Trickle-down is how the world works

POST: Kurdistan's Economic Divide, Enterprise Resilience Management Blog

Good blog by Steve.

People tend to have the most unreal expectations of what initial connectivity can bring to a damaged society (although, let's say the average Kurd, as this guy hints, makes--say--200 a month, which would yield an annual of 2400, which would be stunningly good for a postwar Gap state in recovery), especially on the question of rich v. poor.

Honestly, the first order of any boom is to create some rich people while making sure no one's doing too badly.

Why?

Richer people create economic activity by investing and consuming.

Ask a tradesman sometime. They don't get hired by poor people. They get hired by wealthier ones. You may scoff at such trickle-down notions, but it's actually how the world works.

I myself never seem to make any speaking or consulting fees off "poor" groups or companies, just "rich" ones. Am I supposed to resent that? Or just hope that the ranks of the "rich" ones swell?

Development-in-a-Box is about democratizing access, not equalizing income. It's about making everyone richer, and yeah, it will inevitably be that the poor get richer but that the rich get a lot richer. Unless you want to get in the business of telling foreign cultures what to do with their wealth, that's how it's always going to be. Our job in Kurdistan is not to curtail the growing wealth of the elite, but to expand opportunity.

Globalization will never be about income equalization, but about connectivity equalization. We can't mandate economic outcomes. Can't do it at home. Can't do it in other people's countries.

What we can do is end the disconnectedness while not pretending that we're the world's social worker.

Comments

[Steve French]

Actually, since the bottom is fixed at zero, income inequality is usually a sign of progress.

[Christopher Thompson]

"Ask a tradesman sometime. They don't get hired by poor people. They get hired by wealthier ones. You may scoff at such trickle-down notions, but it's actually how the world works."I just asked the plumber working on my house right now and he said that is makes more than most of his clients ... at least "lives in a nicer house."

"I myself never seem to make any speaking or consulting fees off "poor" groups or companies, just "rich" ones. Am I supposed to resent that? Or just hope that the ranks of the "rich" ones swell?"It's not surprising that you and Stephen find things promising when those who pay you are doing well. But I think it is disingenuous to infer that because trickle-down works for you that it works in general.

The quoted article and many studies before shows the common problems with trickle-down. It is wasteful and therefore produces poor return on investment to the group as a whole.