Businesses are job creators, or so we are told. This almost universally held presumption is at the core of Trickle-Down economic theory. Without it supply-side economics couldn’t exist. This is because the basic premise of the Trickle-Down theory is that suppliers drive economic prosperity, meaning the “supply-side” of the economy.

What this implies is that economic activity begins with suppliers making investments and hiring employees. The claim is that by infusing money into the economy more people will receive incomes, which they will then subsequently spend thereby stimulating further economic prosperity and hence jobs.

Although it comes in many favors, this notion of job creation suggests that businesses create jobs for the benefit of society. Under this business-as-job-creator perspective we are led to believe that it’s in the best interest of society to implement public policies favoring powerful economic interests. These wealthy elites, so the story goes, will then reward us by creating the jobs we require to live, a scenario where employers are cast as the economic saviors of humanity.

This idea is based on the notion that money diverted to the top of the economic “ladder” will trickle down to the rest of us. The supposed logic in this reasoning is that favoring wealthy interests with lower taxes and fewer regulations will result in more jobs being created, which will in turn stimulate the economy as higher levels of employment produce greater consumption, the primary driver of economic prosperity. It is an odd idea in which suppliers create the consumer demand necessary to fuel their own growth.

However this “manna from heaven” perspective is simply not how economic decisions to create jobs are made, because for it to work businesses must hire people before there is sufficient consumption to justify a larger workforce. Yet businesses rarely hire until they absolutely have to, and certainly not if consumer demand is too weak.

What’s perplexing is that the employer-as-job-creator premise suggests that businesses will do exactly this; expand employment in advance of the economic justification for doing so. Yet supplier resistance to hiring more employees before consumer demand justifies them, as we saw in the length of the recovery after the Great Recession, is entirely logical and precisely the response capitalistic theory predicts.

It boils down to the proverbial chicken and egg paradox of which comes first. In other words, what causes businesses to hire? Do businesses hire in response to greater consumer demand, or does business hiring create the demand that causes employers to expand employment?

The supply-side mantra of job creation strongly favors the latter, that employer hiring drives economic activity and thus stimulates demand. The problem with this mindset is that it has resulted in much public policy being passed on the basis of an idea that’s opposite of how and by whom jobs are really created.

Rather, the real motivation that causes job creation comes not from those doing the hiring, but those doing the buying. It’s because no business owner in his or her right mind is going to hire employees until there is sufficient consumer demand to justify them. To do otherwise is hardly a characteristic of successful entrepreneurs.

So if not suppliers, then how are jobs created? Job creators, as it turns out, consist of those people who generate the demand upon which economic decisions, specifically hiring, are made. These people have a name, they’re called consumers. That’s right, the motivation to create jobs comes not from the businesses that sign paychecks, and who would rather hire fewer employees anyway, but from the customers who buy from businesses, and in doing so motivate them to hire more people.

What this suggests is that jobs are created not by the act of hiring, but the act of buying. This means that jobs occur through the increased consumption that makes them necessary, while the process of hiring is merely a reflexive response to greater consumer demand.

Consider, for example, how jobs are created from the simple act of buying vegetables. When we buy vegetables we set in motion numerous business signals, each one creating new demand for employment.

If we work backwards from the checkout counter we start with the checker and bagger. More grocery purchases, including the vegetables we buy and the purchases of other shoppers, places additional demands on checkers and baggers. At some point this forces employers to increase hiring in response to greater shopping activity, something they will only do when absolutely necessary.

However, before we make it to the checkout counter we select our vegetables from the produce aisles. As we do so we often notice employees putting out fresh vegetables. The more we purchase, the faster vegetables must be replenished. When this happens it requires more people to stock the food aisles, an event that signals grocers to hire more people, but only as a last resort.

Of course the faster vegetables move to produce aisles the faster they must be delivered. This means more deliveries, so more drivers are hired. Then as more trucks pick up vegetables, farmers are motivated to plant more acreage. This in turn necessitates that farmers hire more employees, an act they wouldn’t think of doing if it weren’t for the increased buying of grocery shoppers.

Although it may seem this is the end of an extended chain of job creation, it’s hardly the beginning. First, grocery stores are typically located in large buildings, buildings that require numerous employees to build, maintain and protect. Buildings are also expensive assets so they are often financed, requiring loan processors, and insured, requiring employees in the insurance industry. What’s more, employees may receive benefits that are provided by separate industries. So as more employees are added these supporting industries must expand hiring as well.

In addition, delivery drivers require trucks, each of which necessitates employees to manufacture. Also, increased employment is required to repair the vehicles and insure, finance or lease them. Nor can we forget that vehicles rely on gasoline, which requires an extensive petroleum industry plus a vast network of gasoline delivery and service stations, meaning more employees there are needed as well.

