Yale professor Jacob Hacker first used the term "predistribution" at a Policy Network conference in Oslo in 2011. Image: Dan Murrell.
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Jacob Hacker: Ed Miliband’s wonkish pin-up

Jacob Hacker thinks he has the answer to the public’s hardening attitude to welfare – we should “stop inequality before it starts”. But can the idea of predistribution enter the political mainstream?

It was at a think-tank conference in Oslo in 2011 that Jacob Hacker first used the word “predistribution” in public. Among those in the audience was Ed Miliband, whose intellectual curiosity was piqued. Predistribution – the idea that governments should seek to create more equal outcomes even before collecting taxes and paying out benefits – seemed to offer an answer to a question that was becoming increasingly insistent: what is the point of Labour when there’s very little money to spend? Those close to the Labour leader, such as his chief strategist, Stewart Wood, and the shadow chief secretary to the Treasury, Rachel Reeves, began using the word to link together policies such as the living wage, worker representation on remuneration committees and greater vocational training, and also to signal a commitment to fiscal responsibility.

Then, in September 2012, in an interview with the New Statesman and a speech to Policy Network (the organisation that had hosted Hacker in Oslo), Miliband himself presented predistribution as Labour’s “new agenda”. The derision followed swiftly. His use of the term, described by the then director of Policy Exchange, Neil O’Brien, as “the sort of stupid made-up word that only a policy wonk could love”, was presented as proof that the man who won the Labour leadership contest on a promise to “speak human” had given up on doing so. During a memorable session of Prime Minister’s Questions, David Cameron sarcastically declared: “I say that the Labour Party has no plans, but on this occasion I can reassure the House that it has, and the new plan is called predistribution. What I think that means is that we spend the money before we actually get it, which I think the Right Honourable Gentleman will find is why we are in the mess we are in right now.” Alluding to Yes Minister’s hapless Jim Hacker, he added: “His new guru, the man who invented predistribution, is called – and I am not making this up – he is called Mr J Hacker.”

When I meet Hacker at the Kingsley hotel in Holborn, central London, he reports that Miliband began their most recent meeting by offering an apology. “Ed was very funny yesterday,” the 42-year-old Yale professor of political science tells me. “He said: ‘I’m sorry if I screwed up the term for you.’ I said: ‘Are you kidding?’ I’m an academic; I’ve had one idea that’s broken into public consciousness in American political debate and that’s the public option [the proposal to set up a staterun health insurance agency] . . . I’m not used to having my ideas discussed by politicians. So I said, ‘You can talk about it as much as you want. I’m sorry if it made people think that you’re a policy wonk.’”

It was when a friend sent him a YouTube clip of Cameron’s PMQs riff that he realised the influence the term was having. “My first reaction was: ‘This is so cool!’ I am personally being attacked by the Prime Minister of Britain – what more could I ask for? My second reaction was: ‘Who is J Hacker?’ I had to go and look up the reference and now, knowing the reference, it was actually a very good joke and I can see why George Osborne was laughing so hard in the background. It made me think that British parliamentary discussions are a lot more interesting than American ones.”

He reflects, however, that it represented a missed business opportunity. “The punchline of [Cameron’s] joke was, ‘I have seen the latest book by Jacob Hacker. It’s entitled The Road to Nowhere and that’s where this idea will take us.’ And I was deeply offended by that. While I loved being attacked in the House of Commons, the fact that he said the book that I’d written as my undergraduate thesis at Harvard and was published in 1997, that that was my latest book, deeply offended me, because I could have used the free publicity for Winner-Take-All Politics [published in 2010] at the time.”

In person, Hacker is fluent and charming. Casually dressed in a corduroy blazer, beige jumper and black loafers, his brown-silver hair parted, he makes for an admittedly wonkish pin-up.

Born in 1971 and raised in the small college town of Eugene, Oregon, he says that politics was not a big part of his childhood but he felt “a deep unease during the 1980s about the direction of our nation [the United States], an unease that blossomed into more forthright progressivism when I went to Harvard as an undergraduate”. After graduating summa cum laude from Harvard in 1994, he studied for a PhD in political science at Yale, during which time The Road to Nowhere: the Genesis of President Clinton’s Plan for Health Security was published.

Winner-Take-All Politics, his most recent book, was co-written with Professor Paul Pierson of Berkeley (who supervised Stewart Wood’s doctorate while on the staff at Harvard). It is an eloquent j’accuseagainst a Washington elite that has waged a 30-year war on behalf of the rich against the rest. “Yachts are rising, but dinghies are largely staying put,” they write, adding: “There is reason to suspect that the dinghies are staying put in part because the yachts are rising.”

Hacker explains predistribution to me as “simply the idea that government makes markets, and that rather than redistributing income through benefits and transfers the first focus should be on working to make the market more equal and fair”. If he is sanguine about the mockery the concept has attracted, it is partly because most of those who derided it simultaneously conceded that he might be on to something.

Given the financial crisis and the resultant surge in the deficit, which the Office for Budget Responsibility forecasts will stand at £108bn (5.9 per cent of GDP) in 2014-2015, Labour can no longer hope to spend its way to social democracy. At the same time, the increasing public hostility to conventional welfare policies limits the scope for a strategy centred on redistribution. “In a society that grows ever more unequal, you cannot sustain the social contract simply by taking from some of the fortunate, the affluent, and redistributing to the rest of the society. It just doesn’t work politically,” Hacker says. “It doesn’t work because it creates an environment in which the middle is more likely to be resentful towards those at the bottom, who are the largest beneficiaries of public transfers, than they are towards those at the top, despite the fact that the rich are really the ones who have rigged the game.”

