Wealth concentration
Encyclopedia
Wealth Concentration, also known as wealth condensation, is a process by which, in certain conditions, newly created wealth
tends to become concentrated in the possession of already-wealthy individuals or entities, a form of preferential attachment
. Those who already hold wealth have the means to invest in new sources and structure, thus creating more wealth, or to otherwise leverage the accumulation of wealth, thus are the beneficiaries of the new wealth.
-tails function, which decay as a power-law in wealth. (See also: Distribution of wealth
and Economic inequality
).
The second condition is that a small initial inequality must, over time, widen into a larger inequality. This is an example of positive feedback
in the economic system.
A team from Jagiellonian University
produced statistical model economies showing that wealth condensation can occur whether or not total wealth is growing (if it is not, this implies that the poor become poorer).
Either:
In the first case, being wealthy gives one the opportunity to earn more through high paid employment (e.g. by going to elite schools). In the second case, having high paid employment gives one the opportunity to become rich (by saving your money).
In a capitalist society, with a marginal propensity to consume
below one, these are 'automatic' causes of wealth condensation due to variable incomes. The following points relate to the concentration of wealth (capital) itself, even in the absence of variable wage
s.
In the case of plutocracy, the wealthy exert power over the legislative process, which enables them to increase the wealth disparity.
rate by economist
s, but here we consider the actual private income received, after taxation.
Very roughly, the
If this rate is positive then owners of capital (George Orwell
's "dividend
-drawing class") will get richer if they neither produce or consume but simply "leave their money in the bank." It is under this condition (positive net return to capital) that widespread wealth condensation is most likely. (Wealth condensation would be inevitable in the long run in this case, unless the unearned income were consumed more rapidly than it was accumulated.)
Even if the rate of net return to capital is not positive on average, wealth condensation will also occur if the largest owners on average receive a higher return than smaller owners; this would constitute wealth condensation within the capitalist class rather than at the expense of the non-capitalist class.
Examples of Negative real returns:
Hypothetically, leaving a small amount on deposit and then sleeping for several hundred years will lead to great wealth through the action of compound interest
. However, historical real rates of return show that the effects of taxation and inflation would likely leave you worse off than when you started (with the money on risk-free deposit).
s (such as housing, stocks, and bonds
) are inflating faster than the consumer price index
or the commodity price index
.
For instance, the money price
level of bread and milk has risen by 1-5% annually in most G7 countries since the mid 1980s, but real estate
prices in those same countries have inflated at least twice as fast in money terms. At the same time, business assets are becoming more expensive (as measured through decaying PE ratios in the same time frame).
Marx believed that wealth concentration is common throughout democratic countries with free market economies, which is exemplified the old phrase "The rich get richer and the poor get poorer
". (Although most would concede that the extent to which this is true varies from regime to regime, particularly in regard to "unearned income tax" policies.) For instance, the "law of the centralization of capital" was posited by Marx as applying to all capitalist
societies.
and social inequality
, results in a reduction in the standard of living. In response, neoclassical economics
dictates that if a business decreases the standard of living for people participating in the market, participants will exit the market until the business cannot function (that is, bad businesses go bankrupt). For defenses of economic inequality see that article or Equality of outcome
.
, has argued that growing such wealth disparity has wider ramifications than are not caught in neoclassical models. He claims that the disparity not only creates poverty, but that it also results in boom-bust cycles that reduce social welfare. In his 1985 book Regular Economic Cycles: Money, Inflation, Regulation and Depressions, Batra argues that a growing concentration of wealth, measured as the 'share of wealth held by the richest 1 percent', is linked to bank failures and depressions. In Table 1 on page 127, there is data for this measure for the years 1810-1969, showing a rise in this measure prior to the 1929 stock market crash.
and the wealth disparity it creates is that even if the gap between rich and poor widens, the poor themselves are actually better off than they would have been in the more equal state without capitalism. This view is expressed in the saying, a rising tide lifts all boats
.
Supporters of capitalism point out that wealth condensation theory applies less strongly to democratic countries. They argue that the United States
is a counter-example of the theory, on the grounds that its middle class is materially the most prosperous in recorded human history, with America's poor being as economically well off as the middle class
of other, less industrialized countries.
to reward some vastly more than others. Again, it is argued that this will lead to benefits for all.
