Why Trickle-Up Economics Won’t Work: The “Crisis of Distribution” Myth and its Political Implications
Wednesday 12 September, 2012
500 8th Avenue, between 35th and 36th Streets
Andrew Kliman has spent countless hours examining the facts. He will share some of what he has learned, and will also suggest that the myth that we have a distribution crisis is rooted in the belief that “there is no alternative” to capitalism: “If greater equality within the existing system is the best realistic alternative, you want to say that the wealth is there to spread around, and that the system can afford to spread it around, even at a moment of crisis in which a big chunk of the wealth is being destroyed.”
Kliman will discuss how the degree of income inequality varies greatly from measure to measure. And he’ll explain why it’s wrong to assume that rising inequality means that income has been redistributed from workers’ pay to profit; that actually didn’t occur in the decades preceding the Great Recession! “In order to understand what’s been going on,” he says, “we need to make many more distinctions than people realize. There’s no such thing as ‘income’––only many different things.”
He will also take on claims that the recession and the continuing malaise were caused by redistribution of income to the rich, and that trickle-up policies—based on redistribution in the other direction—can fix the problem. The evidence instead suggests that the actual causes are falling profitability, which led to a slowdown in the growth of productive investment, which in turn led to slow economic growth, slow growth of income, and rising debt burdens. And government policies lessened the effects of all this for decades, but at the cost of making the debt overhang that continues to plague the economy and make conditions more intractable.
Come find out the facts! And discuss a theoretical perspective that can actually lead to change!