Monday, October 16, 2017

Some links


Hat tip Lambert Strether at Naked Capitalism.

Bruce Boghosian runs the numbers and shows that without redistribution of wealth, the rich get richer and everyone else gets poorer…
Using a mathematical model devised to mimic a simplified version of the free market, he and colleagues are finding that, without redistribution, wealth becomes increasingly more concentrated, and inequality grows until almost all assets are held by an extremely small percent of people.
“Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair,” he said. “Our model, which is able to explain the form of the actual wealth distribution with remarkable accuracy, also shows that free markets cannot be stable without redistribution mechanisms. The reality is precisely the opposite of what so-called ‘market fundamentalists’ would have us believe.”...
Inevitably, some people ask Boghosian about the political implications of his research, but he tries to stay focused on the math. Still, when pressed, he said intervention is necessary.
“If the natural mechanisms of a market economy are such that what seems fair isn’t, and leads to concentration of wealth in the absence of intervention,” he said, “if that’s true, then by the same ethical calculus that outlaws pyramid schemes and justifies consumer protection laws, we need to protect people from the natural inclinations of free-market economics.”
Worth reading in full.

Tufts Now
The Mathematics of Inequality 
Taylor McNeil

Being poor results in a downward spiral. Good reason to adopt a job guarantee that matches individuals to work.

The Atlantic
The Barriers Stopping Poor People From Moving to Better Jobs
Alana Semuels

This article focuses on the decline of research, which is important, but it is only one of the issues involving the push to "save money" in education.

The Atlantic
The Decline of the Midwest's Public Universities Threatens to Wreck Its Most Vibrant Economies
Jon Marcus



3 comments:

Matthew Franko said...

Neil posted this up some months ago....

Add the ability for a cohort to save and see how skewed it gets...

Tom Hickey said...

Add the ability for a cohort to save and see how skewed it gets...

Add the ability for a cohort to save = increase incomes of that cohort.

This is the issue, isn't it.

Matt Franko said...

No I think that the redistribution is random and equal from all entities...

The problem is that some entities can go to zero and others accumulate large amounts and once ones that go to zero are established they can never can never get much above zero ...

And these are just the random results, imo if you added a bias among some entities to save, maybe 10% to 20% of the income it would accelerate the process towards those savers... iow everybody normally would spend $1 every iteration but you could have 10% of entities only spend 80 cents and save 20 cents... see what happens...

This is the Matthew Effect that Neil pointed out...

https://en.m.wikipedia.org/wiki/Matthew_effect

Warren (rote): "if somebody saves then we can't buy all of our output..." this creates the unemployment in the proceeding fiscal interval...

This is why studying what is currently going on in the EZ would be important.... they are in effect impugning the ability to save over there by CB buying the govt bonds... non-govt can't net save as the depositors asset is the depository's liability so that nets to zero...