The Instigator
DevinKing
Pro (for)
Losing
9 Points
The Contender
Ragnar_Rahl
Con (against)
Winning
15 Points

Trickle Down Economic Theory Does Not Work

Do you like this debate?NoYes+0
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Post Voting Period
The voting period for this debate has ended.
after 6 votes the winner is...
Ragnar_Rahl
Voting Style: Open Point System: 7 Point
Started: 12/5/2010 Category: Politics
Updated: 6 years ago Status: Post Voting Period
Viewed: 5,556 times Debate No: 13867
Debate Rounds (4)
Comments (17)
Votes (6)

 

DevinKing

Pro

I would like to thank my opponent in advance for accepting this debate. I will be arguing for the statement that Trickle Down Economic Theory Does Not Work. My opening argument will be posted in round two. For now, I will list definitions:

a) Trickle Down Economic Theory-- "An economic theory which advocates letting businesses flourish, since their profits will ultimately trickle down to lower-income individuals and the rest of the economy."

investorwords.com

b) Work-- to produce a desired effect or result

http://www.merriam-webster.com...
Ragnar_Rahl

Con

A business operates by hiring employees-- by trading capital for labor, which it then directs and manages after having done intellectual labor of its own.. It cannot flourish without offering labor something better than they have now, for otherwise no one will choose to work for it. Unless employees are by their very nature brainless, they benefit, stuff is "trickled down" to them quite successfully. Mutual advantage is the basis of trade, without it being the rule people cease to trade. And it is the desired effect of letting businesses flourish--laissez faire.
Debate Round No. 1
DevinKing

Pro

--I will counter my opponent point by point, and then provide my evidence and reasoning as to why trickle down theory does not work.

"A business operates by hiring employees-- by trading capital for labor, which it then directs and manages after having done intellectual labor of its own.. It cannot flourish without offering labor something better than they have now, for otherwise no one will choose to work for it."

--This debate is not over the effectiveness of employment. However, you are trying to point out that wealth from the top circulates to the lower classes. This is negated as an overall trend by the simple fact that in order to live, these laborers must spend the wealth gained by their labor to aquire the necessities of life. The amount of money left for personal non-essential spending is tiny or non-existant. The trickle down theory posits a net increase in the wealth of the lower classes as a result of the wealthy having more, what you have said does not support the existance of this trend.

Opening (pro) Argument
-----------------------------------------------------------------------------------------------------------------------------------------

--I urge the audience to ignore the abstract arguments of my opponent (which still fail to show how trickle down theory works) in favor of the concrete argument I am about to present. No matter how well a theory may work on paper, the ultimate test is its implementation. As you are about to see, this test has already been done for us. The results are yours to see:

--The trickle down theory was put to use on a large scale by the Reagan Administration in the United States in the 80's. The tax burden was shifted to the middle and lower classes so that the wealthy would have more money which would supposedly benefit the entire economy. This did not happen. In fact, the real wages for most Americans felt little to no positive increase between the time this trickle down theory was implemented and now. This is effectively illustrated by the following visual aid link: http://en.wikipedia.org...

--Here are citations and statistics to illustrate the increase in wealth of the rich:

"In the United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth." - http://en.wikipedia.org...

In 1981, the top 1% controlled 24.8% of the wealth. - http://sociology.ucsc.edu...

--That is an increase from 24.8% to 38%.

--This more than establishes an increase in wealth for the wealthy. This, once again, should have been followed by a corresponding increase in wealth for the lower classes. There was no increase in the wealth of the lower classes. Since the theory's main tenet was that this corresponding increase would happen, and it did not happen, then it is perfectly clear that the theory did not acheive its desired results and in other words, did not work.
Ragnar_Rahl

Con

"
--This debate is not over the effectiveness of employment"

Employment is the mechanism by which business operates. The effectiveness of business is very relevant to whether it is effective to permit business to flourish.

