Predistribution and living wages

It wasn’t a word I knew until yesterday, yet as I read about it, it became increasing familiar.

“In its more radical forms, predistribution is a potentially inspiring project for social democrats who have come to see the limitations of the old ways of doing things. It’s a project that promises a strategy to deliver abundantly on values of social justice, economic freedom, and equality of opportunity. But it’s a project that involves going head-to-head with entrenched interests, breaking up existing concentrations of wealth and economic power. The politics of predistribution, if taken seriously, simply cannot be a politics without enemies.”

We know a lot about going head to head with entrenched interests.

As I’ve understood it, it’s an inversion of the taxation and benefit approach which will encourage business to take the lead in wealth distribution,  by paying a living wage, for example.

In 2003,  P-CED founder Terry Hallman began a tent based fast which would lead to the sequence of events which introduced his work on values driven business to the UK.  He was calling for the US government to ratify the International Covenant on Economic Social and Cultural Rights.

In the  business plan we developed in 2004, we argued the strategic  case for tackling poverty saying:

“Dealing with poverty is nothing new. The question became ‘how does poverty still exist in a world with sufficient resources for a decent quality of life for everyone?’ The answer was that we have yet to develop any economic system capable redistributing finite resources in a way that everyone has at minimum enough for a decent life: food, decent housing, transportation, clothing, health care, and education. The problem has not been lack of resources, but adequate distribution of resources. Capitalism is the most powerful economic engine ever devised, yet it came up short with its classical, inherent profit-motive as being presumed to be the driving force. Under that presumption, all is good in the name of profit became the prevailing winds of international economies — thereby giving carte blanche to the notion that greed is good because it is what has driven capitalism. The 1996 paper merely took exception with the assumption that personal profit, greed, and the desire to amass as much money and property on a personal level as possible are inherent and therefore necessary aspects of any capitalist endeavour. While it is in fact very normal for that to be the case, it simply does not follow that it must be the case.

Profits can be set aside in part to address social needs, and often have been by way of small percentages of annual profits set aside for charitable and philanthropic causes by corporations. This need not necessarily be a small percentage. In fact, there is no reason why an enterprise cannot exist for the primary purpose of generating profit for social needs — i.e., a P-CED, or social, enterprise. This was seen to be the potential solution toward correcting the traditional model of capitalism, even if only in small-scale enterprises on an experimental basis.”

“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

We also describe how this business would disribute its surplus revenue:

” Fifty percent of annual surplus will remain in each local community where income is derived, by way of deposit into a local community development bank serving that location. In that locales are part of EU and therefore subject to well-developed rule of law, corruption issues should not present insurmountable barriers such as in Crimea.

Fifty percent of surplus will be retained by P-CED for growth and expansion. Along the way, all employees of P-CED are to be paid at minimum a wage sufficient to guarantee a decent standard of living in accordance with the International Covenant of Economic, Social and Cultural Rights.

The fundamental policy guide for P-CED is the International Bill of Human Rights. IBHR is comprised of Universal Declaration of Human Rights; International Covenant of Civil and Politial Rights, and International Covenant of Economic, Social and Cultural Rights. P-CED’s main focus falls within sphere the economic, social and cultural rights, ICESCR. In that the United States of America do not recognize those human rights and is the only industrialized country not to ratify ICESCR, P-CED operations are not yet compatible with underlying US policy and human rights commitments. In that sense, the US itself must be recommended as ‘not yet ready’, albeit for reasons quite dissimilar to those in Crimea. Thus the decision to first institute P-CED in Europe rather than the US. However, partnerships with US entities will be undertaken insofar as they advance the fulfilment of human rights where they are recognized across Europe under ICESCR. P-CED will also continue advocacy toward US ratification of ICESCR, and advocacy for economic rights in the US in particular. P-CED’s founder and first director is a member of the newly-formed US Human Rights Network.”

The model was applied to our software business which made poverty reduction and childcare reform in Eastern Europe its primary focus.

According to what the papers say. Labour leader Ed Milliband supports this idea, but has no idea of how to implement it.

Listening  to  Shadow Business Secretary Chuka Umunna describe it on Radio 4 ‘s Today programme, I’m reminded that it was in SW16, on the edge of his own constituency, that this was published in 2004.

“Going head to head with entrenched interests”, might well describe the experience from the beginning leading up to the confrontation with organised crime over childcare in Ukraine, as described  in  ‘Every Child Deserves a Loving Family Home‘.

See also:

Post growth People-Centered local economies

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One thought on “Predistribution and living wages

  1. David Ellis says:

    One wide open example of this process of exploitation which has resulted in the lost of an industry which could be employing Americans is the reforestation industry in America. The industry has been owned by a sub culture composted mostly of undocumented workers and temporary guest workers who migrate around the county, mostly in the southeast planting trees and caring for the forest. These migrants are married to the job meaning it is a 24/7 way of living not a 8 to 5 job and as such many migrants earn $300 to $400 per week but if the industry included travel time the actual hours spent earning this money will be in the order of 60 plus hours a week. This fact of life makes this an industry that is closed to American workers for they are not willing to live 24/7 for a job and the fact that the process of this work does not provide compensation for travel and living expenses the figure of $300 to to $400 per week actually translates into a net income of $200 to $300 per week. While this is great in Mexico it is not a living wage in the United States thus American workers are not attracted to this industry. If the industry paid a normal perdium of say $150 per week on top of the earnings then Americans could afford this work.

    The ucic foundation seeks to make this a mainstream issue that needs working on. To learn more visit http://www.ucicglobal.com

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