It was sold to the middle class as "Trickle down economics". Basically, if you make the rich richer, your pie gets bigger too. Sadly, people bought that line.
Economics, as the expression of human beings exchanging with each other, accepts neither.
I will never understand how adults can believe that things like economics, journalism, central banking, and (especially) the US constitution can be non-political.
'The economy' and 'the market' are sacred things that are disconnected from the dirty world, and work perfectly in their own if you don't bother them. No need for 'political economy' anymore, only 'economics'.
Free markets are pro-reality, pro-dirty world.
For instance: assuming that property rights exist outside a political framework or power structures.
I reiterate that free market ideology is positive, while government intervention ideology is more normative: it says how things should be and tries to make it so. The best case of this has been obviously Communism and Fascism: they said this is best, and organized top to bottom how things should be, and ignored any evidence of the contrary.
It's not 'poor people' vs. 'rich people' but the majority vs. a minority.
>>"Economics, as the expression of human beings exchanging with each other, accepts neither."
Economics? what do you mean? There are theories that, in a less simplistic way, come to propose one and the other.
As silly a proposition as any other.
> Economics? what do you mean? There are theories that, in a less simplistic way, come to propose one and the other.
Mostly politicians and pundits. Economics, neither the mathematically inclined microeconomics nor the formulaic and macroeconomics have such thought or principles behind them.
Incorrect. It has been well-documented that when people have more disposable income, their spending increases. This increase in economic activity grows the economy.
It has been well documented that when you give people who have proven themselves capable of efficiently allocating capital (i.e. the rich) more capital, they continue to allocate it to its best and most productive use for society.
Everyone's got a narrative, and they're both right. To an extent.
You are making some wild assumptions that require evidence. Specifically, you need to prove that the reason rich people are rich is because they "have proven themselves capable of efficiently allocating capital", as opposed to (or at least independent of) other factors, such as luck, inheritance, etc. You also need to prove that the way the rich allocate resources, even when "efficient" (i.e. provides the most return) is actually good for society as a whole, and not just the rich.
I'm not making any assumptions. In aggregate, by definition, wealthy people are better at allocating capital than non-wealthy people. Yes, not all wealthy people are good at it. But in general, they are. That's why they're wealthy. The fact that exceptions exist is irrelevant to my point.
> You also need to prove that the way the rich allocate resources, even when "efficient" (i.e. provides the most return) is actually good for society as a whole, and not just the rich.
Do you have evidence that the way the poor allocate additional capital is more socially useful?
Totally agree. To be clear, i'm not advocating either narrative, just pointing out that both sides have one. I think they're both important. You need efficient allocators productively allocating capital...and you need them to have the capital to do it with. You also need consumers, with the buying power to make the capital allocators allocations work. The debate ends up being around what the right mix is, and I don't know the answer to that, simply pointing out that it's not a one-sided narrative of "give poor people money!" or "give rich people money!".
Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy.
Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation.
Huh? The fact that they're rich is proof.
> Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy.
Sure, but they had to get rich in the first place.
> Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation.
Yes, its been very unevenly distributed. How do you think that relates to the question at hand?
That can be achieved by being born with the right parents, not necessarily by doing intelligent things.
Again, exceptions are irrelevant. We're talking about the aggregate here.
A certain popular politician/business owner has filed bankruptcy 6 times.
> Sure, but they had to get rich in the first place.
That's easy, just be born that way.
Moreover even if that proposition were somehow true, spending is not a measure of progress of any kind, not nominally and not in real terms. Inflation is a good exercise on this topic.
It's a funny thing that trickle-up is never ridiculed in the public eye.
No, it was sold as “supply-side economics”, “Trickle-down economics” was a hostile characterization (as was Geore H. W. Bush’s “Voodoo economics” characterization.)
The economics and finance professors I took classes with had a good laugh at that idea.