Posts Tagged ‘trickle up’

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Mainstream economists will do almost anything to avoid a serious discussion of the issue of inequality, even while discussing the issue of inequality.

Right now, we have two groups of mainstream economists: those who argue we need to stick with trickle-down economics (which is basically a neoclassical argument that the existing distribution of income represents “just deserts” and that, at some point in the future, everyone will benefit from the continued funneling of income to those at the very top) and those who argue we need to shift gears and grow from the middle-out (which is a more Keynesian argument that the expenditures of the middle-class can and should serve as the effective demand for consumer goods, which in turn will spur private investment and lead to more jobs). Mark Thoma argues it’s a false dichotomy, because the supply side and the demand side are dependent on one another, that there needs to be the appropriate balance between supply and demand.

That’s a nice way of seeming to resolve the problem on the terms of mainstream economics. But what mainstream economists simply don’t want to talk about is a third option: trickle-up economics. That’s the idea that those at the bottom, who produce all the goods and services consumed by themselves and everyone else, would have a say in deciding what and how much gets produced, where it gets produced, and once it’s produced how the proceeds will be distributed.

If that happened, the fundamental cause of inequality would finally be eliminated and we’d actually have a pattern of growth that trickled up—taking care of those at the bottom before everyone else.