http://www.agrfoto.com/philipball/physics.php
(The page includes a few links provided by Philip Ball, author of Critical Mass, which explored the possibilities/limitations as well as the potential uses/abuses of a physics of society.)
--- Jerry Monaco <monacojerry at gmail.com> wrote:
> Does anyone have a critique of this, besides just
> general hostility?
> The link to the original paper is at the bottom.
>
>
> World's economies show similarities in economic
> inequality
> http://www.physorg.com/news95074548.html
>
> Economists who yearn for the redistribution of
> wealth in an ideal
> society are up against history. According to a
> recent study, the
> uneven distribution of wealth in a society appears
> to be a universal
> law that holds true for economies in many different
> societies, from
> ancient Egypt to modern Japan and the U.S. This
> distribution may
> reflect a simple natural law analogous to a
> 100-year-old theory
> describing the distribution of energy in a gas.
>
> Scientists Arnab Chatterjee and Bikas Chakrabarti
> from the Saha
> Institute of Nuclear Physics, along with Sitabhra
> Sinha of the
> Institute of Mathematical Sciences, both in India,
> have analyzed a
> variety models explaining different sets of data,
> and found striking
> similarities. The results show that the poorer
> majority of the
> population follows one distribution, while a small
> proportion of the
> wealthiest people veers off in a tail following a
> power-law
> distribution, in essence reflecting how "the rich
> get richer."
>
> The studies included large sets of data from sources
> such as income
> tax returns and net values of assets in societies
> including Japan, the
> U.S., the UK, India, and nineteenth century Europe.
> The data, taken
> from a large number of recent publications by
> several groups,
> represented a variety of different economies and
> stages of
> development. Generally, the lower 90% of the
> population (in terms of
> income) followed a log-normal distribution,
> characterized by an
> initial rapid rise in population followed by a rapid
> fall as income
> increased.
>
> [World's economies show similarities in economic
> inequality]
>
>
> However, the top 2-10% of the population deviated
> from this bulk
> distribution, as scientists discovered more very
> rich people than
> would be expected using the log-normal model.
> Instead, this top tier
> followed a power law with a certain exponent called
> the Pareto
> exponent, named after Vilfredo Pareto, who first
> observed this power
> law in the 1890s.
>
> "While the distribution of the richest 10% does
> indeed follow a
> different behavior (power law) than the rest (Gibbs
> or log-normal),
> one need not assume different dynamics at work in
> the two cases,"
> Chatterjee explained to PhysOrg.com. "In fact, both
> types of
> distributions can arise from the same model. In the
> case of the random
> savings model, the agents having the highest savings
> fractions will
> have a higher probability of ending up in the
> richest 10% of the
> population, while in the random thrift model, the
> agents with higher
> thrift value generally tend to be the richest.
>
> "As an agent gets richer, a feedback effect occurs
> by which the rich
> are more likely to gain from a transaction than the
> poorer
> agents—thereby resulting in an accumulation of
> assets for the richer
> players that is manifested as a power law tail."
>
> When comparing these income and wealth distributions
> to a physical
> model called the Gibbs distribution, the scientists
> found that the
> economic model of the poorer 90% seemed to fit very
> well with this
> natural law. Proposed in the late 1800s, the Gibbs
> distribution is a
> thermodynamic model that describes the distribution
> of energy in an
> ideal gas in equilibrium.
>
> The economic model and the gas model share basic
> characteristics. As
> Chatterjee et al. explain, the asset- (e.g. money-)
> trading process
> can be viewed as a molecule scattering process—in
> both cases, assets
> or molecules are conserved (on the time scale of the
> model). Also,
> even though an individual does not see asset
> exchanges as random, the
> scientists show that, from a global level,
> exchanging assets or
> scattering molecules are indeed random processes.
>
> "As described in our paper, the Gibbs form seems to
> be a better fit
> for the data than the log-normal form (which is
> preferred by many
> economists)," Chatterjee explained. "Note, for a
> particular [savings
> factor], the resultant [distribution] only fits the
> lower 90% of the
> population. To fit the entire range, including the
> power law tail, one
> needs a suitably distributed saving propensity. In
> the thrift model,
> one obtains realistic values of the Pareto exponent
> (i.e., as seen in
> society) by assuming a distribution of the thrift
> parameter. Hence,
> both these models can explain both the features of
> the observed income
> distribution."
>
> Aside from these general models, the scientists also
> discovered some
> interesting details within their results. When
> comparing wealth (i.e.
> one's net worth) with income, they found that wealth
> is much more
> unequally distributed than income (wealth models
> always have lower
> Pareto exponents, for any society). Also, while most
> of the data for
> the models is based on individuals, data from
> companies also seemed to
> follow the same models.
>
> Even though the model shows a widespread inequality
> among citizens in
> a society, however, the scientists' findings might
> also provide
> guidance for experts trying to distribute wealth
> more evenly.
>
> "With uniform savings and large saving propensity,
> our model would
> yield a narrow peaked income distribution, which
> corresponds to a
> socialist economy," Chatterjee said. "Note that,
> here, the super-rich
> are absent, and the bulk of the population is
> described by a narrow
> most-probable income distribution, or everybody
> ending up with the
> average money in the market—a socialist's ideal
> dream."
>
> Since the richer agents demonstrate certain
> characteristics in savings
> and thrift, the scientists explain that certain
> characteristics might
> make citizens in a society "more" financially equal.
>
> "A way to exercise this would be to modify the
> saving patterns of the
> individuals, making all of them have a similar and
> large saving
> propensity, to be precise. In isolated sectors where
> such
> manipulations with savings propensities were
> possible, our predicted
> effects had indeed been seen earlier by social
> statisticians (such as
> J. Angle) and analysts (such as G. Willis and J.
> Mimkes).
>
> "In the thrift model," Chatterjee continued,
> "introducing different
>
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