Friday 27 September 2013

"Predistribution": A Suitable Socialist Synonym?

No Need For Synonyms in 1894! This Socialist "Christmas Card", by Walter Crane, hails from a time when "the cause of labour" could be openly and proudly proclaimed. For most of the twentieth century, however, left-wing activists (especially in the USA) were required to devise "suitable synonyms for Marxist terms". Even today, those advocating the cause of Labour are forced to reach for synonyms like "predistribution" to prevent the Right's horses from taking fright.
IT’S NOT EASY BEING A SOCIALIST in the United States of America.
Long ago: back in the days when I was still impressionable enough to remember such things; I watched a documentary film about the “New Left” in America. “The trick, in this country,” remarked one of the young radicals interviewed, with an engagingly conspiratorial wink, “is coming up with suitable synonyms for Marxist terms.”
The young Marxist theorists who penned the first clear declaration of New Left principles – “The Port Huron Statement” – accordingly softened the scary Marxist notion of “the dictatorship of the proletariat” into the much less daunting concept of “participatory democracy”.
Seizing control of the means of production, distribution and exchange became the much more acceptable “struggle for economic democracy”, or, as the authors of the Port Huron Statement put it back in 1962: “the economy itself is of such social importance that its major resources and means of production should be open to democratic participation and subject to democratic social regulation”.
If attaching the most cherished word in the American political lexicon to left-wing political ideas secured them a hearing from ordinary American workers, then American socialists were only too happy to oblige.
I was reminded of this long ago search for non-inflammatory left-wing phraseology only a few days ago. The memory trigger was a newspaper article which claimed that Labour’s new leader, David Cunliffe, was a believer in “predistribution”.
How I laughed. Even before researching the term, it was clear to me that in “predistribution” I was dealing with a classic example of a suitable socialist synonym.
Coined by the Yale University economist Jacob Hacker in 2011, the term seeks to identify the income that flows into a worker’s hands from sources unconnected to the State. Unlike “redistribution”: the special subsidies, tax advantages and income transfers that flow to the victims of economic and social inequality from the general revenue; “predistribution” identifies the process of reducing entrenched inequalities by increasing the workers’ share of the private sector’s gross profits.
Now, how would a Labour leader do that?
Well, a New Zealand Labour leader would only have to look back over the course of this country’s history to find the answer.
The Liberal Government of John Balance “predistributed” workers’ incomes by handing over the determination of their wages to a special “arbitration” court made up of three arbitrators, representing workers, their employers, and the state.
The workers’ representative on the Arbitration Court was, of course, chosen by the New Zealand trade union movement. Indeed, without a strong trade union movement to exact an increased share of the private sector’s profits for its members, “predistribution” has little chance of long-term success.
The First Labour Government understood this very well, which is why within a year of winning power in 1935 it had legislated for universal union membership and facilitated the formation of New Zealand’s first effective trade union peak organisation, the Federation of Labour.
A Labour leader could, of course, try to “predistribute” without a large and effective trade union movement. This could be done by lifting the minimum wage to $15 per hour and/or legislating for the payment of a “living wage” to particularly poorly-paid categories of workers.
From the perspective of a Labour Government, however, it would make much more sense to facilitate the design of a brand new institutional framework for twenty-first century collective bargaining.  Achieved by means of a comprehensive, bottom-up exercise in democratic consultation, these new institutions would become the primary instruments for “predistributing” the national income.
Only a trade union movement that had emerged from such an all-encompassing and demonstrably democratic process could legitimately claim the right to play such a vital role in the nation’s economic life. And only while it spoke in the indisputable accents of ordinary working New Zealanders could it hope to survive Labour’s periodic electoral rebuffs.
Assuming, of course, that such a massive exercise in “participatory democracy” hadn’t already removed the need for socialist synonyms altogether.
This essay was originally published in The Dominion Post, The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 27 September 2013.


Brendan McNeill said...

No doubt those employees who eagerly seek a predistributive share of the employers profits, will also be rushing to mortgaging their home in order to invest their capital into the enterprise.


I thought not.

No problem, I guess they will sacrifice a percentage of their wages if the business makes a loss in any given finanical year.


