Predistribution, Public Opinion and Unilateral Executive Action

A market, which exists, unlike “the market” which does not. (St Quinton Saturday Market by M Hobbs)

Matt Bruenig has a good post on predistribution, “measures governments take to reduce or eliminate inequality in market incomes” as “the most viable way to give a boost to low-income workers.”

As far I am concerned, there is no moral or political difference between the two. Predistributive institutions and redistributive institutions are both just institutions. What matters is achieving greater economic equality, not so much the precise institutional regime that we use to get there. If anything, I tend to find so-called redistributive institutions more attractive because they are easier to fine tune and strike me as more liberating.

I certainly agree on the ‘no difference’ point.  Why is it more viable?

But, as Hacker correctly points out, my view is almost certainly an outlying one. For cultural or other reasons, Americans tend to be more supportive of equality-producing measures that get baked into paychecks than they are of equality-producing measures that go through more overt government channels. As a result, the US has a very stingy welfare state and delivers much of its government spending through opaque, submerged mechanisms like tax credits.

The Submerged State and the Production of Inequality

Well beyond its impact on individuals and families, the submerged state exacerbates economic inequality by promoting some entire sectors of the economy over others, at government expense.  In delivering subsidies to particular industries and creating incentives for people to participate in specific market activities, its policies protect and enhance profit-making capabilities in those areas.  From 1980 until the current recession, the core sectors that it nurtures–finance, insurance, and real estate–outpaced growth in other sectors of the American economy.  The fortunes of these industries emanated not from “market forces” alone but rather from their interplay with hidden policies that promoted their growth and heaped extra benefits on them.  Suzanne Mettler, The Submerged State