite!

4

P Spence 09.24.12 at 1:20 pm

Katherine, you might want to read Rosa Luxemberg on co-ops:-

“But in capitalist economy exchanges dominate production. As a result of competition, the complete domination of the process of production by the interests of capital – that is, pitiless exploitation – becomes a condition for the survival of each enterprise. The domination of capital over the process of production expresses itself in the following ways. Labour is intensified. The work day is lengthened or shortened, according to the situation of the market. And, depending on the requirements of the market, labour is either employed or thrown back into the street. In other words, use is made of all methods that enable an enterprise to stand up against its competitors in the market. The workers forming a co-operative in the field of production are thus faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of capitalist entrepreneur – a contradiction that accounts for the usual failure of production co-operatives which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving.”- http://www.marxists.org/archive/luxemburg/1900/reform-revolution/ch07.htm.

You really do not get very far unless the mode of production and exploitation is faced head on: otherwise you fall back on concepts of justice and rights in reference to distribution without addrssing why such concepts arise in the first place.

5

rootless_e 09.24.12 at 1:46 pm

Using Marx’s attack on Lassalle to pitch Rawls! As an illustration of the libertarian foundations of modern Marxism, nobody could have done better.

6

chrismealy 09.24.12 at 2:25 pm

Jacob Hacker had me sold on it a while ago. I was surprised by how poorly Miliband makes the case. Is he always that terrible?

7

William Timberman 09.24.12 at 2:38 pm

If we accept the principle that, all else being equal, we’d prefer to persuade people rather than shoot them, it’s hard to see how we can prevent garden-variety invidious comparisons from eventually becoming institutionalized in any system of distribution we can presently imagine.

We don’t mind paying the bartender for our beer, but we hate tipping him, and we never willingly put a buck in the jar on top of the piano. We’ll pay $2K for a computer, but not for the software we run on it, not if we can possibly avoid it. In our universe, Steve Jobs was a job creator, but not Albert Einstein. Cristiano Ronaldo is, J.K. Rowling is, but but the guys under the street pulling fiber optic cable are not.

These are intellectual property issues, and mass marketing issues, and issues of uniqueness, so I suppose you could argue that they aren’t central to an understanding of who should get what in some imaginary healthy society with the same technology but different priorities than ours. I would argue instead that above all they are psychological manifestations, which not only a redistributionist social democracy, but even a horror show like the Soviet Union could ameliorate to a certain extent, but never cure. Like all things repressed, they do tend to return, and I don’t see that even today, we have enough insight into what to do about them, except to talk louder and more often about what might constitute a better world.

When I argue with a Tea Partier about why those people should get any, it doesn’t help much to argue that they aren’t really much different from him. When I hear about Ann Romney snapping her fingers at the help, I remember Veblen’s sardonic humor, and marvel at the amount of energy she’s expended in convincing herself that she’s of a different species, created out of a completely superior clay from the rest of us. At times like that, I can well understand why one might consider shooting people rather than persuading them. Psychology again; one might as well shoot oneself.

8

David Kaib 09.24.12 at 3:08 pm

This standard social-democratic response to capitalist inequality – welfare-state capitalism – has a lot of drawbacks. Not only does it fail to address the basic causes of inequality; it also puts in place, on a permanent basis, a politics of envy and resentment in which “makers” (tax-payers and self-styled “wealth creators”) are pitted against “takers” (scroungers and “welfare Queens”).

I’m not sure about this – meaning that it necessarily produces a politics of envy. It seems to me that envy is far worse when there is greater inequality, that a politics of envy is more evidence in places (like the US) that are less social democratic, and that (in the US context at least) racial politics had a great deal more to do in terms of creating these dynamics than welfare state capitalism. Or to the extent it was the welfare state, it was the less than fully social democratic divided welfare state. Do we see these sort of dynamics in more clear cut social democratic politics prior to the introduction of neoliberalism? (This is not rhetorical – I’m not nearly as familiar with these countries as I should be).

Obviously, even if we jettison that point, there’s still the thorny question of whether it actually addresses the causes of inequality.

9

Katherine 09.24.12 at 3:20 pm

P Spence, that was written around 1900, yes? Is it meant to be predictive, or assessing co-ops in the past?

