Degrowth

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Discussions about degrowth and all sorts of related topics. This includes UBI, economic democracy, the economics of green technologies, enviromental legislation and many more intressting economic topics.

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Trickle Down Economics (eupolicy.social)

submitted 3 months ago by [email protected] to c/[email protected]

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[–] [email protected] 0 points 3 months ago (1 children)

OF COURSE trickle down works! I just don't understand what's going on in people's minds that they believe the rich people (i.e. all the water) were at the top of the image.

There are lots of reasons why money trickles down from the poor to the rich. Expecting money to trickle from the rich to the poor is like pouring water into an ocean and expecting the mountains to get wet.

[–] [email protected] 3 points 3 months ago (1 children)

...I'm not quite sure what you're trying to express here. You say it works, and then you immediately refute it?

[–] [email protected] 5 points 3 months ago (2 children)

I think they are saying that the model is flawed on a more basic level, since workers are the source of all value, and thus workers are the wine bottle. Of course trickle down economics is accurate if you view it as value trickling (or rather being siphoned) from the poor to the rich. Essentially refuting the ideology that views jobs as a resource that is provided for society by the rich, when the reality is that jobs under capitalism are workers creating value and the rich siphoning more than their fair share from the workers' output and returning a pitance.

[–] [email protected] 2 points 3 months ago

Oh, that makes sense. Thanks.

[–] [email protected] 1 points 3 months ago

Pretty much, but that explanation is way more complicated than it needs to be.

The image of "trickle down" compares money to water. If you drop water somewhere it will move downwards. But for some reason when people talk about trickle down economics they think that money will trickle down from the people will lots of money to those with no money.

If you go back to the image then water will trickle down to the place where all the water has ended up before, i.e. the ocean. Expecting money to trickle "down" from the rich to the poor is like expecting water to trickle "down" from the ocean to the mountains.

And there are lots of obvious reasons for that. A poor person will have to take a loan from time to time which means that they have to pay for no lasting value in return. They will also have less opportunity to save money by buying things in bulk or waiting for discounts. A rich person on the other hand has little reason to pay workers for something that does not end up making them more money.