'Predistribution' - Labour's new way to manage capitalism

[Dennis the 'Bloody Peasant']

So, get the bosses to pay us more. Seems simple enough :rolleyes:

A Labour government would attempt to cut the welfare bill by ensuring poorer workers are paid better, Ed Miliband has said.
Instead of redistributing wealth through the tax and benefit system, there should be more "predistribution", the Labour leader said in a speech.
That meant better vocational training in schools - but also a change in attitude from business.
He called for more "responsible" firms that focused on the long-term.
In a speech in the City of London, Mr Miliband said as big a shift in thinking on the economy was needed now as had happened after World War II and in the late 1970s and it could take longer than a Parliament to achieve.
It would also require a major change in philosophy from the Labour Party.
"The redistribution of the last Labour government relied on revenue, at least in part, which the next Labour government will not enjoy," said Mr Miliband.
"The option of simply increasing tax credits, for example, in the way we did before will not be open to us. Of course, redistribution will always remain necessary and I continue to believe that, but we have learned we have got to do more.
"And fiscal circumstances will make it harder not easier."

(More at http://www.bbc.co.uk/news/uk-politics-19503451)

[x-punk]

Just the usual vague politicotalk with no real concrete proposals on how this would be achieved.

I mean look at this quote:


"Think about somebody working in a call centre, a supermarket, or in an old peoples' home.

"Redistribution offers a top-up to their wages. Predistribution seeks to go further - higher skills with higher wages." Its just nonsense. Is he trying to say that educating people to a higher level to work in a call centre is a good thing. The only way this would work is by restricting the supply side of workers which could perhaps slightly push up wages but would also push down important things like labour mobility, pigeonholing people in careers they hate. FFS this sort of proposal was the bane of the previous labour govt, overeducating people with nonsense to do jobs which didnt require that level of education.

Milliband is a clown. Crikey, the tories are so unpopular just now, you could put have a pile of bricks as the labour leader and they would still get elected at the next election. But Milliband is so bad its almost as if he is working to ensure labour dont get elected next time. The pile of bricks would be much better.

[Dennis the 'Bloody Peasant']

So sad that the supposed Opposition is so flimsy and practically the same party except for a handful of policies, both represent private interests..mostly their own.

"Think about somebody working in a call centre, a supermarket, or in an old peoples' home.

Redistribution offers a top-up to their wages. Predistribution seeks to go further - higher skills with higher wages."

As someone who's worked at supermarkets and call centres..not sure what 'higher skill / wage' one is supposed to get, it was min wage and bonuses around the christmas period if you were lucky.

[Vladimir Innit Lenin]

Blah blah blah growth blah blah blah business blah blah blah fiscal responsibility blah respectability blah blah the markets have to like us (who the fuck are 'the markets?') blah blah blah ordinary hard working britons blah blah fucking blah.

^^Labour since its inception, add 'blah blah blah war evil dictator communist muslamofascist extremist terrorists' in times of increased tension.

Serious post.

[x-punk]

Its hard to tell as its just the usual vague rubbish from politicians, but this proposal seems similar to the 'knowledge economy' nonsense which was pushed a while back.

That is where the govt hoped to get 50% of all school leavers into higher education because they told us that educating people to this further level would increase wealth creation in the economy. Unsurprisingly this was not the case. Yes they managed to push a far higher amount of school leavers into university places but education alone does not create much, if any, wealth into the economy unless people can utilise this education in a productive way i.e. getting a job relating to their qualifications.

At the same time they are scrapping student grants forcing students to take on eye watering levels of debt just to get this education. Also as this is going on, job requirements (especially in public sector jobs) are starting to ask for insane levels of qualifications to do jobs which would previously require far less, if any, qualifications, meaning if you want to do many jobs you are now going to have to get higher education (and the accompanying debt) which is really not needed.

Has this torrid scheme resulted in better service provision, greater productivity or a better quality of life for people. Course not, its had the opposite effect. Its has created a pointless and artificial barrier to entry into many jobs, it has saddled vast amounts of people with unnecessary debt, it has had a massive negative effect on labour mobility as people cant change careers without re-education, which is ludicrously expensive, leading to people stuck in careers they are unhappy with and not being able to move and making labour allocation far more inefficient. This in turn has a negative impact on service provision and productivity.

Yup, the previous scheme was fucking disaster for so many workers so lets repackage it and call it 'pre-distribution' and trot it out again. Lets sugarcoat it with fancy words and deceitful promises whilst kicking the workers in the teeth yet again.

This scheme could be really bad news.

