This article overstates how similar the distributions are across countries. E varies well beyond the 2-3 range he claims. I also note that directed polymer models are hardly the only way one can get a Pareto-Levy distribution. Quite a lot of stochastic processes will generate one. This is a puff piece for these particular physicists. I would note more generally that the new "econophysics" movement is full of a lot of people who don't know any economics and think they are "rebuilding economics from the ground up," when all they are doing is exhibiting their ignorance of the economics literature. I could go on about this at some length, but will resist the temptation.
Again, just because Pareto distributions are widespread does not mean that there is nothing anybody can do about the distribution of wealth or income. These distributions vary quite enormously in their coefficients from country to country, a point already made on this list. http://cob.jmu.edu/rosserjb
Barkley Rosser -----Original Message----- From: McNally, David J. (LNG-MBC) <David.J.McNally at bender.com> To: 'lbo-talk at lists.panix.com' <lbo-talk at lists.panix.com> Date: Thursday, August 24, 2000 6:11 PM Subject: Directed Polymers and the Distribution of Wealth
>These physicists seem to have figured out that we're stuck with small
>numbers of people getting all the wealth.
>WHY do rich people have all the money? This may
>sound like the world's silliest question, but it's
>not. In every society, most of the wealth falls into
>the hands of a minority. People often write this
>off as a fact of life--something we can do nothing
>about--but economists have always struggled to
>explain why the wealthy take such a big slice of
>If Jean-Philippe Bouchaud and Marc Mézard are
>right, it is more than a fact of life: it's a law of
>nature. These two scientists have discovered a
>link between the physics of materials and the
>movements of money, a link that explains why
>wealth is distributed in much the same way in all
>modern economies. Their theory holds out a scrap
>of hope to the poor of the world: there may be
>some surprising ways to make society a bit more
>equal. And it promises a new fundamental science
>of money. Economic theory is about to grow up.