Were we sold a crock of shit If 'trickled down' economics has produced a world in which 1% owns almost half of the world's wealth?

[AWholeLottaNosy]

And if so, what can we do about it? I remember in the 80s, this theory about how cutting taxes for the rich would create more employment and more wealth for everyone due to the ' trickle down effect '. However we've had decades of this and all it's produced is the greatest inequality of wealth ever and more to come. Since we were obviously sold a crock of shit, is there anything we can do about it now, or is it just too late...?

yanbu. majority of evidence shows that it doesn't work in the way its been advocated by the likes of thatcher. Think Keynesian economics sounds a bit more fair but I don't know much about it it tbh.

Yanbu!

There is a shift in thinking happening right now towards an increasingly people centred approach as neoliberalism just doesn't work. All of the models which have worked in the past have been with huge investment from the state to balance the development and guide it into equality, and I think the governments of today need to realise free markets don't work. Success for some = exploitation for others and bugger all trickling down

Some of us never bought it in the first place.

yanbu. The more I read and watch, the more I realise that we've been shafted.

So why are Governments in the West still doing this? We are now being told that if the Tories get in again, 'we ain't seen nothing yet' in terms of more public services being cut. And it's the most vulnerable who are bearing the brunt, the poor, disabled, women, public sector workers. And there seems to be virtually no opposition to it! The Labour Party aren't going to reverse it so who do we have left..? So angry and disillusioned about it all.

Yanbu. And shame on the Tory-voting fools who bought it.

So what are you trying to suggest then, if you have a true socialist model that you think will somehow work this time lets here it.

The greens have dropped their pledge of universal credit because it's not achievable with any realistic numbers, and if you start talking about the living wage then you need to look at inflation/deflation and who generally comes out better in that scenario.

As for Kensian economics the general rule is save/pay of debt in boom and spend in recession, the problem is labour was in control during our boom and left us with nothing.

If your personally willing for your house price to drop in value then we are locked in, Unfortunetly.

I'm not an economist so sadly I don't have the answer but all I can see around me is greater inequality, division and so many people struggling. In one of the richest countries in the world.

But, of course, your house price is the most important thing isn't it? This 'I'm all right Jack' mentality is what is selling this country up the fucking river. As long as your house prices continue to rise, nothing else matters, does it...?

Anyone with replacement number of children or above should welcome stable house values, surely?

This is based on the Oxfam report a couple of weeks ago. I'm afraid that report is grossly misleading. According to Oxfam:

• Anyone who owns an average house in London with no mortgage is part of the top 1%.

• Someone living on the streets of Mumbai (or anywhere else for that matter) with no income, no assets, no debts and 50p in their pocket is in the top 70%.

• Someone with annual income of £250k, assets of £1M and debts of £1.5M is in the bottom 30% - poorer than the person living on the streets.

• Most Chinese are in the top 50% whereas North America has 8% of the world's poorest.

That isn't to say these figures are wrong. In terms of what Oxfam were measuring (net wealth) they are accurate. They just aren't in line with the way most of us think about poverty or, indeed, the rich. They look simply at total assets less total debts ignoring income completely. So anyone with a house in negative equity is one of the poorest people in the world by this measure.

An alternative view based on UN statistics:

• Global poverty is falling faster than at any point in history.

• Since 1990 the proportion of people in developing countries living on less than $1.25 per day has fallen from 47% to 22%.

• In 1990 24% of people in developing regions were undernourished. This has now fallen to 12% - still too many but a huge improvement.

• The global figure for the years of life lost due to disease per 100,000 people is falling rapidly, with particularly large falls in diseases associated with poverty (N.B. This one is from a paper published in The Lancet, not the UN).

The problem is that people tend to assume the size of the cake is fixed, so if those at the top are getting more those at the bottom must be getting less. However, the global economy is growing. It is therefore possible for those at the bottom to be getting more at the same time as those at the top.

Oxfam's figures are about inequality, not poverty. Oxfam won't tell you this but we are living in the golden age of poverty reduction. If our goal is to reduce and eliminate global poverty the evidence says we should carry on with what we are doing now.

Oh, and by the way, Oxfam aren't even terribly helpful on inequality. Global inequality has risen since 1960 but peaked in 2000 and has been falling since then. This is mainly due to stronger economic growth in Latin America, Eastern Europe, former Soviet countries and Africa.

I vote conservative. They're generally as crap as the rest but I agree with the cuts. Has to be done I'm afraid.