"This is negated as an overall trend by the simple fact that in order to live, these laborers must spend the wealth gained by their labor to aquire the necessities of life."
This supposed negation is negated by the fact that if they must do it in order to live, then those necessities of life are not available if they do not take the offer-- the offer is the only thing keeping them alive. Clearly removing the only thing keeping you alive is not good for you.

"The amount of money left for personal non-essential spending is tiny or non-existant."
This is mere assertion without any theoretical backing. And not relevant due to the above.

"The trickle down theory posits a net increase in the wealth of the lower classes as a result of the wealthy having more"
Having necessaries is an increase over not having them, which you just declared is an increase that occurs.

"-I urge the audience to ignore the abstract arguments of my opponent "
There is nothing of value to be found in economics but the abstract.

" in favor of the concrete argument I am about to present. No matter how well a theory may work on paper, the ultimate test is its implementation. As you are about to see, this test has already been done for us."
As a matter of fact, no such test has ever occurred-- no nation has ever permitted its businesses to flourish without interference, there has never been laissez-faire. No valid (controlled) test ever can exist in economics.
However, the closest thing to it, the semicapitalist nations, have since their implementation of semi-capitalism (since the Industrial Revolution), roughly doubled their lifespan, and provided large numbers of common laborers with televisions, computers. Both a benefit in necessaries and nonessentials. It's not controlled, but neither is anything you have on offer.

"The trickle down theory was put to use on a large scale by the Reagan Administration in the United States in the 80's. "
The Reagan Administration pressured the Federal Reserve to subsidize businesses that could not flourish, and eventually raised taxes on those that did. It was no paragon of the trickle down definition that you accepted.

In any case, when dealing with flawed data, the least fallacious stuff is looking at the course of centuries, not decades-- bigger sample to compete with the massive, insurmountable sampling error. And THAT data, again, tells us--- about 70 years lifespan to about 35 in the era previous to whatever halfassed semblance of an implementation of "trickle down" theory has occurred.

"There was no increase in the wealth of the lower classes."
Wealth is not dollars. Wealth is materials. Though this is not necessary to my argument, material wealth for the lower classes has increased since then-- technological advancement, other things equal, is an increase in wealth.
Who does most of the technological advancement? Typically flourishing rich people.
Debate Round No. 2
DevinKing

Pro

"Employment is the mechanism by which business operates. The effectiveness of business is very relevant to whether it is effective to permit business to flourish."

--True, but what what I was saying was that even though employment is a very positive force, it is not sufficient to prove that trickle down theory works.

"This supposed negation is negated by the fact that if they must do it in order to live, then those necessities of life are not available if they do not take the offer-- the offer is the only thing keeping them alive. Clearly removing the only thing keeping you alive is not good for you."

--I am not arguing for the removal of businesses. I am simply arguing that increasing the wealth of those businesses beyond its normal bounds (allowing them to "flourish") does not yield additional benefits. Essentially that their profits do not "trickle down" to the rest of society. This is an exquisite red herring that you have presented.

"Having necessaries is an increase over not having them, which you just declared is an increase that occurs."

--Then you didn't read what I said very carefully. People have been alive long before anything remotely resembling a business existed. See: http://en.wikipedia.org...

"As a matter of fact, no such test has ever occurred-- no nation has ever permitted its businesses to flourish without interference, there has never been laissez-faire. No valid (controlled) test ever can exist in economics.
However, the closest thing to it, the semicapitalist nations, have since their implementation of semi-capitalism (since the Industrial Revolution), roughly doubled their lifespan, and provided large numbers of common laborers with televisions, computers. Both a benefit in necessaries and nonessentials. It's not controlled, but neither is anything you have on offer."

--If the theory was thought to work, then steps were successful in implementing it(the wealthy did indeed get wealthier as per the statistics already provided), and the result was not achieved(once again I have already demonstrated this), then that is called not working. It does not matter that the 'test' was not controlled because it does not matter why the desired results were not achieved, only that that were not acheived. There is not qualifying statement in the definition of "work", it does not say "to produce a desired effect or result when not interferred with", it says quite plainly "to produce a desired effect or result".

