Trickle-down theory

It is the duty of all leader­s with a consci­ence to expose the lie for what it is

ISLAMABAD: This is with reference to the statement by an Anglican Bishop, Rowan Douglas Williams, published in The Express Tribune, praising Pope Francis for coming out strongly against the capitalist doctrine of the trickle-down theory. I am glad — leaders, religious or otherwise, should come out and criticise this pernicious doctrine. More should in fact, do so. The basic claim of the theory suggests that when the rich get richer, they will spend a portion of their increased wealth in ways that will lead to the wealth 'trickling down' from their pockets into those of the poor.

For the sake of argument, let me accept the claim made by capitalists (though I have very strong arguments against it as well). Noted economist Syed Nawab Haider Naqvi and I considered what the trickle-down would amount to. Suppose the wealth of the rich grows at 10 per cent per annum and out of that, a healthy 10 per cent finds its way into the pockets of the poor. This means that if a poor man has one lakh rupees at his disposal, a rich man has one crore rupees. It turns out that the gap between the rich and the poor would continue to increase for 450 years and the gap would close only after 460 years. This is like saying that if a bird is soaring in the sky when its droppings fall on animals below, the animals will become birds and also start to fly. The trickle-down theory is a deliberate attempt to soothe people into accepting the unacceptable. I feel that it is the duty of all leaders with a conscience to expose the lie for what it is; they should call a spade a spade.

Asghar Qadir

Published in The Express Tribune, September 17^th,  2015.

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September 18, 2015 at 01:25PM
Source/Credit: The Express Tribune