Redistribution and Predistribution

Lesley Brennan

5 April 2013

What do Jenny Marra’s Switch Together campaign and the Dundee Labour Students Living Wage at Dundee University campaign have in common?

As well as being excellent campaigns, they are examples of pre-distribution in action.

We are likely to hear a lot more about pre-distribution between now  and the General Election, from ideas that have come from Labour, traditionally the  party of redistribution from the rich to the rest of society.

Ed Miliband has put its importance in context saying,  “We need to care about predistribution as well as redistribution.'

The next General Election will take place against a background of a weakened economy and 5 years of austerity, during which time public expenditure has been cut remorselessly.

The finance to fund Labour’s ambition is likely to be restrained , and while a Labour Government can  and will act to roll back 5 years of  uncaring  Tory government ,  means other than traditional government tax-and-spend can be employed.

Examples include making national and local government contracts dependent on all bidders agreeing to pay a Living Wage above the national Minimum Wage, vocational training, consumers coming together to purchase energy from a distributor at a reduced price, and capping rail prices.

The money that pre-distribution could save could be invested to boost growth.

Low growth areas are low-wage, low skill areas.

Raising skills through training is in the best interests of a company by raising productivity, raising sales, raising wages, and so boosting the local economy.

The founder of Predistribution is a Yale University political scientist, Jacob Hacker  who declares its objective as “to focus on market reforms that encourage a more equal distribution of economic power and rewards even before government collects taxes or pays out benefits"

So instead of relying on government intervention to correct a failure of the market, an equitable settlement is agreed beforehand.

The key to predistribution is consumers exercising their bargaining power.

The switch together scheme highlights the importance of collective bargaining.

The implementation of the living wage demonstrates how commissioners can flex their bargaining power to deliver a more just outcome.

So the potential of pre-distribution is inspiring, particularly in a cold economic climate .

We will hear much more of its championing of social justice and personal dignity in the months to come.

 

Ed Miliband : Speech on Predistribution (download)

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