"The Reagan Administration pressured the Federal Reserve to subsidize businesses that could not flourish, and eventually raised taxes on those that did. It was no paragon of the trickle down definition that you accepted."

--Are you kidding? "the top marginal individual income tax rate fell from 70% to 28%" http://en.wikipedia.org...

"Wealth is not dollars. Wealth is materials. Though this is not necessary to my argument, material wealth for the lower classes has increased since then-- technological advancement, other things equal, is an increase in wealth.
Who does most of the technological advancement? Typically flourishing rich people."

--Would you care to share where this is shown to be true? I have already provided statistics to the contrary. If you can diprove them using better sources, then I would be happy to accept this. But so far you have mearly stated that my sources were wrong without backing up your claim.
Ragnar_Rahl

Con

"
--True, but what what I was saying was that even though employment is a very positive force, it is not sufficient to prove that trickle down theory works.
"

It certainly is.

"
--I am not arguing for the removal of businesses. I am simply arguing that increasing the wealth of those businesses beyond its normal bounds (allowing them to "flourish")"
This assumes some "normal bounds" that have not been established.

Letting them increase their wealth has nothing to do with yourself increasing their wealth.

"does not yield additional benefits. Essentially that their profits do not "trickle down" to the rest of society."
Without profits, they ARE all removed. If their existence has benefits, so does their profits, ipso facto.

"
--Then you didn't read what I said very carefully. People have been alive long before anything remotely resembling a business existed."
For half as long on average.

"f the theory was thought to work, then steps were successful in implementing it(the wealthy did indeed get wealthier as per the statistics already provided)"
You can't have your cake and eat it too. Either trickle down only has to work partway (the businesses existing at all) or it has to work ALL THE WAY and has to be implemented ALL THE WAY to find it out.

"t does not matter that the 'test' was not controlled "
This is a profound rejection of the scientific method.

:because it does not matter why the desired results were not achieved, only that that were not acheived. There is not qualifying statement in the definition of "work", it does not say "to produce a desired effect or result when not interferred with", it says quite plainly "to produce a desired effect or result".
So gravity doesn't work, because rockets do.

:--Are you kidding? "the top marginal individual income tax rate fell from 70% to 28%" http://en.wikipedia.org......
There are other taxes than the top marginal individual income tax rate. Like, for example, business taxes. Which MIGHT be more relevant :P.

:--Would you care to share where this is shown to be true?
Take one look at your computer.

Now go back to before whenever you think "trickle down" was. The computers then available for a comparable price would not have enabled you to entertain yourself in this manner.
Other technologies have similarly improved.

:I have already provided statistics to the contrary.
No, you've provided irrelevant statistics to this point.
Debate Round No. 3
DevinKing

Pro

"It certainly is."

--I don't need to point out much more than the fact that saying that something is sufficient to prove something is entirely different than actually proving it.

"This assumes some "normal bounds" that have not been established."

--Normal bounds would be where the businesses would be without interference, I imagine this is difficult to find where this would be, however, it is assumed that by helping out the businesses, that the businesses would be above their normal bounds to at least some degree.

"Letting them increase their wealth has nothing to do with yourself increasing their wealth."

--Yes it does. Where do you think the extra wealth comes from to increase their capital? It comes from the rest of society. This is exactly how it has been done in the past when the tax burden was pushed onto the middle and lower classes so that the wealthy would have more capital. Capital which was taken from said lower classes through that tax burden shift.

"Without profits, they ARE all removed. If their existence has benefits, so does their profits, ipso facto."

--Trickle down theory is not specifically for businesses existing, it is for letting the *flourish*. This means *above* and *beyond* where they normally would be without this help. Just because businesses benefit society by existing, it is a non sequitor to say "If their existence has benefits, so does their profits". Yes, the industrial revolution benefited society, but it was also businesses operating without considerable government help. This is entirely different than them *flourishing*, which yields no additional benefits.

"For half as long on average."

