The "trickle-up" effect

The Conservatives promote the idea of the "trickle-down" effect - the idea that if people at "the top" get richer, the money trickles down through the economy and spreads to "the bottom" - the poorest. However, in my mind, this system has broken down. It would be better to describe it these days as a "trickle-up" effect - through high rent, housing benefit, dividends to shareholders, high charges for credit, and so on, as much of the spare money of the poor as possible is soaked up and passed up the chain to the wealthy. It doesn't trickle down any more - the net wealth of the richest 1000 people increased by 14% last year. That £83 billion pounds that just 1000 people increased in wealth by could have had a major impact on the economy were it "trickling down". Understand that I am not being anti-rich here. I consider myself one of the lucky ones, in wealth terms. But the whole foundation for how Conservative economics is sold to the population is on this basis. And if in actual fact, the money is simply being tied up in billionaires' assets, then this is not working. Note that even if the same amount was being transferred back to the economy at the same time as their wealth was increasing (though how quickly can a billionaire spend money?!) this would still represent a ridiculously inefficient process of getting money into the economy.

The point about this money is that it has to come from somewhere. And if the money is available to increase the net wealth of individuals, it could be available to reduce the deficit, or pay for hospitals, or .... whatever. The government is enthusiastically chasing something like £1 billion fraudulently obtained benefits - and rightly so. But that billion pounds is spread across far more people than 1000, and they are far more likely to be spending it in the local economy ("trickle-out?") - and the casualties of this are the people who are seeing their benefits cut when they are actually dependent upon them. This is why foodbank use is at record highs.

Similarly, quantitative easement could have passed money into the economy for the benefit of the population - but those billions of pounds were never seen by "normal" people, whilst high earners in the banking sector continued to see huge bonuses.

The world has changed, in this area as well as others (see my post on privatisation below). The Conservatives continue to pretend that things are the same as they were thirty years ago, in regard to these things, which is why people uncritically continue to vote for them, and believe that they represent a better way than the dangerous lefties with their strikes and their unions and their closed shops ("Corbyn will take us back to the 70s"). But these people owe it to the rest of society to understand how the tories are taking them and everybody else for a ride.