trickle down trip-up
World food and oil prices skyrocketing, western booms stagnating.. and everybody's looking surprised!
I recall listening in to an argument between two economically minded uni friends a few years ago. One was a passionate advocate for "trickle down" economic policies, the other calling for some global Robin Hood to rebalance the worlds chequebooks more equitably. The argument presented against trickle down economics was that each successive tier the 'trickle' runs down hoards as much of the flow as they can, so that in reality the order of the hierarchy of wealth never changes, and the trickle usually dries up well before it gets to the people on the bottom of the pyramid. I was struck by the thought - the reality - that my class is probably one of the major culprits. We upper-lower-middle (whatever) class westerners, with our aspirations towards the impossibly rich we see on tv and in corporate boardrooms, gulp and guzzle every cent we can, ensuring only the most meagre cashflow trickles down into the subsequest tiers (the immigrant and unskilled workforces at home, and the vast industrial workforces abroad). My Robin Hood lefty friend warned that a global uprising would inevitably redistribute the world's wealth if the greedy capitalists didn't come round soon. I was surprised by his simplistic, almost superstitious projection of an inevitable revolution of such retributionary - almost karmic - weight. As it turns out, the revolution has begun, and it seems to have a surprisingly karmic quality to it thus far..
As my lefty friend pointed out, the big problem with a trickle down philosophy is that each class uses whatever benefits it can scramble together to catupult itself up a tier, rather than passing the benefits down the chain. So while those at the very bottom of the pyramid tend to stay where they are, those occupuying the top half of the pyramid are relentlessly upwardly-mobile. A pyramid doesn't remain a pyramid for long if the top tiers keep filling up with extra bricks.
So as the exploding urban middle classes in India and China discover appetites for meat and eggs, we suddenly find there's competition for our previously ample supply and voila! the prices skyrocket. So it goes for oil and cars (then there's the subsequest impact of cars' thirst for ethanol eating into a supply chain that ought to be putting food on plates, not fuel in tanks)..
So here we are in 2008, a class exorbitantly rich by global standards, feeling bewildered and out of control by the entry into our own class of more neighbours than the system can handle. Through our own trickle-hoarding and aspirational mobility, we've encouraged rafts of people to join us on this plateau - we've been so busy keeping up with the Joneses, we havent noticed the Kumars and Chans down the road keeping up with us.
What's worse, this new reality shatters our optimism regarding the fight against climate change. It was hard enough for us to concede the need to begin rolling back our own energy consumption.. the thought that hundreds of millions of asians are eagerly joining us in our gluttonous lifestyles blows all easy goals out the window! It won't be as simple as me switching to 10% Greenpower if the number of toasters in the world is going to triple this decade. is there such a thing as economic karma? Are we getting our just desserts?
Surely it's the same deal with housing prices in Australia right now. 15 odd years ago the government begain encouraging Australians to consider real estate as a wealth generation tool, and we as a nation got stuck into the real estate market in earnest. Now, with the newly made fortunes of ordinary aussies resting on record house prices - and those same record prices forcing young people into a lifetime of home rental - what hope is there of ratcheting these prices down again? We wonder how this situation got so out of hand, and cringe at the thought of what kind of country our children will grow up into - yet surely, we engineered our own fate.
Looking back, I think perhaps the biggest evil of a trickle down way of thinking is that it reminds people where they sit in the global economic food chain, which primes us to behave in a hierarchical way. How can I trust myself to trade non-exploitatively with a neighbor who i deem intrinsically lower than myself? And how can I even begin to ask questions about what generosity really is, if my eyes are fixed on those only immediately above and below me? God have mercy on us.
but with righteousness he will judge the needy,
with justice he will give decisions for the poor of the earth.
He will strike the earth with the rod of his mouth;
with the breath of his lips he will slay the wicked.
Isaiah 11:4
I recall listening in to an argument between two economically minded uni friends a few years ago. One was a passionate advocate for "trickle down" economic policies, the other calling for some global Robin Hood to rebalance the worlds chequebooks more equitably. The argument presented against trickle down economics was that each successive tier the 'trickle' runs down hoards as much of the flow as they can, so that in reality the order of the hierarchy of wealth never changes, and the trickle usually dries up well before it gets to the people on the bottom of the pyramid. I was struck by the thought - the reality - that my class is probably one of the major culprits. We upper-lower-middle (whatever) class westerners, with our aspirations towards the impossibly rich we see on tv and in corporate boardrooms, gulp and guzzle every cent we can, ensuring only the most meagre cashflow trickles down into the subsequest tiers (the immigrant and unskilled workforces at home, and the vast industrial workforces abroad). My Robin Hood lefty friend warned that a global uprising would inevitably redistribute the world's wealth if the greedy capitalists didn't come round soon. I was surprised by his simplistic, almost superstitious projection of an inevitable revolution of such retributionary - almost karmic - weight. As it turns out, the revolution has begun, and it seems to have a surprisingly karmic quality to it thus far..
As my lefty friend pointed out, the big problem with a trickle down philosophy is that each class uses whatever benefits it can scramble together to catupult itself up a tier, rather than passing the benefits down the chain. So while those at the very bottom of the pyramid tend to stay where they are, those occupuying the top half of the pyramid are relentlessly upwardly-mobile. A pyramid doesn't remain a pyramid for long if the top tiers keep filling up with extra bricks.
So as the exploding urban middle classes in India and China discover appetites for meat and eggs, we suddenly find there's competition for our previously ample supply and voila! the prices skyrocket. So it goes for oil and cars (then there's the subsequest impact of cars' thirst for ethanol eating into a supply chain that ought to be putting food on plates, not fuel in tanks)..
So here we are in 2008, a class exorbitantly rich by global standards, feeling bewildered and out of control by the entry into our own class of more neighbours than the system can handle. Through our own trickle-hoarding and aspirational mobility, we've encouraged rafts of people to join us on this plateau - we've been so busy keeping up with the Joneses, we havent noticed the Kumars and Chans down the road keeping up with us.
What's worse, this new reality shatters our optimism regarding the fight against climate change. It was hard enough for us to concede the need to begin rolling back our own energy consumption.. the thought that hundreds of millions of asians are eagerly joining us in our gluttonous lifestyles blows all easy goals out the window! It won't be as simple as me switching to 10% Greenpower if the number of toasters in the world is going to triple this decade. is there such a thing as economic karma? Are we getting our just desserts?
Surely it's the same deal with housing prices in Australia right now. 15 odd years ago the government begain encouraging Australians to consider real estate as a wealth generation tool, and we as a nation got stuck into the real estate market in earnest. Now, with the newly made fortunes of ordinary aussies resting on record house prices - and those same record prices forcing young people into a lifetime of home rental - what hope is there of ratcheting these prices down again? We wonder how this situation got so out of hand, and cringe at the thought of what kind of country our children will grow up into - yet surely, we engineered our own fate.
Looking back, I think perhaps the biggest evil of a trickle down way of thinking is that it reminds people where they sit in the global economic food chain, which primes us to behave in a hierarchical way. How can I trust myself to trade non-exploitatively with a neighbor who i deem intrinsically lower than myself? And how can I even begin to ask questions about what generosity really is, if my eyes are fixed on those only immediately above and below me? God have mercy on us.
but with righteousness he will judge the needy,
with justice he will give decisions for the poor of the earth.
He will strike the earth with the rod of his mouth;
with the breath of his lips he will slay the wicked.
Isaiah 11:4