We Can Use Predistribution to Fight Income Inequality

Mainstream economics argues that the tax system is the best tool for reducing economic inequality. In fact, “predistributive” measures like minimum wages and collective bargaining can be equally or more effective.

It is a commonplace that “neoliberal” thought and practice has an anti-redistributive bent. But dig a little deeper, and neoliberalism — or, at least, the mainstream economic thinking that has underwritten much policy in the neoliberal era — is shockingly pro-redistributive. The issue, instead, is how and when redistribution takes place. In this thinking, there is a clear preference for redistributing income exclusively through the tax system, while avoiding supposedly less efficient tools for reducing inequality, such as the minimum wage, collective bargaining, or housing regul