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Distribution of Wealth - Gtx0 ?>
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# Worldbuilding

Distribution of Wealth
Posted: Posted February 22nd, 2010 by chiarizio
 Background: Daniel Ariely recently did a survey of NPR listeners to see three things: (1) What fraction of America's wealth do they think the 20% richest Americans own? (2) What fraction of America's wealth do they think the 20% richest Americans should own? (3) How do their political, social, economic, etc. backgrounds and opinions, correlate with their answers to questions 1 and 2? The survay only had 600 respondents, so the results are not definitively reliable. Nevertheless I remember two things. (1) On average the listeners think the 20% richest Americans own 65% of America's wealth; but this is wrong. Actually, the 20% richest Americans own 88% of America's wealth. (2) Independently of their politics etc., nearly all the listeners think the 20% richest Americans should own about 33% of America's wealth. Questions: In your various concultures, (1) What is the actual distribution of wealth, and (2) What do your conpeople think it should be? For instance, if the richest third own two-thirds, while the poorest two-thirds own one-third: Maybe the 3.7% richest own 29.6% of the wealth between them; the next 22.2% own 44.4%; the next 44.4% own 22.2%; and the poorest 29.6% own 3.7% between them. More extremely, if the richest quarter own three-quarters, while the poorest three-quarters own one-quarter: Maybe the 1.6% richest own 42.2% of the wealth between them; the next 14.1% own 42.2%; the next 42.2% own 14.1%; and the poorest 42.2% own 1.6% between them. Less extremely, if the richest two-fifths own three-fifths, while the poorest three-fifths own two-fifths: Maybe the 6.4% richest own 21.6% of the wealth between them; the next 28.8% own 43.2%; the next 43.2% own 28.8%; and the poorest 21.6% own 6.4% between them. And obviously there are other variations possible. For instance: Maybe the 3.7% richest own 42.2% of the wealth between them; the next 22.2% own 42.2%; the next 44.4% own 14.1%; and the poorest 29.6% own 1.6% between them. Or, maybe the 3.7% richest own 21.6% of the wealth between them; the next 22.2% own 43.2%; the next 44.4% own 28.8%; and the poorest 29.6% own 6.4% between them. Or, maybe the 1.6% richest own 29.6% of the wealth between them; the next 14.1% own 44.4%; the next 42.2% own 22.2%; and the poorest 42.2% own 3.7% between them. Or, maybe the 6.4% richest own 29.6% of the wealth between them; the next 28.8% own 44.4%; the next 43.2% own 22.2%; and the poorest 21.6% own 3.7% between them. Anyway, there's likely to be a Pareto distribution of wealth, and your conpeople are likely to believe that some people deserve more than some other people. (If they don't, that's interesting; why? and what's the result?)
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My understanding of concrete economics in my setting, and complex economics in general, are lacking, but i'd say that since most governments are autocracies, wealth distribution would probably follow something similar to your "More extreme" model:

More extremely, if the richest quarter own three-quarters, while the poorest three-quarters own one-quarter:
Maybe the 1.6% richest own 42.2% of the wealth between them;
the next 14.1% own 42.2%;
the next 42.2% own 14.1%;
and the poorest 42.2% own 1.6% between them.

with the "richest" people- Party officials, landed Lords, and other government elements- owning a lot of the assets in many countries.

It might actually be more like the figure for America, or more extreme (especially for the one Agrarian government that's heavily socialist), but in some cases i'm not sure since there may be a disparity between what the people think is "wealth", and what the government sees as valuable.

A couple things that i'm not really sure about may fit into that distinction: souls, and the microoeconomy, which is monitored by human government (since they need to maintain relations to keep people living), but effectively managed by the intelligent microorganisms that make it up.

Souls are valuable for conversion to a power source, but the government can't really harvest them until someone dies. The issue is that it's possible- due to the original purpose of souls, which had to do with deciding who went to Heaven and who went to Hell- for people to live their lives in ways that can either increase or decrease the amount of energy recouped when the soul is harvested for power. There isn't really any way for the government to control the types of things that people do (at least they haven't had success in doing it), so in a way, do you think that constitutes a kind of personal wealth ownership for the poor majority?

