I was trying to explain something to someone over dinner, and it seems interesting enough to be worth tossing up here for comment and exploration.
The question was why the growing inequality today?
And I had an idea. Basically, wealth has been unequally distributed since it’s been measured (see Pareto).
So within any economy, we have a power law distribution.
What used to be, however, was that there wasn’t much of a ‘global’ or even ‘national’ economy – there were local economies. These were effectively ‘cells’ in the larger economic organism, and most of the activity stayed within the cell.
The implication of this is a geographic field of small power law curves of wealth, with local car dealers, real estate developers, bankers, etc. at the top of the curve.
So the people at the top of these curves were prosperous, but not in the Gulfstream private jet league.
There were national and global networks with their own power laws, but they represented a relatively small component of the economy as a whole.
Got the picture?
Now dissolve the cells. And in the residual soup, build a new power curve, and make almost everyone part of that distribution.
Looks a lot like what we’re living with now, doesn’t it?
Now as an interesting question, in the past gilded ages, could we see similar transitions?