Then, to make farmland more productive requires more farming equipment, which is produced by employees and requires even more employment to acquire and service. Farming also requires seed, fertilizers, soil specialists, and of course more land, the purchase of which often includes realtors, attorneys, loan officers, inspectors and title agents, meaning that every one of these industries will need to hire more people.

Yet this is still just the tip of the job creation iceberg as heightened consumer demand causes wave upon wave of hiring throughout the economy. In fact, a single purchase of vegetables will launch a vast chain-reaction of employment as suppliers respond to the buying decisions of consumers. Although the impact of any one consumer is negligible, when this event is multiplied by millions of consumers their collective consumption causes businesses to thrive or fail, fortunes to be made or lost, economies to expand or contract and great numbers of people to be hired or fired. For although shoppers think nothing of creating jobs when they buy the things they need, they are in fact the primary force driving employment.

Interestingly, notice that nowhere in this extended chain of job-creation did employers ever want to hire anybody, but did so only because they had no other option. So the suggestion by suppliers and politicians that because firms hire people in response to increased consumer demand, as well as their motivation to make greater sales and profits, that they deserve to take sole credit for the role of “job creator” is a preposterous and arrogant proposition. Yet they consistently get away with this ruse because so many people, on both the right and the left, have completely and inexplicably bought into the myth.

This is not, however, meant to denigrate the critical role that suppliers do perform in the economy. Suppliers provide an essential service by making available the goods and services consumers require. They do this by forming labor and capital into productive entities called companies. These companies emerge in response to the needs of consumers, who are the ultimate source of economic decisions.

In turn, businesses hire more employees whenever consumer demand necessitates them. So while suppliers provide essential services in the functioning of the economy, the one thing they don’t do is create jobs. That’s the role of consumers.

So if we want to identify the real job creators we should look not to Wall Street, or Corporate America or even Main Street. Rather, job creators are found in shopping malls, at grocery stores and clicking online buy-buttons. These people, the millions of average consumers who purchase things to support their livelihoods, are the real sources of job creation. As a group they represent the fuel which drives the economy, including how jobs are created.

So rather than job creation being based on money “trickling down” from wealthy interests, the real mechanism by which jobs are created is the upward flow of money as increased buying from average consumers forces employers to do something they would otherwise resist, hire more people. In fact, in this model consumers are not only job creators, but business creators as well because without customers business revenue would fall to zero.

This contrasting economic premise is sometimes called Trickle-Up Economics. Yet unlike the trickle-down model where wealth often remains static while waiting for heightened consumption to justify more hiring, increased consumer demand can flood the economy with jobs as employers compete for buyers by accelerating their hiring activity.

Under the Trickle-Down Theory, suppliers create jobs at the point of hiring. This implies that employers are job creators. However, under Trickle-Up Economics jobs are created at the point they become necessary, as no rational employer would hire unneeded employees. This means that jobs are in fact created prior to the act of hiring. Under this model the process of job creation occurs as a direct response to increased consumer demand, meaning that employer hiring decisions are dependent on consumption. So it is consumers, not employers, who are the true job creators.

So why are our economic policies so beholden to Trickle-Down Economics rather than Trickle-Up Economics? In a word, money. This is very simple; wealthy economic interests can extract far more wealth from the economy if they remain the center of the economic universe, which is precisely why there is so much money in politics.

Visualize how we depict an atom or a solar system. At the center is a source of energy, such as an atomic nucleus or the sun that interacts with the particles or planets that revolve around it. Under Trickle-Down Economics the center of the economic universe consists of employers, while consumers and employees revolve around this employer-nucleus. In this model employers are perceived as the source of economic prosperity, including both products and jobs. This economic pole-position is extremely valuable to suppliers, especially powerful corporations, as it effectively guarantees that public policy and economic resources will be concentrated on their interests.

Yet a Trickle-Up approach flips the model around by placing consumers and employees, who are essentially one in the same, at the center of the economy, while employers move to the periphery. Although this may seem odd, consider that employers only exist because they have access to two critical resources, consumers to purchase their products and employees to make them. And while  the third leg in this equation is of course capital, few employers will be inclined to expend this capital unless there are sufficient consumers to justify it. It is why tax cuts have a poor record of stimulating job growth. In fact, according to a study from the Congressional Budget Office, the most effective way to stimulate growth is to increase unemployment benefits, which puts money in the hands of consumers who need it the most.

So rather than the destinies of employees and consumers being shaped by the actions of employers, in reality the fortunes of suppliers are driven by the behavior of consumers. The only reason why it doesn’t look this way is because economic interests have rigged the game to their benefit, and to the detriment of everyone else. And the reason why they are able to get away with this is because businesses are better able to concentrate wealth and power than either consumers or employees, which allows them to subvert the system for their narrow interests. What’s more, this employer-centrist mindset has so thoroughly permeated politics and society that it’s nearly impossible to even have a conversation about any alternate economic model.