There have been some experiences with co-ops more recently than that, that might be worth assessing.

10

Phil Perspective 09.24.12 at 3:31 pm

chrismealy:
Yes!!!!!!!!

11

aepxc 09.24.12 at 3:35 pm

I’m actually surprised that the idea is not discussed with greater frequency. If capital ownership eases the further production of capital, the initial distribution of capital is critically important, to justice as to efficiency. Namely:

1. The basis of civilisation is each generation producing a little more than they consume, thereby leaving behind an ever-growing surplus of assets (in terms of infrastructure, knowledge, etc.) to their descendants.
2. Before people start their economically productive lives, there is no basis by which to claim that any one of them is somehow more deserving of anything than any other.

It then seems commonsensical that before the start of each cohort’s economic productivity, each of them must be endowed with an equal amount of the surplus assets which are ownerless as a result of the death of their owners. We do it with universal education to a large degree, and we endow each individual with an equal political asset (the right to vote), but the equitable predistribution of economic assets never occurs, seemingly for no other reason than to ensure the continuation of inequality.

Of course, what Miliband is proposing does not actuall predistribute much either…

12

Wonks Anonymous 09.24.12 at 3:47 pm

I wonder how much empirical research there is on envy. I recall reading once that different people are emotionally affected by inequality in different ways, with Americans apparently taking less of a utility hit.

13

Murray Reiss 09.24.12 at 5:25 pm

So, redistribute capital ownership instead of profits and that’ll stop the plutocrats from moaning? Instead of continually coming along and “taking” do it in one fell swoop? That should ameliorate any sense of entitlement, for sure.

14

Josh R. 09.24.12 at 5:56 pm

Perhaps also of relevance: James Heckman has a recent article in the Boston Review on the efficacy of early child-hood educational interventions in potentially reducing inequality, which he ends with a section titled “Predistribution, Not Redistribution”.

http://www.bostonreview.net/BR37.5/ndf_james_heckman_social_mobility.php

15

Claudia 09.24.12 at 6:58 pm

The idea of predistribution is similar to equality of opportunity in the sense that one would like to affect the determinants of inequality rather than inequality itself; however, there is evidence than inequality has a negative effect on equality of opportunity. Thus, worrying about inequality should do both: predistribution AND redistribution.

16

James Reffell 09.24.12 at 7:37 pm

I’ve never minded tipping the bartender for my beer, or putting a buck in for the piano.

17

Alex 09.24.12 at 7:57 pm

This is an argument against redistribution, not predistribution, isn’t it? Also, isn’t the key issue in predistribution unions?

18

bob mcmanus 09.24.12 at 8:15 pm

17.2: Yes, I suppose. And regulation.

With apologies or something, here, linked without comment, is a column by Jacob Hacker on “predistribution.”

19

William Timberman 09.24.12 at 8:20 pm

James Reffell @ 16

No, and I do understand that you’re not alone in your never minding, but I wasn’t aiming at a universal theory of dialectical immaterialism, just trying to show that a) human judgments about value, even in the abstract are more often than not based on stuff and who has how much of it, just as Marx claimed, and b) when they’re not based on stuff, they’re by no means as simple, at least in economic terms, as we might expect.

Which is why I always thought that replacing a manufacturing economy with a service economy was going to be much more complicated than our technocrats were claiming — if we were expecting a continued and general prosperity, that is. More of us were always likely to be stocking shelves at Walmart than handing out venture capital or removing brain tumors, no matter how far we got in our plans for a genuinely universal education.

So, in our imagined utopia, on exactly what principles were the differences in compensation between the Walmart associate and the Bain Capital partner going to be based? This very definitely IS a trick question.

20

piglet 09.24.12 at 9:03 pm

The party acronym is SPD, not SDP.

21

krippendorf 09.24.12 at 9:26 pm

@14: Others in the Boston Review series have made this, or related, arguments as well. See, e.g., Grusky and Weeden argue that rising income inequality is as much due to shifts in the distribution of opportunities to extract rent within the market itself as it is to weak mechanisms for post-market redistribution.

