REDISTRIBUTION. — In the classic division of political economy dating back to J. B. Say (1803), still in use today, distribution is placed after the production and circulation of wealth and before consumption. It can be understood: either in a static sense (from which arise the various questions relating to property); or in a dynamic sense, as the division of the annual product (cf. INCOME) among the factors of production: enterprise, capital, and labor, in the form of profit, interest, and wages respectively, aside from mixed forms. The importance of distribution is evident, not only for social dynamism, but also for statistics and fiscal administration. The criteria, systems, and results of this division are not, in fact, merely the theoretical subject of the “distribution” chapter in treatises on political economy, but in practice form the object of lively debate on the structure of society, i.e., on the so-called social question.
Today’s criticisms of classical, or liberal, economics focus in particular on distribution, generally recognized as unjust and uneconomic: hence the importance of the concept of redistribution, a modern term summarizing the economic-financial mechanisms, whether spontaneous or forced, through which income received by subjects in any way privileged is partially redirected for the benefit of individuals or categories less favored by the existing social order or by events. Instruments of spontaneous redistribution include the luxury spending of the rich (cf. also LUXURY), savings, profits and land rents, industrial surplus incomes employed productively, as well as donations and grants of various kinds. Instruments of forced redistribution are, first and foremost, fiscal impositions, which, through the State, flow back into financing, subsidies, and assistance, or else support public needs; then social security contributions borne by employers, economic policy measures regarding prices, wage supplements, family allowances, profit-sharing, and the like (cf. WAGE).
Pending the establishment of economic and social systems inspired by greater justice, redistribution fulfills the task of partially correcting the most evident imbalances that occur in the distribution of income, and allows society to await new times in relative tranquility. A danger, however, lies in the lazy accommodation to spontaneous mechanisms, and even more in the blind trust in the forced mechanisms of economic and fiscal policy, which are practically inexhaustible and easy to imagine and impose, and which normally form part of social security plans (cf.). More important than perfecting redistribution systems is thus to reduce its necessity by regulating the formation of incomes according to which, through true competition and an exact measurement of value (cf. VALUE).
For the distribution and redistribution of the world’s natural resources, cf. RAW MATERIALS.