🚀 go-pugleaf

On Mon, 02 Feb 2004 16:30:19 -0600, S.Smith wrote:

> It has failed to work for anyone but the very wealthy...which 
> I suppose is who it was really intended to help in the first place.

It's not so much that it failed or didn't, it just doesn't happen, at
least not how it's described from an economic standpoint. If wealth
trickled down from rich to poor, we would be well on our way to moving
towards (but not by necessity coming close to) some kind of equilibrium in
what should be the closing gap between the wealthy and poor (just to be
charitable, I'll limit the poor to those who actually have a job). I'm not
sure how much of it is really credible anyway, but attacking trickle-down
theory to prove the idea internally flawed (heck, maybe it is) is like
wrestling a gun out of someone's hands and then attempting to beat the
crap out of the gun while the person is standing over you with a knife. 

The thing about trickle-down theory is it depends on moral
propositions, not economic results or additional economic well-being. The
very premise of the idea seems to be that there is some kind of law that
can be said to be a metaphorical gravitational pull causing wealth to
automatically end up "falling down," despite the structure or function of
the capitalist system. The idea is comparable using Newton's First Law,
"for every action, there is an equal and opposite reaction," as proof that
if you do something of ethical degree X, then X will happen to you (like
some cheesy new-agers and televangelists seem to think).

If trickle-down is a theory, it's not so much an economic one as a
rehashed moral one, sort of like social darwinism, except without the
part about letting everybody who can't compete in a capitalist economy
die. It's based partly on a misinterpretation of Adam Smith as someone who
saw economic wellbeing under mercantile capitalism as something that could
be maximized only if public welfare is ignored entirely politically (an
idea Smith found rather silly). The other major part I guess comes from
some kind of hardline John Locke-ish interpretation of property rights
that I imagine not very many people in English-speaking countries entirely
disagree with. And then there are other moral propositions thrown, like
capitalism is perfect, not working is bad, blah blah blah.

What people don't seem to grasp about economics is that it's a tool and,
like a mathematical equation, not a moral proposition. I guess that
mistake comes from the fact that early economics has its place in moral
theory. Public well-being and economics aren't attached in any express
way, at least not beyond the assumption that a better economy is more
likely to serve economic interests than one that isn't so good. Having the
best economy can often mean having a terrible job market though, so the
assumption isn't designed to be regarded as true 100% of the time. If we
should have learned anything from the Bush recovery, it's that the economy
can grow without most people getting more well-off.