The sad fact is that most modern investment is more like an umbrella than a funnel. The trickle down effect - the idea that money spent on the rich will eventually trickle down to the poor - simply doesn't work. At best the poor receive just that - a trickle.
We invest vast sums in regeneration schemes or attracting foreign factories that so often just benefit the intermediaries involved. At the first sign of an economic downturn, the investments collapse or the factory owners are off to a better deal somewhere else on the globe. A diverse local range of local businesses are more likely to stay put, more likely to spread the wealth around, and more likely to create a sense of local well-being, than a couple of large retailers run by a board of 'fat-cat' directors in London or New York.
This isn't an argument against trade. But it's a reminder that the poorest places often have buying power and assets of their own that the big markets ignore, and which they can use to regenerate themselves.
Amount spent at a supermarket to create one local job: �250,000 Amount spent at a corner shop to create one local job: �50,000 UK taxpayers' subsidies to build 500 de Lorean cars: �77m UK taxpayers' subsidies to car-maker, British Leyland: �2,500m Pay-offs to failed UK directors of FTSE 100 companiessince the stock market began falling in 2000: �170m.
The Lords of Poverty
Graham Hancock
Macmillan, 1989
ISBN 0333439627
