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The public are firmly behind the idea of ‘predistribution’

September 7, 2012 11:30 am

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Ed Miliband’s speech yesterday has attracted some comment, especially over his use of the term ‘predistribution’.

Putting debates about language to one side, this is an excellent approach to age old questions about income inequality and one which is in step with the British public’s views.

‘Predistribution’ means how wages are spread out before tax and benefits. Some societies (e.g. Japan) have more income equality than Britain or America while actually distributing less through the tax and benefits system. Wages are just more equal.

What do the public think about these questions?

People in England certainly think that there is too much income inequality.

They also think that the current system is rigged and that there is one rule for the rich and one for the poor.

And that ordinary workers do not get a fair share of the nation’s income.

However, there is little support for government to take a more active role in redistributing money (for example through the tax and benefits system).

What this means is that there is great potential for Labour to promote policies which will bring about greater income equality, without requiring redistribution of income through the tax and benefit system.

These could be policies around reforming the way pay levels are decided within companies, efforts to modernize the Trade Union movement or even efforts to make businesses less hierarchical.

The High Pay Commission have some interesting thoughts on this, as does Duncan Weldon at the TUC.

Whatever you want to call this theme and whatever policies come from it, it is clear that the public are firmly behind the idea of ‘predistribution’.

P.S. These numbers are taken from the British Social Attitudes Survey. I am indebited tothis blog post for inspiration for this article.

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  • ColinAdkins

    So no more slagging of trade unions who are a force for predistribution,

  • Pingback: Can predistribution lead to a good democracy – or is it another straitjacket for Labour? » 21stCenturyFix.org.uk

  • DavePostles

    On the most optimistic level, what we can envisage with this ‘policy’ is: (a) the imposition of 20x ratio in the public sector; and (b) the living wage in the private sector, but executive ‘remuneration/compensation’ continuing to explode.  Wouldn’t it make more sense to accept the offer made by some of the more reflective rich and agree to tax them at a higher level?  The rationale is there: some of them have made the case, to the shame of those who demur.

    • Redshift1

      I don’t think this is incompatible with worker representation on remuneration committees, reintroducing the 50p tax rate or a mansions tax or whatever…

    • ColinAdkins

      I don’t know why the rich are not taxed at source like most mortals. If workers in a factory, office, hospital or school found away to be collectively paid to an offshore account and then have their respective wages repatriated free of tax how long do you think that aviodance scheme would last? The scheme would be closed and probably with retrospective effect. The rich can avoid tax but I do not have the opportunity to do so nor would I want to. When it comes to wealth why don’t we ask some of these people if you have not earnt this money how on earth have you got it? Phoney avoidance schemes should not only be at risk of paying the tax but also additional penalties.

  • Jeremy_Preece

    Yes it has some potential, but this needs to be clearly thought through as does how to communicate it before it is put into the public domain.

    I am beginning to see some of the sense, although the very word “predistribution” made me think of the “dedication” and the old theme song that Roy Castle used to sing at the start of his Record Breakers show.  Hopefully the majority of vibrant youthful Labour membership will all be too young to remeber,

    What is a serious point is that the Tory policies of the last two years have been all about trying to drive down wages for the lower and some middle range earners. I still have a real problem with the idea that you mustn’t tax the suer rich top 5% because they will find ways of ducking and diving out of paying. I also can’t belevee that cutting benfits for disabled is the right way forward while cutting the top rate of tax. Clecarly we are not all in it together. 

  • JoeDM

    What an utterly anti-aspirational approach !!!

    This is a  very negative viewpoint for Labour to take. 

     

    • http://twitter.com/waterwards dave stone

      “a  very negative viewpoint”

      Well, ain’t that a pronouncement from the horse’s mouth…

    • Thomas Neumarkjones

      I think it is quite aspirational to think of ways in which all workers benefit from the success of the companies at which they work

    • ColinAdkins

      Joe have you ever thought that low paid workers may aspire to receive a greater proportion of the value their work generates?

  • http://twitter.com/RF_McCarthy Roger McCarthy

    Comparing the first three graphs to the fourth is why I despair of the human race….

    And ‘efforts to modernise the trade union movement’ – really? its the reactionary trade unions that are the problem?
     
    As Chris Dillow points out these ideas are neither original nor do they make economic sense.

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2012/09/predistribution-good-bad-unoriginal.html

    These high wage, high skill, high benefit jobs can no more be magicked into existence by Ed Miliband than they could by Tony Blair or for that matter Harold Wilson when they invoked them as the glorious future.

    Noises about tackling price gouging sound slightly more promising but ultimately you can only curb rail and energy prices by taking the corporations that are ripping us off back into public ownership.

