ABSTRACT
The viability of capitalism, in the past, has been based on its ability to accumulate capital without apparent limit and to realize a growth rate sufficient to allow an ever-increasing level of well-being broadly, though not necessarily equally, distributed across all strata of society. The parliamentary system and the rise of trade unionism provided the better evolutionary route. The relative tranquillity of 1870 to 1914 was shattered in the First World War, in whose aftermath the unbending autocracy of Tsarist Russia was engulfed in the Bolshevik revolution. Reaganomics has accepted in full the classical supply-side argument for cutting taxes—especially on investment income. In short, Reaganomics is not about growth. It is a raid on the public treasury in favor of the rich which, in its short-sightedness, may undermine the very interests of the highly privileged classes it seeks to promote. It was clearly necessary for the administration to do something to get the public’s mind off the deficits.