[Die Neue Zeit]

While Labour treats this as a buzzword, no doubt, that doesn't mean the left shouldn't consider appropriating that term. I will highlight key parts here to demonstrate this:

Ed Miliband finds the buzzword, but will it sting? (http://www.opendemocracy.net/ourkingdom/oliver-huitson/ed-miliband-finds-buzzword-but-will-it-sting) by Oliver Huitson



In his speech at the Policy Network conference Miliband continues to build a strong analysis of Britain's economic predicament but do his proposed solutions go far enough?

Speaking at yesterday’s Policy Network conference, The Quest for Growth, hosted by the London Stock Exchange, Miliband emphasised some important changes in the landscape of political economy. Despite Miliband’s insistence, this is a party still plagued by caution, acting as if it will get back into power as long as it does nothing to frighten voters. But a serious Opposition must itself develop prescriptions that meet the scale of the crisis. How did he fare in this respect?

Labour’s new buzzword, “predistribution”, was given a more thorough airing and its meaning I will return to. But there were some important moments early in his speech on the economic fundamentals of neo-classical orthodoxy. He cited three assumptions: low inflation secures stability, a ‘rising tide lifts all boats’ and the rules governing our economy are fixed. For the last 30 years these have been foundational maxims of British governance. “All of them”, he said, “have been discredited”.

Yet this is not a view shared by George Osborne whose economic toolkit is rooted in a firmly pre-2008 world, and it is in the recognition of neoliberalism’s demise – intellectually at least – that Miliband has begun to mark his territory:

"Just as the postwar consensus could not solve the problems of the late 1970s, so the ideas of the last three decades will not solve the central economic challenges we face. Instead we need a new agenda."

The fleshing out of a ‘new agenda’, however, is where Labour remains unconvincing; the step from recognising problems to delivering solutions. What should be made of Labour’s ‘Predistribution’ approach? It recognises it was a failure of New Labour to think that inequality can be entirely redressed retrospectively; predistribution is about building a high wage, high skill economy that requires less intervention on incomes from the state. Fairness must be built into the economy at ground level rather than being levered in by the state retrospectively.

"Centre-left governments of the past tried to make work pay better by spending more on transfer payments. Centre-left governments of the future will have to also make work pay better by making work itself pay."

It says a lot that this banal aspiration has to be regarded as significant progress. But it is welcome, despite the wonkish terminology. Seen alongside his speech on immigration and globalisation, Miliband is at least starting to understand the realities of the Blair-Brown model, as well as the central role of inequality in the global crisis: “we are going to build growth based not just on credit, but on real demand”. The flexible, unequal, low wage, low skill, credit-fuelled asset-churn approach of New Labour is not just unstable but unworkable; the assault on wages necessarily translates into demand problems, requiring credit booms to cover the gap. This then leads to increasingly high levels of transfer payments, an aspect of our low wage, globalised economy that has caused major strains on the post-war welfare model and a source of growing social tension.

In Dani Rodrik’s “The Globalisation Paradox” the redistributional problem of globalisation is set out in some depth. Global trade, based on comparative advantage, generally moves production to where labour costs are lowest, putting downward pressure on consumer demand (not to mention working conditions). To return briefly to neoclassical methodology, where every agent is deemed identical in spending habits regardless of income, this is a non-problem. But in actually existing capitalism this has been a fundamental flaw highly germane to our present crisis.

"…income redistribution is the other side of the gains from trade… some groups will necessarily suffer long term losses in income" (Rodrik, 2011)

Demand, thankfully, warranted much discussion at the LSE yesterday and Miliband was on sure footing when he cited it as the critical problem facing the UK today: “demand matters”. The Coalition’s brazenly ideological supply side assault is almost entirely worthless – from a growth perspective – but in its attack on employee rights and planning restrictions it will be positively harmful. ‘All pain no gain’ describes their current approach and looks set to become their lasting epitaph.

In his denunciation of ‘collective austerity’ he echoed Larry Summer’s lively speech from earlier in the day, though with not quite the same verve. Summers, who served as Treasury Secretary under Bill Clinton, issued a plea for the lessons of the 30s to be relearnt in a withering attack on Osborne’s economic record. Keynes’ rejection of Says Law was ‘exactly right’, he argued, supply will not create its own demand and with real interest rates at, or near, zero, “the government has the capacity to spend and invest in ways that may well pay for themselves”.

Returning to Miliband, his speech was not without problems and omissions, particularly in the Q&A session. He was weak on climate change and the green industries - which in a conference on growth was surprising. Even when the railways were mentioned the only message was “ensuring competition”, putting under further doubt Labour’s ability to view any sector of the UK economy – health and rail in particular - in anything other than pre-2008, marketised terms. Reforms of corporate governance, now a fundamental requirement for Britain’s economy, will apparently, under Labour, be “led by business”: a byword for guaranteed inaction. On tax havens, many of which being British owned, Ed Balls would only suggest “vigilance” whereas both the country and the world needs action, and it would be popular too. There was not a word on quantitative easing and how the funds created by the Bank of England might better be deployed, and the key issue of debt write-offs – on which any recovery will ultimately depend – merited no mention. On moving towards a more co-operative, economically democratic model there was, again, nothing.

