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It might be a dirty truism: utopian promises are for children and the slow, reality requires messy, pragmatic nuances that often break and contradict simplistic

It might be a dirty truism: utopian promises are for children and the slow, reality requires messy, pragmatic nuances that often break and contradict simplistic, academic "wouldn't it be nice if" or wishes for a perfect, simple solution that is designed and pushed into policy. One of the most pragmatic, matter-of-fact Marxist economists, R. Wolff, acknowledges the foibles, workarounds and tendencies... how people behave in reality, rather than how some people should like to make them, or would like, them to behave, or that libertarian, unregulated, utopian capitalist economics is some meritocratic magic wand that solves all externalities and inequalities in "the market," usually with "trickle down" economics that never happens. Reality is most definitely none of those things, even though people still try to pretend otherwise, likely for their own benefit.

stareatgoats 8y ago
> "trickle down" economics that never happens Never say never. The problem is that "trickle down" economics happens to some degree. This is a problem because it convinces a large number of fence-sitters that all is good, at least compared to the straw-man opposite extreme: that no inequalities would be allowed at all under anything that has 'socialism' in it's name, be it democratic or not.
- Nokinside 8y ago
  The most amazing thing about "trickle down economics" is that it was never a real economic theory . It started as a Will Rogers joke. Opponents of Reagan administration started to use it [1]. Then amazing thing happened. Somehow people in the right started to believe that it's actually a thing with solid facts behind it. Then politicians followed. Some economists have even tried to find the effect. It seems not to exist. [1]: Reagan administration believed in supply-side economics and free markets ad the cause of more economic growth.
  - sonnyblarney 8y ago
    I don't think it was ever a theory, just an idea. If BigCorps, who employ a lot of people are healthy and stable, they will invest and grow. Related to supply side economics. It's not irrational. BigCos along with banks are at the center of the economy - their leaders have more direct and clear impact that others. Demand side things like government subsidies are generally a little more indirect, take time, and of course come a long with a bunch of side effects. 2008 was 'trickle down' economics, i.e. 'the banks must survive' and they got some cherry deals.
    - Nokinside 8y ago
      Demand and supply must match. Too much supply creates just excess capacity and reduces the return of investment. That matching quantity is the size of the economy. Supply side argued that improving supply will increase demand and grow economy. In practice the demand side is more often correct, supply side wrong. Demand creates incentives to increase supply, not other way around. Supply side can be correct in some special circumstances for a short time, but not so much that it would be solid macroeconomic policy. Economy is like a rope. Demand is like pulling the rope. Supply is like pushing the rope.
      - sonnyblarney 8y ago
        "Demand and supply must match." They never match match. In an modern economy demand is created by innovation and marketing, i.e. by creating things like the iPhone, which change all previous consumer expectations, and other innovations change the dynamics of production for other things. " demand side is more often correct, supply side wrong. .Demand creates incentives to increase supply, not other way around" No. Printing money, or borrowing it to gin up demand is nothing but a temporary distortion and a waste of everyone's time unless you're trying to 'hold things over' while an economy recovers from some kind of shock (or fix a taxation situation that was whack), moreover, over any period this will just cause inflation and nothing will change in real-dollar terms, other than the temporary misreading of the economy by producers. To be clear: there can be no fundamental and secular shift in demand (and therefore growth) from demand side activities. There was no 'demand' for electricity until someone figured out electricity and the lightbulb, there was no 'demand' for toasters until someone figured it out. There was no 'demand' for the XMen and Avengers films, until someone created them. The majority of per-capita growth is predicated on some kind of fundamental innovation be it process, technology, organizational, geopolitical (i.e. trade deals). This is supply side. Now this doesn't mean we should just go ahead and wipe out corporate taxes yada yada, and that's not to say that strategic investment can't yield longer term action, but that strategic investment would have to be inherently value creating, not just some pure economic shift.
  - tim333 8y ago
    Rogers proposed a counter hypothesis that money trickles upwards: >...The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow.
sonnyblarney 8y ago
"matter-of-fact Marxist economists," There can be no such thing.
slededit 8y ago
A consistent theme throughout history is the need for a "story" justifying power. It doesn't need to be perfect but it needs some grounding. A King is thought to simply have absolute power but this isn't true. The story is that he or she gained his power from "god", which is why Henry VIII nearly tore the country apart with his divorce. His decisions were the start of a dissent that ultimately culminated in the English Civil War. This is also why dictators will go through the motions of a sham election. They derive their right to authority from the outcome of this election. If the dictator were to later say the election was a sham he would be disavowing his own right to authority. The Chinese authority gains its power from the revolution. The people decided and fought to implement communism. If they back away too far from this in a way that is overt they will loose their moral authority to govern. Failure to maintain this story gives ammunition to political opponents.

