Econophysics -- dumb question

Doug Henwood dhenwood at
Tue Aug 29 08:03:48 PDT 2000

Gordon Fitch wrote:

>If the native or raw ability to acquire wealth is distributed
>randomly, we ought to see a bell curve of abilities, whether
>of individuals or groups. However, in a dynamic system, where
>the ability to acquire wealth is positively enhanced by wealth
>already acquired, it is a truism that them that has, gets, so
>that we can expect any ability to acquire wealth to be quickly
>amplified by its own effects unless the effect of existing
>wealth on wealth acquisition is vanishingly small, which does
>not seem to be the case. Again, this effect would apply to
>groups (families, communities, classes) as well as individuals
>and would grow exponentially over time.
>If all this is so, then in any example of a system of this
>type, we should soon see a very small number of individuals or
>groups having almost all the wealth, while the remainder were
>entirely or almost entirely deprived of it. This is what Marx
>seems to forsee in the _Manifesto_. But polemic to the contrary
>notwithstanding, this is not what we observe; if it were so,
>most people would now be starving to death, because food is
>a form of wealth and the ability to acquire it is another.

For one, capitalism is a dynamic system, as you say. So while inherited wealth - or one's starting social position generally - is a strong determinant of later outcomes, it's not the whole story. Fortunes are made, fortunes are lost; people do rise and fall on the social ladder. Innovation, competition, our old damned friend creative destruction guarantee that the race isn't always to the richest.


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