Jude Wanniski was a journalist, WSJ editorial page writer, author, historian, Polyconomics founder, and brilliant revivalist of Classical economics. He passed in 2005 but left a massive compilation of writings that span decades. Jude was a prolific writer. During his Polyconomics years, he produced near daily written output. This took the form of macro economic explanation and predictions for institutional clients, private correspondence, missives available to the public, and Supply-Side University. The Polyconomics Institute has graciously made Jude’s collected works available at polyconomics.com.
Jude created an economic model. His ability to predict economic and political events from his model established the success of his institutional consulting firm, Polyconomics. He centered his model on Classical economics but freely distilled economic insights from every wing of economic thought. This spans the philosophers Plato and Aristotle, includes 14th-century Arab historian Ibn Khaldun, and cites all the great economists from Smith, Ricardo, Mill, Say, Malthus, Marx, Keynes, Von Mises, Friedman, through his initial mentors, Mundell and Laffer. With a degree in Political Science and a profession as a newspaper writer, Jude began his economic journey as a member of Robert Bartley’s WSJ op-ed page with a very clean slate. He was fortunate not to carry the entrenched baggage of institutional economic dogma. His dogged newspaper background led him to follow economics wherever it took him.
The economic model on the surface is very simple. Like the Classical economists, he based his model on the producer, not the consumer. Jude’s origination of the term supply-side economics derived from Herb Stein’s laughed off description of Jude’s economic apostasy as “supply-side fiscalism”. Today’s Keynesian demand-side consumer based model dominates economic thought and policy. A proper analogy is that supply-side economics is to Copernicus as demand-side is to Ptolemy. If the basis of the economic model is incorrect, everything that derives from it will also be incorrect. Supply-side economics incentivizes the producer. Money is stable in value to provide an unwavering foundation for the efficient exchange of goods and services. This requires a gold standard. Fiscal policy’s goal is maximum production aligned with the electorate’s desire for government’s role and the Judeo-Christian ethics of providing for those with the least means. In general, supply-side fiscal policy requires low taxes, beneficial regulation, and limited government. This maximizes productive effort, economic growth, national development, standards of living, a fluid society, and the advancement of mankind. The supply-side model does not consider the consumer. The consumer’s propensity to demand goods and services is unlimited and requires no incentivization.
While the foundation of the economic model is very simple, understanding it requires great nuance. What is true within the model in one economic or political context may change in another. The world is continuously adapting. Political policy makers inflict errant economic policy upon their constituents for various reasons, some out of misplaced noble intention and others for political expediency and the gain of few at the expense of many. Interpreting the model requires understanding this constant change in context with the model. Beyond the Classical foundation, the model is only as rigid as the interpreter. The model is analogous with gold. The monetary world orbits about gold’s stability. Gold reflects the errors of central bank fiat currency linked to nothing real. Likewise, the economic and political world orbit about the model’s foundation stability. The model reflects errant economic and political thought. Because the model reflects errant thought, it is predictive. The future course of political and economic events can be seen through the prism of the model.
Anyone can understand the model. The information is readily available. Supply-side University and the Polyconomics archive is a large body of work. It requires university level effort to properly grasp its totality. Supply-side University covers economics, monetary policy, fiscal policy, politics, history, philosophy, geopolitics, trade, regulation, political leadership, and everything in between. Complementing the Polyconomics archives for understanding the model is a vast library of supply-side books, classical economists, websites, think tanks, consultants, authors, columnists, and select political representatives. There is no formal university curriculum available anywhere that teaches or even comprehends the model. Academia is lost in the economic wilderness of the demand-side world.
Disclosure: I was a client of Polyconomics from 1993 to 2005.