The Philosophical Case for Inverted Supply-Side Economics


Since the late 1970's, America has changed. It has not been a quiet change nor has it been a particularly benevolent one. For the most part it has been a change that has brought greater inequality, poverty, and a host of other characteristics that liberals are not impressed with. The blame for most of this has been laid at the feet of supply-side economists, and most notable their supreme leader, Ronald Reagan. The theory of supply-side states that money put in at the top of the economic ladder will multiply and "trickle-down" to the lower classes thus enriching everybody. It is a theory that has remained largely unchallenged by the American left. While individuals have decried it, there has been no massive theory designed to counter it. Thus it is clear that a new theory needs to be developed and indeed it has: The Kaempen Theory of Supply-Side Economics. This new theory believes that supply is key to economic success but that the supplying should go to the economically undeveloped. This can be seen by looking directly at the Kaempen Theory of Supply-Side Economics.

The infamous, trickle down, is shaped like a pyramid. The smallest number of people are at the top and are first to get tax-brakes, under supply-side economics. To illustrate (albeit simplify immensely), if that pyramid is filled with rocks, big on top and little on the bottom, America is then represented in that pyramid (the rocks referring to either the size of a person's economic value or the number of people in each class, for this analogy the difference does not matter). Now supply-side con would say, in a very simplified way, that what is poured in at the top will "trickle down" to the bottom. It can easily be agreed that it would trickle and as this analogy would show, the amount making it to the bottom (the bottom being a tray at the bottom) would be a very small amount and would come out very slowly, a perfect analogy for real-life "trickle down."

The Kaempen Theory of Supply-Side Economics inverts the pyramid and thus turns it into a "V" shaped economic chart. If money is fed in at the wide-end (bottom of the economic ladder, but first to receive money in this theory), that which makes it to the narrow end (top) will be roughly proportional to the amount that each person at the other end gets. More simply, even though less makes it to the rich, there are less rich people and so the amount they get is a great deal more proportional to what each person at the bottom of the economic ladder gets.

Furthermore, if an agreement is reached that giving people at the bottom money will stimulate the economy, it seems only reasonable to apply that in such a way so as to return the money to the market fastest. A rich person will buy a LearJet, Porsche, or perhaps invest in his company. None of those three factors will significantly help the economy. To see this in plain terms, I'll take the richest person and the richest company. Those would be Bill Gates (46.6 billion dollars net worth) and Citigroup (255.3 billion dollars market value). Both those stats are from for 2004. Now assuming Bill gives all his money to citibank, they have a 1/6 increase in investment. That's all. Billionaires and millionaires at lower levels could not invest as much, and personal income drops faster than corporate market value. Thus, the actual impact of wealthy investment as a result of tax breaks is negligible.

Should money be given to the opposite end of the ladder, though, the results are far different. If a considerable amount of money (say 25% of their current income, pretax) is given to the poorer people and they are let to spend it, they will. They will pay off debt, make housing improvements and perhaps even do things conducive to a positive home environment. The effects of that are many. First, the money would go to the companies. They have more demand for their goods and more profit. That necessitates more supply and jobs to create that supply as well as to turn it into demand. That job increase is the second positive impact. Thirdly, the poor people's lives improve. People who are better off are more conducive to be materialists and that is always good for big business. Finally, a better home will not only drive property values up (and making more income for those people effected, should they sell their land) but it also makes better students and in today's market, an education is the priority to keep a person economically competitive.

It should thus be obvious that the real key to economics success for everyone lies in the ability to utilize the masses of poor to lower-middle class Americans. Turning them into viable materialists is the ultimate key to achieving an America that is truly prosperous for everybody.

Or so the Kaempen Theory of Supply-Side Economics would say.