The issue with the microorganism economy is that i'm not really sure how it stands in the society at all. It's certainly a resource, since the agreements Agrafascists have with single-celled life keep them safe from disease among other things, but no one really "owns" all of it, and the whole system is subject to failures on the micro end since i imagine each individual human body as a relatively sovereign state.

But many common people probably wouldn't list either of those as wealth. If you asked most people a question like this, they'd probably say "We fucking want 100% of the food, 100% of the coin, and 100% of the slaves!" As far as other kinds of wealth though, many non-landed people wouldn't necessarily object to the richest owning 80 or 90% of the land.

Posted February 23rd, 2010 by Fetus Commander
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In the main city I'm focusing on in what is currently my primary world, The richest 5% own something like 60-65% of the wealth of the city. They are in the upper echelons of the city's three gangs. "gang" is a bit of a misnomer here. They started out as trade guilds, then moved on to facilitating illicit transactions, and by now, have bought up most of the legit businesses in the city. Now, they function like japanese zaibatsu companies, except with WAY mare bloodthirst. One of them even colects & keeps taxes that are suposed to go to the somewhat faltering empire that is suposed to be ruling the city. Another has bought almost all the banks in the city, giving them a near monopoly on the city's banking sector.

the next 10-15% of the people hold the next 20-25% of the city's weath. this includes sucessful independent business owners, and well paid gang employees; managers of profitable businesses, good propagandists, especially renound sorcerers and the like. a kind of upper middle class.

Below them are the petite bourguisie and the lower class. I haven't really thought about how wealth is distributed between these two groups. I think the lower classes would have more wealth in total than the lower middle class, because in this city, the latter group is relatively small. The poorer sections of societey are far from having no impact. like the citicenery of Paris before the 1850's, they can ocasionally riot and barricade streets to get the leaders' attention. It's working. One of the gangs has actually begun a mass political campaingn aimed predominately at the city's lower classes. They've named themselves the Peaople's Organization, and they advocate radical and somewhat impractical reforms that smell like communisim, though they aren't really very similar at all.

Posted April 13th, 2010 by Elyador
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The poorer sections of societey are far from having no impact. like the citicenery of Paris before the 1850's, they can ocasionally riot and barricade streets to get the leaders' attention. It's working. One of the gangs has actually begun a mass political campaingn aimed predominately at the city's lower classes. They've named themselves the Peaople's Organization, and they advocate radical and somewhat impractical reforms that smell like communisim, though they aren't really very similar at all.
There's also the Resistance movement, which is starting to rapidly gain support in the lower classes of society. It's an organized group that seeks to overthrow the gangs and establish a new order. Although they are well intentioned, many of them are essentially terrorists.

Posted April 13th, 2010 by Velkas
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The poorer sections of societey are far from having no impact. like the citicenery of Paris before the 1850's, they can ocasionally riot and barricade streets to get the leaders' attention.

The Plebeians in Ancient Rome got concessions by threatening to leave the city en masse. Kind of a "general strike". Note that not all the plebeians were poor and not all the patricians were rich for at least some of the time this conflict was going on.

-------------------------------------------------------------------------------------

I thank everybody for all their responses so far.

My next question is not in response to any single post above, but:
What do you think of this distribution of wealth:
``````Richest 10% -- owns 14.8%
Second 10%  -- owns 13.5%
Third 10%   -- owns 12.2%
Fourth 10%  -- owns 11.1%
Fifth 10%   -- owns 10.1%
Sixth 10%   -- owns  9.2%
Seventh 10% -- owns  8.4%
Eighth 10%  -- owns  7.6%
Ninth 10%   -- owns  6.9%
Poorest 10% -- owns  6.3%``````

As for Adpihi, at least at a certain time in its history, I think the distribution might maybe be somthing like this:
``````Richest  1% own one-seventh
Next     2% own one-seventh
Next     4% own one-seventh
Next     7% own one-seventh
Next    14% own one-seventh
Next    25% own one-seventh
Poorest 47% own one-seventh``````
I've been thinking of the 2% as "the Rich", the 7% as "the middle class", and the 25% as "the poor". Or, the 1% are "the Senatorial class", the 2% are "the Equestrian class", the 4% are the upper-middle class, the 7% are the middle-middle class, the 14% are the lower-middle class, the 25% are the working class, and the 47% are the proletariat.

