The never-ending game

Mani Basharzad has a very interesting CAPX piece on what he calls distributionalism, the political dead-end which has killed long-term thinking.

How ‘distributionalism’ killed long-term thinking

• Modern governments are in endless debates about which group deserves what share of the economic pie
• Social justice activists can never seem to decide when a sufficient level of equality has been reached
• Distributionalism attempts to engineer growth toward preferred social outcomes

One can trace this mentality, in its modern form, to the rise of distributional analysis pioneered by organisations such as the Resolution Foundation. The underlying assumption is that every policy should primarily be judged by how it affects different income and wealth groups. Want to evaluate tax reform? Examine its impact across income deciles. Welfare reform? Measure how different social classes are affected.

The whole piece is well worth reading as distributionalism is a major obstacle to longer term political thinking in the UK. We can call it socialism, but as with so much political terminology, ‘socialism’ has become too vague and politically threadbare to be as useful as it could be.

Modern governments have become trapped in endless debates about which group deserves what share of the economic pie, rather than concentrating on how to expand the pie itself. At this point, the knowledge problem becomes unavoidable. What exactly is the ideal distribution of wealth? Who decides which groups should possess which share of resources? The truth is that nobody knows. Even among advocates of social justice, there is no agreement about what a perfectly just distribution would look like.

The usual answer is simply ‘more equal than now’. But when is equality sufficient? Where does the process end? As Robert Nozick wrote, ‘There is no central distribution, no person or group entitled to control all resources, jointly deciding how they are to be doled out’.

That is why distributionalist politics becomes a never-ending game: it has no natural endpoint. Yet the economic distortions it creates are very real. If governments genuinely want to tackle short-termism, they should begin by abandoning distributionalism as the central framework of policymaking.