jim blair: September 2000 Did you see the interesting article in New Scientist 19 August 2000 on the subject? That's the way the money goes 19 August 2000 by Mark Buchanan Magazine issue 2252 "WHY do rich people have all the money? This may sound like the world's silliest question, but it's not. In every society, most of the wealth falls into the hands of a minority. People often write this off as a fact of life-something we can do nothing about-but economists have always struggled to explain why the wealthy take such a big slice of the pie. If Jean-Philippe Bouchaud and Marc Mézard are right, it is more than a fact of life: it's a law of nature. These two scientists have discovered a link between the physics of materials and the movements of money, a link that explains why wealth is distributed in much the same way in all modern economies..." Apparently the shape of the wealth distribution in all societies is pretty much the same equation. The number of people richer than a certain figure runs as 1/W^n where n runs from about 2 to 3 depending on stuff like tax regime. Some french physicists discovered you can predict this distribution using a model more usually applied to physics, even if you assume all the people involved are identical. Article is at: http://newscientist.com/ : >>I'll have a look although I'm not very good at maths. Mason Clark: > > Don't bother. It's garbage "science." Hi, But Mason, the article is supporting your claim about the uniformity of wealth distribution between different countries, and attempting to provide a theoretical basis for it. I think we need to distinguish between empirical data and theory here. The article claims that the wealth distribution curve is the same for many (all?) socities. Is this true? Finding the data to support the claim would be tricky, given the different ways that different societies define and measure wealth. I remember reading the Oscar Lewis papers on the distribution of wealth in poor rural Mexican villages back in the 1940's. To provide a standard of measure, and since money was not used much, Lewis used the bushel of corn (or something like that) as the unit of wealth. A bed or a cow or a chair was evaluated in terms of its corn equivalent. I agree that the article's attempt to provide a theory is nonsense, since it does not address the sources of wealth. But I like the suggestion that IF there IS a common distribution curve with an exponent between 2 and 3, then the exponent is probably e, the base of the natural log scale ;-) ,,,,,,, _______________ooo___(_O O_)___ooo_______________ (_) jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin USA. This message was brought to you using biodegradable binary bits, and 100% recycled bandwidth. For a good time call: http://www.geocities.com/capitolhill/4834 AND 31 Jan 2002 ( Doug Bashford ) wrote: > >WEALTH SPAWNS CORRUPTION >Physicists are explaining how >politics can create the super-rich. http://www.nature.com/nsu/020121/020121-14.html Hi, The claim that restriction on freedom of trade leads to the concentration of wealth into the hands of a relative few is correct. The assumption that the total wealth of a society is fixed is not true. It is probably not even true that the "total wealth" of a society is limited. Or if total wealth is "limited", this is of no practical importance, since no one knows what that limit is. Sure the number of Al or Fe atoms on the earth is finite (if we ignore the various things that fall to earth from space). But wealth comes from the organization of matter, not from the amount. >I think one has to dig deeper into >this model. The question of excess >and saved wealth becomes moot if the >purpose of the corporation is returned >to its original ideal of serving the >public good and not the shareholders, ???? I see no conflict here. A company makes money for its shareholders by serving the public. No customers for its products or services, no profits for its shareholders. >particularly in a world where invested >capital in the corporations from the >"market" has been decreasing and, >in knowledge driven corporations, >the contribution of invested capital >pales when compared with the contribution >of human capital. Yes, human capital. To say that total wealth is limited is like saying that total knowledge is limited. Limited to what? >also, from an environmental perspective, >as Lux and others have argued, >profits, expended, consume more >resources as society maximizes its >consumption of material resources. Yes, if everyone is poor, they don't consume as much as if they were rich. But "rich" societies create "material resources" in addition to "consuming" material resources. And can I summarize the article as: the choice for a society is between "poor but equal", or "rich but unequal"? >Anyone who believes exponential growth >can go on forever in a finite world is >either a madman or an economist. > --Kenneth Boulding > >thoughts? > Exponential growth of what? Knowlege? Information? Wealth? People? He may have a point if he means people, but what does he mean by "finite world"? The Universe? Or just planet earth? ,,,,,,, _______________ooo___(_O O_)___ooo_______________ (_) jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin USA. This message was brought to you using biodegradable binary bits, and 100% recycled bandwidth. For a good time call: http://www.geocities.com/capitolhill/4834