--Witty. But in any case it does not deflect what I said. They were ALIVE, proving that they had the necesities of LIFE and this is clear IPSO FACTO. They did not NEED businesses.

"You can't have your cake and eat it too. Either trickle down only has to work partway (the businesses existing at all) or it has to work ALL THE WAY and has to be implemented ALL THE WAY to find it out."

--Oh, but I can. Trickle down theory isn't working partway just by businesses existing(I am obviously not arguing that businesses don't exist). Thrickle down theory must have two things happening to be considered working.

1. It must be trickle down theory which is producing the effect. (i.e. businesses must be FLOURISHING)
2. It must produce the desired effect or result. (i.e. the profits of these businesses must be halping all of society)

--The first of these obviously happened. But the second one has not. Therefore, it DID NOT work.

"This is a profound rejection of the scientific method."

--No, asserting that I reject the scientific method is a clear red herring. If something asserts that: if condition A if fulfilled, then B will be true. And then condition A is subsequently fulfilled but B remains untrue, then whatever asserted that statement is wrong. It does not matter why B is untrue, it only matters that it IS NOT TRUE.

"So gravity doesn't work, because rockets do."

--Wrong. The goal of gravity is an action, not a result. This action is performed(there is pull exerted on the rocket), so therefore gravity works. However, if the goal of gravity were to keep everything from escaping the earth, then no, it would not work because rockets can and have left the earth.

"There are other taxes than the top marginal individual income tax rate. Like, for example, business taxes. Which MIGHT be more relevant :P."

--Who do you think owns the businesses? Who do you think owns the capital? The people who are in the top income tax brackets. If someone wanted to take the tax burden off of their profits, then they would reduce taxes on the people who get the profits.

"Take one look at your computer."

--I just so happen to be doing that right now. This demonstrate that technology exists, but not that it is resulting from trickle down theory. Government funding plays a huge part in the scientific advancement of our society, not just businesses.

"No, you've provided irrelevant statistics to this point."

--Wrong. I provided relevant statistics which you said were incorrect. You failed to back up your statements with anything remotely substantial, making them essentially worthless. If I am not mistaken, you have yet to back up one word with any sort of citations. When an abstract argument is pitted against a concrete, empirical argument based in facts and statistics, it is like throwing eggs against an iron wall.
Ragnar_Rahl

Con

"
--Normal bounds would be where the businesses would be without interference, I imagine this is difficult to find where this would be, however, it is assumed that by helping out the businesses, that the businesses would be above their normal bounds to at least some degree."
Helping is not what is being asked for here, leaving without interference is. And "help" for one business tends to harm another.
"--Yes it does. Where do you think the extra wealth comes from to increase their capital? It comes from the rest of society."
Economics is not a zero sum game.

" This is exactly how it has been done in the past when the tax burden was pushed onto the middle and lower classes"
"Letting businesses flourish" consistently, since businesses are started by entrepreneurs of all classes, requires the abolition of taxes on all classes.

"
--Trickle down theory is not specifically for businesses existing, it is for letting the *flourish*."
To flourish is to exist-- well.

" This means *above* and *beyond* where they normally would be without this help. "
"Letting" does not mean help. It means "Get the **** out of the way."

"ust because businesses benefit society by existing, it is a non sequitor to say "If their existence has benefits, so does their profits"."
Without profits, they shall not exist. No one forms them unless profits exist to be had.

"Yes, the industrial revolution benefited society, but it was also businesses operating without considerable government help. This is entirely different than them *flourishing*"
It is not different from "Let them flourish." It is different from "make them flourish," but that is not the policy being advocated, by the definition that was a stipulation of this debate.

"They were ALIVE, proving that they had the necesities of LIFE and this is clear IPSO FACTO."
And then they were dead, proving they ceased to have those necessities. The necessities of life are a quantitative thing, that can be improved upon, in terms of having the necessities for a longer life.

"
--Oh, but I can. Trickle down theory isn't working partway just by businesses existing(I am obviously not arguing that businesses don't exist)"
To exist is onlya quantitative difference from flourish.