Despite all this Miliband struck many of the right notes. He could well be building a basis for a far more interventionist approach, on takeovers and industrial policy, combating short termism, with a British investment bank and financial reform. As ever, the key test will be the delivery; bold words in Opposition are ten a penny. But his diagnosis of the British economy continues to grow sharper and more coherent, and often with surprising subtlety – even if his proposed solutions remain lacking in ambition and constrained by internal party dynamics. Perhaps the real gamble is Labour’s conservatism – with voters grimly aware that some measure of radicalism is needed, there is a danger they will seek its rightwing manifestations if no left wing alternative is offered.

[Workers-Control-Over-Prod]

Centre-left governments of the future will have to also make work pay better by making work itself pay.


:laugh::laugh::laugh::lol: If only the traitors knew... if workers wages are raised, industrial capital will flee even faster and western capitalism asphyxiate itself even more. It is good, let's hope the left reformers get voted in in Europe and completely take out the fundament of the system. What was it? "Macht Kaputt Was Euch Kaputt Macht!" Or something like that.. :lol:

[Die Neue Zeit]

I'm not as pessimistic as you and your emphasis on crisis. I was hinting at a different iteration of "making work itself pay" than what the Labourite policy wonks interpret that to be.

[citizen of industry]

He called for more "responsible" firms that focused on the long-term.

Wow, just brilliant. Companies shouldn't worry about competition, profit margin and market share. They should just be "responsible" and think about the "long-term." "Excuse me Mr. Capitalist. Don't you think you should be a bit more responsible and think about the long term? Just an itty-bitty raise? Huh? Plllleeeeaaase?"

[Vladimir Innit Lenin]

Despite all this Miliband struck many of the right notes. He could well be building a basis for a far more interventionist approach, on takeovers and industrial policy, combating short termism, with a British investment bank and financial reform. As ever, the key test will be the delivery; bold words in Opposition are ten a penny. But his diagnosis of the British economy continues to grow sharper and more coherent, and often with surprising subtlety – even if his proposed solutions remain lacking in ambition and constrained by internal party dynamics. Perhaps the real gamble is Labour’s conservatism – with voters grimly aware that some measure of radicalism is needed, there is a danger they will seek its rightwing manifestations if no left wing alternative is offered.

Fuck me, you've got to be kidding me.

You want a british investment bank and financial reform? Why are you not fighting for the end of financial services and of speculation? A BIB and financial reform will merely entrench them for longer, and will make no difference to the lives of working people, so why bother?

His diagnosis of the economy is a load of incoherent crap, but purely because he pays homage to the 'demand side' you love it. His solutions are not constrained by internal party dynamics, his solutions are constrained by the fact that he is a right-wing conservative with a reactionary idea of where Britain should be - back in 'traditional' little England mode.

[Die Neue Zeit]

Calm down, will you? The author of the article was critical of Miliband's speech. Besides, you of all people know my stance on British financial reform of any sort vs. public policy action taken at the EU level.

[Paul Cockshott]

There is one policy here, replacement of min wage by living wage, and that is of benefit to workers. So a very limited Trade Unionist step left.

[Vladimir Innit Lenin]

Calm down, will you?

Alright, Mr. Cameron;)


The author of the article was critical of Miliband's speech. Besides, you of all people know my stance on British financial reform of any sort vs. public policy action taken at the EU level.

I don't totally understand why there's a radical difference between financial reform at a national level and a regional level. In many ways British financial reform is regional anyway, since it encompasses the combined economies of four countries.

My point was against financial reform in general, rather than a subset thereof. For example: if we advocate financial reform (on whatever scale), what is the purpose? Are we not admitting that financial services, the existence of money, interest-payable loans and share investment via speculation have some merit as they are 'worth' reforming? It's difficult to tactically prioritise financial reform, if your strategy is the abolition of money. It draws us into that whole 'politics of the possible' crap.

[Paul Cockshott]

There is one policy here, replacement of min wage by living wage, and that is of benefit to workers. So a very limited Trade Unionist step left.

[Die Neue Zeit]

There is one policy here, replacement of min wage by living wage, and that is of benefit to workers. So a very limited Trade Unionist step left.