Wealth
Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo-European word stem...
tends to become concentrated in the possession of already-wealthy individuals or entities, a form of preferential attachment
Preferential attachment
A preferential attachment process is any of a class of processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals or objects according to how much they already have, so that those who are already wealthy receive more than those who are not...
. Those who already hold wealth have the means to invest in new sources and structure, thus creating more wealth, or to otherwise leverage the accumulation of wealth, thus are the beneficiaries of the new wealth.
Economic conditions
The first condition is an unequal distribution in the first place. Without this there is nothing for the new wealth to 'condense' onto. This condition is surely satisfied in developed nations in 2005. In their wealth condensation model J. P. Bouchaud & M. Mezard estimate that 90% of "total wealth" is owned by 5% of the population in many rich countries. They say that the distribution of wealth throughout the population is closely described by a ParetoPareto
Pareto may refer to:* Vilfredo Pareto , Italian sociologist, economist and philosopher* Paula Pareto , Argentine judokaSeveral things named after Vilfredo Pareto:...
-tails function, which decay as a power-law in wealth. (See also: Distribution of wealth
Distribution of wealth
The distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the distribution of income in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society.-Definition of...
and Economic inequality
Economic inequality
Economic inequality comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of...
).
The second condition is that a small initial inequality must, over time, widen into a larger inequality. This is an example of positive feedback
Positive feedback
Positive feedback is a process in which the effects of a small disturbance on a system include an increase in the magnitude of the perturbation. That is, A produces more of B which in turn produces more of A. In contrast, a system that responds to a perturbation in a way that reduces its effect is...
in the economic system.
A team from Jagiellonian University
Jagiellonian University
The Jagiellonian University was established in 1364 by Casimir III the Great in Kazimierz . It is the oldest university in Poland, the second oldest university in Central Europe and one of the oldest universities in the world....
produced statistical model economies showing that wealth condensation can occur whether or not total wealth is growing (if it is not, this implies that the poor become poorer).
Correlation between being rich and earning more
Given an initial condition in which wealth is unevenly distributed, several economic mechanisms for wealth condensation have been proposed:Either:
- A correlation between being rich and being given high paid employment (oligarchyOligarchyOligarchy is a form of power structure in which power effectively rests with an elite class distinguished by royalty, wealth, family ties, commercial, and/or military legitimacy...
). - A marginal propensity to consumeMarginal propensity to consumeIn economics, the marginal propensity to consume is an empirical metric that quantifies induced consumption, the concept that the increase in personal consumer spending occurs with an increase in disposable income...
low enough that high incomes are correlated with people who have already made themselves rich (meritocracyMeritocracyMeritocracy, in the first, most administrative sense, is a system of government or other administration wherein appointments and responsibilities are objectively assigned to individuals based upon their "merits", namely intelligence, credentials, and education, determined through evaluations or...
). - The ability of the rich to influence government disproportionately to their favor thereby increasing their wealth (plutocracyPlutocracyPlutocracy is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy is called plutarchy. The word plutocracy is derived from the Ancient Greek root ploutos, meaning wealth and kratos, meaning to rule or to govern.-Usage:The term plutocracy is generally...
).
In the first case, being wealthy gives one the opportunity to earn more through high paid employment (e.g. by going to elite schools). In the second case, having high paid employment gives one the opportunity to become rich (by saving your money).
In a capitalist society, with a marginal propensity to consume
Marginal propensity to consume
In economics, the marginal propensity to consume is an empirical metric that quantifies induced consumption, the concept that the increase in personal consumer spending occurs with an increase in disposable income...
below one, these are 'automatic' causes of wealth condensation due to variable incomes. The following points relate to the concentration of wealth (capital) itself, even in the absence of variable wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
s.
In the case of plutocracy, the wealthy exert power over the legislative process, which enables them to increase the wealth disparity.
