At NRO, Thomas Sowell tackles what he calls the “lie” of the “trickle-down economy”. So, writes Sowell, “the ‘drooping’ lie is a 100 percent lie.” Sowell cites Bill de Blasio and Barack Obama as figures perpetuating the “lie”, as well as writers in “the New York Times, in the Washington post, and by professors from prestigious American universities – and even from as far away as India. “
But we should also note that “runoff theories” are mentioned in Evangelii Gaudium, also: “Some people continue to defend fallout theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing more justice and inclusion to the world.
In the midst of his discussion, Sowell asks the following penetrating questions:
Why would anyone advocate that we “give” something to A in the hope that it would trickle down to B? Why on earth wouldn’t a sane person give it to B and eliminate the middleman?
Whether or not there is a “trickle-down economy” in discussions of the market economy, isn’t there something similar to what Sowell calls for at play in wellness programs? usual redistributives? Do we not “give” something to bureaucracies and government agencies in the hope that they will in turn redistribute it (hopefully in addition to a trickle) to the poor?
And with regard to the runoff part of the runoff welfare economy, Juan de Mariana observed a long time ago that “money, transferred by many ministers, is like cash. It always leaves a residue in the containers. So why not give directly to the poor and cut out the middlemen, as Sowell asks?
It is precisely the discussion taking place on the Bleeding Heart Libertarians blog, among others, on direct cash transfers to the poor in the place of bureaucratic welfare programs. Head over to the BHL blog to check it out.