In the last Blog's comments BB-Idaho asked what "Redistribution Upwards" would be called.
"It has been said (rather ignorantly) that wealth redistribution downward is socialism. What are we going to call the last 30 years of redistribution upwards?"
Perhaps Applied Physics may have some observations of use.
Nonequilibrium Thermodynamics of Wealth Condensation "We analyze wealth condensation for a wide class of stochastic economy models on the basis of the economic analog of thermodynamic potentials, termed transfer potentials. The economy model is based on three common transfers modes of wealth: random transfer, profit proportional to wealth and motivation of poor agents to work harder. The economies never reach steady state. Wealth condensation is the result of stochastic tunneling through a metastable transfer potential. In accordance with reality, both wealth and income distribution transiently show Pareto tails for high-income subjects. For metastable transfer potentials, exponential wealth condensation is a robust feature. For example with 10% annual profit 1% of the population owns 50% of the wealth after 50 years. The time to reach such a strong wealth condensation is a hyperbolic function of the annual profit rate."
---Dieter Braun
Ludwig Maximilians University München, Germany
http://www.sciencedirect.com(by the way it won't let me copy any part of the actual article)
My Okie Abstract goes something like this:
The rich get richer until there is nothing to be had and then it all collapses.
Parable:
Once a month the U.S. Army paid its troops in cash.
Before they handed out the cash they deducted anything you owed the army for lost equipments, fines, etc., then they deducted what you had set aside to send home to the wife, then they deducted what you owed the NCO or EM or Officers club from last month, and then they gave you what was left. Crap games, poker, whores, bars, paying of loans and basic entertainment ate up the rest generally within days or weeks. From that point on you lived on credit at the EM, NCO, etc. clubs or borrowed from the barracks loan shark. At the end of the month the cycle was repeated thus the equilibrium was restored.
"First, the skewed distribution of wealth has persisted, and it has become more concentrated at the top of the distribution over time. In the early 1960s, the average level of wealth held by the wealthiest fifth of all households was 15 times that of the overall median; by 2004 it was over
23 times. As would be expected, the distribution in the shares of wealth held by wealth
class is very unequal. The share of all wealth held by the bottom 80% was just 15.3% in
2004—down from 19.1% in the early 1960s—and, that 3.8% share of wealth shifted to
the top 5% of households."
http://www.stateofworkingamerica.org/swa06-ch05-wealth.pdfTrouble is in the real world the redistribution gets out of whack and goes on too long, most generally historically upwards. Redistributions downward have been due to catastrophe or revolution. Equilibrium is obtained only in passing and is seldom notice. Wealth accumulation is not an evil, until it becomes wealth hording. That is a recipe for catastrophe for all sides.
