Tuesday 18 June 2013

Taking back pre-distribution from Labour

Some years ago, I wrote an essay for an excellent book of counterfactuals, edited by the equally excellent Duncan Brack, trying to explain why it was the the British Left had moved away from the kind of co-operative culture that was embraced in Scandinavia.

I imagined the difference was because Beatrice Webb failed to marry Joseph Chamberlain, as she had hoped, and turned away from Liberal co-operatives as a solution in favour of dour state Fabianism.

The only review I got was from the left wing Tribune, which called it "an insult to everyone involved".

Possibly it was.  But the basic message was important.  Something shifted the direction of UK reform in the wrong direction, with disastrous results - because the whole business of reform has to be fought for now all over again.

A century ago, the two sides were still slugging it out.  The New Age was battling with the Fabian New Statesman week by week for a more all-embracing radicalism.  Unfortunately, the two papers merged and the Fabians ended up on top.

So it was that Labour, and to some extent Liberal, policy was governed by an approach that left the basic structures of business intact, but then tried to redistribute a bit afterwards using the tax system.

As a result, successive Labour governments took office convinced of the need to change nothing, but to fiddle a lot with tax codes and tax credits and benefits.  The staggering wealth of the new elite, and the inflationary pressure that brings on the rest of us, is testament to their failure.

I mention all this because the American commentator Jacob Hacker has been in town at events organised by the Policy Network, about the term he coined 'predistribution'.  This is what he said in the Guardian:

"Finance was at the heart of the crisis and is at the heart of rising inequality, and policies should be retooled to foster long-term investments in entrepreneurship and innovation, not quick profits based on volume, leverage, or insider knowledge."

Predistribution is never going to take off as a slogan, but as a guideline for policy-makers it is extremely important.  For the first time in a century, it allows us to escape the dead hand of Fabianism and re-visit those radical ideas that even the Liberals lost faith in during the Edwardian era - co-ops, local institutions, and re-organising business so that the rewards spread more evenly and more efficiently.

It cannot be efficient, for example, for investors to buy a lifetime interest in their investments when they are only actually interested in 25 years.

So I hope that Liberals will embrace redistribution, but make it distinctively Liberal.  Because, with the best will in the world, we can't rely on the Labour Party to do more than gargle with the word and leave everything exactly as it always was.

And remember, if you doubt it, what Beatrice Webb's inspiration was by the end.  "Some old ladies fall in love with their chauffeur; I have fallen in love with Soviet communism", she said in 1944, during the great years of Josef Stalin.

Beatrice Webb's love life has a lot to answer for.

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