Trickle down economics is a form of laissez-faire capitalism in general and more specifically, it is a form of supply side economics. Whereas general supply side theory favours lowering taxes overall, trickle down advocates prefer targeting the very wealthy for lower taxes. Trickle down theory is implicit in neoliberal discourse. As such, it’s become politically normalised. It’s become a form of tacit knowledge.
However, the term trickle down originated as a joke by humorist Will Rogers and it is often used to criticise economic policies based on a justification of ‘competitive individualism’ and ‘meritocracy’, which strongly favour and reward the wealthy and privileged, while being framed as ‘good’ for the average citizen. This of course is political hocus pocus and snake oil economics. The government has been pulling at supply side economic levers which, for some time, have been attached to nothing.
The economic ‘success’ of governments has increasingly been measured by an aggregated data set that fails to take into account actual wealth distribution, merit, social contribution, inequality, poverty, or even the welfare and health of public they claim to represent. This kind of economics has become overarching and totalising, sucking in the social realm of human relationships and transforming them into hierarchies of economic (and political) worth.
Democracy is shrinking with the economy, as more and more money, political power and influence is concentrated in fewer and fewer hands.
The richest 1% of people in the UK own almost a quarter of the country’s wealth. The huge levels of inequality in the UK were revealed in a detailed assessment by Credit Suisse last year, that also showed the richest 5% of people in the country own 44% of all wealth.
Commenting on the report, Sally Copley, the charity’s Head of UK Policy Programmes and Campaigns, said: “The wealthiest one percent of the population – who own nearly a quarter of all the country’s wealth – continue to do well whilst so many people in Britain are just about managing to stay above the poverty line.
“Globally, the richest one percent own more wealth than the rest of the world put together. This huge gap between rich and poor is undermining economies, destabilising societies and holding back the fight against poverty.”
As we have recently learned, the wealth accumulated among the richest 1%, through the systematic dispossession of the rest of the population, is rather more likely to trickle offshore and to be hoarded than finding its way to the Treasury and then redistributed to ordinary citizens, rewarding them with a long awaited break from the futile, self-defeating consequences of neoliberalism: austerity, increasing poverty and inequality.
There is an expanding and gaping hole in the economy as more and more money is funnelled off by the government to hand out to the wealthy, while increasing numbers of other citizens are now teetering on the brink of the chasm without an adequate social safety net or political lifeline.
What remains of our public services are now also in private hands, serving the private interests of vulture profit seekers.
Multiple studies have found a correlation between trickle down economics and reduced economic growth. Conservatives since Thatcher and Reagan, however, have insisted on imposing it, despite recessions, and the resulting social damage caused by rising inequality and poverty. When neoliberalism fails, the Conservative answer is to simply apply more aggressive neoliberal policies and increasing authoritarianism.
According to the economist John Kenneth Galbraith, trickle down theory was once called the rather less elegant “horse and sparrow” theory, a couple of centuries back, which goes something like this: You feed the big horse all of the oats and the wee birds can feed in its wake.
Which is fine only if you happen to like a diet of horse sh*t.
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