So I'll be upfront. I hold this belief but I don't have hard empirical evidence to back it up. It's more based on logic and values than data.
My thinking is basically this. The left operates on the idea that a strong economy grows from the bottom up and the middle out. Policies like food stamps, middle class tax breaks, worker protections, these put money in the hands of people who actually spend it which drives economic activity. The right believes wealth trickles down from the top which to me has never really made logical sense.
I know that's the theory not the evidence. And I'm genuinely open to being shown where I'm wrong. What I want is actual real world outcomes not just ideology from either side. Has the middle class measurably grown stronger under left leaning governance versus right leaning governance?
I'm not here to fight I'm here to actually learn. Change my view if you can.
Cmv: Left leaning policy produces better outcomes for the middle class than right leaning policy.
byu/AIwannabe ineconomy
Posted by AIwannabe
4 Comments
Stalin, hitler, Mao, Kim, Pol pot etc they where left weren’t they?
Or are we talking like middle ground like France and Europe.
A right leaning economy always produces better *purely economic* metrics with all else equal. Even wealthier European and worldwide nations grew with relatively very open and free economic policies (Sweden, Luxembourg, Singapore, Poland as of recently, and obviously the US).
This isn’t independent of “left” leaning policy as a lot of those have strong elements of left leaning policies, but generally as you get taxed more and the government gets proportionally larger vs private industry, economic growth slows and wealth diminishes.
This isn’t a hard concept.
If you’re a company or person wanting to start a business, why would you operate where you lose more of your profit to taxes? If you’re a skilled worker why would you move somewhere you get taxed significantly more and make less money?
It’s not necessarily fair, especially if you’re poor, but it absolutely creates more wealth.
Depends on what you define as “better outcome for the middle class”.
Looking at it from a risk managment angle, that is, constant rolls of the “lose your money” dice, left leaning policies favour social mobility:
We are all subjected to risk in a daily basis. The chance you get sick and skip work. The chance you get a permanently or temporary disabling condition. The chance you get mugged, robbed, etc. These are your **social risks**.
At increasing levels of income, these risks are indirectly mitigated by the evolution of lifestyle choices tied to income. For example, you can now afford a car, so the risk of getting mugged on public transport is nulled, or the risk of getting sick from exposure to weather on your daily commute to work is drastically reduced. If you can also afford (or are offered) a parking space, the risk of getting your car stolen drops. If the food you eat is of higher quality (and price) the chance to develop cronic illness drops.
There are a number of strategies to mitigate risks:
* You can **reduce the chance** of them happening, like in the examples above.
* You can **reduce the severity of the loss** (i.e., cheaper car means less money lost when totalled),
* You can **transfer the loss**. This is what we call **insurance**.
Given the nature of risks, and the fact covariance between multiple random variables, is usually more stable than variance in a single random variable, insurance for masses is economically much more efficient (cheaper) than the sum of individual insurance. Insurance for a fleet of cars is cheaper on a car by car basis, than hiring insurance for each car individually.
The insurance that covers the entirety of the population in a country, and that mitigates the daily social risks we discussed above, is called **social security**.
Get sick? Social security treats you, at no cost (or reduced cost).
Get disabled? Social security’s got your back.
Get unemployed? There’s unemployment insurance.
When people on the lower stratums can deal with the daily social risks appropriately because social security works as intended, they stop losing money just from daily life, and can start using their income to invest in themselves, to develop skills, to get better education, to start small business, to CLIMB the social ladder.
The better (more effective, more efficient) a country’s social security system is, the more mobility the population have.
Otherwise, the poor are trapped in a poverty trap, and the middle class is one bad month away from becoming poor.
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But, there’s no denying, that free market, with reduced government control, a right leaning policy, generates higher pure economic growth (no comment about distribution of income).
So the question is… how to mantain a strong social security system, to favour social mobility and a higher quality of life for the population, and at the same time a market that is as free as it can be?
And there’s just not a simple, easy answer there. Countries have been debating and testing different approaches to this forever.