I've done pretty well out of my houses but would gladly have minimal equity so that house prices can return to something more feasible. However that would annihilate all those who've paid top whack for their houses so is never going to happen.

So what's your solution?

The "trickle down" theory has always been a very convenient one for the top echelon of society! In fact, very, very little wealth ever trickles down to the less fortunate: you can only create a more equal society by redistribution through the tax system.

Economics is not an impartial "science* - it is completely imbued with the political values of the economist. Right-wing economists' theories for fixing the economy and stimulating growth are completely different from left-wing economists because the economists have fundamentally different interests at heart.

The UNDP website is really interesting - for example, in Bangladesh GDP per capita had increased 3 fold in the last 15 years, but the human development index is almost static. This suggests something is wrong in the trickle down and action is needed to redress the inequality.

The UNDP website is very easy to understand and really interesting

Of course it is bollocks. The gap between rich and poor is growing. Those in power are generally wealthy as you generally need to have wealth to get into power. They want to retain their wealth for themselves and their chums and have no incentive to change that. Lets not forget that they are getting back-handers from those in business to keep it that way.

Thanks for that prh47bridge

I had been looking for some comparative info, I had read the Oxfam blurb and realised they had their own view on the figures. I wondered about the actual difference in incomes etc.

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The interests of elites ?are not served by excessive inequality, as it grows so does the likelihood of the peasants revolting.
Rich people are very scared of the angry mob...the'pitchforks in the streets ' scenario ?.
So they should be!
those greedy fuckers have fucked us over good and proper, the media have got the 1% vs the 99% bit between their teeth and they are stirring us all up.

Who'd want to be a robber baron now eh??

A more unequal society has more social problems and unhappiness than a more equal society. Not to mention reduced social mobility. Even if poverty is decreasing we should still be very concerned about rising inequality.

When technology entered the workplace it was hypothesized that soon everyone would work short days and have a high standard of living with lots of leisure time. Instead most of the economic benefits of technology have gone to the business owners as staff are replaced by technology, rather than having their jobs made easier.

Yes some benefit is passed to the consumer through cheaper goods, but as the taxpayer has to support more people I think the benefit is negated.

Also why are profit making companies allowed to employ people on sub living wages so they require top ups via state support? Why is the tax payer subsidising their labour costs?

A rising tide may float all ships, but take a look at the 'ships'

A few massive luxury ocean liners towering over many many tiny leaky little rowing boats

Banging on about inequality is a self-serving change of tune for campaigners. The bald truth is that global capitalism is dragging more people out of poverty worldwide than any other system, ever.

Personally I'm not sure how much I care about a widening 'gap between rich and poor' as long as fewer people overall worldwide are living in corrugated iron shacks and rummaging in landfill for their dinner.

What's happening in this country is, simply, that worldwide incomes are starting to standardise. Rather than the UK and a few other nations having all the wealth and a nice equal society, while everywhere else is on the bones of its arse, things are evening out worldwide.

There will be winners and losers. I don't think anyone pretends it's going to be rosy for everyone. But anyone who complains about changes in the fabric of UK society while ignoring the bigger picture is, effectively, wishing ongoing grinding poverty on the rest of the world just so we can be nice and comfy in this country. Fine if you're honest about that, but not so much if you're dressing it up as concern about 'rising inequality' in this country.

Unfortunately many voters will continue to vote for parties that favour the rich as they want to keep their own assets, an I'm Alright Jack mentality. Also they believe our financial problems are primarily caused by 'benefits cheats'. My parents and PIL have exactly this attitude, they will continue to vote Conservative as they believe it furthers their interests.

Unless you are very well off, voting Tory is a bit daft as they couldn't give a shit about you. And I mean very well-off, not just a 6 figure salary.

Did anyone actually believe the 'trickle down economics' spiel anyway?

Yabu for quoting such an overused and wrong stat. 1% don't own half the world, 1% own the same wealth as 50% of the poorest people. It is very different!

Yanbu to think the system is broken and corrupt. I blame governments, regulation and people. All three are part of the problem.

Personally I'm not sure how much I care about a widening 'gap between rich and poor' as long as fewer people overall worldwide are living in corrugated iron shacks and rummaging in landfill for their dinner

I hear what you're saying OTheHugeManatee. However, studies have shown how harmful inequality is to society. If we're not "all in it together", whatever that situation may be, it's divisive and corrosive. It's no good to be a bit less poor if you don't stand a snowball's chance in hell of having a fraction of what the wealthy have. Here's an interesting TED talk by Richard Wilkinson: How economic inequality harms societies which is well worth watching if you have a spare few minutes.