(Not quite the same as
``````Richest seventh owns 47%
Second  seventh owns 25%
Third   seventh owns 14%
Middle  seventh owns  7%
Fifth   seventh owns  4%
Sixth   seventh owns  2%
Poorest seventh owns  1%``````
)

Posted April 16th, 2010 by chiarizio
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What do everyone think of the following four “rules”, whether individually, or all four together, or any combination of two or three of them?

• The poorest 5/6 of the population, taken together, must own or control at least 2/3 of the society’s total property wealth, and earn at least 2/3 of the society’s total income. Equivalently; the richest 1/6 of the populace, altogether, must not own nor control more than 1/3 of society’s total property wealth, nor earn altogether more than 1/3 of society’s total income.

• The poorest 2/3 of people must own/control at least 1/2 of the society’s total property and earn at least 1/2 of the total income. Equivalently the richest 1/3 must not own/control more than 1/2 the property nor earn more than 1/2 the GNP (if I should even use that term).

• The poorest 1/2 of The people must own(or control) at least 1/3 of the property and earn at least 1/3 of the income. That is, the richest 1/2 mustn’t own/control over 2/3 the wealth nor earn more than 2/3 the income.

• The poorest 1/3 of folks must own (etc.) at least 1/6 of the total wealth and earn at least 1/6 of the total income. I.e. the richest 2/3 of people shouldn’t own over 5/6 the property nor earn over 5/6 the total income.

——————

Do you think I’ve listed these ideas in order of importance/priority/urgency from most to least? Or from least to most? Or neither?

—————
——————————————————————

For purposes of discussing the ideas in this thread — especially those in this post — how many economic classes do you think it would be best to divide the population into?
I assume the answer is between two and ten, inclusive.

Should each class contain about as many people as each other class, or not?
Or instead, should each class collectively own or earn about as much as each other class, or not?

Suppose there are five classes and we aren’t going to keep them equally numerous.
What would be a better ratio? (From wealthiest class to poorest class.)
1:4:6:4:1? Or 1:2:3:4:5? Or 1:4:9:16:25? Or 1:2:4:8:16?

With six classes, and the top 25% having 75%, we might get something like:

0.098% have 23.73%
1.465% have 39.55%
8.789% have 26.37%
26.37% have 8.789%
39.55% have 1.465%
23.73% have 0.098%

Which I think most of us would feel is pretty unequal..

————————————————————
————————————————————

Next up; How should such inequality be solved?

Guaranteed good nutrition, adequate housing, good healthcare, good education and job-training, and ways to inform jobseekers about available jobs and get them to the job sites, seem like obvious partial solutions.
OTOH restricting the reproduction of the poor and unemployed seems also “on the table”.

All of that has to be paid for; and it seems at first blush that the obvious people to foot the bills are the wealthy and affluent.

But first; what should be the highest income-tax bracket?
20%? 25%? 33.33%? 37.5%?

And how about property tax? In real life it’s a much lower rate than income tax. Should it be about a tenth the income-tax rate?

——————————

Assuming the income tax should peak at 25%, and property tax at 2.5%, I’ve come up with a scheme. I don’t know its merits. But since we’re discussing generic fictional societies, it’s probably worth a look.

First;
For anyone whose income is more than twice the median income, they must pay 12.5% of the difference as income tax. (So only something less than half the people would have to pay this tax.)
Additionally, for anyone whose income is more than the 75% centile, (that is, they earn more than is earned by 75% of individuals), they must pay 12.5% of that difference. (So only one-quarter of The people would have to pay this tax.)
So, people whose income was both in the top 25% and more than twice the median would be paying 25% of their excess income over the greater of those two figures; people whose income exceeded only one of those two figures would be paying 12.5% of their excess over the lesser figure; and no-one else would be paying income tax.

Property tax would be similar. People whose property-wealth’s value exceeded twice the median assets —— the amount that 50% of the populace owns that much or more and another 50% owns that much or less —— would pay 1.25% of the excess as property tax. So fewer than half the population would owe this tax.
Additionally, people whose assets were valued at more than an amount 75% of the population owned that much or less, but another 25% of the population owned that much or more, would pay 1.25% of the excess in property tax.
So some folks (25% of them or fewer) would be paying 2.5% of the excess over the greater limit; some would be paying 1.25% of the excess over the lesser figure; and more than half the population would owe no property tax.

— — — — —

