Predistribution

I recently finished reading The Spirit Level by Richard Wilkinson and Kate Pickett. I last read the book shortly after it was first released in 2009. The book made quite a splash at the time in the UK, but I don’t recall a similar fuss being made about the book in South Africa. But I digress.

For those who have not read the book, it’s premise is simple: unequal societies fare worse than equal societies when looking at societal conditions and factors such as drug abuse, teenage pregnancy and incidences of violent crime (to name just three).

Wilkinson and Pickett show that invariably the Anglo-Saxon capitalist countries (and Portugal, funnily enough) have higher incidences of teenage pregnancy, drug abuse etc. than the Scandinavian countries due to the inequality within the Anglo-Saxon capitalist societies (the focus of the book is admittedly on the developed economies).

But one of the key points I want to pick up on that is dealt with briefly in the book is the notion of “predistribution” (though Wilkinson and Pickett never use the term themselves in the book).

Economically there are two ways of creating an equal society:

The first way is to tax companies and individuals and then distribute the proceeds via benefit payments, for example. This is the predominant model used by states, including South Africa.

The second way of creating an equal society is through a method known as predistribution (admittedly not the sexiest of terms). Predistribution can be distilled to the following principle: if you pay people a decent wage (before tax) there will be less need for redistribution after tax by means of benefit payments.

Given the high levels of inequality in South Africa, it is therefore not surprising that there are such high levels of crime, for example (a la the inequality in Anglo-Saxon societies as compared to the Scandinavians mentioned above). After all, if you have something I want and I know there is never any way that I could ever be in an economic position to be able to afford what you have, why wouldn’t I resort to crime to get what I want? By the way, Wilkinson and Pickett also show that simply locking people up doesn’t solve the problem of crime.

Sure, there are a number of structural factors that would constrain the implementation of predistribution in South Africa. These factors could fill countless blog posts on their own. The question though is simple: what kind of society do you want to live in? If you want to live in a peaceful and harmonious society (ie a more equal society than the present), would you rather start looking for solutions (such as predistribution) now or simply just sit and wait for the midden to hit the windmill?

As long as the current levels of income inequality remain what they are in South Africa, the door is ajar for those who would implement far more radical ways reforming the economy and distributing the wealth in the economy than by predistribution. The results would probably not be to your liking if you currently lead a relatively comfortable middle-class existence.

As Alex Haley said, “either you deal with what is the reality, or you can be sure that the reality is going to deal with you”.