Part 1 of 2. Creating Opportunities: A Comparison of Top-down and Bottom–up Systems

Jean-Jacques Rousseau (1712-1778), a political philosopher and essayist, described an endemic moral inequality that was related to power and wealth. As men come together, Rousseau claimed, there is a drive to compare themselves to others – driving men to seek domination over their fellow beings as a way of augmenting their happiness. This leads to the formation of government in which the property owners (wealthy) trick the poor into creating a government with the sole purpose of protecting their property and locking in moral inequality as a permanent feature of civil society. This contract is promoted as treating everyone equally, but in reality, it is in the interest of the few who have become stronger and richer through development of their private property.

Rousseau believed that the role of government should be to secure freedom, equality and justice for all within the state (regardless of the will of the majority). The only reason that human belongs agree to be ruled is because they believed that their rights, happiness, and property would be better protected under a form of government. Everyone is free because everyone forfeits the same amount of freedom and imposes the same duty on all. If any form of government does not properly see to the rights, liberty, and equality of everyone, Rousseau claimed, then the government has broken the social contract that lies at the heart of political authority.

The economic system in the West, in the 21st century, is a top-down system. This top-down system is about cheap money and power staying concentrated with a small group at the top of the economic pyramid. Milton Friedman claimed that the system helps poor people by the trickle-down effect, and that economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. This economic theory advocates letting businesses flourish through reduced taxation and regulation, since their profits will ultimately trickle down to lower-income individuals and the rest of the economy.

All candidates at the fourth Republican Presidential debate outlined a plan to cut taxes to the rich in order to create well-paying jobs for the middle class. Inequality will be addressed under various economic plans; basically, as the rich get richer prosperity will return for all. However, this ideology is challenged everywhere. Even the Washington Post’s Fact Checker urges individuals “to be wary about job-creation schemes at the state or national level, as so much of what happens in an economy is beyond a politicians control.”1 In addition, there is a need address the growing oligarchy in Canada and the US – identifying policies to end big money’s grip on politics, an issue that lies at the core of the debate on the economy.

The top-down concept in the West appeared during the Roman Empire, which maintained strong top-down control. Roman religion became a mosaic of belief systems as Roman power grew and expanded through the known world. The Roman Empire came into contact with cultures and religious beliefs of major cultures, and was happy to assimilate any deities they encountered. With the passing of the Roman Republic into an Imperial system, the nature of Roman religion expanded to include the emperors themselves. The Imperial cult that developed was inseparable from Roman deities. This included top-down favourtism of the Roman gods, which began with the emperor and trickled down, if only feebly to the lowest of society. Roman civilization consisted of a paternal system within a highly stratified social structure which gave unswerving allegiance to the Roman system of pacification as a basis for social cohesion. The divinized emperor was seated in spendour at the high point of the patronage system, and he distributed power and privilege down the system. This trickle-down system was established by rites and ceremonies incorporating a combination of patriotism and religion.

In the 4th century CE Christianity became the state religion of the Roman Empire; it had the power to suppress dissention and heretics and organize wealth. With the collapse of the Roman Empire in the 5th century CE the Catholic Church was the only organized force in Western Europe. The church took on the top-down structure of the empire. The Medieval church was the most dominant institution in Western Europe; it was one of the largest landowners at the time and collected many rents and fees for offices and services. Its top-down structure facilitated control of information and creation of wealth. The church remained a significant force up to the 18th century.

By the end of the 18th century, the Industrial Age in Britain was heralded with the mechanization of the weaving industry and the invention of the steam engine that allowed more effective pumping of water in the coalmines to increase the supplies of coal. The Industrial Age of the 19th century was a top-down system, however during this era two bottom-up theories appeared: one developed by Karl Marx, and one developed by Charles Darwin.

For Karl Marx all history is class struggle – exploitation is hidden by the political institutions that exist. Marx was unhappy with the social climate of his time in which the working class (proletariat) was being exploited by the upper class (bourgeois). The owners pay them enough to afford food and a place to live, and the workers, who do not realize they are being exploited, have a false consciousness, or a mistaken sense, that they are well off. They think they can count on their capitalist bosses to do what was best for them.

In the early 20th century Lenin adapted Marx’s ideas to support the Russian revolution run by a minority. Lenin inserted a band of revolutionaries at the head of an elitist revolution onto an unwilling populace. They developed a system of differential wages. The surplus capital went to support a bloated bureaucracy, headed by a single dictator. Lenin installed a top-down control system (called communism) in the USSR. When Stalin finally pushed Trotsky aside and took over power in 1928, he used this system to suppress the populace and industrialize the country.