    It is simply the nature of private monopolies to exploit their position to the full and no amount of regulation has ever curbed them for long due to their well-proven ability to capture the regulating agencies and corrupt politicians. 

     

    • Thomas Neumarkjones

      Thanks Roger. 

      I would just point out that Chris’s blog that you mention is complimentary about some aspects of predistribution, for example those that are concerned with increasing worker’s power. I think there is a lot of scope to develop popular policies in this area.

    • Quiet_Sceptic

      High waged, skilled and benefit jobs can’t be magicked into existence overnight but that doesn’t mean that over periods of 10-20 years, governments can’t make a difference.

      Government as a huge spender, both directly and indirectly through its policies, has massive scope to influence how industries and their supply chains develop and to get them to locate their jobs in the UK.

      The UK though seems to have a chronic habit  of inconsistency, stop-start support for industry and projects which ultimately results in the manufacturing supply chain fracturing as companies go out of business or relocate elsewhere.

      There’s plenty of examples of government investment with long term benefits in capturing skilled jobs: Japanese and French with their investment in their high speed train networks, they captured the market. French have remained consistent in their support of nuclear power and carried on building steadily, unsurprisingly they are now the major player in that market.

      In the UK we don’t seem to have that long term commitment, government policy towards industries can change in months let alone years or decades. It’s not conducive to supporting long term investment.

      [Edit] typo correction.

    • Brumanuensis

      I agree with a lot of what Chris Dillow has written, but I think his point about capping fares is a touch wide of the mark, because although high prices do often signal scarcity, trains as an economic good are not always capable of being substituted for another transport option. In this sense, fears about reduced quality of provision, whilst not necessarily wrong, rather miss the point. If infrastructure investment is funded out of public borrowing – as it should be – then this can act as an effective subsidy for fares and of course a switch to less-polluting modes of transport like the railways, is a public good in itself. 

  • Serbitar

    I worry when a country as different in every imaginable way to the United Kingdom as Japan is flagged up as an example of benefits that supposedly accrue from a more predistributive society.

    There is a tsunami of invisible grinding poverty in the Land of the Rising Sun. 

    http://www.economist.com/node/21549003

    http://www.nytimes.com/2010/04/22/world/asia/22poverty.html

    You can only compare like with like and when all is said and done Japan isn’t much like the United Kingdom at all politically, economically, historically or culturally. 

    There are many dangers in attempting to draw naive comparisons between one country and another like this. The Conservatives do disingenuous things like this this all the time, e.g., David Cameron expressing his desire to introduce Lawrence M. Mead inspired welfare reforms to the UK that he says have “worked in America” (like time limiting unemployment benefit or stripping the under 25s of Housing Benefit altogether) ignoring the fact that under such a regime millions of Americans lost everything when they lost their jobs, including the roof over their head, and ended up as homeless itinerants left to wander the streets.

    Let’s try to get some rationality, honesty, compassion, and sense back into politics.

    (Incidentally the buzzword “predistribution” hasn’t much chance of becoming a meme.)

    • Thomas Neumarkjones

      Thanks for your comment. I agree that you shouldn’t try and naively
      copy policies from other countries. All I meant by using the Japan
      example was to show that there are many ways to skin a cat. Many
      people assume the only way to make society more equal is through the
      tax and benefit system but this is not the only way as is shown by the
      Japanese case.

      I do agree though that any attempt to bring about greater income
      equality through these types of ‘pre distribution’ policies needs to
      be based in British culture such as co-ops, unions etc…

  • Brumanuensis

    Can I just suggest that ‘pre-distribution’ be dropped as the term of reference. It’s logical, but clunky and sounds like something you do at a distribution depot.

    I suggest, for alliterative reasons, ‘supply-side socialism’.

    • http://twitter.com/waterwards dave stone

      I’d go for social justice.

      • Daniel Speight

         ’Pre-distribution’ is a nerdish, wonkish and exceedingly silly term to be used. Whichever bright spark of a SPAD came up with that one should be sent back to wherever he or she came from, Oxbridge I guess.

        • AlanGiles

           I think this is one of the great bugbears in politics of recent years – the dreaming up of “important” sounding words, which really mean nothing. You get the impression that 90% of the time has been spent on  thinking up the description, and 10% to the actual content of the policy.

  • http://twitter.com/shibleylondon Dr Shibley Rahman

    Really helpful Thomas. Thanks. There’s still a bit of uncertainty whether policy did get more redistributive towards the end?

    http://blogs.telegraph.co.uk/news/neilobrien1/100179750/predistribution-is-an-interesting-idea-but-what-exactly-is-ed-miliband-going-to-do-about-it/

  • Pingback: Can Predistribution deliver Responsible Capitalism? — Social Europe Journal

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