Trickling down.

It has become abundantly obvious in recent years that “trickle down” economics doesn’t work. Here’s the redoubtable Elizabeth Warren voicing it in respect of the States; the Thatcherite revolution here has produced exactly the same phenomenon. In both countries, the concept that if you give the rich tax breaks, these “wealthy creators” will distribute the money and it will naturally flow down to the lowest levels and thus benefit everyone has been demonstrated not to work, not just not to work well, but not to work at all. We have had a thirty year experiment, and this is a failed theory.

What has happened is that the rich have become substantially richer and everyone else has become relatively poorer. Both the States and here have managed to produce the fabled “rising tide” which is supposed to lift all boats, i.e. the economy has improved. The only boats which have lifted have been those of the rich, strongly indicating that there’s something deeply wrong with the metaphor; I’ve seen it suggested that it wrongly assumes that we all actually have boats – in which case I’d comment that the working class have no boats and are drowning, the middle class have boats with a huge hole in them and are bailing like mad just to avoid drowning.

Unfortunately, there will be some people who read this blog who will still agree with, in the States the Republicans and in the UK the Conservatives, and say that we just need to get more money into the hands of the rich (or the bankers) and suddenly the theory will work. I have also heard it said that the definition of insanity is keeping doing the thing which hasn’t worked time and time again and expecting the result to be different this time (this is a twelve-step concept, so addiction may be a factor here…). I have no idea how to persuade these people otherwise; they seem to think the theory is so neat that it has to be true, no matter what the evidence shows.

In passing, I have my own theory, which is that “trickle up” economics is what actually works; if you give the poor tax breaks, or a living minimum wage, or better benefits, given a little time all the surplus money will be back in the hands of the rich anyhow. This is not, of course, to say that taking this to extremes (for instance raising minimum wage to some ridiculously high rate or taxing the rich 110%) would work; it almost certainly wouldn’t, though Sweden did manage to operate with marginal tax rates that high for quite a while.

For completeness, I mention that Karl Marx predicted many years ago that trickle down economics would not work, and it seems that in that, he was right. However, his competing economic theory has also been tried, and there’s absolutely no evidence that that works either.

However, it strikes me that there is something which does obey the “trickle down” principle, and that is unmerited good fortune. Every so often a story goes around about someone on the streets who is given something and who promptly gives some or all of it away to others. The picture of the winning gambler who expansively treats everyone around him is a cliche, so often does it happen.

This fortune doesn’t have to be in the form of money or things, either. I know that (for instance) when I’m driving and someone lets me into a stream of traffic, it’s far more likely that I’ll then let others into it in my turn. Small acts of kindness have a tendency to replicate themselves.

In the Lords Prayer, we thank God for our daily bread, and one implication is that this is given to us by God rather than something we earn. A well-known hymn says “All good things around us are sent from heaven above, so thank the Lord, O thank the Lord for all his love”. I contrast this with the ideas of libertarian economics, which revolve round the “wealth creator” keeping everything they create, anything else being an infringement of their liberties by “the state”. In the Christian view, we are the lucky recipients of the grace of, among other things, our daily bread; in the libertarian view we have created the wealth to buy it, and woe betide anyone asking us to be grateful for the ability to have done that or to spread our good fortune around.

As another aside, there is a strong positive correlation between feeling grateful and feeling happy, which comes close to making me feel sorry for the Libertarian!

Now, as it happens, I do not eat courtesy of handouts (though I have in the past for a while), and I could take the Libertarian view and say that I’ve worked hard and “created the wealth” on which I’m now living in semi-retirement (although to be fair, I have inherited a fair amount of it…). Yes, I have worked hard, but I had a number of entirely unmerited advantages. I was born with a reasonable intellect and without serious physical or mental impairment. I have always had family money on which I could if necessary call. I have been lucky in being in the right place at the right time on occasion, and in having contacts which have opened opportunities and friends who have supported me in difficulty. None of that has been “worked for”. There are countless people who have worked just as hard as I have or much harder and who have far, far less than I have. People who have not received unmerited good fortune. People who are not intellectually agile, or relatively healthy, or from a well-off family, or blessed with some amazing friends, or who have just been unlucky. Oh, I’ve had some bad luck as well, and I didn’t work for that either, and as a result I’ve been in some difficult times and I’m not in quite as wonderful a situation as I might have been in, but broadly I’m OK, and I’m lucky to be that way.

So I’m happy to have some of this good fortune trickle down from me, and if the government (which is representative of the society in which I live) wants to make some of that trickling compulsory, how can I remotely complain, when I don’t deserve it in the first place?

“Let justice roll down like waters, and righteousness like an ever-flowing stream” (Amos 5:24) “And what does the LORD require of you? To act justly and to love mercy and to walk humbly with your God” (Micah 6:8). Justice and mercy tend to go together, and mercy is akin to graceso I will pray “let mercy and grace roll down like waters”, rather than just trickle down.

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