So What Is "Predistribution" Exactly?

It has to be admitted that the "News In Shorts" was quick to rubbish Ed Milliband's ideas about "predistribution" without, some might say, explaining why. Are we guilty, perhaps, of dismissing the idea simply because it seemed supiciously like soundbite politics without giving it due consideration? There is, after all, at least one economy in the world that does actually operate a predistribution system - Japan. Essentially it consists of distribution of the nation's wealth through the medium of a much more equitable wage structure without the need for excesive government interference in the form of a redistributory tax system and artifical devices such as tax credits. In other words Japanese employers pay a living wage to all their employees and, in return, they have managed to sustain a high level of domestic final demand that has benefitted both the employer and the employed even in the face of sustained recessions. The key to their success, however, is that the Japanese have the necessary highly skilled and productive workforce and low unemployment to sustain such a system. Britain, after decades of ideological interference in education, the wholesale waste of talent and a criminal lack of investment, unfortunately has none of these things. In Japan training the workforce to maximise both its productivity and earning potential is considered by employers to be the indispensible foundation of their success and, ultimately, of their profits. In Britain employers see driving wages down to starvation level, even as they drive prices up, as the foundation of their success - and we can all see how well that's worked out. In a country like Britain, where class is still the measure of all things, where millions are without proper employment and greed is seen as a force for good, predistribution seems doomed to failure. Low wages and the rationing of good education for ordinary people have been the shame of Britain for decades and there is little prospect that it can be reversed during the lifetime of a single government.