Positive net real rate of return to capital
This condition would bring wealth condensation around more quickly than the two possibilities above (because there is so much net worth in the world). The general rate of return to capital investment is sometimes called the rentalEconomic rent
Economic rent is typically defined by economists as payment for goods and services beyond the amount needed to bring the required factors of production into a production process and sustain supply. A recipient of economic rent is a rentier....
rate by economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
s, but here we consider the actual private income received, after taxation.
Very roughly, the
- net real rate of returnReturn on investmentReturn on investment is one way of considering profits in relation to capital invested. Return on assets , return on net assets , return on capital and return on invested capital are similar measures with variations on how “investment” is defined.Marketing not only influences net profits but also...
= (nominal risk-free interest rateRisk-free interest rateRisk-free interest rate is the theoretical rate of return of an investment with no risk of financial loss. The risk-free rate represents the interest that an investor would expect from an absolutely risk-free investment over a given period of time....
- InflationInflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
) - (unearned income tax, dividendDividendDividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
tax, and other capital-gains taxes).
If this rate is positive then owners of capital (George Orwell
George Orwell
Eric Arthur Blair , better known by his pen name George Orwell, was an English author and journalist...
's "dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
-drawing class") will get richer if they neither produce or consume but simply "leave their money in the bank." It is under this condition (positive net return to capital) that widespread wealth condensation is most likely. (Wealth condensation would be inevitable in the long run in this case, unless the unearned income were consumed more rapidly than it was accumulated.)
Even if the rate of net return to capital is not positive on average, wealth condensation will also occur if the largest owners on average receive a higher return than smaller owners; this would constitute wealth condensation within the capitalist class rather than at the expense of the non-capitalist class.
Examples of Negative real returns:
- These were a long term JapanJapanJapan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese phenomenon, despite and because of their high rates of private saving before deflation. - Many countries in the 1970s experienced stagflationStagflationIn economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high...
and surprise inflationInflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
which meant that the purchasing powerPurchasing powerPurchasing power is the number of goods/services that can be purchased with a unit of currency. For example, if you had taken one dollar to a store in the 1950s, you would have been able to buy a greater number of items than you would today, indicating that you would have had a greater purchasing...
of savings was substantially reduced even with the interest income, (which implies a negative real rate of return to capital). - Since capital gains taxes apply on nominal earningsEarningsEarnings are the net benefits of a Corporation's operation. Earnings is also the amount on which corporate tax is due. For an analysis of specific aspects of corporate operations several more specific terms are used as EBIT -- earnings before interest and taxes, EBITDA - earnings before...
the net amount of wealth can decline even when the risk-free yieldYield (finance)In finance, the term yield describes the amount in cash that returns to the owners of a security. Normally it does not include the price variations, at the difference of the total return...
is above inflationInflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. This is why inflation is sometimes said to be a "Wealth TaxWealth taxA wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock , including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and...
", which prevents wealth condensation. Furthermore, the tax bands are not typically inflation-adjusted, so a higher share of nominal income must be paid in tax each year even as real incomes remain flat.
Hypothetically, leaving a small amount on deposit and then sleeping for several hundred years will lead to great wealth through the action of compound interest
Compound interest
Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding...
. However, historical real rates of return show that the effects of taxation and inflation would likely leave you worse off than when you started (with the money on risk-free deposit).
Assets inflation
A common econometric phenomenon throughout developed nations since the beginning of the 1990s (and earlier) is that assetAsset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
s (such as housing, stocks, and bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
) are inflating faster than the consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
or the commodity price index
Commodity price index
A commodity price index is a fixed-weight index or average of selected commodity prices, which may be based on spot or futures prices...
.
For instance, the money price
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
level of bread and milk has risen by 1-5% annually in most G7 countries since the mid 1980s, but real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
prices in those same countries have inflated at least twice as fast in money terms. At the same time, business assets are becoming more expensive (as measured through decaying PE ratios in the same time frame).
