How to reinvigorate the centre-left? Predistributionm by Jacob Hacker,
guardian.co.uk: ... Center-left progressives seem to have lost their
ability to provide a clear alternative to either current conservative
nostrums, or the "third way" many of them staked out before the fall.
The only way out is a new governing approach – one that I have
infelicitously called "predistribution", but which can be more simply summed
up as "making markets work again for the middle class". Third way jujitsu
rested on two maxims: let markets be markets, and use redistribution to
clean up afterward. For the left, this has proved fatal... [explains why,
Predistribution may not be a catchy slogan, but the left does not need more
slogans. It needs to take a cold, hard look at the concessions made to the
rhetorical and political triumphs of the right. Yes, inequality is a global
trend. Yes, globalization places real limits on economic strategies. Yes,
labor is weaker, and must be retooled and supplemented. And yes, the state
cannot do everything. But there is a vital place for active governance in
the 21st century economy, and not just in softening the sharp edges of
capitalism. Now more than ever, governments need to step in with boldness
and optimism to make markets work for the middle class.
I don't quite agree with the description of the "third way" -- let markets
work and clean up afterwards. For me, markets only work if they are reasonable
approximations of the classic textbook case of "pure competition." The first
step for the third way then is to correct market failures that cause significant
departures from this ideal (including how income is distributed). I wish the
article had done more to emphasize this aspect of the problem since it's an
essential element of his call for "making markets work again for the middle
class" (it does so indirectly, e.g. the call for worker organizations recognizes
unequal market/negotiating power over wages, and the call for public goods and a
reduction in carbon emissions, but it does not recognize this as part of the
"'third way' many [center-left progressives] staked out before the fall" and I'd like to see the general market failure problem receive more emphasis).
The second thing to realize is that market outcomes depend upon the initial
distribution of income and wealth. If initial allocations are highly unequal, as
they are presently, the market outcome will reflect that.
How to correct this? One way is to equalize opportunity, and I fully agree
with all his recommendations that push in this direction (this seems to be the
essence of predistribution -- but you'll need to read the article for the full
description of what predistribution means). But some correction of past
inequities through post-distribution may be necessary to sufficiently
equalize opportunity. Otherwise, those inequities will be perpetuated even with
reasonably competitive markets and reasonably equal opportunity.
For a long time I believed that equal opportunity, sufficiently competitive
markets, and equitable initial allocations of wealth would be enough. Everyone
has a fair chance, so there was no reason to worry about inequality of outcomes.
But it may be that even under those conditions rising inequality will continue.
For example, if technology continues to wipe out the middle class even
after we've provided education, health, and so on to everyone, then some degree
post-distribution may be necessary to prevent an ever widening income gap.
That's a position -- a fair start may still produce inequities that will
subsequently be perpetuated if we don't intervene -- I've come to reluctantly.
I'm fully on board with predistribution, but the article seems to deemphasize
post-distribution, in part because the wealthy have the political power to
Redistribution itself is never popular. Citizens want a job and
opportunities for upward mobility more than a public cheque. Meanwhile, the
super-wealthy loudly resent the increased tax bite they face – and have
enormous political influence to back up their complaints.
But he does add:
Taxation and redistribution are cornerstones of progressive governance
Again, let's work on instituting the ideas behind the label "predistribution."
But I think it would be a big mistake to, at the same time, deemphasize
the need for post-distribution. That day may come, but we aren't there yet.