Predistribution: An Attack on the Social Wage

(pictures of money / flickr)

The Labour leader, Ed Miliband, has finally revealed what was twitching behind his curtain: predistribution.  Essentially, this means, rather than taxing the rich to fund welfare, the government should focus on making work pay more.  This neologism fails in every possible way as a political currency.

First, this jarringly technocratic cadence speaks to no “common sense,” evokes no sentiment, accesses no shared assumptions about the economy, justice, fairness and so on.  It sounds like what it is: the gruelly issue of wonkers and think-tankers.  If it was a product, no one would buy it; if it was a headline, no one would read it.  And no one will vote for it.

Second, it lacks any conceptual depth or concreteness.  Reading Miliband’s speech, it is clear that he has some sense that the neoliberal “consensus” of the last three decades (though strictly speaking, it only became a consensus because Labour abandoned any rival project) is over.  The growth formula based on low inflation (i.e. low wages), and deregulation has crashed.  Cutting spending and relying on quantitative easing won’t work either.  So, strictly in terms of finding an effective spatio-temporal fix for British capitalism’s problems, Miliband understands that the old formula isn’t working.  “Predistribution” is to be a socially just part of the answer to this problem by focusing government policy on the creation of a skilled, high-wage economy.  This is to be achieved, it seems, through a combination of short-term fixes (bringing forward infrastructural investment projects, taxing banks modestly to fund house-building, etc), watered-down corporatism (for example, unions, businesses and the government collaborating on a new vocational education sector), and tighter government regulation of markets.  This is, putting it generously, a mild version of the “social market” model that elements of the moderate trade union bureaucracy are calling for, and which New Labour dabbled in during its early years.  The supply-side emphasis on improving skills and human capital is straight from Gordon Brown’s Treasury.  It is also unlikely to drive up wages, as one of the reasons why skilled labour is relatively expensive is its rarety.  Expanding the pool of skilled labour will simply depress its aggregate cost.  Miliband’s speech is otherwise extremely vague about specific measures, and it isn’t at all clear that the proposals would either remotely answer the scale of the structural dysfunctions in British capitalism, or seriously counteracts the long-term tendency for labour’s share of national income to be depressed.  Indeed, such material concessions to labour as are gestured at here are perfectly consistent with a long-term increase in the rate of exploitation which, judging from their growth strategies, both parties appear to agree is necessary to revive British capitalism.  In fact, Miliband’s agenda of increasing the pool of skilled labour seems to be exactly along those lines: raising productivity while depressing unit costs.

Third, the logic of the supporting argument fails.  Miliband says: “The redistribution of the last Labour government relied on revenue which the next Labour government will not enjoy.”  But, asked what  might be a concrete example of “predistribution,” Miliband offered the example of the “Living Wage,” and pointed out that the state could use its presence in the market through procurements to encourage its adoption.  The “Living Wage” is not a great deal higher than the statutory minimum wage, and lower than the median hourly wage for both men and women.  The means for ensuring its uptake are highly indirect and non-coercive, most likely because there are a large number of poverty employers in small to medium sized businesses that would be killed by such an increase in the wage bill.  In other words, the chosen example seems to underline that for most affected by low wages, there won’t be any gain.  And obviously, for those who don’t receive any wages, the perpetually expanding army of the unemployed, there will be no gain whatever.  But even if there was, even if the effect of such a policy was to place a solid floor below wages, the effect would not be “predistribution”; it would be redistribution.  The money to pay for higher wages would have to come from profits, and in this respect it would be logically no different to taxing profits and spending more on the social wage.

Which brings me to the final point.  This isn’t really about there being less revenue available.  It is about the Labour leadership accepting the further neoliberalisation of the state under the rubric of “austerity.” It will have a social justice agenda, albeit a frail and emaciated one.  But it will be bent around the assumption that the social wage has to be cut.  One goal of neoliberal doctrine was to reverse the trend in the twentieth century toward the collectivization of consumption, which took place through the socialisation of goods such as health, education, libraries, street lighting, council housing, child care, and various cash allowances.  This didn’t necessarily involve the state’s withdrawal from funding, but the provision had to be somehow marketised, costs introduced, competition engineered between providers, the relationship between provider and consumer pivoted on a market basis.  The logic of this is to make consumption of collective goods more individualised, and to ration consumption on the basis of pricing.  The resulting individualization of collective consumption constituted an attack on the poor, on ethnic minorities, on pensioners, on the disabled, and on women, all of whom depend disproportionately on the social wage. To fulcrum a strategy for social justice on the most narrow trade unionist’s mantra of making work pay more is to accept that attack on the poor, as the price of achieving something for Miliband’s “squeezed middle.”

And it’s reasonable to ask, given the Labour leadership’s strategy, how they would intend to justify such an approach.  The answer seems to be embedded in the “Blue Labour” approach of restoring the most narrow patriarchal, chauvinist sense of labourism: throw aside all the politically correct causes, stick it to the poorest, and demonise them as irresponsible parasites on a par with bankers.  But if that is the case, why bother with the clumsy think-tank nomenclature?  So what if it pleases a few academic supporters of Labour, a few trade union intellectuals, a couple of church men, and the odd apparatchik?  It would be more honest to openly take up the “Blue Labour” mantra of “Family, Faith and Flag,” evoking the white, male, exclusivist notion of labourism underwritten by what Diane Abbott has characterised as “Hovis commercial nostalgia.”  At least, if Labour couldn’t win on such a formula, everyone would know what they were getting at.