The theory of one individual is hardly any cause of liberals to rejoice that they now have a weapon against supply-side economics. If anything, this theory must be regarded with great skepticism. Therefore, this theory must be "spruced up." It must be sharpened like a spear and only then can it be hurled at supply-side. In order to toughen it up, it must be defendable. The best thing to do here is to find those whom would support it the most and use them to defend it. Here, those people are Aristotle, John Rawls, and Michael Walzer. These three shall provide the basis of support and defense for this theory. That is not to say that there are not others whom could do this just as well, merely that time and focus prevent the necessary digressions that other philosophers would require to bring them in.

Aristotle, 2,000 years distant and yet he is still the core of leftist thought. The basis for Aristotle's claim to defend leftist supply-side is that Aristotle promotes the common good. Plain and simple, his underlying message for everyone and everything is that everything everyone does should promote the common good. The following quote from The Politics shows this well.

"; or rather we may say that while it grows for the sake of mere life,it exists for the sake of a good life."

How could anyone justify the unimaginable poverty that a great deal of Americans live in as being a good life? Aristotle would not be impressed with the status of the common good in America. From that one quote, the American government should derive its powers to help the citizens of this country.

In fact between the 1930's and 1980's that is what America did. The CCC, WPA, TVA are three of the Roosevelt projects that made the life of people good. Roosevelt's legacy was carried on by Harry Truman, John F. Kennedy, and especially Lyndon B. Johnson. They all used the state to improve the lives of as many people as they could. That all changed in the 1980's with Reagan. American government withdrew from the Aristotelean responsibilities of government and instead grabbed onto religious rhetoric.

Aristotle had more points but they all focused and returned to the idea that the state needs to improve the common good for all, almost a "greatest good for the greatest number" sort of deal. However, the final thing of Aristotle to be mentioned is his view on justice. Aristotle believed that:

"justice belongs to the polis; for justice, which is the determination of what is justice is an ordering of the political association."

That talk makes clear that the polis, which has a duty to its people first and foremost, also has a duty to justice and thus being a just society. That leads well to John Rawls who focuses primarily on justice.

John Rawls also focused on one single idea. His was that justice is inseparable from fairness. He then defined fairness as having equal opportunity to do something (not equal everything, just opportunity, the rest is up to the individual). Combining his view of justice with Aristotle's leads to a strong fusion of ideas: All people are part of the polis which has as one of its responsibilities the maintenance of justice. As Rawls defined it, justice is then equal opportunity and so the lineage becomes this: all people are part of the polis and thus have an obligation to provide an equal start for all people.

Furthermore, Rawls asks people to ignore all that they know and decide how they would want to live knowing that their chances of having a good life are very slim. If a rich person would choose a safety net system, then that person recognizes the flaws in equality in the current system. That idea makes a good deal of sense as someone who didn't recognize their flaws is bound to get a bad lot simply because the odds are so against them and they are so blind to it. This idea, the "Hidden Veil," idea will come up in the linkage of John Rawls to the Kaempen Theory of Supply-Side Economics. However, Rawls is not a total "commie-pinko" as he is fully aware that the efforts of individuals should not be punished. In short he recognizes awarding of bonuses for those who work harder, so long as they do not hurt the majority of people (notice the similarities between that and the common good of Aristotle).

That is the final key aspect of Rawls. While everyone should have equal opportunities, this means that things may not be distributed equally (e.g. those who are disadvantaged get more) but it is all dependent upon the degree to which the distribution helps and hurts. Rawls does not support equality if it does not benefit most people. That is unjust according to his second principle of justice:

"Social and economic inequalities are to be arranged so that they are both to the greatest benefit of the least advantaged, consistent with the just savings principle."

Right there Rawls laid forth his whole basis, a very Aristotelean idea that the polis is responsible for the benefit of its people by arrangement of wealth. With the topic of wealth at hand, it is time to move on to Mr. Michael Walzer.

Now Walzer is pretty much a "commie-pinko." He supports total equality (egalitarianism). He wrote his work in response to one of the supply-side Reagan men, Irving Kristol. Walzer tried to take everything that Kristol said and destroy it. He did. For Walzer, the main reason to support egalitarianism was that there are many different forms of inequality, not just one. It is almost impossible to stop the other forms of inequality because monetary differences affect all other aspects of inequality. Furthermore, as the effects of the monetary inequality get larger, and as the other forms of inequality grow, the tyranny of inequality begins to affect people. The tyranny of inequality is the influence that one area of inequality (most namely money) has over the other areas.