22

jonathan hopkin 09.24.12 at 9:37 pm

Alex is right that a lot of the action in predistribution is around unions – it’s a lot easier to establish strong redistributive policies when a) the initial ‘market’ distribution is fairer, giving taxes and benefits less work to do and b) you have strong unions to act as a voice for lower income citizens (since elections are performing this function less and less, see Hacker and Pierson, Bartels).
It’s interesting though that some high redistribution countries, such as Sweden and Norway, are not necessarily great at predistribution. The social democratic settlement was always about leaving capital with its profits, and taxing workers and consumption to pay for welfare. You can still get quite low inequality with very unequal initial endowments – Sweden’s distribution of capital isn’t any fairer than in the UK.
If predistribution asks big questions about how assets are controlled, then it gets interesting. The way Miliband uses it it is probably just the ‘social investment’ idea under a new name.

23

jonathan hopkin 09.24.12 at 9:40 pm

My autocomplete keeps turning predistribution into redistribution. Is this a sign?

24

Tom Hurka 09.24.12 at 9:40 pm

Is there a politics of envy and resentment “on a permanent basis”? The 1950s and 1960s saw top marginal tax rates of 90% and higher and significant extensions of the welfare state in many countries, all with widespread public support.

The makers vs. takers ugliness seems to me more a recent development than something endemic in any capitalist economy. Which isn’t to say it’s not ugly. But can’t there be more factors affecting attitudes like those than just the mode of production?

25

Dave 09.24.12 at 10:19 pm

It’s well known that the ‘liberal consensus’ in the US went down in flames with the Watts riots of 1965.

26

Jonathan Monroe 09.24.12 at 11:48 pm

On the politics, the idea that redistribution is harder to defend politically than predistribution seems dubious. Thatcher didn’t get elected by attacking strawman welfare queens – she got elected by attacking unions head-on (and in 1970′s Britain, the destructive greed of some unions was not a straw man).

In fact, widening capital ownership (by selling council houses and state-owned companies at a discount) was Thatcher’s most important policy. So some forms of “predistribution” are consistent with out-and-out Thatcherism

In both Britain and America, the politics of welfare-bashing are mostly about attacking never-married mothers, a group who predistribution won’t do much to help. Redistribution to the working poor is a lot more popular – the US EITC seems pretty untouchable, and the current British government has limited it’s attacks on the working poor to large families in expensive houses. Even now, breaking the remaining unions is a lot more popular than seriously shrinking the welfare state.

27

gordon 09.24.12 at 11:50 pm

In a couple of papers and blog posts the sociologist Lane Kenworthy has suggested that, as a matter of fact, countries with lower inequality achieve that happy state mostly by Govt. transfers, ie. by regular, enforced redistribution.

http://lanekenworthy.net/2011/12/11/how-rich-countries-lift-up-the-poor/

http://www.stanford.edu/group/scspi/_media/pdf/pathways/fall_2011/PathwaysFall11_Kenworthy.pdf (NB: .pdf)

http://www.rooseveltinstitute.org/americas-struggling-lower-half-lane-kenworthy-paper-myths-about-government-roundtable

His thesis is pretty convincing to me. The implication is more welfare, not less.

The effort to construct an autonomous low-inequality system based perhaps on an original equality of endowment doesn’t, by contrast, seem very convincing. First, you need to confront the fact of existing inequality of both income and property (as I think Murray Reiss is saying at 13), and that looks pretty revolutionary. Second, I suspect that professional economists could show that an initial equality of endowment doesn’t necessarily persist.

28

chrismealy 09.25.12 at 2:11 am

I’d hope that capital-based or asset-based redistribution died with the housing bubble. There are so many problems with the ownership society. If your shares in a worked-owned enterprise where really valuable you’ll want to cash out and diversify rather than keep all of your eggs in one basket. A million workers owning a millionth of a business doesn’t have the political power of one CEO who owns 0% of the company he works for. The worst is when people start to think of themselves as capitalists instead of what they really are, workers. It’s like when people up to their eyeballs in debt worry about inflation.

29

engels 09.25.12 at 4:02 am

But other critics, also disappointed by Miliband’s concrete proposals, such as Martin O’Neill, are right to take some comfort from the geneaology of the “predistribution” idea.

Jazz lovers are right to take some comfort from the genealogy of Kenny G’s version of ‘What A Wonderful World’…

30

derrida derider 09.25.12 at 4:50 am

Rob W @3 hits it in one – this post goes nowhere. It rightly points to the political limits of equalising personal consumption by delinking it from personal production but nowhere tells us how you can equalise personal production.

That’s surely because to do so is to concede the point to those nasty Gradgrindian neoclassical economists – that wages, subject to footnotes concerning observability of output and appropriation of relatively modest matching rents, reflect marginal product. Marginal product in turn is a function of capital accumulation, technology and personal characteristics (including training and education). This point, once conceded, leaves the bien-pensant nowhere much to go in equalising wages (as distinct from equalising incomes) other than the weak and indirect nostrum of better education.

I think that, apart from pursuing much more vigorously a “no child left behind” agenda, there is no real alternative to redistribution in some form if we want acceptable outcomes. We should therefore spend most of our energy on looking for forms that have wider limits than the present ones.

31

engels 09.25.12 at 5:32 am

How could he not, given his background as a policy wonk and his training in Oxford PPE? He’s read his Rawls

According to wikipedia, Miliband dropped philosophy after the 1st year (currently limited to logic, Descartes and Mill I believe) so I don’t think this follows. (And it might make for an interesting social research project to investigate what proportion of Oxford PPEists can recall much of anything from Rawls [say] ten years after graduation…)

32

Arielle Medved 09.25.12 at 5:57 am

“austerity-lite or austerity-smart, but still austerity.”

And what is so awful about austerity?

http://www.foreignpolicy.com/articles/2012/09/13/paul_krugmans_baltic_problem

33

dbk 09.25.12 at 9:49 am

JoshR@14: Thanks for the link to the piece by James Heckman, whose arguments in favor of predistribution (which I understand as essentially “early redistribution”) I found compelling. A nice feature was Heckman’s acknowledgement of recent work in neuroscience, which is enabling the scientific understanding of what has long been empirically observed, viz., that children raised in stimulus-poor environments cannot really make up for initial deficits, which Heckman notes are both cognitive and emotional/social. There is solid statistical evidence now (and not only from the U.S.) that “early redistribution” in the form of infant creches, universal nurse visitor programs to new mothers, extended/enriched daycare, etc. yields alot more bang for the buck long-term. Essentially, what such programs do is enable the infant’s brain to develop normally, viz. to its natural potential.

Some of the comments on Heckman’s piece were pretty depressing, e.g. “if they just had fewer kids, then they’d be better parents.” The actual evidence, though, runs counter-intuitively: when the median/mean income of a population group rises, one of the consequences is a fall in birth rates (sometimes dramatically, within one generation).

Another comment created a play on Heckman’s term “accident of birth”, turning it into “accidental birth”; I couldn’t judge whether the commenter really understood that the author’s expression referred to what I have learned to call “moral luck” (after Bernard Williams).

Capitalism as a system doesn’t have much to offer to those stricken by bad moral luck; this responsibility falls on the state, whose mandate is to ensure the well-being and flourishing of as large a number of its citizens as possible (er, that’s how I understand the role of the state, anyway). Our current crop of captains of finance seem not to have realized that the state has the potential to become a different kind of ally – one which will ensure that the system can perpetuate itself without crashing to a halt every few years, for as long as is required to create a new one which might incorporate enhanced economic equality ab initio.

It seems to me capitalism contains a feature that I’d describe as the “trickle-up” effect: over the course of a given cycle, capital/resources tend to gravitate upward towards an ever-shrinking percentage of the population. If one accepts capitalism as the “best we’ve come up with” economic system availabe, then either (a) one accepts that periodically the system will crash and need to be jump-started again (causing misery on a massive scale to entire populations), or (b) this feature of the system needs to be continuously defended against through a counter-feature, viz. vigorous, enforced, ongoing redistribution, with emphasis on early or “preemptive” redistribution, which oddly enough protects both individuals and the system itself.

34

Peter T 09.25.12 at 9:57 am

I think it’s fair to say that economics is mostly uninterested in production; it concentrates much more on exchange (trade). But this is part of the problem, in that, as has been pointed out, the social economy of production sets the parameters for the social economy of consumption. It’s not even a new problem: the wave of serfdom that swept over eastern Europe from the mid C15 onwards was driven by specialised large-scale agricultural production in response to western markets (one historian noted that the incomes of nobles doubled over a century – that of the peasants sunk by three-quarters in the same period). The same could be noted in many places in the C19, as imperialists imposed production for export on previously balanced economies, to their own benefit and to the immiseration of much of the population.

But nobody has mentioned the conscious – and often largely successful – C19 efforts to avoid this sort of pattern of production. In Canada this involved limits to farm size, in Australia centralised wage setting, and in both a policy of tariffs designed to ensure a basic level of local production (it also involved restrictions on immigration, which are a less pretty part of the picture). Why are these or similar economic policies off the table?

35

Tim Worstall 09.25.12 at 10:21 am

“You can still get quite low inequality with very unequal initial endowments – Sweden’s distribution of capital isn’t any fairer than in the UK.”

Indeed, Sweden’s distribution of market income is only slightly more equal than that of the UK or US. And that for the US is more equal than that of Italy, Germany or France for example.

“In a couple of papers and blog posts the sociologist Lane Kenworthy has suggested that, as a matter of fact, countries with lower inequality achieve that happy state mostly by Govt. transfers, ie. by regular, enforced redistribution. “

Kenworthy has also gone on to point out that the US tax system does more of that redistribution than the Swedish one does. It’s the Swedish benefit system that does the equalising. Even to the point where he muses that perhaps it’s necessary to have a largely regressive (ie, financed by consumption taxes like a VAT) tax system to enable the progressive benefits system.

As to the basic idea of predistributionism in the UK political sense. I’m sure CB will be shocked to know that people like the ASI are all in favour of it. As an idea. That property owning democracy thing for example. The difficulty comes in what it actually means in terms of policy. I’ve seen at least one person claiming it means rent controls: not a sensible policy whichever idea is used to back it.

36

john c. halasz 09.25.12 at 7:01 pm

37

js. 09.26.12 at 4:16 am

jch @36:

What’s really remarkable about that FP article is the studious avoidance of any of Krugman’s actual, you know, arguments for why it’s ridiculous to think of Estonia etc. as “success stories”. Real hack job, that one. Anyway, wouldn’t have known the background; cheers.

38

engels 09.26.12 at 6:32 am

And what is so awful about austerity?

Seems to me this is one of those questions (a bit like John Holbo’s of some while ago, asking someone to ‘give an account’ of ‘why capitalism sucks’) which evokes the Louis Armstrong response:

‘If you gotta ask, you ain’t never gonna know…’

39

John Quiggin 09.26.12 at 6:52 am

“[Market income distribution] for the US is more equal than that of Italy, Germany or France for example.”
According to the OECD, this is true only for Italy.
http://www.oecd.org/els/socialpoliciesanddata/49499779.pdf

And that’s using Gini coefficients, which are excessively sensitive to the middle of the distribution, and correspondingly insensitive to the top tail, which is where the US action is concentrated.

40

Tim Worstall 09.26.12 at 10:04 am

That’s an excellent paper. Thanks for that. I’ll stop relying on the figures given in Wikipedia now.

41

harry b 09.26.12 at 12:34 pm

On Heckman (14) — it is worth reading Charles Murray’s response (linked in a sidebar) and then reading Heckman’s response to the responses, in which he elegantly and gracefully demolishes Murray’s response.

42

Kiwanda 09.26.12 at 11:04 pm

I looked over the post and comments and related links in vain for a straight-forward definition of “predistribution”, and even a kind offer “let me google that for you” would not have been helpful, including the Wikipedia article on the term.

I take it that a concrete form of “predistribution” would be for every child to have the birthright of some sort of capital, such as a stock portfolio. Or, more and better early-childhood education, or a higher minimum wage. Or what?

Probably the birthright of some minimum level of food, shelter, education, and healthcare would be equivalent, though I’d think many countries (not including the US) already have that. So I’m unclear on what exactly is being discussed here.

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