Thursday, 6 September 2012

Predistribution

Ed Miliband's comeback is based on one horrendous made-up word - "predistribution". In a nutshell, this is stopping people from having stuff in the first place rather than letting them have it and then redistributing through taxation as benefits. Examples of this would be increasing wages at the bottom (see living wage) to save on tax credits and rent controls to reduce spending on housing benefit. Now I'm not in favour of benefit dependency so this should be a good thing right? Nope, this still distorts the market but at a different point in the process, and also adds another level of government control, something typical and beloved of Labour.

In my ideal world, there wouldn't be all this minimum wage, housing benefit, and tax credit nonsense, we'd let the market decide what a job or house was worth. The government sticking its oar in has fucked all this up and is now difficult to reverse. But predistribution isn't just about wages and rents; it can be about regulation and control over anything - want a banking license? We're going to tell you who to lend to so the money goes to the "right" people. Landlord? This is how much you can charge your tenants, oh and we've limited the number of properties that you're allowed to buy to let. Company director on a big salary? We're capping that at ten times the wage of your lowest paid worker. So by letting the government control things like this, at what point would it leave you alone to get on with things? The answer to this is that it wouldn't. This is only the top of a slippery slope where things are controlled, restricted, or banned in the name of equality or because they know what's best for you. Be careful what you wish for...

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