Saturday, March 12, 2005

The Rich Get Richer

This New Scientist article describes an economic model developed by physicists that shows there may be a systemic division between the very rich and the not so rich.
While the model is not proof by any means, it does show that ‘some things may never change.’
Injustice may be part of the system.

Wealth Distribution


It is well known that wealth is shared out unfairly. "People on the whole have normally distributed attributes, talents and motivations, yet we finish up with wealth distributions that are much more unequal than that," says Robin Marris, emeritus professor of economics at Birkbeck, University of London.

They found that while the income distribution among the super-wealthy - about 3% of the population - does follow Pareto's law, incomes for the remaining 97% fitted a different curve - one that also describes the spread of energies of atoms in a gas

This, along with research data from other countries, suggests that there are two economic classes. In one, the rich grow richer while in the other the poor stay poor. Yakovenko explains this by going back to the analogy of atoms in a gas.

"It suggests that any kind of policy will be very inefficient," says Yakovenko. It would be very difficult to impose a policy to redistribute wealth "short of getting Stalin", says Yakovenko, who will talk in Kolkata next week.

New Scientist Breaking News - Why it is hard to share the wealth


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