Turning Trickle Down Upside Down
By Tyler McClelland
During the first US presidential debate last year, candidate Clinton rebuked candidate Trump’s proposal to boost economic growth by cutting taxes for businesses and the wealthy, saying, “I call it trumped up trickle-down, because that’s exactly what it would be. That’s not the way to grow our economy.”
In that moment, it occurred to me that at Trickle Up we rarely talk about ‘trickle-down’ economics, a theory of economic growth so influential in 1985 that President Reagan addressed the nation about it, promising “a greater incentive to climb higher, to excel, to help America grow.” The wisdom went something like this: cutting taxes and regulations affecting the wealthiest people and corporations would free up capital for investment in new and expanded enterprises that would provide jobs and opportunities for poor people. Invest in the top, the wealth trickles down to the bottom, and everybody wins.
Similar ideas for economic growth influenced foreign aid too – governments would invest in large development projects and the benefits would trickle down, worldwide, to the poorest people. In reality, though, this embrace of trickle-down policies coincided with a staggering growth in income inequality in the United States and within and between countries across the globe.
No matter where you were, the rich became richer. The poorest didn’t feel a drop.
In 1979, a visionary couple grew frustrated with these failures and became determined to reverse the trend. Glen and Mildred Robbins Leet met in Mombasa while she was running a United Nations seminar on disaster relief and he was the featured speaker. A year later, they married in Vienna. Six years later, Trickle Up was born. “With our years of work in the international community, we saw firsthand what an overwhelming need there was for a program which would truly benefit…the person at the bottom,” Mildred said. “We saw the massive infusions of aid did not trickle down. The rich were getting richer, and the poor were getting poorer. We developed the idea of… grants with the expectation that [their benefits] would trickle up,” she told Business Week.
The idea was simple but revolutionary: turn trickle-down upside down.
Instead of driving more cash into the upper crust and hoping a fair share of the pie will make its way down to the poor, invest in people directly and when they succeed, they’ll inspire and empower others. Slowly, wealth will begin to trickle up and out. And it worked. Over the past 37 years, millions of people have created more prosperous trajectories for their families and overcome extreme poverty with Trickle Up. Some have opened the first markets in their villages, engaged in collective enterprises that employ neighbors, and even negotiated with national governments to export crops.
So today, with our time-tested understanding that investing in people at the bottom of the economic ladder builds a pathway to success, it’s hard to ignore the resurgence of trickle down economic policies. Sure, they’re a stellar economic development program for the wealthiest and most powerful, but what about the poorest and most vulnerable?
“We reject ‘trickle-down’ approaches that assume any undifferentiated growth permeates and fortifies the soil and everything starts to bloom even for the poor. We need to find an economic growth model that’s inclusive, that lifts up the poorest citizens rather than maintains those at the top,” declared Jim Kim, president of the World Bank not long ago. At Trickle Up, we’ve been building an inclusive growth model for nearly 40 years. We invest in the poorest and most vulnerable people because we believe that tapping into their potential is the only way that we’ll be able to end poverty.