Opposition
Marx promoted several explanations of the cause of wealth concentration. Some of the causes may include:- Cost of living is typically the same for everyone. In a free market economy, factors contributing to the cost of living will adjust so that poorest members of the society are forced to spend all their income on bare necessities (food, housing, medicine), whereas richer members will have enough excess income that they can save and invest. Thus, in a free-market capitalist economy, both savings and the investment income (Marxian surplus valueSurplus valueSurplus value is a concept used famously by Karl Marx in his critique of political economy. Although Marx did not himself invent the term, he developed the concept...
) are disproportionally accumulated in hands of wealthiest individuals. - The process by which corporate officers are paid large salaries and bonuses: for example, average CEO pay is estimated to be between 200 and 300 times the pay of an average worker as of 2005. Critics of the corporate system have often charged that there is a substantial disconnect between a) officer performance and compensation, and b) officer compensation and worker compensation, and that officers are compensated at levels disproportionate to either performance or payroll because they are already part of the elite, and that this is a self-perpetuating methodology to maintain an elite class (see neofeudalismNeofeudalismNeofeudalism refers to a theorized contemporary rebirth of policies of governance, economy and public life reminiscent of those present in many feudal societies....
). - If the economy of any country is organized in the interests of the super-rich, or is a plutocracyPlutocracyPlutocracy is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy is called plutarchy. The word plutocracy is derived from the Ancient Greek root ploutos, meaning wealth and kratos, meaning to rule or to govern.-Usage:The term plutocracy is generally...
in which only the wealthy can hold government office, it should be expected that wealth condensation will follow. Critics contend a modern example of this is the current executive of the U.S. In the view of critics like Paul KrugmanPaul KrugmanPaul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
the taxTaxTo tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
policies of the BushGeorge W. BushGeorge Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
administration vastly favored the wealthy over the poor and the middle class. The argument underlying this was that progressive taxProgressive taxA progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate...
systems were being scrapped in favor of regressive taxRegressive taxA regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the...
systems, driving wealth condensation (by allowing the wealthy to retain more of their wealth as disposable and investable income.)
Marx believed that wealth concentration is common throughout democratic countries with free market economies, which is exemplified the old phrase "The rich get richer and the poor get poorer
The rich get richer and the poor get poorer
"The rich get richer and the poor get poorer" is a catchphrase and proverb, frequently used in discussing economic inequality...
". (Although most would concede that the extent to which this is true varies from regime to regime, particularly in regard to "unearned income tax" policies.) For instance, the "law of the centralization of capital" was posited by Marx as applying to all capitalist
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
societies.
Support
Wealth concentration is generally defended by proponents of capitalism. They argue that the principal assumption that wealth is neither created nor destroyed but rather shifted is wrong. Wealth is not a zero sum game and thus any wealth collected by the wealthy need not be taken from the poor. They argue that over the course of human history, total global wealth has grown over the last several centuries, and therefore, investors may reap large economic benefits, and the side effect of investment is the creation of new jobs and industries that increase the overall standard of living for anyone participating in the market. Opponents argue that an increase in economicEconomic inequality
Economic inequality comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of...
and social inequality
Social inequality
Social inequality refers to a situation in which individual groups in a society do not have equal social status. Areas of potential social inequality include voting rights, freedom of speech and assembly, the extent of property rights and access to education, health care, quality housing and other...
, results in a reduction in the standard of living. In response, neoclassical economics
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
dictates that if a business decreases the standard of living for people participating in the market, participants will exit the market until the business cannot function (that is, bad businesses go bankrupt). For defenses of economic inequality see that article or Equality of outcome
Equality of outcome
Equality of outcome, equality of condition, or equality of results is a controversial political concept. Although it is not always clearly defined, it is usually taken to describe a state in which people have approximately the same material wealth or, more generally, in which the general conditions...
.
Criticism
Ravi BatraRavi Batra
Raveendra Nath "Ravi" Batra is an Indian-American economist, author, and professor at Southern Methodist University. Batra is the author of six international bestsellers, two of which appeared on The New York Times Best Seller list...
, has argued that growing such wealth disparity has wider ramifications than are not caught in neoclassical models. He claims that the disparity not only creates poverty, but that it also results in boom-bust cycles that reduce social welfare. In his 1985 book Regular Economic Cycles: Money, Inflation, Regulation and Depressions, Batra argues that a growing concentration of wealth, measured as the 'share of wealth held by the richest 1 percent', is linked to bank failures and depressions. In Table 1 on page 127, there is data for this measure for the years 1810-1969, showing a rise in this measure prior to the 1929 stock market crash.