Most of that revenue would be distributed directly to the poorer citizens.

For anyone whose income is less than 1/3 the median income, they’d receive a benefit of 7% of the shortfall.

Independently, for anyone whose income is less than half the 33.3% centile — (the amount that 1/3 of the population earns that much or less, and 2/3 of the population earns that much or more) — they’ll receive 7% of that shortfall.

And finally, for anyone whose income is less than the 20% centile (the amount which 80% of the population earns that much or more, while 20% earns that much or less), they’ll receive 7% of that shortfall.

So some people (at most 20%, likely(?) fewer) will be receiving 21% of the shortfall below the lowest of those three figures. Probably at most 1/3 of the people will get 14% of the shortfall below the middle figure; and fewer than 1/2 the population will get 7% of their shortfall below the highest figure.

I may be mistaken, but I estimate that all of the property tax revenue and at least 4/25 of the income tax revenue, will be available for defense, infrastructure, healthcare, education, law-enforcement, and other necessary public services.

And I think that might work. It wouldn’t “penalize success” in my opinion ; and it wouldn’t be burdensome to the affluent and wealthy, or at least I expect not. And it would guarantee that the least affluent people would not fall too far behind the middle class.

Most people wouldn’t be taxed. Most wouldn’t get welfare payments either. I’m not sure the majority wouldn’t do one or the other, though. I’m not even sure that those who do neither would outnumber each of the other two groups. But I hope they would. Can anyone answer?

—————

Is that one viable technique for trying to rein in income inequality and/or wealth inequality? It depends somewhat on the notion that people who are down on their luck at the moment, are their own best judges about what they need to spend their money on, if they could only get some.

Please criticize and/or improve, or just creatively suggest alternatives without necessarily saying which alternative is better.

Remember this is for general-purpose fictional societies.
Or, you could make it for one of your conworlds or concultures. Or someone else’s.

• Posted June 5th, 2018 by chiarizio
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I have no idea what it would be for Saltha.
Is there a good rule of thumb formula for figuring it out?
Saltha is a preindustrial society, so I imagine it's pretty unequal.
Though as a society while they are much more capitalistic sort of than communistic (no really large mechanism for redistribution of wealth, though there are some assistance through taxes), there's nothing that outright intends to go in the opposite direction either (laws that intentionally pads the pockets of the rich).

Posted June 7th, 2018 by Foolster41
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It’s usually something like:
90% of the wealth is owned by 10% of the people (rather less equal than modern US)
Or
80% of wealth is owned by 20% of people (rather more equitable than modern US)
Or
70% of wealth is owned by 30% of people (a good deal more equal than modern US)

You can figure out a finer classification by assuming each class’s wealth is distributed among themselves in the same way total wealth is distributed among all the classes.

I think for some purposes at least some economo-sociologists would report on the rich 5th, the 2nd fifth, the middle 5th, the 4th fifth, and the poor 5th. You could assume each fifth owned a certain multiple of what the next lower fifth owns; and that multiple is constant from one fifth to another.

For instance; maybe:
The top 5th owns 16/31 of the total wealth;
The 2nd fifth owns 8/31 of the total wealth;
The middle 5th owns 4/31 of the total wealth;
The 4th fifth owns 2/31 of the total wealth;
And the poorest 5th owns 1/31 of the total wealth.

So the richest fifth average about 16 times as wealthy as the poorest fifth.

To me that seems rather severely unequal; yet it’s much less severe than the modern US. It gives the top 20% ownership of around 52% of everything; but in real life US right now they actually own about 88% of everything.

I haven’t figured out how to keep all the classes’s sizes constant at 20% and calculate what fraction of the national total wealth each one owns by just knowing how much the richest fifth owns, by assuming each class owns the same fraction of how much the next higher class owns. Right now my formula would require solving a 4th-degree equation, which I don’t know how to do (although I do know a method exists).

A similar problem would be; assume each of five classes owns 20% of the total wealth; and there is some constant multiplier such that each class contains that multiplier times as many citizens as the next higher class.

For example:
The richest 1/31 of the people own 20% of the total wealth;
The next 2/31 of the people also own 20% of the wealth;
Then the next 4/31 of the people own another 20% of the wealth;
