Andrea ‘s latest op ed piece on Cunliffe focuses on his use of the idea of pre-distribution, following it being embraced by UK Labour leader Ed Miliband. I posted a quick analysis on open mike of the ways Vance incorporates a right leaning stance in her piece. In this post I want to focus more on the idea of pre-distribution, and whether it can under-pin a new direction for the left in NZ: one that will be relevant to the challenges of the 21st century, especially in countering the too wide inequality gap.
“Pre-distribution” offers a way to break with the failure of the soft neoliberalism of Third Way politics. Third Way politics aimed to let the market work, then tidying up after it with re-distributive policies. “Pre-distribution aims for more government intervention to prevent the developments of vast inequalities, while proactively providing more opportunities for all, in times when money is tight.
It is a centre left, social democratic position, that does not aim to end capitalism, but to restructure it so that it works better for the many, not the few. It puts strong emphasis on giving all workers a fair go; on encouragement of employers to provide a living wage; on promoting educational opportunity form early childhood up to university level; on re-vitalising apprenticeships and training; on promoting research and development; improving housing affordability; on providing access to health care, pensions etc for all. While moving aware from bennie bahing, it still treats social security as something that does not get a lot of budget funding.
Cunliffe said this about pre-distribution in his Daily Blog interview last week:
I don’t think however that our tax and benefit system is inexhaustible. And there’s a whole bunch of literature around about building into the wage system, better structures and processes, so that we have more social equity.
So stuff like industry standard agreements, which would put unions back at the heart of industrial relations; the idea that we would have a living wage, and that we would highlight that through the government sector; the fact that we would raise the minimum wage; the fact that we would protect vulnerable workers; and the fact that we would get better jobs – is all part of a package that, rather than redistributes, you might say pre-distributes by hard wiring and better levels social equity right from the start. And we have to change the industrial relations frame work to get there, and we will.
The most significant point in Vance’s article, was this one:
Pre-distribution is an agenda that British Labour leader Ed Miliband is flirting with. Critics believe he is being too cautious.
The downsides are it is a deeply un-sexy thing to sell. Cunliffe is planning a ”major unveiling” of his 2014 election strategy at the Christchurch conference in November. Expect it to contain many of the elements of pre-distribution.
It was Ed Miliband that put pre-distribution on the left wing political agenda as a new big idea. But the pressures from the right wing elites mean he has promoted it in a very weak and increasingly diluted way.
Miliband took the pre-distribution idea from Yale University Professor Jacob Hacker. As argued by Hacker, in the Guardian, and this interview, the notion of pre-distribution incorporates a reworking of macro-economic policy, while also aiming to provide more educational opportunities and fairer employment practices in times when there are budgetry restraints. It aims to revamp social policies and public provisions, strengthening the role of governments in relation to markets, at the same time as promoting the importance of “civil society” in a democratic market society. However, it aims to maintain a market economy, while winding back the role of markets in society.
An article in the New Statesman identifies ways in which UK Labour could flesh out the idea of pre-distribution in its policies.
For one, predistribution will not succeed unless the bargaining position of low-paid workers can be strengthened. This will require a very different balance to be struck between regulation and flexibility in the labour market, including a higher ‘living’ minimum wage with scope for sectoral pay bargaining to prevent under-cutting. It will require stronger collective organisation too, with scope for ‘new unions’ to organise the lowest paid workers.
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Neither will predistribution be credible unless Labour can advance a bold education reform strategy for Britain. In the UK, raising the economy onto a high wage, high skill, high productivity trajectory entails sustained investment in training and human capital.
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Further education colleges need bold reform to raise quality; apprenticeships should be guaranteed for young people who achieve the requisite qualifications in English and Maths; access to university, regardless of social background, must be further expanded.
However, the final recommendation in the New Statesman’s article is a worry, suggesting continued austerity for beneficiaries:
Finally, an effective strategy of predistribution will require Labour to resolve major debates about the balance between targeting and universalism in the welfare state.
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Many of the benefit cuts introduced by the coalition cannot be reversed by an incoming Labour government: the price of the contributory principle will be declining benefits for the workless poor.
However, in the above linked interview with Hacker, he does indicate that “pre-distribution” could mean more investment by the state in state and/or social housing.
I would say that one way to make this agenda broader than just Keynesianism is to say that it is about encouraging macroeconomic stability overall, which is something that needs to be figured out now, before the next asset bubble. It is really important to make both the housing and financial markets more resilient.
With housing, I think this could come primarily from the public sector writing better sets of rules, and getting involved through investment. In fact I would argue that the most straightforward way in which you could tackle both the housing and the macroeconomic problems simultaneously would be to undertake significant public investment in housing in the short-term
So, while policies on social security remain a worry, there is much to be excited about in the Cunliffe focus on pre-distribution: moving towards a living wage for all, a fair go and financial security for all workers, access to higher education across all socio-economic classes, and more affordable housing for all – and all provided within a responsible and manageable budget.
It is a move towards the most successful examples of Nordic social democracy, and not towards ending capitalism.
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