The Semantics of Inequality Reduction: Predistribution vs. Redistribution
A recent debate centers on the relative importance of “predistribution” and “redistribution” in addressing inequality, sparked by differing interpretations of economist Julien lazardi’s work and the approach of French economist Thomas Blanchet. The core of the disagreement isn’t necessarily about how to reduce inequality, but rather how to categorize the tools used to achieve it.
The author contends that Blanchet’s methodology appears to operate on the premise that social insurance programs – encompassing old-age, disability, and unemployment benefits – are not truly redistributive. This outlook rests on the idea that these benefits are “paid for” by workers for their “own” use, a line of reasoning mirroring common distinctions made in the United States between programs like Social Security (frequently enough viewed as earned entitlement) and programs like Food Stamps (frequently labeled “welfare“). This sentiment was exemplified by a recent incident where an individual publicly demanded politicians “keep yoru government hands off my Medicare.”
However, the author argues that a clear-eyed assessment of the mechanics of inequality reduction reveals a basic consensus on the necessary steps:
- Compress the wage scale through measures like unionization and collective bargaining.
- Redistribute capital’s share, either through global dividends (as seen in Alaska) or by increasing the labor share of income.
- Provide income support to non-workers via the welfare state.
The author suggests that the debate frequently enough stems from ideological biases, with some perceiving steps (1) and (2) as radical departures from capitalism, while viewing (3) as less significant. this leads to attempts to demonstrate the greater impact of wage compression and capital redistribution over the welfare state.
The author’s analysis concludes that:
- Wage compression is the most effective tool for reducing inequality among workers.
- The welfare state is the most important lever for reducing inequality across society as a whole, including those not participating in the workforce.
The author critiques the practice of redefining the welfare state as “predistribution” simply to claim that it is not the largest driver of inequality reduction. This, they argue, involves excluding non-workers from the calculation and effectively redefining the welfare state out of existence, a maneuver they deem “silly and confusing.”
Ultimately,the author concedes that if one insists on prioritizing the term “predistribution” and includes the welfare state within its definition,then it is indeed possible to conclude that “predistribution is the biggest driver of inequality reduction.” However, this conclusion is contingent on a specific, and arguably artificial, categorization of existing social programs.