"
--The first of these obviously happened. But the second one has not. "
To say that net help has not occurred, which is all you said, and is itself false, is even if true not to establish that a specific thing did not marginally help. It is merely to establish that if that thing helped, other uncontrolled variables harmed.

"--No, asserting that I reject the scientific method is a clear red herring. If something asserts that: if condition A if fulfilled, then B will be true. And then condition A is subsequently fulfilled but B remains untrue, then whatever asserted that statement is wrong."
Dropping the context. The assertion contains the assumption of other things equal, which is not fulfilled. Condition A is "other things equal, leaving businesses alone to flourish will..."

Economic effects are powerful, but they are not omnipotent.

"
--Wrong. The goal of gravity is an action, not a result. "
Gravity doesn't have a goal. And an action is a result. Trickle down theory describes an action or process of profits affecting middle and lower classes positively, or the result of a MARGINAL positive effect (not an omnipotent positive effect, uncontrolled variables can mask it).

"--Who do you think owns the businesses? Who do you think owns the capital? The people who are in the top income tax bracket"
Shares are sold to people of many varying classes, and government pension funds claims to which are almost never owned by the top brackets.

"--I just so happen to be doing that right now. This demonstrate that technology exists, but not that it is resulting from trickle down theory. Government funding plays a huge part in the scientific advancement of our society, not just businesses."
How many parts of your computer were manufactured by the government, or developed into something usable for your purposes? (ARPAnet was not usable for your purposes).

"
--Wrong. I provided relevant statistics which you said were incorrect."
I said nothing about the correctness of the statistics, only the notion that they were useful (after all, they do not come from a laboratory, they come from chaos).

: If I am not mistaken, you have yet to back up one word with any sort of citations. When an abstract argument is pitted against a concrete, empirical argument based in facts and statistics,
The abstract argument has one fact going for it. The most important fact around here. That is that empricism requires controls or it is naught but noise.

Assume an NFL team runs a pure jumbo offense and a high school team runs a West Coast offense. The two teams play. Does the sheer domination by the NFL team prove that it is better to run Jumbo than a West Coast offense? I'd pay more attention to the nature of the teams, though unlike in football, there are millions of "teams," most of which you know nothing about.
Debate Round No. 4
17 comments have been posted on this debate. Showing 1 through 10 records.
Posted by RoyLatham 6 years ago
RoyLatham
There was a problem in defining what "works." Pro seemed to be defining it in terms of equality of income. So under Pro's definition, North Korea "works" and South Korea doesn't, because incomes are more equal in North Korea. In terms of prosperity, such as the percentage of people living above subsistence level, then the reverse is true, and there are endless examples of flourishing business bringing prosperity to a whole nation: East v West Germany, Hong Kong or Taiwan v mainland China. Con kept mostly to theoretical examples, which weakened his case, even though the theory he argued was sound.

The US examples are difficult to argue, because the laws are so complex it's hard to pin down clear cause and effect. When there were very high tax rates at the start of the Reagan Administration, almost no one paid them, because the laws allowed so many ways to avoid them. In the US, the best example is at the start of the 1920s, when lowering the high marginal rates produced clear increases in tax revenues as well as increased prosperity.

This is a difficult topic to debate. I thought both sides raised relevant issues. Con's theory was sound and was not overcome.
Posted by TombLikeBomb 6 years ago
TombLikeBomb
I think empiricism was the wrong course for Pro, both because the most it could have done would have been to prove trickle-down to be a conditional failure and because Con's argument was even more logically flawed than the best pro-trickle down argument. That more wealth in the hands of the wealthy as opposed to less is, all else being equal, beneficial to the poor is uncontroversial. But trickle-down is not an all else being equal theory. It's a theory that holds that decreasing downward redistribution benefits those on the bottom. It's remarkable, then, that Con didn't even address their lower purchasing (of the products of business) power that is trickle-down's other immediate result (and perhaps more remarkable that he wasn't pressed to). Consumer wealth is as sure to make its way to business as business wealth is to make its way to employers and consumers, but there is a huge quantitative difference between it starting in one's own hands and it starting in another's.
Posted by Sieben 6 years ago
Sieben
Voted con on scientific method/chaos of economic empiricism point.