E. P. Thompson, among others, promoted the bottom-up approach to history – begin with the needs of society then build upwards to construct the economic climate that will provide for needs of the people. He wrote about the poor and invisible groups in society and their effects shaping the course of history, and in the process creating new approaches to historical truths. The focus is on social history rather than the history of the powerful, the ruling order of kings and queens, aristocrats, industrialists, soldiers, politicians and landowners. Writers live out their professional lives in the midst of social struggle, thus their writing is the interpretation of the world through the culture and belief systems of the invisible groups in society.

The gap between the rich and the powerful and the rest is accompanied by a similar gulf in political perception. Thompson showed how fundamental social political change came from movements of the ‘common people’. Thompson campaigned passionately for the protection of these freedoms as a core element of a democratic society. A 21st century example is the Occupy movement. This approach to history is now under attack from the ideologues of the new right. It is no coincidence that the current attacks on the welfare state and public sector are accompanied by attempts to undermine core cultural and institutional freedoms such as rights of trade unionists and media freedom. These activities are undermining the freedoms and opportunities that had been achieved through working-class, progressive struggle against the bitter opposition of the ruling class.2

Primary factors that shape the health of people in Canada and the US are not medical treatments or lifestyle choices but rather the living conditions they experience. These conditions have come to be known as the social determinants of health. Income is perhaps the most important social determinant of health. Increasing income inequality has led to a hollowing out of the middle class in Canada and US with significant increase in inequality in the past 30 years. 50% of health outcomes can be attributed to the social determinants of health.

Lower income is associated with increased burden of diseases and higher mortalityThe emerging consensus is that income inequality is a key health policy issue that needs to be addressed. This variation among individuals and groups due to income is referred to as the ‘social gradient.’ The social gradient illustrates that higher income levels result in better health outcomes. Poor conditions lead to poorer health. An unhealthy material environment and unhealthy behaviours have direct harmful effects, but the worries and the insecurities of daily life and the lack of supportive environments also have an influence.

A report in 2015 by five IMF economists dismissed “trickle-down” economics, and said that if governments wanted to increase the pace of growth they should concentrate on helping the poorest 20% of citizens. The study – covering advanced, emerging and developing countries – said technological progress, weaker trade unions, globalization and tax policies that favoured the wealthy had all played their part in making widening inequality ‘the defining challenge of our time’.

The IMF report said the way income is distributed matters for growth. “If the income share of the top 20% increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20% is associated with higher GDP growth,” said the report.

The report noted that widening inequality also has significant implications for growth and macroeconomic stability, it can concentrate political and decision-making power in the hands of a few, lead to suboptimal use of human resources, cause investment-reducing political and economic instability, and raise crisis risk. The economic and social fallout from the global financial crisis and the resultant headwinds to global growth and employment have heightened the attention to rising income inequality. Policymakers need to focus on policies forthe poor and the middle class that provide oportunities to reach their potential. The IMF study suggests that raising the income share of the poor and ensuring there is no further hollowing out of the middle class is good for growth through a number of inter-related economic, social and political channels.3

Where should these investments be made? Poor people can spend over 30% of their disposable income on housing. Providing supportive housing for individuals and families and making rent affordable for households at risk of homelessness would address this. Single mothers represent a disproportion of those living in poverty. Providing access to subsidized childcare for poor families would allow women to futher their education and/or make it feasible for them to work. Poor people have problems travelling to where the jobs are. Providing a low-income transit passes is an answer to such transportation challenges. In addition, ensure that people delivering city services, either directly or through contractors, have decent, stable jobs. It is important to create opportunities for people with lived experience to guide and work in city programs to ensure relevance and effectiveness.

Families should earn an income sufficient for them to pay for the basic necessities of life so that they can live with dignity and participate as active citizens in our society. Investment in the lower 20% creates more opportunities for the working poor. Rousseau identified a two-fold remedy for poverty: one pertains to the duty of individuals to one another and the other pertains to the economic institutions or structures under the control of government. It is evident to Rousseau that government has a role in economic distribution. As cultural process gave rise to the inequalities, Rousseau noted, it takes a change in cultural process to reverse the harmful inequalities.

1 Phillips, Amber. (10 Nov 2015) The top 9 issues ahead of Tuesday’s GOP presidential debate. https://www.washingtonpost.com/news/the-fix/wp/2015/11/10/the-top-9-issues-ahead-of-tuesdays-gop-presidential-debate/

Taylor, Richard and Rodger Fieldhouse (31 Dec 2013) Our History is Under Attack http://www.theguardian.com/commentisfree/2013/dec/31/history-under-attack-ep-thompson

Keller, Jared. (18 June 2015) The IMF Confirms That ‘Trickle-Down’ Economics Is, Indeed, a Joke. http://www.psmag.com/business-economics/trickle-down-economics-is-indeed-a-joke

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3 Responses to Part 1 of 2. Creating Opportunities: A Comparison of Top-down and Bottom–up Systems

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