"American inequality didn't just happen. It was created."
Joseph Stiglitz in The Price of Inequality (p28)
Which is an important point: never presume that the current inequality in the US or elsewhere, including he UK, is chance, or some sort of natural outcome. Nor it it even the result of market forces, or some indication of obvious ability.
It's happened because of the ability of a privileged few to capture the state to advance their rent seeking activities at cost to the rest of us.
That's Stiglitz's view.
It's mine too.
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Hmmmm….
And so far…
20% unemployed, so:
http://www.zerohedge.com/news/guest-post-has-perfect-moment-kill-dollar-arrived
Actually there is a simple mathematical principle underlying the emergence of economic inequality. (Which does not mean it cannot and should not be constrained by other actively redistributive measures.)
In an artificial game of random transactions, winning streaks can go on indefinitely, but seldom do, while losing streaks have to end at nothing left to lose. Such a game will soon develop into an accurate model of real-world wealth distribution.
New Scientist had a very good article on this a few years back.
That is an absurd idea, worthy only of an economist’s blackboard.
It assumes there are noi external factors at play but the market
There are external factors. First there are externalities the market does not price – conveniently ignored in the theory you mention. Second there’s government – and since there is no modern market without government you can’t ignore it.
When there is government we don;t have random transactions – we have regulated transactions (yes, even money is regulation).
In other words your hypothesis was not even worth mentioning unless your sole reason for doing so was to excuse abuse.
Markets are rigged! Look up the expressions “pump and dump” and “high frequency trading” to see what I mean.
The elite will always make sure that they receive the biggest share of the cake.
And of course, while we are all stupid enough to continue to tolerate this state of affairs!
Maybe the double negative in the parenthesis was unclear grammar. Of course the process is and needs to be externally constrained. I still think the proponents of the theory made an unassailably obvious case for it being an underlying force, even if I cannot pass it on so lucidly. To say that is why inequalities arise is no more seeking to excuse abuse, than identifying gravity as the cause of things falling down is a call to stop erecting buildings. To deny a cause, though, is a handicap to creating appropriate remedies.
It’s not a cause
It looks like a lame excuse
And to suggest it is a cause is very poor social science of the worst crypto natural science sort
I may not have the writing skill to explain how power law or Pareto distributions fall out of randomness in a short comment, so let us imagine the tendency is to some other trope and drop it.
However, I am perplexed and dismayed that you take me as seeking to excuse abuse. I actually believe it is why there must be redistribution. If anyone can bear several hundred words of my leaden prose, I nailed my colours to the mast at. http://ughitshim.blogspot.com/2010_01_01_archive.html
David
The difficulty is then that you’re using a false excuse offered for inequality to justify redistribution
But two wrongs don’t make a right
The reasons for redistribution is that there is market failure allowing rent seeking and monopolistic behaviour that has to be tackled
Richard
There is a game whose original conception illustrated this perfectly. Monopoly was invented as The Landlords Game by a follower of Henry George (patented, I think, in 1907- although someone else claimed the invention and money, with the connivance of Hasbro). The current game also shows that whoever owns the most landed property wins by charging rent to the rest of the players.
Carol, I think I would extend your line of thought further. In the early stages of Monopoly some skill is required in deciding which properties to buy but in the end, chance plays the largest part in how the dice rolls.
The point Stevo!! makes is most valid. Imagine playing the game when one player has a cup which controls the throw of the dice and can always produce the required number. A large property holding will not beat this.