Distribution of Wealth
The distribution of wealth refers to how assets and resources are divided among individuals or groups within a society. It encompasses the unequal allocation of income, property, and other forms of wealth. This distribution is a key focus in economic analysis and policy-making, as it can have significant implications for social and economic stability.
7 Key excerpts on "Distribution of Wealth"
eBook - ePub- Martin Bronfenbrenner(Author)
- 2017(Publication Date)
- Routledge(Publisher)
...CHAPTER TWO Variations on the “Distribution” Theme Economics vs. Business: Income vs. Wealth 1. The distribution of income, of wealth and of such related entities as “wages” or “liquid assets,” means, in economics, its division among various social groups and classes, usually in consequence of the workings of an economic system. This usage contrasts in a confusing way with the meaning of the term distribution in business administration. There it relates to the physical process of distributing goods from their point of production to their points of consumption, and may be used synonymously with “marketing.” In these chapters, we follow the economic usage; from this viewpoint, such questions as “Does distribution cost too much?” are meaningless. It is important to distinguish between the distribution of income and that of wealth, although academic practice used “wealth” in both senses as recently as World War I, and popular practice still does so. Income is conventionally regarded as a flow of returns from human and nonhuman assets alike, while wealth is a stock of nonhuman assets (plus slaves, a human asset, where the institution of slavery survives) and an increment of wealth is a component of income. 1 The distributions of income and wealth differ widely, depending (chiefly) on the importance of “human capital” as an income-earning asset, and on the rate of return obtained as income in different societies. Comparing the United States and the United Kingdom, for example, the distribution of income, as commonly measured, is more unequal in the United States, while the Distribution of Wealth is more equal there. 2 An incomplete and superficial explanation of this disparity is the greater concentration of British wealth in residential housing and other forms of “consumer capital” whose returns, if any, are not recorded as income...
eBook - ePubInflation, Income Distribution and X-Efficiency Theory
A Study Prepared for the International Labour Office...
- Harvey Leibenstein(Author)
- 2022(Publication Date)
- Routledge(Publisher)
...16 (December), pp. 305–9; and Amartya Sen, On Economic Inequality (Oxford University Press, London, 1973), pp. 24–46. It would be useful to recapitulate an important caveat on the use of the various measures of inequality given by Weisskoff, ‘It must be emphasized that these measures of inequality and the income shares cannot be used to indicate whether the “poor are getting poorer” or the “rich are getting richer” in real terms. At best, the detailed income shares do indicate whether segments of the distribution have gained or lost relative to other segments. For example, the share of income received by the bottom 10 percent of families in a given county may fall from 6 percent to 4 percent, but the absolute level of income of those families may be doubling at the same time’ (p. 309). 3. ‘Existing theories of income distribution are of only limited value in establishing an analytical framework for comprehensive governmental action because they are somewhat narrowly focused on the functional distribution of income between labor and capital’, Hollis B. Chenery et al., Redistribution with Growth (Oxford University Press, London, 1974), p. 43. 4. There is considerable evidence that the distributon of assets is more concentrated than the distribution of incomes. According to Chenery et al., ‘Whatever the shares of labor and capital as determined in the factor markets, greater equality of personal incomes could be achieved if ownership of private capital and access to public facilities were more equally distributed’, Redistribution with Growth, p. 44. 5. Chenery et al., Redistribution with Growth, p. 23. 6. A similar point was made by Fishlow: ‘… families, while an important mechanism for redistribution of income at a moment of time, also are an important source for transmitting inequality into the future...
eBook - ePub- Harlan M. Smith(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...It does not suffice simply to say so in so many words, because it is likely to be taken as a norm unless at least a few of its difficulties are presented. And since distribution is so important to everybody, and such concepts as the ability concept tend to be tied to the marginal productivity concept, a word about such is also needed to stimulate students to think about parts of accepted ideology—not to provide a different normative answer, but to disabuse them of the notion that economics has given a definitive answer to a question that involves a variety of ethical issues. 25. More on the Distribution of Income and Wealth The marginal productivity theory of distribution deals only with the functional distribution of income by purportedly explaining the pricing of productive services in the factor of production markets. That pricings however done and explained, is only the first step in determining the income of any person, household, or family. The textbooks usually say that that income, the personal or size distribution of income, is determined by the pricing of productive services and the distribution of ownership of such productive services. And so it is. But there is no textbook explanation of the distribution of ownership of productive services, as important as that is. The reason for the omission is that there is no economic theory to explain it. Only history explains it, that is, describes its evolution. Clearly it is partly a result of the operation of an economy over time, the results cumulating. As popular ideas have it, not incorrectly, it takes money to make money, so to some extent inequality tends to grow. “Shirtsleeves to shirtsleeves in three generations,” another popular saying, indicates that excess stupidity can crop up in any family line at times. It can happen, but even moderate prudence would enable the wealthy to become wealthier if their gambles were confined to half their wealth while the rest was invested safely at compound interest...
