Let’s
start with a quiz for my readers:
Which
pioneer of free market capitalism developed the theory for “trickle-down”
economics?
a)
Adam
Smith
b)
John
Locke
c)
David
Ricardo
d)
None
of the Above
In
which work did Milton Freedmen advocate “trickle-down” economics?
a)
Capitalism and
Freedom
b)
Free to Choose
c)
A Theory of
Consumption
d)
None
of the Above
In
response to Keynesianism, which Austrian School author and associated work
advocated “trickle-down” economics as a means of addressing income inequality?
a)
Hayek
– Road to Serfdom
b)
Menger-Principles of Economics
c)
Rothbard-Man, Economy, and the State
d)
None
of the Above
If
you answered ‘d)’ to all of these questions, you are correct. So my follow up question is this: When did “trickle-down” economics become synonymous
with free market capitalism? That is the
inherent assumption adopted by Rush Limbaugh in his segment “It’s Sad How WrongPope Francis Is”, where he takes issue with the Pope’s statements in Evangelii
Gaudium. Some highlight’s of Limbaugh’s
statements:
“This
is just pure Marxism coming out of the mouth of the Pope.”
“It's
sad because this pope makes it very clear he doesn't know what he's talking
about when it comes to capitalism and socialism and so forth”
Limbaugh isn't alone in his sentiment. FOX New’s
Stuart Varney offered very strong words against the Pope in defense of capitalism. So somehow, it has been ingrained in the political
lexicon of America that “trickle-down” economics = free market capitalism.
I
would like to make the argument that “trickle-down” economics is not proposed, espoused,
or championed by Classical, Neo-classical, or Austrian School economic models
or theories. Rather, at its origin, it
was used in a negative light and in political terms.
Its
beginning in modern day usage is often attributed to David Stockman (Reagan’s budget
director) when he stated supply-side economics was an attempt to sell “trickle-down”
economics to the public, and until recently, its most common usage has been as a
pejorative. Liberal economist John
Kennith Galbraith said trickle-down theory is “what an older and less elegant generation called the horse-and-sparrow
theory: 'If you feed the horse enough oats, some will pass through to the road
for the sparrows.’” And endless satirists have described “trickle-down”
economics as the rich pissing on the pour.
Yet
somewhere between today and Stockman needing to disguise “trickle-down” economics under
another name, the Left using it as a pejorative against the Right, Republican Senator
Hank Brown vehemently denying the GOP’s use of the theory and lamenting its attribution
to the Republican party; “trickle-down” economics has become
something to be defended by right wing political commentators, because to
defend that, is to defend capitalism.