He is sharply critical of New Labour and the Third Way approach of “letting the market be the market and mopping up afterwards”. By tolerating the excesses of the City in the belief that its lucre could be redistributed through the tax credit system, Tony Blair and Gordon Brown created the conditions for the crash and ultimately failed to stem the rise in inequality. As Stewart Wood, who served as an adviser to Brown between 2001 and 2010, reflected when we spoke separately: “We were doing remedial work, rather than getting to the root of the things that drive unequal outcomes. Predistribution allows you to address the forces that create less efficiency and greater inequality, which often go together.”

While redistribution will remain an important part of the left’s armoury, not least for those permanently or temporarily excluded from the labour market (the retired, the unemployed, the long-term sick, the disabled), Hacker tells me that “as a society we’re more likely to create solidarity and to get what we want as social democrats and as progressives if we make redistribution as little necessary as possible. That’s why it’s important, in the simplest terms, to stop inequality before it starts.”

The question that immediately follows is: “How?” Hacker says that when he met Miliband, the first and most important thing he emphasised was “getting the macroeconomy right”. In the short term, he says, this means “keeping the door open for stimulus”, and he quips that the International Monetary Fund has “moved to the left” of Labour on this score. He warned Miliband not to repeat the mistake of Barack Obama, whose administration derived little political benefit from the US stimulus “because they did it through a payroll tax cut that most people didn’t see”.

“Politically, the problem is if it’s invisible you get no credit for it. So do something concrete, like literally something concrete – build something, put people to work building things.” Having called consistently for a temporary, similarly “invisible” cut in VAT, Ed Balls wisely signalled in his 3 June speech on the economy that the policy would be abandoned at some point in the coming year in favour of greater capital investment. It is housing, Hacker suggests, that could be the silver bullet for Labour. “If you did a serious housing investment, you could have a pretty large effect in the short to medium term, which could help a lot in rebuilding trust in whichever party implemented it.”

Though Hacker is surely right to emphasise that growth is a prerequisite for any successful centre-left project, his presentation of predistribution is frustratingly diffuse. When I challenge him to outline five distinctive policies, he cites better financial regulation, a workers’ bill of rights, stronger corporate governance, full employment, greater investment in skills and early-years education and, as a bonus, supporting a small-enterprise economy. Here is a strategically smart agenda for a post-crisis left that recognises both its ability and its duty to shape the rules of the market.

Of a workers’ bill of rights, Hacker says: “None of this involves spending. You could have a living wage requirement linked to average wages over time, a right of request for workplace flexibility and pay transparency.” He notes: “It’s a huge issue that the workers themselves don’t understand that someone who’s working right next to them, or a manager, is earning vastly more than them. And it really depresses their ability to demand higher pay. If we’re talking about a free market for labour, you need to have information on both sides.”

One of the main causes of the stagnation of British wages, which began in 2003, is the steep decline in trade union membership (from over 13 million in 1979 to 6.5 million) and collective bargaining agreements, and Hacker suggests we will require new institutions in order to protect workers’ rights. He offers the example of US open-source unions, which “use social media and new organising tactics to run campaigns to change the terms of employment”, and Germanstyle works councils, which “adjust national labour agreements to local circumstances”, as models for the UK.

But can predistribution succeed in a global economy in which companies relentlessly seek out low-wage, low-tax locations? Hacker concedes that “some form of global regulation or government would help a lot with predistributive strategies” – which suggests we could be waiting some time – but adds more encouragingly, “We should recognise that companies do not just go to low-wage, low-tax locations; they go to high productivity relative to wage locations. And with regard to taxation, it’s pretty clear that stability is more important than the level. The key is to figure out how to raise productivity and skills investment would help greatly with that.”

The UK productivity gap – the difference between our productivity and that of other countries – is at its highest level since 1993, at 21 percentage points below the G7 average. Yet while the British government has pledged to reduce corporation tax to 20 per cent in 2015 (the joint lowest in the G20), more productive economies such as the US and Japan retain corporation-tax rates of 39 per cent and 38 per cent, respectively.

In any case, as Hacker argues, “You’ve got to focus on the primarily non-traded sectors: education, health care, social care, face-toface services. There’s no global competitive reason why you can’t do that.”

Five years after the start of the greatest crisis in capitalism since the 1930s, and after the comprehensive failure of austerity, the centre left remains becalmed. In Britain and elsewhere, it is the populist right that is gaining ground as voters shun mainstream social democracy. Even so, Hacker says he is “cautiously optimistic”.

“I do think there’s this hunger for direct and simple policies to help the squeezed middle. And one thing you can say for predistribution ideas, like ‘Hey, let’s have a living wage’, is that they’re pretty straightforward to explain.” He also remarks: “The cost of organising has come down with the information revolution. You can marry simple policies with new organising strategies. That’s a pretty powerful force multiplier.”

While Miliband and his allies often speak of the potential for a Thatcheresque transformation of the economy and society, Hacker suggests greater modesty is in order. “You’re not going to get a big bang of policy change. Instead, what progressives need to do is gain office, do some important things that improve the overall situation of the squeezed middle, and then get re-elected and repeat.” If Labour is to win in 2015, Miliband will need to pull off a daunting balancing act, persuading the voters that he offers a bold alternative to the coalition and at the same time reassuring them that Labour won’t run out of other people’s money again. Though the word may rarely pass his lips now, predistribution remains his best hope of doing so.

George Eaton is political editor of the New Statesman.

This article first appeared in the 08 July 2013 issue of the New Statesman, The world takes sides

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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