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...?

[PoppySausage]

Great link and very good points made. Sobering

[keepitsimple0]

I think the problem isn't trickle down econ, but globalization and the knowledge economy. some people can really generate gobs of wealth, and those at the bottom are in trouble because they can't compete with low wages abroad.

[30somethingm]

Until the crash in 2008, the Labour Government managed the finances better than any previous 20th century government. The UK even managed 4 consectutive budget surpluses in the early 2000s. To put that in context, since the 2nd World War there have been 6 budget surplus years... 1 under Atlee at the end of that parliament, 1 under Thatcher, and 4 under New Labour and Tony Blair. Unfortunately bailing Northern Rock out j 2007 created a large deficit that year, followed by an even bigger deficit created by bailing the rest of the banks out.

I'm no New Labour fan, but it is worth pointing out that the narrative has not exactly been fair or based in fact! Labour didn't create the Global Economic Crisis - reckless banks did and then we bailed them out.

The deficit which had not yet been cut by a half in numerical terms is not going away and the Tories have borrowed nearly twice the figure Labour did in 13 years, excepts the Tories have managed to do so in only 5 years.

Trickle down economics is discredited and the Thatcher, Major, Blair neoliberalist experiment needs to now be terminated.

It is time to look at low inequality Scandinavian countries for inspiration. Even their "centre-right" parties are seekers of social justice and left of centre by our standards!

[30somethingm]

PS it was 3 out of 5 (since the 2nd World War) budget surpluses New Labour managed, not 4 out of 6.

Anyway all of this is irrelevant as budget surpluses are not required. We've managed perfectly well with deficits for decades, but I was just making a little known point

[Suzannewithaplan]

Trickle down economics is the theory that rich people create wealth and so make all of us richer.
The truth is that the very wealthiest, the top 0.1 percent function as an extractive elite.
They leverage their wealth and power, to get them a bigger slice of the pie so that the rest of us have to go without. ?

[LividofLondinium]

Great link and very good points made. Sobering

Thanks Poppy. Our lecturer spent a couple of lessons discussing Richard Wilkinson and Kate Pickett's research (they have a book called The Spirit Level: Why Equality is Better for Everyone), and it's a health based course! Scratch the surface a bit and look deeper into unequal societies and they are unhealthy societies.

I have a friend who lived in Denmark for years and another now living in Sweden and they both say how much happier people are on those countries than here. The gap between the richest and the poorest in both of them is far smaller than here and the USA. We have a veneer of being fine, but it's just that. Lots of chronic stress, leading to all sorts of psychological and physical conditions. It pisses me off so much how people can work really hard yet still have no choice but to live in a dump of a "house" in a crap neighbourhood, whilst claiming benefits to bring their earnings up to a living wage. Yet we seem to be heading more and more towards the American model! We should be heading away from them and towards the Scandinavian model IMHO.

[lljkk]

Us liberal Lefties were saying it was a crock of crap in 1981.

[fancyanotherfez]

Its not a crock of crap if you have an aspirational middle class, with money to buy resources, employ people in their businesses and at home and spend money on the high street. It is a crock of crap if you have what we have, where social mobility is stagnant, so aspiration is suppressed, people use the housing market in London as a bank, so don't live here to use the services and big business don't pay decent wages or taxes, so people don't have money to better themselves or services to rely on.

[lljkk]

Did/does anywhere have the type of aspirational middle class you mean, Fancy?
Coz I'm American and we have boundless aspiration but the social inequality we have is appalling, too. Trickle-down economics was Reagan's huge thing.

[peggyundercrackers]

Why should we have social equality when people have differing abilities? If everyone had the same ability to create wealth, jobs or do a specific professional job then we should have social equality.

[lljkk]

We need to keep individual incentives, these are fantastic and do a lot of good.
But in a society where advantages are inherited (which is society we have), inequalities can mount up over generations and the more unequal a society is overall the more problems everyone has; even the people at the top have more suicide-divorce-teenpregnancy-depression etc. than the people at the 'top' of a society with less social inequality. The theory why, is that the folk at the top get more stressed about protecting their position as a society gets more unequal.