"...as the concentration of wealth rises, the number of banks with relatively shaky loans also rises. And the higher the concentration, the greater is the number of potential bank failures."Batra predicted the same would happen if the 1% share rose again.
Legitimate types
Proponents of neoclassical economics argue that this "leveraging of wealth" can be explained either by the legitimate creation of wealth by its owners or by specific instances of malfeasance. Therefore, by this line of argument, the results do not constitute a "process" or "effect", and to describe it as such could even be misleading because it would conflate two distinct sorts of behavior: one legitimate and positive, the other dishonest and harmful.Rising tide argument
An argument in support of capitalismCapitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
and the wealth disparity it creates is that even if the gap between rich and poor widens, the poor themselves are actually better off than they would have been in the more equal state without capitalism. This view is expressed in the saying, a rising tide lifts all boats
A rising tide lifts all boats
The aphorism "a rising tide lifts all boats" is associated with the idea that improvements in the general economy will benefit all participants in that economy, and that economic policy, particularly government economic policy, should therefore focus on the general macroeconomic environment first...
.
Supporters of capitalism point out that wealth condensation theory applies less strongly to democratic countries. They argue that the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
is a counter-example of the theory, on the grounds that its middle class is materially the most prosperous in recorded human history, with America's poor being as economically well off as the middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
of other, less industrialized countries.
Winner-takes-all markets
If returns to scale are positive, or if 'superstars' can earn vastly more than the average, some argue that it is natural and efficientEfficiency (economics)
In economics, the term economic efficiency refers to the use of resources so as to maximize the production of goods and services. An economic system is said to be more efficient than another if it can provide more goods and services for society without using more resources...
to reward some vastly more than others. Again, it is argued that this will lead to benefits for all.
See also
- Economic inequalityEconomic inequalityEconomic inequality comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of...
- Capital accumulationCapital accumulationThe accumulation of capital refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is money or a financial asset invested for the purpose of making more money...
- Preferential attachmentPreferential attachmentA preferential attachment process is any of a class of processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals or objects according to how much they already have, so that those who are already wealthy receive more than those who are not...
- The rich get richer and the poor get poorerThe rich get richer and the poor get poorer"The rich get richer and the poor get poorer" is a catchphrase and proverb, frequently used in discussing economic inequality...
- Matthew effect (sociology)Matthew effect (sociology)In sociology, the Matthew effect is the phenomenon where "the rich get richer and the poor get poorer". Those who possess power and economic or social capital can leverage those resources to gain more power or capital. The term was first coined by sociologist Robert K...
- Economic Growth and Tax Relief Reconciliation Act of 2001Economic Growth and Tax Relief Reconciliation Act of 2001The Economic Growth and Tax Relief Reconciliation Act of 2001 , was a sweeping piece of tax legislation in the United States by President George W. Bush...
- Gini coefficientGini coefficientThe Gini coefficient is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper "Variability and Mutability" ....
- Inequity aversionInequity aversionInequity aversion is the preference for fairness and resistance to incidental inequalities. The social sciences that study inequity aversion include sociology, economics, psychology, anthropology and ethology.-Human studies:...
- Pareto distribution
- Preferential attachmentPreferential attachmentA preferential attachment process is any of a class of processes in which some quantity, typically some form of wealth or credit, is distributed among a number of individuals or objects according to how much they already have, so that those who are already wealthy receive more than those who are not...
- Kinetic exchange models of marketsKinetic exchange models of marketsKinetic exchange models are multi-agent dynamic models inspired by the statistical physics of energy distribution, which try to explain the robust and universal features of income/wealth distributions....
External links
- Winner-takes-all markets defined in the EconomistEconomistAn economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
magazine. - CEO-to-worker pay imbalance grows
- Wages in America: The Rich Get Richer and the Rest Get Less
- 15 Mind-Blowing Facts About Wealth And Inequality In America - charts by The Business Insider