Libertarian Predistribution

Olly Neville July 16, 2013 4
Libertarian Predistribution

The goals of predistribution are best achieved through libertarian means

When Ed Miliband announced his great idea of predistribution most people ignored it. Even the politically aware had very little idea what it was, assuming it was a wonkish term for more left-wing tax and spend. The idea seemed to get very little political traction and has been brushed away slightly.

However, upon looking at predistribution it is actually, almost, a very sensible idea. Predistribution is basically the idea that we should move toward a more equal society not by taking from the rich and giving to the poor but by setting the rules of the game so the outcomes are more fair. So far it has been championed mainly by those on the left and their suggestions to solving the problem are: the living wage, regulation, etc; these are typical left-wing ‘fixes’ to almost anything and lack economic credibility, and they certainly will not solve the problem of inequality.

Predistribution as a concept, sans these policy recommendations, is not only a worthwhile aim, it is also exactly what libertarians should be arguing for. Where libertarians and the left agree is that corporations typically tend to screw the little guy, where they differ is that libertarians understand that corporations only get so big due to their preferential treatment by government . Corporations typically aren’t products of free markets but of corporatism, an unholy alliance between Government and big business.

If predistribution is ever to be achieved it can only be done so by libertarian means. Cutting back on regulatory barriers to entry and high taxes means that competition can flood into markets that are currently run by a few big players. More competition means that the corporate elites can no longer make the enormous profits that fund their extravagant lifestyles, whilst lower prices will mean a better deal for the average consumer. If we realise that the vast majority of the rich and powerful have gained and maintained their fortunes thanks to the work of government; through laws and regulation cementing their position by stopping competition; through cosy friendships meaning the largest firms get off while smaller ones are punished; by subsidies meaning the tax payer shells out for corporate profits and by good old fashioned corruption, backroom dealing, heavy lobbying and so on, then we can realise that the only way to turn this around, to stop the concentration of wealth and the 1% isn’t by writing more laws and regulations, but by tearing up the ones we have. The predistributors are right that we need better ‘rules of the game’, but they are wrong that we should write them. We already have written them, and they’re awful. In fact central government has written the rules of the game for time immemorial and they have almost always been dreadful, and when they are good they quickly get changed for someone’s benefit.

It is an undeniable fact that we live in an unequal society, it is undeniable that the richest use their power and influence to get richer at the expense of the worst off. It is equally undeniable that the very cause of this inequality is the same vehicle that many misguided souls think will change it – namely the state. A more equal society is definitely something we should be aiming for, but ‘do good’ measures such as regulating and controlling only end up widening the gap. The rich and powerful, the corporations and multinationals can employ the very best to use every rule to their advantage whilst the little guy, the small producers, get squeezed out. The very things that some think will solve inequality actually will only go as far as to further it. The ‘solutions’ from the left will only further the problem, adding huge costs to small producers pushing them out of business and adding another hurdle to those wanting to end the market and make it competitive, while big corporations can absorb the cost or pass it onto the consumers.

The solution is clear. If you truly believe in an equal society then the only course of action is to reduce the one vehicle big companies can use to force out competition and cement their power. The only solution is to cut back the regulatory nightmare of central government, to take the state out of the market completely, to properly and fully open up markets to competition. All the well intentioned legislation in the world will only get corrupted and twisted, the politicians with supposedly good hearts get bought and traded, and any temporary fix is quickly changed by the next batch of politicians, corporate lobbying and backroom deals.We cannot trust the very thing that creates inequality to solve it. Predistribution is a worthy goal. To reach it we need to change the rules of the game fundamentally or forever. No sticking plasters, no temporary fixes, real predistribution means ending the state, not increasing it.

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