Kanttekeningen
Author
Supply-side economics: a typically American socio-economic theory - Supplyside economics was developed as a theory in the seventies. The British professor William Harold Hutt prepared the ground with his book ,,A rehabilitation of Say’s law” (1974). By insisting on the negative repercussion on income and demand of a reduction in supply he suggested that a permanent increase in wealth is more easily attained by raising the supply of goods and services than by pushing up demand. Another important contribution to the new theory was made in 1974 by Arthur Laffer with his reputed LAFFER-curve, a rather naive device to prove that a raising of tax-rates above a certain level leads not to more but to less income for the state. The American specialist in international economics Robert A. Mundell furnished the third main ingredient of the theory on the advantages of the combination of an expansive fiscal with a restrictive monetary policy in an economy confronted with stagflation and an external trade deficit. During the late seventies the supply-side theories found an increasing number of adherents in conservative circles which in the United States determine the political and economic goals of the Republican party. The main ideas of supply-side economics were popularised by two journalists. Jude Wanniski published his book „The way the world works” in 1978; George Gilder had his book „Wealth and poverty” published in 1981. Both publications met with huge success and influenced strongly public opinion. Wanniski and Gilder have developed not only an economic theory about the beneficial effects on the economy of tax reduction but also a sociological theory about the nature of man and the moral, legal and political institutions necessary for the realisation of a free and affluent society. With the election of Ronald Reagan as president in November 1980, the theory of supply-side economics had a chance of being applied. In February 1981 R. Reagan proposed a substantial tax reduction to Congress and ‘Reaganomics’ become almost a synonym for supply-side economics. However, it was much easier to lower tax-rates than to reduce public expenditure. The budget deficit grew from $ 27.4 billion at the end of the presidency of Carter to $ 186 billion in the fiscal year 1982-83. The combination of an expansive fiscal policy with the tight monetary policy practised by the Federal Reserve Board has brought about a strong increase in interest rates and massive capital imports pushing up the exchange rate of the dollar. As a consequence, exports of American goods were reduced and imports encouraged so that a massive trade deficit has been created. This situation has brought about a schism in the ranks of supply-side economists. Jude Wanniski and George Gilder favour the maintenance of existing tax reductions. Other supply-side economists, such as Martin Feldstein, Norman Ture and Michael K. Evans, consider a return to a more balanced budget a pressing necessity and are of the opinion that only tax reductions which favour saving and investment should be maintained.
Keywords:
How to Cite: Vandewalle, G. (1984) “Aanbodseconomie: een typisch Amerikaanse sociaal-economische theorie”, Tijdschrift voor Sociale Wetenschappen. 29(4). doi: https://doi.org/10.21825/tvsw.94886