stareatgoats 8y ago

> "trickle down" economics that never happens Never say never. The problem is that "trickle down" economics happens to some degree. This is a problem because it convinces a large number of fence-sitters that all is good, at least compared to the straw-man opposite extreme: that no inequalities would be allowed at all under anything that has 'socialism' in it's name, be it democratic or not.

Nokinside 8y ago
The most amazing thing about "trickle down economics" is that it was never a real economic theory . It started as a Will Rogers joke. Opponents of Reagan administration started to use it [1]. Then amazing thing happened. Somehow people in the right started to believe that it's actually a thing with solid facts behind it. Then politicians followed. Some economists have even tried to find the effect. It seems not to exist. [1]: Reagan administration believed in supply-side economics and free markets ad the cause of more economic growth.
- sonnyblarney 8y ago
  I don't think it was ever a theory, just an idea. If BigCorps, who employ a lot of people are healthy and stable, they will invest and grow. Related to supply side economics. It's not irrational. BigCos along with banks are at the center of the economy - their leaders have more direct and clear impact that others. Demand side things like government subsidies are generally a little more indirect, take time, and of course come a long with a bunch of side effects. 2008 was 'trickle down' economics, i.e. 'the banks must survive' and they got some cherry deals.
  - Nokinside 8y ago
    Demand and supply must match. Too much supply creates just excess capacity and reduces the return of investment. That matching quantity is the size of the economy. Supply side argued that improving supply will increase demand and grow economy. In practice the demand side is more often correct, supply side wrong. Demand creates incentives to increase supply, not other way around. Supply side can be correct in some special circumstances for a short time, but not so much that it would be solid macroeconomic policy. Economy is like a rope. Demand is like pulling the rope. Supply is like pushing the rope.
    - sonnyblarney 8y ago
      "Demand and supply must match." They never match match. In an modern economy demand is created by innovation and marketing, i.e. by creating things like the iPhone, which change all previous consumer expectations, and other innovations change the dynamics of production for other things. " demand side is more often correct, supply side wrong. .Demand creates incentives to increase supply, not other way around" No. Printing money, or borrowing it to gin up demand is nothing but a temporary distortion and a waste of everyone's time unless you're trying to 'hold things over' while an economy recovers from some kind of shock (or fix a taxation situation that was whack), moreover, over any period this will just cause inflation and nothing will change in real-dollar terms, other than the temporary misreading of the economy by producers. To be clear: there can be no fundamental and secular shift in demand (and therefore growth) from demand side activities. There was no 'demand' for electricity until someone figured out electricity and the lightbulb, there was no 'demand' for toasters until someone figured it out. There was no 'demand' for the XMen and Avengers films, until someone created them. The majority of per-capita growth is predicated on some kind of fundamental innovation be it process, technology, organizational, geopolitical (i.e. trade deals). This is supply side. Now this doesn't mean we should just go ahead and wipe out corporate taxes yada yada, and that's not to say that strategic investment can't yield longer term action, but that strategic investment would have to be inherently value creating, not just some pure economic shift.
- tim333 8y ago
  Rogers proposed a counter hypothesis that money trickles upwards: >...The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow.

sonnyblarney 8y ago

"matter-of-fact Marxist economists," There can be no such thing.

slededit 8y ago

A consistent theme throughout history is the need for a "story" justifying power. It doesn't need to be perfect but it needs some grounding. A King is thought to simply have absolute power but this isn't true. The story is that he or she gained his power from "god", which is why Henry VIII nearly tore the country apart with his divorce. His decisions were the start of a dissent that ultimately culminated in the English Civil War. This is also why dictators will go through the motions of a sham election. They derive their right to authority from the outcome of this election. If the dictator were to later say the election was a sham he would be disavowing his own right to authority. The Chinese authority gains its power from the revolution. The people decided and fought to implement communism. If they back away too far from this in a way that is overt they will loose their moral authority to govern. Failure to maintain this story gives ammunition to political opponents.