The UK government’s economic policies under new PM Liz Truss have caused a stir among, not only leftists, but also among mainstream economists. The new government says the solution to the stagnation and failure of British capitalist production is to cut taxation on the rich and on big business. The extra income flowing to them will then be available to boost investment and spending that can deliver economic growth.
This is a reversion to a very old idea in neoclassical economics: trickle-down economics. The term “trickle-down” originated as a joke by humorist Will Rogers which he used to criticize economic policies that favoured the wealthy or privileged while being framed as good for the average citizen.
Trickle-down economics is often seen as part of what economists call ‘supply-side economic policies’ which argue that it is failures in production, not demand that is the problem for capitalist production…
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