The problem, comrade, is that there is no explicit acknowledgement in all that Labourite chatter to counter inflationary pressures of wages: http://www.revleft.com/vb/sliding-scale-wages-t98609/index.html


For example: if we advocate financial reform (on whatever scale), what is the purpose? Are we not admitting that financial services, the existence of money, interest-payable loans and share investment via speculation have some merit as they are 'worth' reforming? It's difficult to tactically prioritise financial reform, if your strategy is the abolition of money. It draws us into that whole 'politics of the possible' crap.

British financial reform is parochial compared to what I've said before regarding the ECB and all financial services in the European Union.

[Grenzer]

:laugh::laugh::laugh::lol: If only the traitors knew... if workers wages are raised, industrial capital will flee even faster and western capitalism asphyxiate itself even more. It is good, let's hope the left reformers get voted in in Europe and completely take out the fundament of the system. What was it? "Macht Kaputt Was Euch Kaputt Macht!" Or something like that.. :lol:

For some reason this reminds me a lot of what certain members of the KPD were saying in the late 1920's and early 30's. They believed that the rise of fascism was indicative of the desperation and political deterioration of the bourgeoisie in the face of the international financial crisis. This led them to the bizarre view that not only was fascism was an inevitable consequence of this, but even a desirable one since it supposedly heralded the downfall of capitalism.

The problem with your emphasis on crisis is that the spontaneous activism that springs from it in no way prefigures a realization that a new economic and political order under the revolutionary proletarian dictatorship is possible; that can only happen with the building of a single revolutionary party which contains the most advanced elements of the class itself.

The main point here is that the financial health of capitalism and the political consciousness of the proletariat are mutually exclusive.

[Paul Cockshott]

The main point here is that the financial health of capitalism and the political consciousness of the proletariat are mutually exclusive.
What did you mean there?

[Grenzer]

What did you mean there?

The implication is that a political strategy revolving around crisis theory is impotent.

[Workers-Control-Over-Prod]

For some reason this reminds me a lot of what certain members of the KPD were saying in the late 1920's and early 30's. They believed that the rise of fascism was indicative of the desperation and political deterioration of the bourgeoisie in the face of the international financial crisis. This led them to the bizarre view that not only was fascism was an inevitable consequence of this, but even a desirable one since it supposedly heralded the downfall of capitalism.

The problem with your emphasis on crisis is that the spontaneous activism that springs from it in no way prefigures a realization that a new economic and political order under the revolutionary proletarian dictatorship is possible; that can only happen with the building of a single revolutionary party which contains the most advanced elements of the class itself.

The main point here is that the financial health of capitalism and the political consciousness of the proletariat are mutually exclusive.

Agreed.

The KPD had some very inexperienced revolutionaries in it, yes. I don't recall though anyone thinking in Germany that the fascists would raise workers wages though, every thing i have read and heard about the time was a quite clear and widespread understanding in the workers movement that the Nazis were funded by the "Ruhrbarone", industrialists and would implement a similar austerity program to the Italian fascists in the late 20's; cutting worker benefits, increasing work time, cutting wages in half, reintroducing child labor, cutting corporate taxes by 50%, raising regional "charity" taxes on the working class, initiating arms programs etc.

If anyone on the left believed in the 1930's that Capitalism was doomed to failure, it was out of political opportunism "revolutionary optimism", not out of a scientific analysis. Capitalism produces periodic and systemic crises due to low rates of profit, which can only be resolved by a destruction of Capital Value. This theory of Marx has always been widely accepted, and some people (Stalin for example), used the Great Depression for political gains and suppressed dissenting views (i.e. cycle-theorists ala 'Destruction of Capital Value' rejuvenating profitability).

But now we are talking about a different thing you must understand. Rosa Luxemburg's elaboration on Marx's basic concept of the tendency for the falling rate of profit, basically holds that at a certain point, the rate of profit of the production process (not the whole economy) will fall below the financial interest rate, leading to large economic problems. This is basically what has been the case the last ten years since the rate of profit went below 2% in the USA. The rate of profit of the production process falling below that "point of no return" (Luxemburg) has lead to massive financialisation and unstable, state-subsidised industrial production. I am not adhering to the "economistic" revolutionary spontaneous party organisation, merely pointing out the shocking similarity between Luxemburg's economic theories and current reality.

http://www.tradingeconomics.com/chart.png?s=ip%20yoy&d1=19200101&d2=20120531


http://www.tradingeconomics.com/chart.png?s=indu&d1=19280101&d2=20120531


http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=INDPRO&scale=Left&range=Max&cosd=1919-01-01&coed=2012-07-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Monthly&fam=avg&fgst=lin&transformation=lin&vintage_date=2012-09-09&revision_date=2012-09-09

[Paul Cockshott]

The implication is that a political strategy revolving around crisis theory is impotent.

It is only impotent if you are not advocating a means of resolving the crisis that can win mass support.