The ratios are not the same. The proportion of wealth owned by the top 5% (and especially the top 1%) in the US has increased quite sharply over the past several decades. When I started teaching, the top 1% owned about 25% of the wealth. Today it is closer to 40%. I think Doug can give a more precise time series on that one, although I think the proportion owned by the top 1% may have slipped slightly recently. I remember seeing something about this in a fairly recent lbo....
To the extent that there is a universal law, it may arise from probability. Once someone is ahead, it is easy for them to stay ahead, or get ahead further. Takes money to make money, etc. And hard to get out of that bottom layer.
I would note that this aspect of it applies even in socialist societies, where wealth may not be monetary but may consist of access to goods granted to members of the nomenklatura. If you are high up in the hierarchy, it is easier to get still higher up. Kim Jong Il lives much better than most North Koreans as does his inner circle. And it is hard to get into that inner circle, but once one is there, well.... Same for Mao and his inner circle in the PRC, even in the days when the PRC may have had the world's most equal distribution of income, gini coefficient down around 16 or so (and Mao was denouncing Kim Il Sung as a "fat revisionist").
The difference thus is not in whether one has a Pareto distribution or not, but in how flat (or steep) it is, that is, how equal (or unequal) the distribution is. Underlying function is the same, but the exponents are different.
There really are and have been big differences between capitalist and socialist economies in income distribution and these differences do (or have) shown up in the data, whether gini coefficients, or decile ratios, or Atkinson indexes or.... The most equal distribution of income in the world today is almost certainly in Slovakia, a formerly socialist state, that has managed to retain its high degree of equality, in contrast to some of the other formerly socialist states like Russia or Ukraine or Georgia. And, there are some capitalist states that have managed to have fairly high degrees of equality, notably the Scandinavian social democracies. One big difference between them and the socialist states is that they have more unequal distributions of wealth.
I am not aware that Pareto ever did any actual empirical estimates of these things, although I stand to be corrected. He dreamed up the function, but did not estimate it. Also, his theory of "circulating elites" did not say that there was only one group always on top, but (at least) two competing groups that would trade off, kind of like the Repugs and Demagogues, with both always a part of the more general elite, but alternating as to who is getting the very best shares of the pie.
As for what's up? Just getting ready for a new semester after a long cross-country trip and still trying to finish a book..... Barkley Rosser -----Original Message----- From: Charles Brown <CharlesB at CNCL.ci.detroit.mi.us> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Friday, August 18, 2000 3:18 PM Subject: Re: what are gini coefficients?
>Barkley,
>
>Hello prof. . What's up , doc ?
>
>>>> rosserjb at jmu.edu 08/18/00 02:29PM >>>
>CB,
> No, no, no! There are very big differences in the
>degree of income inequality around the world. Brazil
>(and South Africa, not on Branko's list) really are much
>more unequal than Slovakia. Russia (and Georgia)
>have become much more unequal than they used to be.
>Everybody knows this and these facts do show up in the
>data, despite some disagreements about details.
>
>_______
>
>CB: When you say "very big differences" , what is the size of the
neighborhood of the range of these differences relative to universe of
potential distributions of wealth ? Is there are larger picture in which
these differences seem small in comparison with an overall consistent
concentration of wealth ?
>
>________
> Again, the Pareto curve discussion says that there is
>a similarity to the shape or pattern of inequality everywhere.
>
>_______
>
>CB: Isn't this similarity potentially an empirical reflection of somekind
of law of capitalist development ? Sounds like a kind of law of
monopolization, concentration in discrete segments or strata of wealth. The
variation in the specific shapes of capitalism around the world might even
explain some.. no let me stop. too unempiricist there.
>
>What countries did Pareto use ?
>
>Anyway, what if we just stick with the U.S. for a moment. How consistent is
the Pareto or 80-20 or Gini ratio for the U.S. for the last 100 years ?
Seems I am always hearing reports that , somehow, remarkably, 5% at the top
own the same disproportionately higher amount than 5% of the whole as in
1900. I take it as an axiom that 5% at the top own more than 5%, but for the
ratios to remain the same is a thinglike fact, suggests a precision which is
natural science-like, a law in the scientific not legal sense ( although
state statutes might contribute to its consistency)
>_______________
>
>
>But, that similarity can fit very different degrees of inequality.
>Is the second richest person 99% as rich as the first or only
>10% as rich? Either of those are consistent with a Pareto
>type distribution, but each implies a very different pattern
>of inequality.
>
>__________
>
>CB: We would be talking about an abstract law which would fit a concrete
array of different situations, a unity in diversity.
>
>
>
>
>-----Original Message-----
>From: Charles Brown <CharlesB at CNCL.ci.detroit.mi.us>
>To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com>
>Date: Friday, August 18, 2000 11:00 AM
>Subject: Re: what are gini coefficients?
>
>
>>The thing that struck me about the Gini curves on the LBO website example
>is that they were so close together. Then there is this discussion around
>here that Pareto or somebody and others have demonstrated that the income
>distribution/dispersion/inequality is and has been very close over a the
>long run ( or is that a joke ?).
>>
>>It would seem like the interesting thing about income distribution is that
>it doesn't change, suggesting none other than a scientific law at work.
>>
>>CB
>>>>> dhenwood at panix.com 08/17/00 07:15PM >>>
>>Jim heartfield wrote:
>>
>>>At the risk of boring those in the know, I would love to know what the
>>>methodology of the gini coefficient is? Gini was the name of a soft
>>>drink here, that never quite took off (somewhere between sprite and
>>>fizzy water). I've always assumed that it was some measure of relative
>>>poverty (as opposed to absolute) but that's as much as I know.
>>
>><http://www.panix.com/~dhenwood/Gini_supplement.html>.
>>
>>>Most of all I've noticed that conventional economics is very much at
>>>home with gini coefficients,
>>
>>It's not something that troubles most economists, only income & poverty
>types.
>>
>>> in a way that it never was about old-
>>>fashioned inequality - something about mathematics makes it all sound so
>>>technical and impersonal.
>>
>>If you want that, you refer to "income dispersion" rather than
>"inequality."
>>
>>> I guess that this is a measure of
>>>distributional inequality rather than one of social power.
>>
>>Distributional inequality isn't unrelated to social power, is it?
>>
>>Doug
>>
>>
>
>