Magazine article Renewal

The Predistribution Agenda: Tackling Inequality and Supporting Sustainable Growth

Magazine article Renewal

The Predistribution Agenda: Tackling Inequality and Supporting Sustainable Growth

Article excerpt

The Predistribution Agenda: Tackling Inequality and Supporting Sustainable Growth

Claudia Chwalisz and Patrick Diamond

Policy Network/IB Tauris 2015

'Predistribution' elicits strong views in different directions, often among people who either disagree about, or don't know, what it means. There's no doubt it is a concept with a high wonkiness threshold. If you look it up on Wikipedia the entry begins: 'Predistribution is a neologism', which doesn't exactly clear things up for the uninitiated. The fact that it was claimed by Ed Miliband and his team (that includes me) during the last Parliament was thought by many to be symptomatic of the Labour leadership's excessively cerebral approach to political strategy. Others are suspicious of the term on the grounds that it suggests a return to the left's vices of the 1970s: picking winners, ideologically-motivated state intervention--an excuse for 'an economic manifesto from the last days of disco', as one critic put it.

But for many others, including the vast majority of contributors to this Policy Network volume, predistribution offers the tantalising possibility of showing the left a way to navigate a way back to ideological and policy renewal. The essence of predistribution is simple: the idea that inequality is more effectively addressed by taking action to prevent inequality emerging in the first place, rather than relying on tax and spend policies to reduce it once it has occurred (in other words, redistribution). Predistribution is not necessarily the enemy of or an alternative to redistribution. But it is a response both to some of the limitations the left has found with its existing approach to policy, and to some of the economic and social forces in advanced industrial democracies that threaten to raise inequality still further.

The left's historical reliance on redistribution to do the work of tackling inequality has a number of problems. One is that the scale of the inequality challenge has increased substantially since the late 1970s (particularly in the UK). Not only is redistribution on its own limited in its effect, because of its focus on symptoms rather than causes: in addition, because it is also faced by drivers of accelerating inequality (reduced employment protection, lower unionisation, large increases in wage premiums for skilled work, etc) it is simply less able to do the work expected of it. Hence the paradox that the Blair and Brown governments achieved more redistribution than any government in British history, but also oversaw a moderate rise in inequality. Arguably, redistribution has also suffered from rising public aversion to paying more tax, a point supported by the surveys summarized in Lucy Barnes's chapter here.

But there is another problem with relying too much on redistribution as inequality grows: it makes it difficult to build the political coalitions the left needs to win and retain power. Focusing on the casualties of rising inequality has led Labour towards providing greater financial support for both the unemployed and low-paid. Tax credits are an important legacy of New Labour, but sooner or later we need to turn to addressing the root causes of the growing low-wage, low-skill and low-security economy that make them so necessary on such a large scale. And if, as Thomas Piketty argues (backed by Alan Manning in this volume), the ongoing technological revolution is likely to exacerbate inequality further in the coming century, getting tough not just on inequality but on the causes of inequality will be an agenda that is more likely to get the support of a broad majority. Moving our focus from redistribution to predistribution is not just good policy, but essential politics for Labour and the wider left.

Jacob Hacker, the man who coined the term 'predistribution', begins this volume with a discussion of the need to revisit centre-left statecraft. In Hacker's view, the left urgently needs to change the way it approaches governing: to jettison the managerialism of the Third Way, and instead embrace an active role for the state in promoting innovation and productivity, reducing the financialisation of our economy, and 'translating growth into shared prosperity'. …

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