actual economic wealth, population size and, above all, the extent to which
these qualities have been used to produce military strength, especially in the
possession of sophisticated nuclear armaments. Ignoring the nuclear aspect
might more easily allow China into the club, although its actual economic
strength is much less. Alternatively, taking merely economic capacity and
wealth would certainly entitle Japan, with no nuclear capacity and very limited
conventional forces, a position as a superpower. (Although even this judgment
requires a certain blindness to possible fragility in the Japanese economy which
does not rest on population size or domestic raw-material possession.) Perhaps
more than anything else superpower status depends on a desire actually to use
the power resources available. Thus theEuropean Unionhas all the ingre-
dients, including nuclear forces, to be a superpower, but clearly lacks the
political will to be one. What has often been noted by historians is that being a
superpower (or in the older language, an imperial power) is on the whole
expensive and unrewarding.
Supply-Side Economics
Supply-side economics is usually seen as the ‘invention’ of the US right-wing
economist Arthur Laffer, who so influenced Ronald Reagan when he was
campaigning for the presidency in 1980 that the economic policy approach
that came to be called Reaganomics was largely based on Laffer’s theories. The
basic idea of supply-side economics, which still has influential supporters on
the American right, is the advocacy of relatively low taxation on high incomes,
and especially on marginal income (essentially industry’s profits). The argu-
ment is that releasing this income from taxation will produce extra invested
funds, which will, in turn, produce more jobs, increased productivity and
higher profitability. Consequently, reducing tax for those whose surplus
income is likely to be invested is good for the whole economy—a version of
the ‘trickle-down’ thesis. In contrast, reducing taxes for lower earners simply
increases consumption, which has only a short-term impact on the economy
and one which, if the economy is not in recession, may be inflationary. The
theory has never been taken seriously by most professional economists, and
there is no evidence from Reagan’s experiment withfiscal policybased on
Laffer’s ideas that trickle-down does work. Nevertheless, the supply-side
approach was, and to some extent still is, important politically in presenting
an apparent justification for reducing the level of taxation on high incomes.
Syndicalism
Syndicalism is a version of trade unionism which was mainly important in the
years before the First World War, though it remains a potentially explosive
Syndicalism