Since the 1980s, the solution to all questions of distributive justice has been “trickle-down economics”. The logic is that if we give all the money to the rich, they will spend it, and in doing so the money will trickle-down to the poor.
In actuality, the rich hoard the money, and use it as leverage to further impoverish and enslave the poor. They mostly do this by buying housing that the working class would otherwise have bought, and then charging rent to people who would otherwise have owned property freehold. The term ‘trickle-down economics’ has thereby taken on bad connotations for working-class Western people. It invokes visions of being pissed on.
After almost half a century of trickle-down economics, housing has never been more unaffordable. The average house in New Zealand costs ten times the average household income, and Australia, Britain and Canada are almost as bad. Wealth has become so generationally entrenched that many people now feel they’re living under a feudal-style system – except neo-feudalism has none of the community warmth and connection, nor any protection from a liege. In neofeudalism your village is the planet and your lord is the invisible government.
This outcome is inevitable. The rich already have enough money to meet their own needs. If they get more money, then, there’s nothing to spend it on except assets. These assets will usually draw rent in some form, so the rich end up with even more excess money, which buys more assets, capturing even more of the economy etc. The poor see more and more of their money going on rents; eventually they have to go into debt to meet rent obligations. At that point many of them reason that they have nothing to lose through political revolution.
So far, the existing arrangement in the West has not broken out into violence against the ruling class. This is possibly because Huxley was correct when he predicted the ruling class would have us too drugged up and confused to resist them. It’s possibly because the will to violence is still building. I believe that resentment has built to such a point that mass violence is only avoidable if drastic measures are taken soon. This is a similar situation to the one headed off by Franklin Roosevelt’s New Deal.
What I am proposing is a complete and total inversion of trickle-down economics: a universal basic income.
Because trickle-down economics has failed so totally, the reasoning is that the opposite of it is most likely to succeed.
The logic of trickle-up economics is that poor people have to spend everything they get in order to survive. I’ve been poor – you aren’t hoarding any money, because you needed to spend it already yesterday. Any windfall you might have is already earmarked for something else. That money gets spent on goods and services, which are usually sold by companies, which redistribute profits to shareholders. Much as with rent, the poor can’t avoid spending money on goods and services. Thus an upwards flow of money is unavoidable.
Therefore, if money was given to the people at the bottom of society – the poorest – it would “trickle up” to the wealthy again. The assets (not labour) of the wealthy would then be taxed to pay for the next round of universal basic income. The greedy among the wealthy will object to this, with the usual whinging about laziness, but the intelligent among them, being fully aware of the risk of civil war, will understand that only trickle-up economics is sustainable in the long term.
A universal basic income would have the practical advantage of relieving a great deal of personal economic stress. In the past there was much less such stress; a part-time job was often enough to make rent in a major city. Today the average worker works long hours with little left over after rent. With a universal basic income it would be possible to move to areas of cheaper housing and find part-time work, alleviating much of the demand pressure on housing in urban areas.
Other advantages are economic stability and efficiency. Businesses would be able to count on a set level of spending per unit of time from the communities they service. They could then deploy their goods and services to match.
Perhaps the best advantage of this system is that it would dampen the endless whining about who deserves what. The idea that someone “deserves” to eat and someone else doesn’t is antiquated, a remnant of the days when an excess love of leisure threatened the viability of communities. It’s tiresome to hear wealthy Boomers argue they have earned endless free money when young people are stressed to the limit just making ends meet. Let’s simply declare that everyone deserves enough money to meet their basic needs.
Our current system is set up to make the worker dependent on the employer. This is the logic of trickle-down economics, which continues because people continue to accept it. It’s time to stop accepting it, and demand something suited for the 21st Century: trickle-up economics!
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