With a basis for tyranny established, Walzer then claims that in order to prevent the fall of liberty and justice, equality is needed. Part of achieving this equality is changing the current reward system. In the current system rewards are not meritocratic but Walzer believes they should be. For example, a restaurant owner not only benefits from his industry in that society will eat at his restaurant more, but then that society is expected to give him other rewards. Walzer does not agree with that idea, his successful business should be reward enough. Walzer thinks that the other types of rewards, those not money based, are quite sufficient for most people, as he states in the following quote.

"There are other values, however, that they must respect, for money isn't the only or necessarily the most important thing for which work can be exchanged."

Thus it is that Walzer establishes his position in support of egalitarianism. Now that his views have been added to Aristotle's and Rawls', the synthesis of them can begin.

Looking back at the Kaempen Theory of Supply-Side Economics, the first thing that stands out is the attempt to proportional distribute money up the economic ladder. To a conservative economist this is just fool's talk but it is something that Rawls, Walzer, and quite probably even Aristotle would have supported.

Rawls' support comes from a few aspects of his work. The first is that it is fair. Everyone earns a roughly proportional amount of money, although the poor would receive a much higher amount of money in relation to their income. That is fair by Rawls. He would also have supported it because it reaffirms the equality of all people in the social contract. Furthermore, it not only meets his requirement that the distribution be equal AND if it isn't (e.g. not a lot of money trickles down to the rich) then this system advantages the worst off. Rawls' final point is that of the "Hidden Vail" and this would again apply. Everyone would win in this system because it is just, fair, and benefits the lowest state of socioeconomic existence but does not hurt (and in fact might even help as well) the rich. Rawls is thus the strongest defender of the Kaempen Theory of Supply-Side Economics, but still there are others who can defend it.

Walzer would have supported it because it helps bring around an egalitarian society by reducing the inequality. Say for example, that rich person "A" had one-hundred units of wealth and poor person "B" had ten. If they both got five units from this system, that instead of the rich person having ten times the wealth, person "A" would only be ahead by a factor of seven. That's quite a noticeable decline. Thus the tyranny that the rich have over all other forms of equality, and even people, would be reduced by the per capita increase of wealth for the poor. The system would also help the meritocratic. As the money would almost certainly have stipulations on what it could be spent for, he who is the most industrious would have an advantage in that he could stress each and every dollar further. With these points in consideration, the equality that is necessary for liberty would almost certainly have no problem flourishing and fighting against the tyranny of money. Despite the length of Walzer's defense, in addition to that of Rawls', there is still more defense to be added.

Aristotle, although he could not have had any conception of the modern economic system, would support the Kaempen Theory of Supply-Side Economics. He would do this because of a few factors. The first being the cliché of the common good. There are more poor people than there are rich people. This is common knowledge about America. Thus by helping the poor more than the rich, more people would be helped and the Utilitarian Idea of "the greatest good for the greatest number" would rear its head and support Aristotle's common good. This also requires that man submit to his self-interests to the need of the common good. This is another one of Aristotle's points. Finally, this system meets Aristotle's "plurality of goods" in that the good of everybody is helped here. Nobody would not benefit from this system as happens in regular supply side economics. This system would definitely have had the support of Aristotle.

With these defenders backing it, this theory can now stand tall and be allowed to clash heads with regular supply-side economics. The Kaempen Theory of Supply-Side Economics is the closest thing to a weapon that liberals have in the war against supply-side. It has historical and political roots. Therefore with any luck, in ten years this theory will take its Aristotelean/Rawlsian/and Walzerian ideas and use them to rejuvenate the Democratic Party of the United Sates. Hopefully, it will turn awaken us from our slumber and see the true way of liberalism.