Can also vote con on improvements unmeasured by GDP and income figures (computer quality).

Overall, lousy debate. Pro is very incoherant, and con's spelling/formatting is lazy.
Posted by DevinKing 6 years ago
DevinKing
It sure does.
Posted by Ragnar_Rahl 6 years ago
Ragnar_Rahl
does it let ya edit first round?
Posted by Ragnar_Rahl 6 years ago
Ragnar_Rahl
Works and will take.
Posted by DevinKing 6 years ago
DevinKing
Well, I was asking you because you were acting as an advocate of it. But I will provide a definition from investorwords.com which appears to be "for" it. I think it is important to note that I have found numerous definitions which are all virtually the same.

"An economic theory which advocates letting businesses flourish, since their profits will ultimately trickle down to lower-income individuals and the rest of the economy."

Will this suffice?
Posted by Ragnar_Rahl 6 years ago
Ragnar_Rahl
In other words, I'm perfectly willing to continue what we were doing in the thread in the thread. But to make a formal debate out of it I want to see a definition of trickle down given by someone who claims to advocate it.
Posted by Ragnar_Rahl 6 years ago
Ragnar_Rahl
" Give me the definition that you would use to describe it."
I don't. I defend it till I get a definition, for heuristic reasons.

\"
"since the unemployment rate is not 100 percent, and it's illegal to enslave so only compensation can get employees, there must be something trickling down."
"
That may or may not be what trickle down theory means. Ask someone who advocates the terminology.
Posted by DevinKing 6 years ago
DevinKing
I am confused? You seem to be trying to evade this.

--Give me the definition that you would use to describe it. You CLEARLY argued for it. You may be for laissez faire, but you were defending trickle down theory. Thats what the entire thread was about. For example, you specificaly said that:

"since the unemployment rate is not 100 percent, and it's illegal to enslave so only compensation can get employees, there must be something trickling down."

AND

"It isn't goddamn rain. You can't just take it, you have to make it. The trickling down happens when you seek labor to realize your planning on how to make it."

AND when defending it further that:

"That doesn't ****ing matter. If everyone benefits from an arrangement, the arrangement is good for everyone, ipso facto."

--If you have had a change of heart and no longer wish to defend trickle down theory from my attacks on its "logic", then speak up now and don't waist my time with me trying to entice you into debating me.
6 votes have been placed for this debate. Showing 1 through 6 records.
Vote Placed by RoyLatham 6 years ago
RoyLatham
DevinKingRagnar_RahlTied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:03 
Vote Placed by LaissezFaire 6 years ago
LaissezFaire
DevinKingRagnar_RahlTied
Agreed with before the debate:-Vote Checkmark-0 points
Agreed with after the debate:-Vote Checkmark-0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:03 
Vote Placed by SuperRobotWars 6 years ago
SuperRobotWars
DevinKingRagnar_RahlTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:-Vote Checkmark-1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:Vote Checkmark--3 points
Used the most reliable sources:Vote Checkmark--2 points
Total points awarded:51 
Vote Placed by Sieben 6 years ago
Sieben
DevinKingRagnar_RahlTied
Agreed with before the debate:-Vote Checkmark-0 points
Agreed with after the debate:-Vote Checkmark-0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:03 
Vote Placed by mongeese 6 years ago
mongeese
DevinKingRagnar_RahlTied
Agreed with before the debate:-Vote Checkmark-0 points
Agreed with after the debate:-Vote Checkmark-0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:03 
Vote Placed by Shtookah 6 years ago
Shtookah
DevinKingRagnar_RahlTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:Vote Checkmark--1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:Vote Checkmark--3 points
Used the most reliable sources:-Vote Checkmark-2 points
Total points awarded:42