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Winter 2023

ISSN 0890-913X

Volume 38, Number 4

Trickle-Down Economics

Walter E. Block, Loyola University New Orleans

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Trickle-DownEconomicsWalterE.Block*LoyolaUniversityNewOrleansUnitedStatesofAmericaTheJournalofPrivateEnterprise38(4),2023,72-79AbstractTrickle-downeconomicsisthehypothesisthatwhentherichgetwealthier,thiswillpositivelyimpactthepoor.Therichwillliftupthepoorintoalesspoverty-strickensituation.Thishypothesishasbeenwidelyexcoriatedintheliterature.SometimesithasbeenconflatedwiththeLaffercurve.Thepresentpapermakesthecasethatthereismoretotrickle-downeconomicsthanthecriticsallow.JELCodes:E62Keywords:trickle-downeconomics;wealth;LaffercurveTrickle-downeconomicshashadbadpressasoflate.Criticshavebeenpilingon.1AccordingtoHope(2020),intheviewoftheInternationalMonetaryFund(Dabla-Norrisetal.2015)“arisingincomeshareofthetop20percentresultsinlowergrowth—thatis,whentherichgetricher,benefitsdonottrickledown.”AndtheAssociatedPress(2017)maintainsthat“historyshows[trickle-downeconomics]hasaspottyrecordofdeliveringonitspromises.”2TheentireKeynesianedificebitterlyopposedthisconcept,onthegroundsthattherichspendadisproportionatelysmallerpercentageofanyadditionalrevenuetheyareabletogarnerthantheotherincomegroups.Whatistrickle-downeconomics?Itistheviewthatthepoorwillgaininwelfareiftherearemorerichpeoplearound.Themetaphorsometimesbandiedaboutisthatthetablesoftherichareheavilyladenwithfood,andtheysitbackastheyeatsothatcrumbsdropontothefloor,theretobepickedupbythepoor,starvingwretches.*Theauthorthanksanunusuallyactiverefereeofthisjournalforgreathelpinimprovinganearlierversionofthispaper.1Thisisnotallowedinfootball,butallisfairinthisregardinpoliticaleconomy.2TheAssociatedPresscharacterizesthematterasfollows:“Doesmoneyrolldownhill?”Butthisisaproblematicwayoflookingatthematter.Itimpliesthattherichdonatemoneytothepoor.Butthishardlyexhauststhemannerinwhichthewealthy,bygainingevenmorewherewithal,areabletohelpthepoor.

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Metadata [hide]

Title	Trickle-Down Economics
Authors/Creators:	Walter E. Block, Loyola University New Orleans
Year:	2023
Volume:	38
Number:	4
Pages:	72 - 79
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	trickle-down economics; wealth; Laffer curve

Citation:
Block, Walter E. / 2023. "Trickle-Down Economics." The Journal of Private Enterprise, 38(4): 72-79.