Difficult to resolve the huge wealth gap? Not really! It just take what they dont have in DC: A spine!! ” Entrepreneurs, Chance, and the Deterministic Concentration of Wealth ” plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0020728 “….We present an intentionally simplified individual-based model of wealth generation among entrepreneurs to assess the role of chance and determinism in the distribution of wealth. We demonstrate that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%. Specifically, concentration of wealth results when the rate of return on investment varies by entrepreneur and by time. This result is robust to inclusion of realities such as differing skill among entrepreneurs. The most likely overall growth rate of the economy decreases as businesses become less diverse, suggesting that high concentrations of wealth may adversely affect a country’s economic growth. We show that a tax on large inherited fortunes, applied to a small portion of the most fortunate in the population, can efficiently arrest the concentration of wealth at intermediate levels.”
Posted on: Fri, 31 Jan 2014 05:22:23 +0000