Economic philosophy must accept new situations

Interestingly, after the death of a queen who was the child of Edwardian parents and saw the adulthood of children who had never lived in a world populated by politically powerful monarchs , England plunged into an economic crisis caused by adhering to post-war economic thinking.

For too long, the political right in the Western world has endorsed the thinking of the Austrian school of economics and economists who have expanded their thinking. The economic meme “Trickledown” emerged during the eighties. This theory had its roots in opposition to Karl Marx and his idea of ​​socialism, which would lead to pure communism, where everyone shared goods and services, and no one went without.

History has shown that communism will never work. Moreover, state ownership of a company or, as Marx described it, of the means of production, is not an efficient way to achieve an innovative and growing economy. However, the individual liberties that are part of democratic government have produced a standard of living that would amaze a time traveler from the period when Marx and the Austrians expounded their theories.

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Capitalism, the growth of an economy by investing in the means of production (all profit-making enterprises), is the only peaceful path to prosperity for every human being. The devil is and has been in the details. A democratic form of government is essential, where the majority rules, but minorities are protected. Capitalism needs innovation, and only people who are free to think and speak as they wish will become creative.

The trickle-down economy ignores the modern innovation of worker investment. The world that incubated this theory had an industrial class reproducing monarchs and the noble class without heritage. Of course, they wanted subsequent generations to inherit the position and wealth they had acquired and improve upon it.

This world had not developed mutual funds, pension plans, investment clubs and educated individuals who invested their funds in the stock and bond markets. This world had very few cooperative investments and could not imagine a world where millions of people could and would provide investment capital.

When Reagan instituted the reforms he did, there was a sense that the tax reform measures would produce more economic growth through private investment. At that time, it turned out to be true. However, this was not a lasting solution.

What has happened over time is creating two serious problems. The amount of Discretionary Income in ninety-two percent of budgets has decreased in value and as a percentage of revenue. For too many, it has shrunk to the point where there is none and families are living paycheck to paycheque. The second problem is that too much capital is concentrated in too few hands. The wealthy hire companies to manage their wealth without paying personal attention to it. Games are played and investment instruments are created that do not produce investment that brings value to the world as a whole.

The significant decrease in government revenue for cities, states, and the nation means that the government cannot effectively deliver the deals it has made with citizens. When governments function poorly, citizens lose trust in politicians and bureaucrats. Lack of faith is a critical source of the troubles we have in America today.

Fortunately, new data and free thinking have produced new theories about creating economic well-being for all income amounts. We need to choose the most promising ones and try them rather than buy into ideas whose promise has pushed us to a point where we know only capitalism works. We must develop corporate standards, tax policy and supervisory regulations that enhance productive investment and individual economic security.

Tax the rich and No New Taxes are meaningless slogans. The ideals that founded our country and our centuries-old religious beliefs tell us to work for the well-being of all. Our economy must do the same.

Our midterm elections give us the opportunity to signal that we want economic growth along with personal well-being. I intend to ask for the change when I vote.

Linda Brugger, a retired Air Force Reserve and leaning Democratic and community activist, can be reached at [email protected]