I thought not.

Brendon said...

I actually like the 'predistribution' term. There is lots of situations in NZ where those who control the capital have an unfair advantage.

From the land bankers and bankers who like toffs of old make housing more expensive than it needs to be. Or the rigged system of electricity, supermarkets and hardware markets that rort the incomes of the ordinary worker.

There is plenty of systemic changes to New Zealand Inc that would have a 'predistribution' effect. I think these should be highlighted and explained as being different from the more traditional left wing tax and spend redistribution policies.

Anonymous said...

Workers have OFTEN taken a cut in pay and/or conditions to help out a business. MORE often it's just done compulsorily to expand the bloated bottom line, but evenso.

Richard29 said...

I presume Cunliffe is thinking of something along these lines:
Relatively uncontroversial in the high wage economies of Western Europe.
I'm sure Key/Joyce/English will denounce it as North Korean communism....

Richard29 said...

I doubt Cunliffe is about to introduce compulsory unionism. I suspect he has something along these lines in mind:
Has little impact on good employers who invest in their people and pay them fairly but devastating for bad employers competing in a race to the bottom through lousy pay and working conditions. Relatively common in the high wage economies of western Europe.
I'm sure Key/Joyce/English will denounce it as North Korean communism or worse.

Gerrit said...

One can foresee a union organised strike if the level of "predistribution" was not high enough due to the "profit" being spent on new plant and equipment. Management want to spent profit on expanding the company, workers want cash in the hand.

Why don't unions simply bypass owners and their management staff and start their own businesses?

No need for any predistribution or any such post profit distribution schemes.

All profits would be automatically redistributed to the workers.

So simple, and the state is not need to involved in supervising (plus clip the ticket on administration costs!) the profit (cash) transfer structure.

Dave said...

Pre-distribution is ultimately an impossibility Chris. Marx proved as much in his manuscript 'Value, price and profit' commodities must sell at their values under capitalism, including labour power as distinct from labour. To attempt to raise the wage will eventually be reversed by the contradictions inherent to the capitalist mode. This led Marx to the conclusion that the workers struggle must be for the abolition of the wage system in it entirety. though this does certainly not rule out struggles for better conditions is an important ground for working class education.

More generally there is a danger in "popularised" terms as they often hide a different meaning than what the listener interprets, drawing on their own experience. Think of nationals 'mum and dad investors' for example. Likewise pre-distribution is not a Marxist term nor idea, dating back to Utopianism and saint-Simon

Anonymous said...

Profit being spent on new plant and equipment :-)- like the railways??? Thanks for the laugh.

peterpeasant said...

An interesting perspective on company ownership and empoyer, employee relationships was raised on Nat rad "Nine to Noon" today (27/09/13). when K Ryan in the 10 - 1030 slot Steven Pearlstein.

Well worth listening to. Opened a few doors I had forgotten had existed.

Doors the neo libs deny exist at all.

Brendon said...

Labour has already made a good start with predistribution with its electricity proposals. I believe the proposals could lead to significant savings for householders. But to administer this new system Labour would need to make institutional changes so that public servants like the electricity commission are more independent and merit based.

The easiest way to do this would be for the Speaker to be elected by a near unanimous vote in parliament and be given the responsibility for appointing the key public servants.

Brendon said...

Recently for financial and child care reasons I helped out at a family owned restaurant doing kitchen hand jobs. It was good honest labour and I certainly saw how hard people work in the hospitality industry.

What is disturbing is how much others are riding on the backs of that hard work. Landlords are constantly assessing when to put up the rent to extract their pound of flesh. There is only one main supplier of food products since Raewood's got taken over and they supply poor products at high prices. Electricity costs rise above inflation every year. Apprentices training is being gradually downgraded with basic skills being lost. New modernist cuisine cooking techniques are not being introduced. There is a general feeling of stagnation.

Really food is something we should be doing well. We should have an abundant supply of good quality products and an evolving national cuisine. Check out this link from the Nordic countries for what can be done with a lot fewer resources than what we have.

