Yes Minister, Pre-Distribution and the Big Society

A Yale political scientist, one Jacob Hacker, has come up with an idea he calls "pre-distribution", focusing work done by John Rawls and others on how to make society fairer.  At the moment the state tries to do this ex post facto via taxation and welfare.  Hacker wants to do it much earlier on.

I heard Hacker interviewed on the radio the other day because his ideas have been taken up by Ed Miliband  (the Tories have been quick to link the hapless author with Yes Minister's Jim Hacker; David Cameron delightedly pointed out at PMQs that the academic has written a book called The Road To Nowhere).  Jacob Hacker seemed a thoroughly amiable chap, partly bemused and partly flattered by the attention he is getting.

Basically, he wants employees to be given more money.  This is all very laudable (and if it could be achieved by making sure their Chief Executives got less, it might even work); but if you pay employees more, you immediately raise the company's cost base and make its products and services less competitive.  More money for the employed means fewer jobs for others.  If we did what Hacker - and now apparently Ed Miliband - want, the Germans and Chinese would be laughing their heads off.  Because they are the people who would benefit.

Hacker's view is shared by by Dave Prentis, head of public sector union UNISON.  Prentis has bitterly criticised the Government's public sector pay freeze.  He may be justified in trying to get better pay and conditions for his members, because this is after all what unions are there to do, but he is wrong to suggest, implicitly if not explicitly, that higher wages for public sector workers are somehow good for society at large.  They aren't.  Every pound spent on higher public sector wages is one less that can be spent somewhere else in the economy.  That's why Ed Miliband has endorsed the Tory pay freeze.  Prentis needs to explain which service (or whose jobs) he would cut to pay for his members' wage increases.

For the disaffected, alternative employment and better pensions may be available in the private sector.  Or not.

If the pre-distributionists really wanted wages at the bottom end to rise, they would be calling for an end to unskilled immigration.  Its effect has been much studied (not the least by Prof David Blanchflower) and is well understood.  The pool of available labour increases.  Employers don't have to compete for staff by raising wages.  Wages at the bottom end stagnate while those at the top rise.

During the last Labour government more than 50% of new jobs created went to people born outside the UK, leaving many British people (some of them, incidentally, with brown skins) languishing on their sofas.  Ironically, those most in favour of unrestricted immigration are those most likely to complain about the inequality which results when you have it.

Like other big ideas, Pre-Distribution will come and go.  Blue Labour.  Red Tory.  Ed Miliband mentioned Disraeli's One Nation during his party conference speech - that one, more than a century old, flickers briefly into life now and again.  Will the Third Way still have legs in 2112?  Perhaps.  But I don't think we'll be hearing much about the Big Society.