The Crisis of Egalitarian Policy and the Promises of Asset-Based Redistribution

This paper analyses the links between egalitarian policy and unemployment and the possible use of asset-based redistribution to overcome the crisis of egalitarian policy. Contrary to left-Keynesian belief, egalitarian policies in the postwar period were not the means to ensure high aggregate demand and full employment. The main direction of causation went the other way: full employment generated increasing egalitarian demands while high unemployment after the golden age paved the way for increasing inequality. The breakdown of the golden age is itself explained by a gradual deterioration of the business climate which undermined the full employment policy. In addition, increasing international mobility raised the costs of redistributive taxation. Asset-based redistribution may, as suggested by Bowles and Gintis, open new possibilities, but the Scandinavian experience with increased worker ownership raises serious questions about the implementation of asset redistribution