Earlier I mentioned that the employer-as-job-creator idea is accepted on both sides of the political aisle. Some years ago I had an experience that illustrates the magnitude of the problem. I had the occasion to meet the then chair of the Democratic Party Debbie Wasserman-Schultz. In the few moments we spoke I suggested to her that businesses were not job creators. She responded with a predictably political line about how jobs are created by small businesses, as if the distinction somehow fundamentally separated her from conservatives who, she implied, were aligned with the interests of big businesses.

The problem is that her position still accepted the basic fallacy that employers are at the center of the economy, instead of the millions of consumers who cause businesses to hire in the first place. In other words, she acknowledged that she bought into a core idea – employers create jobs – that is at the root of economic inequality. And she led the Democratic Party!

So I tried to explain how her distinction missed the underlying issue. However, I didn’t even complete my first sentence before her “handler” physically interjected himself between us and shut the conversation down. And we wonder why our political leaders can’t even initiate meaningful conversations, let alone create policy that supports economic equality for average people?

So what can be done to rectify this seemingly insurmountable gulf between the demands of wealthy elites and the needs of average people? There are of course numerous ideas and policy positions tossed around that are intended to address this very issue, such as campaign finance reform, various tax reforms and government programs.

But as the interaction with Representative Wasserman-Schultz illustrated, the problem is more basic. So any meaningful response must address the underlying issues. To this end I propose that nothing productive will occur until we change two things, our mindset and our behavior. It’s something we need to do not just individually, but collectively as well.

The first change, a different mindset, consists of changing the way we perceive economic processes. For example, if asked, most people will probably say that jobs are created by employers. This is entirely understandable. After all, for most of us our livelihoods are dependent on the paychecks we receive from employers.

But although this perception is largely invalid, it’s very hard for people to recognize the influence they have on the economy. The problem is that due to the economic demands of living, and the limited control we have over our respective destinies, people are unable to see how much power they really possess in the aggregate.

In truth consumers are extremely powerful as their actions determine the economic security, or lack thereof, of everyone, whether employers or employees. But in the magnitude of the overall economy individual consumers and households feel powerless, because for the most part they are. There is relatively little any one consumer can do to impact the system. It is this shared sense of powerlessness that makes us vulnerable to the belief there is some “other” who will provide the security we so desperately seek.

And yet it’s an illusion, albeit one that’s strongly supported by economic elites who have a great vested-interest in maintaining their position in the economy. It’s a key reason why it’s so difficult for people to break free from this top-down economic worldview.

Yet average consumers must find a way to change their mindset in order to recognize and appreciate their economic power. Until we do it’s unlikely we can have meaningful conversations about changing a system that leaves too many of us feeling powerless.

The second thing we need to change is our economic behavior, specifically our collective economic behavior. We need a mechanism that allows us to reclaim decisions that have been abdicated to an economic monster we have little influence over.

This may seem impossible given the tremendous power imbalance between consumers and suppliers. Yet modern technology, specifically the Internet, has enabled an environment where the possibility for collective action has never been so great. Would, for example, the Tea Party have emerged so quickly and become so powerful if it weren’t for the Internet? Probably not.

So consider what could happen if similar technologies were used to empower consumers nationwide and allow them to wield concentrated power. By harnessing the combined economic influence of numerous buying communities’ people might fundamentally alter the way economic decisions are made, and in doing so regain a greater sense of personal power.

For example, networked communities of consumers might acquire the collective buying power to negotiate better deals and enhance the value of their limited incomes. Such consumer-communities might even become large enough that they can control or own the means of production. These are just a few of the many things that could benefit individual consumers as a result of these networked, consumer unions. In this way communities of people might collectively reclaim economic decisions, and in doing so utilize economic resources more equitably.

I call this process Community Capitalism. Community Capitalism is a model in which economic decisions are influenced not only by a minority of elite special interests, but also by many millions of average consumers whose combined buying behavior creates jobs and shapes economies, including the businesses that operate within them.

Community Capitalism would provide average consumers with a mechanism to reassert their economic power at levels that were previously unimaginable. Such influence would naturally extend into the political sphere as large consumer communities could negate the power of economic elites. This would empower people to comprehend a new mindset in which communities of average consumers interact on the basis of shared political and economic interests, and in doing so shift the balance of power from wealthy elites to consumers and employees.

By leveraging the combined consumption of average people, Community Capitalism could create an economy where the allocation of value is both more equitable and efficient. Maybe then we can finally turn the page on the failures of Trickle-Down economics and create a more equitable Trickle-Up economy. In doing so we would return the influence of consumers to its rightful place in the economic universe. Because ultimately, economic prosperity – including jobs – is created at the moment of consumption.

This post was partially excerpted from the author’s essay The Realism Manifesto: A Vision to Reclaim the American Dream. The Realism Manifesto proposes a vision for how average people might reshape the way political and economic decisions are made, and in doing so reclaim the American Dream. It proposes new ideas which may provide a starting point to take back Government from special interests and the politicians they influence. You may link to a synopsis of the essay here.