Trickle-Down Failure

Trickle-Down Failure

Date: 7th, January, 2015


I’ve just read a brief article in the Radio Times as part of a brief TV series about the wealthy in the world and their remote high lifestyle. While fascinating to many tabloid news readers and viewers the key point of the article was the failure of the trickle-down theory for redistribution of wealth.

According to the article the latest work of economic analysis shows that trickle-down isn’t working, in fact they believe it’s now working in reverse and failing the rest of the world.

I believe this is flawed and that trickle-down theory is fundamentally at fault, but can be corrected for everyone’s benefit.


According to trickle-down in capitalist economics it’s acceptable to tolerate the immense wealth of extremely wealthy people and companies because their money will “trickle down” to the rest of the economy as they spend or invest it after receiving tax cuts from the government. Research is showing that this is not happening and thus trickle-down is failing.

From this comes the suggestion that a new mechanism is needed to draw money from these remote and lofty regions of the economy to bring benefits to the rest of the community. In other words taxation.

Raising taxes on the wealthy will allow money to be drawn from them and circulated in the rest of the economy. So taxes on the rich are good for the economy. Theoretically.


This is where I see a fundamental flaw in the assumption of taxation. Just like trickle-down has built-in assumptions about the flows of capital in the market so taxation, applauded by politicians and economists, has an assumption that the flow of money in the economy will reach those in need at the lowest levels in the community.

There is no proof of this. In fact I suggest that just as trickle-down is flawed so wealth taxes are equally flawed.

Can you trust a politician with greater taxes?
Can you trust a politicians to see that money circulates to those in need?

From all our experiences of taxation and politics one flaw in the political-economic system is the enormous temptation on politicians to spend money on programmes that benefit them and their bureaucracies first long before any money reached the rest of the community.

Grandiose spending projects (for example the forthcoming squandering of money on HS2 railway train in Britain) or petty bureaucracy or little wars to win popular votes are some of the ways that government can squander their own trickle-down and prevent money reaching those most deserving it in the community.

Tapping Trickle-Down

Trickle-down is flawed in the assumption that money automatically “naturally” flows down as the rich spend their wealth in society on goods and services. It assumes an automatic process that doesn’t need any outside action to occur. This is a false assumption.

If nothing exists or nothing is created for the wealthy to invest in or spend their money on then it cannot flow. If the shops are empty they do nothing, money goes nowhere.

We need to create means of tapping into the wealth of the world that produces direct beneficial effects on the rest of the economy without driving the wealth away with punitive taxes for political fantasy-spending.

My solution to this is to create the kind of products that wealthy clients would appreciate, luxury supercars being the first option. But there is a flaw in our economy that prevents trickle-down – we cannot built the taps: the products that people desire.

To trigger trickle-down we must create the practical mechanisms of cashflow in our economy. My own plans, for the design and delivery of a new high performance supercar (The Rumbler Sport Tank) is intended to achieve this, create new jobs, stimulate new manufacturing and tap (pardon the pun) into the thriving British car industry. And it isn’t working.

There is no money for manufacturing in Britain, where the political class have declared we now live in a post-industrial world. There is no mainstream venture capital, nor bank funding, and government cash is only available in minuscule quantities if you’re lucky enough to find it.

This is the fundamental failure of the trickle-down theory – if you cannot tap into the wealth it will not flow.

We need to build the taps that will produce a direct flow down to the public not politicians and that is my vision of the future.

I plan to draw up the paperwork to raise money from general public subscription for the Rumbler project. Thousands of ordinary members of the public will be invited to help build and install the tap and begin the real trickle-down by sharing in the glamour and wealth of the prestige British car industry. Through this the first money will flow to everyone else with more to come.


Footnote: For clarity “Trickle-Down” is not a formal or proven form of economics. It is merely a mechanism/ideology promoted by right-wing capitalist factions to promote the idea of reducing tax on the rich as a means of releasing capital into the economy. As I point out, this mechanism doesn’t work unless there is a stimulus to trigger the flow of money down from the heady heights of wealth. Unfortunately government economic planning does not permit such large-scale investment in the mechanisms of stimulus, hence my own initiative with the likes of the Rumbler 505 Sport Tank.