The government funding of only 3 million euros may seem insignificant but New Nordic cuisine involves the major food wholesale and retail providers, world class restaurants, food equipment makers and other players, so it has significance greater than simple government spending.

This could easily be a model for New Zealand. Co-operation between producer and consumer could provide a new, better, more affordable and healthier national cuisine that we could market to the world.

That is the sort of predistribution I want to see in New Zealand.

Anonymous said...

Hilarious Brendan, a list of middle class transgressions. A refreshing change from your normal beneficiary bashing. Maybe you're learning :-).

Mark Wilson said...

Give me as break - back to the bad old days of destructive unions and capital strikes destroying the economy.

Anonymous said...

Thank you for this interesting contribution, Chris! But looking at the challenges "the left" in the US have had for so long, let us get real about the challenges of "the left" in modern day New Zealand, which I argue, does hardly exist now.

Even Labour - under Cunliffe and his new front bench - are nothing much of the kinds of "socialists" that would dare forcing employers to allow participatory democracy in the work place, are they?

Imagine the average kind of Kiwi enterprise, most of which are small by any international standard, many run by sole operators, or as limited companies of small to medium sizes, allowing their staff to appoint a "worker's representative", let alone a "worker's collective", to represent the staff on the workshop, factory or office floor.

New Zealand is a bit of a "wannabe", yes dishonest, egalitarian society, where individual effort and enterprise are held higher than social involvement of all layers of society. We have a broad, but breaking up middle class that ultimately determines who will be in government, and they are primarily interested in ensuring their living standards, their lifestyles, that they can somehow get the own home financed, that they can run their one to two cars per household, that they send their kids to the best (if need be private) schools, that they can import cheap products and shop cheaply here too, while low paid retailers ensure prices do not reach too high.

We have poor and wealthy suburbs, we have some excluded from opportunities and decent incomes, and it will not change with a mere change of government.

So while we have a lot of "social" or "socialist" romanticism in some quarters, where is the true participatory democracy here? Where are the economic stakes - shared by the New Zealanders as a whole, while thousands (who have spare money) now rush to buy Meridian shares?

I feel some better wake up. The new Labour lineup looks better and more promising, but will certainly not take us where you and some others would like to take us and the country.

But dreams are for free, and without dreams, life would be truly dreadful, I suppose.


Anonymous said...

And the economy's better now? Only by the boss's yardstick, not for the structurally unemployed.

Davo Stevens said...

@Anon Mike 11.09

Right on. We don't have a true Democracy here more of an "Elective Dictatorship".

There is a place for 'Socialism' and a place for 'Capitalism' the trick is finding the right balance. Presently we have it tipped in the direction of 'Capitalism' at the expense of Workers.

Although for much of my life I worked in Middle to Upper Management I have done my share of working in a sewer shovelling poop! But believe me, there is a fair amount of that poop floating around here!

We need to have a Govt. who really cares about Kiwi's not just lip service. At times like now that Govt. should be creating jobs for the un-employed, even just in the short term. There are many things that could be done that would benefit the society and economy as a whole that could be done by getting the un-employed into work instead of just paying them a pittance and ignoring their plight.

Private Enterprise is a lean, mean, money-making machine and they won't pick up those workers who find themselve out of work.

Anonymous said...

Import control, through tariffs etc, should obviously have a place in any predistributive scheme. However, this would go down like a lead balloon in today's economic environment.

aberfoyle said...

The tool in the box for raising workers wages and conditions is obviously compulsory unionism,and most full time low waged and low waged casual workers would gladly embrace that rule, knowing that fear of retribution from their employer, for legally being a member of a union would be illegal,unlike today, were employers are free to discriminate against those, who choose to be union members.

However,the likely hood of compulsory unionism under a Cunliffe lead Government, is what it is, a pipe dream,as his governance in the work place will be one of caution and market reality.What i presume we will see is a raising of the minimum wage to $15 per hour, and a favourable hand to the right of collective bargaining, and rolling back the ninety day work rule.

As for the predistributive share, or workers having a sharing in a employers business, for most employers that would be anathema to their basic 18 century profit mentality.

Greg Pirie said...

In relation to the language of the left, see...


and in more detail: