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.