The components of an economy. The concept of trickle down is that the upper class creates entities that provide jobs for people so that they can make money and spend it to have a better lifestyle. It is the idea that the super rich, oligarchs etc. who have the enormous wealth to create companies and corporations are responsible for the creation of jobs so that people can fulfill those jobs thereby making the money to create a greater affluence by being able to purchase those items that the corporations create. In other words pursuing the principles that the ‘American Dream’ purports.
Within the valid and true mechanism above, we can observe the reverse. The individual who has a job (makes money) can now go out and purchase some item of desire to increase their affluence (The American Dream). Every time they spend a dollar, the dollar has two components. One is the cost of materials, wages, expenses, and general cost burdens of running the organization. This cost must also include a fair wage for the owner or owners. If the owners collect a tiny fraction (say a penny) over and above the fair salary they earn, and produces and sells millions of items their ’profit’ would be enormous.
This mechanism which is seldom reported or discussed by name is the concept of ‘Trickle Up’ economy. And it is this un-advertised ‘Trickle Up’ economy that creates all of the oligarchs, who can then use these fortunes to create more entities of production to collect more investment (as opposed to productive) income.
Much Love, Founder.