REDISTRIBUTION. — In the classical division of political economy, which goes back to G. B. Say (1803) and is still in use today, distribution is placed after the production and circulation of wealth and before consumption. This may be understood either in a static sense (hence the various questions relating to property), or in a dynamic sense, as the division of the annual product (v. REDDITO) among the factors of production: enterprise, capital, and labor, in the form, respectively, of profit, interest, and wages, apart from mixed forms. The importance of distribution is evident not only for social dynamism, but also for statistics and fiscal organization. The criteria, systems, and results of this division are not, in fact, merely the theoretical subject of the chapter on “distribution” in treatises on political economy; in practice, they constitute the subject of the vigorous
controversy concerning the structure of society, that is, the so-called social question.
Contemporary criticism of classical, or liberal, economics is directed in particular at distribution, generally recognized as unjust and uneconomic: hence the importance of the concept of r., a modern term that summarizes the spontaneous or compulsory economic and financial mechanisms through which the income received by persons privileged in any way is partially redirected for the benefit of individuals or categories less favored by the prevailing social order or by circumstances. Instruments of spontaneous r. are the luxury expenditures of the rich (v. LUSSO), savings, profits and land rents, industrial extra-incomes employed productively, as well as donations and grants made for various purposes. Instruments of compulsory r. are above all taxes, which, through the State, flow back into financing, subsidies, and assistance, or meet public needs; then social provisions borne by employers, economic-policy measures concerning prices, wage supplements, family allowances, profit-sharing arrangements, and the like (v. SALARIO).
Pending economic and social systems inspired by greater justice, r. fulfills the task of partially correcting the most evident imbalances that occur in the distribution of income, and makes it possible to await the advent of new times in relative tranquility. A danger lies, however, in sluggish accommodation to spontaneous mechanisms, and even more in blind confidence in the compulsory 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 (v.). Rather than perfecting systems of r., it is therefore important to reduce their present relevance, instead regulating the formation of incomes according to equity through genuine competition and an exact measurement of value (v. VALORE).
For the distribution and r. of the world’s natural resources, V. MATERIE PRIME.