Talk:Wealth condensation

Cut from the article:

A number of people have pointed to American Republican tax policies as supporting this process in the United States, whereby the wealthy are excused from much of the burden of taxes, which are then paid by the middle class.

This sounds like a partisan criticism. So it should be attributed to a partisan. Say rather that Democrats and/or socialists criticize Republicans and this can go right back into the article.

It should, then, be balanced with either:

an objective statement of how much taxes wealthy and middle class pay; or,
a partisan defense of Republican tax policy; or,
both of these

--Uncle Ed 17:37, 17 Feb 2004 (UTC)

This article is incoherent. The intro apparently is referring to people with money investing it to make additional money. But the examples shown are talking about something else:

Two examples of leveraging new wealth are:

1. The process by which corporate officers are paid huge salaries and bonuses, the total compensation sometimes being as much as thirty thousand times as much as that of their lower-paid employees. Critics of the corporate system have often charged that these executives are often given raises and increasing bonuses even while their corporate charges are losing money and laying off workers.

and

2. The Republican tax policy which critics claims vastly favors the wealthy over the poor and the middle class, thus allowing the wealthy to retain more of their wealth as disposable income.

In the first case, the corporate officers are allegedly leveraging connections, but this has no direct connection to wealth. One could imagine a poor man with connections becoming wealthy by getting a cozy job with a corporation. In the second, we are talking about wealth being taken away from people, albeit in reduced quantities following a tax cut. How can this be an example of leveraging wealth by its current owners?

This article can certainly have examples, in fact it should definitely have them so as to help me understand what it's supposed to be about, but it would be good to clarify the connection between the above and the intro before returning them to the article. - Nat Kraus e 16:49, 14 May 2004 (UTC)[reply]

I completely disagree. These are examples of how additional wealth accrues to certain members of the wealthy class; so what if there are rare examples in which poor people become rich? And reduction of taxes is a relative process; a regressive tax structure is one of the predominant processes driving wealth condensation. jaknouse 17:14, 14 May 2004 (UTC)[reply]

"So what" is that there is no direct connection between becoming a CEO and being wealthy previously. Therefore, it is not an example of the process the article apparently describes. It might well be true that having money beforehand correlates with becoming a CEO, but correlation is not causation, which is to say that it is not a "process". One could easily imagine an individual from a privileged background who, because of debt, is quite poor on paper, but using his connections, becomes an executive in order to earn money.

Likewise, unless we are talking about a tax on assets, which is rare, there is no direct connection between the amount of money that you have and the taxes that you pay. Furthermore, no amount of taxation, however low, will ever cause anyone to have more money than before they were taxed. Therefore, this cannot be an example of wealth accruing to anyone. Perhaps it could be included as an example in a wealth dissipation article. Regressive taxation can theoertically increase the relative disparity in wealth (while decreasing the absolute disparity), but, again, this does not involve wealth accruing or condensing. - Nat Kraus e 11:39, 16 May 2004 (UTC)[reply]

Trickle Down Effect[edit]

Is there another way to phrase or qualify the argument against the “trickle down effect”? If you take the first sentence of the first and third, they seem to be in complete, yet angry agreement.

“The thrust of these arguments in support of free markets and the wealth disparity they create is that even if the gap between rich and poor widens, the poor themselves are actually better off than they would have been in the more equal state without free enterprise.”

“Critics of this position also point out that the total wealth of the United States is vastly higher than most other nations, and that the relatively superior standard of living of the American poor is solely due to this single disparity.”

The way I read the first paragraph, the argument for wealth condensation is that restrictions would stifle the economy, or in other words, freedom helps grow the economy. The second paragraph seems to argue that it is unfair to compare the United State’s poor to other nation’s poor, because the United State’s economy is larger. Unless there is an argument that somehow the United State’s economy is larger for reasons external to its free market economy, the two “opposing” arguments are in complete agreement.

In addition, http://www.census.gov/hhes/income/histinc/ie4.html is strong evidence against saying that the poor actually get poorer as a result of wealth condensation. I am not familiar with the arguments on wealth condensation, I have come up with some plausible arguments:

Income for the poor could be increased faster through careful regulation than market forces alone would provide
The growth in the bottom 10% percentile’s income is due to factors outside of a growing economy, or the growing economy is not the result of free enterprise
Even though free markets do increase the income of the poor, the increase in income disparity is worse than the benefit of increase income because:
- The disparity reduces class mobility
- It is inherently unjust

I have tried to explore every avenue of attack on the “trickle down effect” and therefore, I will not add them to the article, as I am sure fairly that half of the arguments will turn out to be held only by extremists or are just figments of my imagination. I would encourage those that know better than I to copy in the arguments that make sense.--Techieman 07:09, 8 Jun 2005 (UTC)

Density money map[edit]

I am looking for a map like this one, but instead of people... money density http://antwrp.gsfc.nasa.gov/apod/image/0303/peopleearth94_usda_big.gif —Preceding unsigned comment added by 24.150.231.163 (talk • contribs) 20:33, 28 july 2005 (UTC)

Intergenerational inequality[edit]

It would be nice to put something here on intergenerational inequality and wealth condensation. Talk about the process through which high amounts of wealth are transferred from one generation to the next. -- Kodemizer, december 2 2005

Rewrite trickle down[edit]

