Its above me too at times Mutt.
basically, Pareto explained some time ago that there is a basic formula that explains wealth distribution in society. 20% of the people generally control 80% of the wealth. the number may not be exact i.e. 15/85 etc, but that in general it is fairly accurate.
Various mathematicians have tested this model much in the same way that Colin did by simply writing a program for example that takes a sum of money, say $10,000,000 and gives it away at random to say 10,000 individuals, 1$ at a time. The results usually follow the 80/20 rule as Pareto predicts.
Wealth distribution, in contrary to RawAlex's romantic notions about "how things should be" can be explained just as easily by natural laws of numeric distribution as it can by "greed" and "selfishness" and any other colorful description such liberal minded people can think of.
RawAlex goes further to suggest that the "rich get richer, poor get poorer" at (i like this choice of words) "at an alarming rate" because poor people cannot get poorer. He ignores the basic premise of wealth distribution being discussed which is that there is a total amount of wealth and a total number of people and that wealth is distributed over that total number of people in some way. He refers to removing "exceptional cases" of wealth and poverty from the formula from the equation, which is totally irrelevent to the conversation. i am sure that Bill Gates is exceptionally wealthy... i dont know what "exceptionally poor" means or what formula explains the relationship between the two that would make it ok to remove those "groups" or even identify each as such... and of course, he caps it off with a typically colorful liberal remark "the poor cant get poorer, but the rich can certainly get richer". This of course, is ignoring the fact that the rich cannot get richer in a vacuum but generally through the creation of jobs, businesses, factories etc etc etc, which still affects everyone else on the curve in a more or less proportionate way. For example, Bill Gates is super rich. Bill Gates did not print his own money. He got rich by creating Microsoft, by creating 50,000 plus high paying jobs and approximately 2000 millionaires working directly for Microsoft and thousands of spin off companies started by ex-employees. Rich people "create wealth" they dont confiscate it... just as economies "grow", so does wealth.
Colin is saying that the saying "the rich get richer, poor get poorer" is true and is explained by simply by population growth and interest earned on wealth over that same time.
RawAlex is saying this is true because as Liberals believe, the economy is a "Zero Sum" system where for one person to gain, another must lose. Or, for me to make money, someone must lost a proportionate amount of money and it is only through my own selfishness, heartlessness and greed that i can make myself rich. Of course this completely ignores the most basic fundamentals of Macro economics and economic growth... but hey... its easier to get a rise out of people by using colorful adjectives and descriptions and emotional appeals about "fairness" than it is to simply understand the math.
Last edited by -= JR =- at Nov 16 2002, 04:01 AM
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