Concentration of wealth

The most unhappy feature of many societies is the growing gap between the rich and the poor, the extreme concentration of wealth in a few hands. Wealth gives power and power creates more wealth. Wealth becomes more and more concentrated, unless society sets up mechanisms to reduce the concentration. This reduction is somewhat possible, but not to a great extent.

The wealthy use their wealth to ensure that the deck is heavily stacked in their favour. They also control the organs of propaganda, i.e., the media, the politicians and their flunkies, and now, the social media. This prevents most people from really understanding what is going on.

See: “Is the basic inequality in wealth distribution repeated in country after country the result of the talents—or lack thereof—of a country’s citizens? Not according to a new study. According to this excerpt from a Harvard Business Review article, the disparity ” ‘appears to be something akin to a law of economic life that emerges naturally as an organizational feature of a network.’ ” See https://hbswk.hbs.edu/archive/wealth-happens-wealth-distribution-and-the-role-of-networks

and also see: “We introduce a simple model of economy, where the time evolution is described by an equation capturing both exchange between individuals and random speculative trading, in such a way that the fundamental symmetry of the economy under an arbitrary change of monetary units is insured. We investigate a mean-field limit of this equation and show that the distribution of wealth is of the Pareto (power-law) type. The Pareto behaviour of the tails of this distribution appears to be robust for finite range models, as shown using both a mapping to the random `directed polymer’ problem, as well as numerical simulations. In this context, a transition between an economy dominated by a few individuals from a situation where the wealth is more evenly spread out, is found. An interesting outcome is that the distribution of wealth tends to be very broadly distributed when exchanges are limited, either in amplitude or topologically. Favoring exchanges (and, less surprisingly, increasing taxes) seems to be an efficient way to reduce inequalities.” from Wealth condensation in a simple model of economy, Jean-Philippe Bouchaud, Marc Mezard (CEA-Saclay, Science et Finance and LPTENS-Paris, https://arxiv.org/abs/cond-mat/0002374

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