- Peter Flora(Author)
- 2017(Publication Date)
- Routledge(Publisher)
...Part Four Economic Equality: The Distribution of Incomes Chapter 6 The Historical Development of Income Inequality in Western Europe and the United States Franz Kraus I. Problems in Examining Income Inequality A. Defining Income Distribution Today material welfare is much less dependent on market incomes or rewards for labor and property in the production process than in earlier times. Direct and indirect taxes, transfer payments, and the provision of public services—all consequences of the growth of the welfare state—have clearly weakened the importance of wages and assets in determining economic status. To analyze income inequality with respect to the development of the welfare state, we must distinguish between a producer inequality that simply refers to market incomes, and a consumer inequality that reflects the final distribution of income after taxes, transfer payments and the consumption of public goods have been taken into account. To assess income inequality from a comparative and historical perspective, we must ask how these two fundamental aspects of economic inequality differ from each other, how they vary between countries, and how they have changed over time. Furthermore, we want to examine the relationships between producer inequality and consumer inequality: who finances, and to what extent, public expenditures, and who benefits, and to what extent, from transfer payments and public goods? Because of the shortcomings of available sources, particularly for previous periods, quantitative assessment of the extent men benefit from public goods is most difficult. 1 Similarly it is difficult to estimate the impact of public expenditures on income inequality through changes in factor demand and supply, such as the extension of public education or the civil service...
- John Stuart Mill(Author)
- 2017(Publication Date)
- Madison & Adams Press(Publisher)
...1. Individual Property and its opponents Table of Contents The laws and conditions of the Production of Wealth partake of the character of physical truths. There is nothing optional or arbitrary in them. It is not so with the Distribution of Wealth. That is a matter of human institution solely. The things once there, mankind, individually or collectively, can do with them as they like. They can place them at the disposal of whomsoever they please, and on whatever terms. The Distribution of Wealth depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries; and might be still more different, if mankind so chose. We have here to consider, not the causes, but the consequences, of the rules according to which wealth may be distributed. Those, at least, are as little arbitrary, and have as much the character of physical laws, as the laws of production. We proceed, then, to the consideration of the different modes of distributing the produce of land and labor, which have been adopted in practice, or may be conceived in theory. Among these, our attention is first claimed by that primary and fundamental institution, on which, unless in some exceptional and very limited cases, the economical arrangements of society have always rested, though in its secondary features it has varied, and is liable to vary. I mean, of course, the institution of individual property. Private property, as an institution, did not owe its origin to any of those considerations of utility which plead for the maintenance of it when established. Enough is known of rude ages, both from history and from analogous states of society in our own time, to show that tribunals (which always precede laws) were originally established, not to determine rights, but to repress violence and terminate quarrels...
eBook - ePubInequality and Stratification
Race, Class, and Gender
- Robert A. Rothman(Author)
- 2015(Publication Date)
- Routledge(Publisher)
...In one sense the income gap can be seen as a working out of the American Dream, with wealth going to those who work the hardest—wealth is a just reward for effort and talent. And yet, most Americans express some reservations about the current distribution of money and wealth. A full 62 percent of Americans feel that money and wealth “should be more evenly distributed among a larger percentage of the people” (Gallup Poll, 1996). The rest feel that current economic patterns are “fair” or have no opinion. Forty-nine percent of Americans in one poll went so far as to agree that the income gap was morally wrong (Smiley, 2000). As would be expected, opinions on the fairness of the current system are shaped by class, race, and gender. Women are somewhat less likely to endorse the fairness of the current situation, as are minorities. Judgments of fairness are directly related to the size of income, with one-half of the people in families earning more than $40,000 seeing the distribution of financial resources as fair, with the percentages declining to only 16 percent of those in the $10,000 or less income bracket. It is not surprising that perceptions of the fairness of the stratification system are defined by the size of the rewards people earn from the existing system. Key Concepts annual income chronic poverty deinstitutionalization earnings gap homelessness living wage movement net worth poverty poverty thresholds working poor Suggested Reading EileenApplebaum, AnnetteBernhardt, and Richard J.Murnane, eds. Low-Wage America. New York: Russell Sage, 2003. The authors in this collection show how technology and globalization have prompted employers to cut wages in order to compete, although they also provide examples of firms that offer decent pay and benefits. DennyBraun. The Rich Get Richer: The Rise of Income Inequality in the United States and the World, 2nd ed. Chicago: Nelson-Hall, 1997...
eBook - ePub- Richard P. F. Holt, Steven Pressman(Authors)
- 2001(Publication Date)
- Routledge(Publisher)
...To make such a critique persuasive requires a clear theoretical restatement, going beyond the usual appeal to institutions, politics, and history. But it also requires a persuasive empirical substantiation, one capable of accounting for the movement of inequality through time and in different national settings. Post Keynesians need to show that the personal distribution of income is linked to the flow of economic profits as a share of national income, and therefore to the spending decisions of capitalists and their macroeconomic ramifications. They need to show this, not only for the US, but for a wide range of countries. The Post Keynesian theory of income distribution is not specific to the US. For this we need more and better data, particularly better measures of economic inequality through time, so that the relationship between inequality and macroeconomic phenomena can be tracked. A macroeconomic theory of distribution requires macroeconomic measures of distribution. Fortunately, this condition can be met. The requisite information is available in the historical record, over long time spans and for many countries. Until recently, however, its potential for this purpose has rarely been recognized and almost never exploited (see Galbraith and Berner, 2001). Toward a macroeconomic theory of personal income distribution Consider a simple setting: an economy with one production factor (labor), and firms with identical rising marginal production costs, but distinct markets. One firm faces a competitive, perfectly elastic demand curve and prices at marginal cost. Another firm faces a downward-sloping demand curve and sets output so that marginal revenue equals marginal cost, with price taken from the corresponding point on the demand function [as first stipulated by Joan Robinson (1933)]...
