The predistribution solution

This policy brief analyzes the American political economy past and present through the lens of “predistribution.” Predistribution policies seek to achieve greater equality in opportunities, resources, and power, whereas redistribution policies take from some and give to others. Predistribution policies include public investments in education to foster substantive equality of opportunity and market regulations to balance power in the economy. Redistribution policies include progressive taxation and welfare spending to achieve greater equality of outcomes, such as income and wealth. We readily acknowledge that the two types of policy can blur in practice, yet the conceptual distinction is useful nonetheless.

We contend that the predistribution policy agenda provides the most compelling alternative to neoliberalism and plutocratic populism, both in theory and in practice. The term “neoliberal” can be used to refer to everything from an ideology to a stage of capitalism to a basket of policies. In the realm of theory, neoliberals tend to hold the free market as an ideal. They view markets as arenas of freedom and government actions as constraints on individual freedom and impediments to market efficiency. Therefore, they seek to limit government “intervention” in markets. In practice, however, US neoliberalism since the 1970s has not reduced government regulation but rather shifted market governance in favor of those with wealth and power. Plutocracy refers to government by and for the rich, while populism denotes movements that mobilize mass support by claiming to represent the common people against the elite. Hence, plutocratic populism constitutes a mutant form of neoliberalism more than a break from it in that it still seeks to redistribute power and wealth upward. Therefore, the antidote to both neoliberalism and plutocratic populism would be to reverse the arrows in the other direction—and that is the essence of the predistribution solution.