Chris isn't optimistic that Milliband's first hashing out of the concept does much more than gloss Labour's adherence to austerity. That's looks to be true, though I share Martin O'Neill's view that raising the topic at all in this way is quite a break-through in itself.
Criticism on the Left of post hoc re-distribution isn't new, of course. In the 1830s, Louis Blanc (1811-1882) wrote scathingly that as "competition produces misery" and the "fecundity of the poor throws upon society wretched beings who want work, and cannot find work", so we ultimately arrive "at this pitch, society can only choose between killing the poor out of the way, or supporting them gratuitously - that is between atrocity and folly."
[Louis Blanc's l'Organization du Travail (1839), trans. by James Ward in Louis Blanc on the Working Classes: With Corrected Notes, and a Refutation of his Destructive Plan (London, 1848), p. 83].
Obviously Blanc wanted to avoid atrocity and folly. Blanc was a moderate, relatively speaking, who believed in gradual reform and the avoidance of violence or class conflict. Unlike the hyper-statist Saint-Simonians, however, he was passionately committed to democracy and the universal (male0 suffrage. This, he believed, would transform the state into an instrument for progress.
The democratic ‘social republic’ would not take over and plan the economy, but rather would facilitate cooperative production by associations of workers. Starting-up capital would be provided to Ateliers Nationaux (national workshops) which, as they attracted skilled, well motivated workers, would soon stand on their own feet. The State would provide a binding 'code' for the Ateliers, but after a year's midwifery no longer directly intervene. Workers would run the associations themselves.
The associations would generally handle necessary welfare provision which, along with the ‘right to work’, would give labour the security of a private property. The monopoly of capital in the hands of employers would be ended, and in due course capitalist enterprises would dwindle as wage-labourers decamped to become cooperative producers in the Ateliers.
Blanc's ideas were resuscitated by Ferdinand Lassalle in the 1860s (to Marx's grief, as he could see no good coming from the Prussian state), and by the early Fabians in the 1880s. Fabian Essays (1888) argued that some industries such as railways should be taken into state control for reasons of technical efficiency, and if a capitalist enterprise acquired national monopoly status, it should be taken over (compensation being paid) by the state. In general, however, County and other Councils were expected to set up socialised enterprises in competition with capitalist outfits; being free of charges for rent and interest, they would be easily competitive. In the main, capitalist enterprises would be squeezed out of the market rather than taken over. Socialised enterprises, firstly for public works (roads, bridges, schools, hospitals, housing, public utility services), ultimately establishing farms and factories, would ensure employment and establish the socialist ‘right to work’.
In contrast to Blanc and Lassalle, however, in the relevant essay by Annie Besant, the idea of workers’ control of their industries was rejected. Instead, government authorities should appoint managers and boards; usually, of course, local government authorities for local and regional public enterprises. Later on, Guild Socialist Fabians around G.D.H. Cole tried to bring back in the idea of workers' control, but within a pluralist system of countervailing powers (consumers, trades unions, etc.).
The late Paul Hirst thought about these ideas a lot, and his notions of 'associative democracy' might well be worth revisting for 'pre-distributionists' now.