So quite apart from any moral argument about social equality, or worrying that basic public services are done competently or about the next street revolution, it benefits everyone if the gap between poor & rich isn't too big.

[ToysRLuv]

I come from Scandinavia and miss the equality. Here in the UK I constantly feel like "a class B citizen". I think the situation is a bit too far gone here to get to equality any time soon. The rich and influential are going to resist any attemp to raise taxes, which they feel they don't need to pay since they use private transport, schools and hospitals. Let the class B citizen have their shitty public resources. Surely, they deserve them for not having worked hard enough. Right?

[Suzannewithaplan]

?
The rich don't get rich from their ability to create wealth, they are not philanthropists, using their talents to benefit mankind.
Rather they use their wealth and power to manipulate the system so that even more wealth flows their way ?

[simontowers2]

YANBU. The rich just get richer. And yet the young today seem totally apolitical. If i were them i'd be out on the streets if i was still having to rent well into my 30s because the government was happy to let property prices keep rising (in order to keep the core, baby boomer voting demographic happy).

[TooHasty]

Putting more money in the pockets of poor people helps the economy more than putting it in the pockets of rich.poorerpeople are more likely to spend it in the UK on consumer goods and services, which then creates income for suplliers and so on - 'the multiplier'. Wealthy people are more likely to save a greater proportion invest it overseas etc and this represents a leakage from the economy because it isn't circulating in th uk.

[debbietheduck]

Saw this thread this morning and didn't have time to post. YANBU, here is a link that I think sums it up:

cheezburger.com/2814131200

[TheChandler]

30Something Until the crash in 2008, the Labour Government managed the finances better than any previous 20th century government.

You do realise that the crash was created by false accounting measures and tighting up the rules on that has been part of the recovery?

As for trickle down economics, its just the latest fashionable theory - I mean its always been around, but soemone's read about it or written about it and its been picked up on. There are loads of competing economic theories. I think what we operate on at present is the opening up of competition, and thats a macro-economic theory and why we have the EU internal market. How you do that varies from country to country - the US is much more laissez-faire than much of Europe, and the UK would like to lie somewhere in between. Even in the US, economists can't agree between the Harvard School and whatnot and whether sometimes monoplies and cartels can be good for the economy or whether they foreclose markets and drive up prices and lower quality.

And then of course you have control-centric countries, which think the government should control everything, from the platform that companies operate, to the things they do and the profits they make and what they do with those profits. I don't think that works, because it drives away talent and innovation.

Generally, I think competition is good and so I'm in favour of laissez-faire regulation (not no regulation), because we do live in a capitalist economy - otherwise we would probably still be living in caves and huts, hunting animals on foot for food.

[TheChandler]

I've lived in a Scandinavian country and yes, its certainly more equal. But I'm not sure it would work here, partly because as ToysRLuv says, the UK is a bit too far gone, and partly because it depends on a very Scandinavian honesty not to abuse the system and to put in a fair effort, even though it doesn't cause any detrient for them. People seemed obsssed with whether you worked or not, and how you paid for things, and there seemed to quite a lot of disaproval of not working (I was a student) and not playing your role in society.

Most people seemed to live in identikit apartments in identikit town centres, which had been homogenised to remove their individual character, and drive pretty old slightly clapped out cars or not have cars. There didn't seem much to aspire to for all that talk of work, or much to differentiate the brilliant from the ordinary. There was a real problem with depopulation of the countryside as everyone wanted to live in the capital. I always got the impression that people seemed more concerned with their appearance and sex lives as a result, as that was the one area they could excel (or not) indvidually, and it was like a kind of snobbery if you like. And students took ages, sometimes a decade to finish degrees, failing things, getting away with poor attendance and not studying, and resitting other things that suited them more, but still getting jobs at the end of it because of who their parents knew.

It was also incredibly, breathtakingly expensive, and public transport, while newish, smart, well designed and frequent, wasn't noticably faster or cheaper and there was still a lot of trudging around in the rain between rail and bus stations.

Theres also a real attitude against "tall poppy" syndrome - you were expected to fit in and that meant not obviously doing better, buying a flash new car, or some ostentacious consumerism, talking down your achievements or keeping them secret, and so on.