Trying to make certain parts NPOV. The "free market enthsiasts" paragraph was full of verbs like "claiming" and modifiers like "alleged" and "supposedly", while the critics paragraph uses "point out" and "is" with no modifiers. PAR 23:49, 16 July 2006 (UTC)[reply]

Absolute vs. relative wealth condensation[edit]

The article seems to confuse absolute wealth condensation (i.e., the fact that the wealthy get wealthier) with relative wealth condensation (i.e., growing wealth inequality). For instance, positive real rates of return are given as a cause of wealth condensation, but obviously they would only cause absolute wealth condensation, not relative wealth condensation (unless the rich have access to better capital markets). Also, the assertion that the average real rate of return on risk-free assets is negative should be backed up by evidence (since it is probably false). Finally, with respect to Japan: obviously Japan had negative real interest rates, considering its real exchange rate appreciated very strongly between, say, 1950 and 2000. —Preceding unsigned comment added by 190.139.224.52 (talk) 03:30, 29 August 2009 (UTC)[reply]

Biased "objections" and "defence" sections[edit]

I've removed the first two sections called "political objections to wealth condensation" and "in defence of wealth condensation". The first one gave the historical marxian view and the second gave various "free market" arguments in favour of wealth condensation. All in all, they were horribly biased and I think that if this article would benefit from a for and against section, it would be much better to rewrite them from scratch. Bob A (talk) 03:58, 13 June 2010 (UTC)[reply]

Of course they are horribly biased, but at least somewhat balanced. Taken together they provide useful information, so I have restored them. When you have finished rewriting them from scratch, please put the new version in. Until then, they are better than nothing. PAR (talk) 05:13, 13 June 2010 (UTC)[reply]

I've improved the sections a little bit, but I really don't see a need for them when economic inequality already has a well developped "perspectives" section, and I don't see how any of the arguments in this article apply to "wealth condensation" specifically. Bob A (talk) 16:19, 13 June 2010 (UTC)[reply]

Wealth condensation is one or more mechanisms by which economic inequality is produced. For both wealth condensation and economic inequality, the political attitudes towards each subject, for and against, should be included. The wealth condensation article should focus on political attitudes about the mechanisms of wealth condensation, not on attitudes about other mechanisms and economic inequality in general. That should be reserved for other articles. I agree, the two articles are kind of mixing things up. We also need to separately describe the mechanisms of wealth condensation, describe them in as neutral a way as possible, then introduce the value judgements that people have about those mechanisms, or at least the plans of action people have as a result of their value judgements. PAR (talk) 22:45, 13 June 2010 (UTC)[reply]

It seems to me that the distinction would be much more important to people for whom the distinction between equality of outcome and equality of opportunity is important. Bob A (talk) 05:10, 14 June 2010 (UTC)[reply]

Which distinction? Between wealth condensation and economic inequality, or between the different value judgements? At any rate, the problem I have is finding references which make an intellectually honest analysis of the situation rather than cherry-picking data which supports a particular value judgement, then cheerleading for a particular plan of action. I think the best we can do is present the opposing viewpoints and leave it at that. PAR (talk) 12:37, 14 June 2010 (UTC)[reply]

I meant between economic inequality and wealth condensation. Bob A (talk) 17:23, 14 June 2010 (UTC)[reply]

I think its like the distinction between air pollution and automobile use. Automobile use is one of many ways to produce air pollution. Wealth condensation is one of many ways to produce economic inequality. And I don't mean to make a value judgement about any of those things. I would think that anyone who is trying to understand how things are and how they work will be interested in the distinction between equality of opportunity and equality of outcome. People with an agenda may try to obscure the difference or exaggerate the importance of the difference in an attempt to convince others to sign up to their agenda, but Wikipedia should not be used for that purpose. I think the article should describe the mechanism of wealth condensation, and then give the opposing viewpoints and arguments on whether it is good or bad. PAR (talk) 20:04, 14 June 2010 (UTC)[reply]

Grammatical Corrections[edit]

unless the unearned income were consumed more rapidly that it was accumulated.
modified to:
unless the unearned income were consumed more rapidly than it was accumulated.

132.8.8.45 (talk) 15:30, 2 November 2010 (UTC)[reply]

Economic article with no economists[edit]

Are there any economists specializing in this area? If so please contribute here. As far as I can tell, this is essentially original research, and has most certainly not been adopted by economists.

The only two papers cited here were written by physicists, not economists. For example, "Wealth condensation in a simple model of economy" by Jean-Philippe Bouchaud, Marc Mezard (CEA-Saclay, Science et Finance and LPTENS-Paris). The problem is they are both physicists with some interest in finance. But they are not economists, seem to lack any substantial training in economics, and their paper ignores all the most important, fundamental lessons from economics. There is no gain from exchange in their model, no sense of wealth creation through arbitrage or entrepreneurship, not even a meaningful brush at investment. They only model cash movements in a completely stochastic environment, where investment returns are a (Gaussian) random draw multiplied by an agents current cash holdings. It's not even clear what "transactions" means in their paper. A more accurate term would have been stochastic transfers. There's no economic reasoning in it.

I am not an expert in agent based simulations, though. Would someone please address this? I'm sure the authors are excellent scientists, but they are way out of their field. I wouldn't trust an article on dark energy written by economists either. Plutologist (talk) 20:35, 25 September 2011 (UTC)[reply]