And the next 8/31 of the people own another 20% of the wealth;
Finally the remaining 16/31 of the people own the remaining 20% of the wealth.

There may be some purposes for which some socio-economists would prefer that way of classifying the populace.

But you see that about the richest 3.2% of the population have about 20% of the wealth, while about the poorest 52% have to share about 20% of the wealth. The richest class average about 16 times as much wealth as the poorest class; and the poorest class are (just barely) more than half the total population.

It’s much easier to decide by what multiple each class will be wealthier than the next lower class, and/or by what multiple each class will outnumber the next higher class, and figure out the result, than it is to start from the result you want, and figure out what those parameters must be.

However, the Pareto distribution (a.k.a. the log normal distribution) has been well-studied, starting with Pareto himself, so I’m sure somewhere someone has published a solution to this problem. I just don’t know how to get my hands on it.

———

Suppose you wanted each class to own 3/2 times as much property, or earn 3/2 as much income, as the next lower class; and you also wanted each class to have 4/3 times as many people as the next higher class.

And suppose you want five classes.

Divide the wealth into shares of 81 + 54 + 36 + 24 + 16 (totaling 211 shares);
And divide population into shares of 81 + 108 + 144 + 192 + 256 (totaling 781 shares).

Now say:

81/781 of the people have 81/211 of the wealth,
108/781 of the people have 54/211 of the wealth,
144/781 of the people have 36/211 of the wealth,
192/781 of the people have 24/211 of the wealth, and
256/781 of the people have 16/211 of the wealth.

Calculate those fractions as percentages, and you have something scientific-looking.

But for what you’re asking for, it might be more realistic to have something like this:
0.01% of the people have 90% of the wealth,
0.09% of the people have 9% of the wealth,
0.9% of the people have 0.9% of the wealth,
9% of the people have 0.09% of the wealth, and
90% of the people have 0.01% of the wealth.

If I’m figuring right (and maybe I’m not):
The wealthiest tranch will be about 9000 times as wealthy, on the average, as the middle tranch (the median); and in their turn the median tranch will average about 9000 times as much per capita as the poorest tranch.
So the wealthy few will average about 81 million times as much wealth per head as the impoverished many.

————————————

What did you think of my wealth-redistribution scheme?

in my opinion it would not come close to correcting an imbalance such as actually exists IRL, even after many generations.. But it would, I’m guessing, slow down the runaway growth of the income-inequality gap.

To actually stop the gap growing, and even shrink it, would require aggressive and extensive evening of the playing field for everyone from conception to adulthood, in terms of safety, security, sanitation, nutrition, housing, water, healthcare, and education; tapering off after adulthood (except a bit longer after adulthood for education), but continuing if and as and for whom needed, for the rest of their careers, in (I assume) lessening amounts.

What say you?

Is there any chance anyone in any of your concultures would try for anything like that?

—————

It seems, from the OP, that if a population thinks the richest 20% owns not more than 65% of everything, they’ll tolerate it without doing anything more dangerous than grumbling; and if they think the top fifth owns just a third of everything, they’ll actually think that’s fair!

But what will they do if/when they find out the richest 20% actually own/earn 88% of everything?
In modern America I think they’ll just want the rich to support programs for defense, policing, Justice, sanitation, water, nutrition, healthcare, education including job training for anyone whose job becomes obsolete; communication and news especially about what jobs need what kind of workers, where and when, and will pay how much; and help moving house to where those jobs are, or help commuting to those job sites if changing residence is not necessary. Thus, roads etc. , and air travel and water travel, will also be something they’ll want.
But if the super-rich refuse to help with those programs —— or the middle and lower classes think they’re dodging their fair share of the burden —— there’s likely to be a political upheaval (probably falling short of violence, and even short of a (nonviolent) revolution) in the US or Europe.
It’s not clear such an upheaval won’t backfire.

———

———

I’m thinking Adpihi and Reptigan will try to build in ways to keep things from getting too out-of-hand, from the beginning. I doubt there’ll ever be any guarantee these built-in safeguards will be adequate..

I can’t see a way to avoid making some of them depend (at least partly) on people’s honesty.
I also can’t see a way to avoid making some of them depend (at least partly) on people’s sense of duty.

Posted June 7th, 2018 by chiarizio
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Those rules of thumb are a good start!

I guess the problem is, I'm not sure on what economicly my world looks like like.

I imagine them packed into a small area, situated around an oasis, so I don't know if a feudal system would develop. I'm thinking maybe they don't farm at all, and only hunt. I guess knowing how people make money and generate food is probibly needed to figure out an economy.

During the time of the divided monarchy, each city was it's own city state. Then there the was a single royal lineage ruling the whole lands.

1.)The King and his family would be at the top.
2.)Wealthy families who could afford to purchase titles for privilages
3.)Not as wealthy, but somewhat well-off farmers (?). merchants, artisens and soldiers (being so isolated with no outside wars, soldiers wouldn't have quite the same influence as a state like Rome).
4.)Peasants (everyone else)

After the revolution though, the king was disposed. Probability a good deal of his wealth w as seized and distributed as well (though much of it would go to repatriations to other nations in the war). Besides taking away special privileges of titles, I don't think anything happened to the second class.

Actual population numbers would be helpful to this too, so I could know how many is .01% etc, but calculators/systems like "Medieval demographics made easy" doesn't really apply to what I'm thinking my world would be like.

Posted June 7th, 2018 by Foolster41
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If there’s no agriculture, there is no individual ownership of land. The community would own the land for hunting and gathering; Ownership would mean defending it against some other community that wanted to hunt or gather there.

Even at that stage, there would be manufacturing. Some people would make rope. Some people would make stone tools. Some people would probably weave baskets or make clay pots or tan hides for people to make clothes.

I don’t see any huge difference, for Old Stone Age people, that is the Paleolithic people, in wealth between the chiefs and the average tribesman; unless it were measured in wives or something. Even the dogs would probably be a communal property, since everyone would be equally interested in the hunt.

Once there is farming, there would be land ownership. Once animals start being domesticated, there would be a distinction between, say, people who own cows and people who don’t, or people who own horses and people who don’t. Once people start building houses, there will be differences in how big somebody’s house is, and/or how many outbuildings somebody has.

Once metallurgy starts, the biggest difference between the wealthy and the poor will probably be how many metal items, or how much metal, somebody owns.

Even at this stage, at first, everybody will know how to do every job. Specialties won’t depend on who knows how to do what; instead they will depend on who can do it better or who wants to do it or who can’t do anything else. For instance, maybe the smiths will be whoever is lame.

The first professionals will probably be the shamans.

Tertiary industries —— transportation and marketing and so on —— probably will not arrive (in the sense that someone can make a living that way) until people start trading with other groups further away.

Technically, all of primary industry (extraction of natural resources), secondary industry (manufacturing), tertiary industry (transporting and selling), and quaternary industry (government, religion, accounting, teaching, and so on), will exist from the beginning; but at first the only way anyone will make a living will be in the primary industries.

Once civilization actually starts, after the Neolithic revolution, the distribution will probably be something like: 90% of people will make their living in primary industries; 9% of people will make their living in secondary industries; 0.9% of people will make their living in tertiary industries; and 0.1% of people will make their living in a quaternary industries.

This doesn’t necessarily say anything about how wealth will be distributed.

The industrial revolution will put much more emphasis on the secondary industries.

Later developments will cause a big increase in the tertiary industries (as happened IRL between the Great Depression and the “Ad Age” of the 1950s) Later yet, there will be an upsurge in the relative importance of the quaternary industries (as happened here IRL in the Cyber Revolution between the 1970s and the 2000s). I don’t know whether or what point they will outshine the secondary industries. It seems that just recently, after the Cyber Revolution was well underway, the manufacturing industries of the US have finally and permanently taken a back seat to the tertiary and quaternary industries.

Posted June 8th, 2018 by chiarizio
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With buggy WiFi buggy autocorrect is damn buggy.

Posted June 8th, 2018 by chiarizio
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