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7

I can only speculate on what Mill meant, but it seems to me that This is mostly a figure of speech. People sometimes say things like "I have no money, but I am wealthy in other ways", meaning they have something they would not trade for money, i.e. monetary wealth. If there is a distinction, it is in the concept of ownership. Air is not wealth ...


7

tl;dr: In the hypothetical you set in the body of your question redistribution cannot help the poor. However, this is not because redistribution could not significantly raise the welfare of the poor but rather because in your question 'the rich' actually don't have any resources to share with the rest. In fact, in your hypothetical example's set up, what you ...


6

First we need to discuss what wealth is. Is it just the amassment of valubles? In the 16th-18th century, rulers thought so. This notion is called mercantilism. This idea was rejected by Adam Smith in book IV of The Wealth of Nations. The current meaning of wealth is not the amount you own, but rather how much you can consume (sustainably). Formally, the ...


6

Wealth cap that would confiscate and redistribute wealth above certain limit is in an essence just different term for wealth tax (as opposed to situations where there would be just a ban on having more wealth which would be proper cap). Consequently, to see whether such policy is optimal one has to look in literature on wealth taxes. A wealth cap that takes ...


4

Scrooge McDuck likes swimming in money, which is why he accumulates a lot of it without any intention of ever spending it. If you think bringing in Scrooge McDuck is far-fetched and irrelevant, you are right. People do not generally accumulate wealth with no intention of ever spending it. But suppose there were such people and, to make things concrete, ...


4

No, the idea of wealth as something to be created did not originate in the United States. It was part of the mercantilist approach to national economic policy that was widely adopted in Europe in the 16th to 18th centuries. Mercantilism involved a range of policies, many of which were designed to increase the wealth of one country at the expense of others ...


4

Robot taxation is a bit like corporate income taxation. Like corporations, robots don't pay taxes, people pay taxes. In the words of Herb Stein: I remember that in addressing the issue in the 1980s, the late Herb Stein said that it's as if people think that if the government imposed a tax on cows, the tax would be paid by the cows. Are Taxes on Corporations ...


4

Globally, there is Lakner and Milanovik (2015)'s elephant graph: Hellebrandt and Mauro (2015) Thus, the two previous distributions look like bimodal log-normal distributions. or CDFs, as in MacAskill's book Doing Good Better Did not find something strictly related to wages. For most of people, income may be a good proxy of wages.


4

With my very limited knowledge of development economics: $\left(\frac{x_m}{x}\right)^\alpha$ represents the proportion of the population that has an income larger or equal to $x$ where $x\geq x_m>0$ and $x_m$ is the minimum income amount. Example 1: Suppose $\alpha\rightarrow 1$ and the minimum income in the economy is $50,000$. We may ask the ...


4

There could be some complicated models where high inequality could have effect on efficiency - the research is inconclusive (or to be more precise almost non existent) on the matter. However, in Public Economics, depending on the selected welfare function (ralwsian, utilitarian, charitable conservative/libertarian etc.), inequality matters for optimal ...


4

The Pareto distribution was derived based on the observation of Vilfredo Pareto that in Italy $80\%$ share of land belonged to $20\%$ of the country’s population, and he showed this held for many other countries as well (see Pareto Manual of political economy - the book is still being reprinted). Consequently, based on this empirical observation it was ...


3

Both distributions are often modelled log-normal, with a substantial number of zeros. A pareto distribution is also sometimes used (Piketty & Saez (2012), p.32) for modelling the distribution of top incomes. Wealth distributions are also in general far more skewed than wage (or income) distributions.


3

First, let us make a distinction between the functional distribution of income, related to how payment goes to factors of production, i.e, labour and capital, via wages and rents, and the personal distribution of income, which refers to how such factor payments are distributed across individuals or households. After commenting about this, we can start to ...


3

While the owners of a successful business will generally experience an exponential growth compared to their employees, there are some factors to consider: I find it unrealistic for any business to maintain a growth rate of 100% over many years. (As per the example) You can only sell twice as much if you can find twice as many buyers. As a business grows, it ...


3

Re: "You could say this is 'creating' money" - no you couldn't. This would be conflating money and wealth. Wealth can be created without new money being created - indeed wealth was created before money even existed. Conversely money can be created without creating wealth. So they are entirely separate things. A crude analogy: wealth is to money as apples are ...


3

The argument is correct Social Mobility and Income Inequality are simply two distinct phenomenons. Mobility is arguably the more complex one, and there are many different ways to define it. As an example, absolute mobility refers to someone earning more income in absolute terms (\$ per year), while relative mobility refers to someone earning more in ...


3

The short answer is that money is not the same wealth. You yourself probably have less money than the value of all the stuff you own. When the economy grows the total amount of wealth grows. (This is usually also accompanied by growth of money, but that is a separate matter.)


3

I think the big unknown here is how much they'll start to dissimulate and/or offshore their (new) wealth. According to one paper: A recent study by Brülhart et al. (2017) gives support to the plausible assumption that the effect of net wealth taxes on reported wealth is the more pronounced the more integrated the regions involved are. According to the ...


3

there actually were some bananas in communist countries. There was just shortage of bananas and other products as well such as toilet paper etc. As this article from Financial Times shows, there actually were some bananas in East Germany. Near the queue, locals were doling out used toys and bananas (the West Germans believed the East Germans didn’t ...


2

The reference is World Bank (2006). You can see the detail of the methodology in Appendix 1, and their estimates of intangible wealth in Appendix 2. There are other methodologies to measure intangible wealth (e.g. here and here). Alternatively, there are many ways to compute natural and physical capital, which will give different results to the one given ...


2

The gold will be free. (price 0 not anymore rare). banks and others institutions will found others stuff for having reserve. ( platinum, silver, grains, maybe one day water ).


2

Too much inequality is probably still bad even in a simple model. Too much equality is probably not good either. A balance has to be found. Let's say every enterprise consisting of production of goods/services, middlemen, etc. distributes 99% of its profits to that one individual. Then the consumer is paying a price that reflects that and its effectively ...


2

This statistic shows the Gini coefficient, an index for measuring income distribution, for U.S. households from 1990 to 2016. A Gini coefficient of zero expresses perfect equality, where all would have the same income,a Gini coefficient of one expresses maximal inequality among values. In 2016, the Gini coefficient for household income was 0,48. ...


2

The title of this question currently is "How is Money Created?" This question does not appear to reflect the intent of the question, I think it should be "How are profits created?" "Money" has a technical meaning in economics, and the usage in the question does not reflect that technical meaning. (There are other questions on banking and reserves creation on ...


2

It is "stupid" only to the extent that it doesn't take into account the socio-economic and political realities. It appears the government tries to make the plan acceptable by giving to everybody, rich and poor, the same nominal amount of money. So it seems this is not "in favor of the poor against the rich" so why would the rich people react against it? ...


2

The main problem is that wealth does not equal cash. Those ten rich people probably have most of their wealth in real estate and stocks. Imagine all you own is a Lamborghini, then the government prints a lot of money, does that impact you? Depending on the situation the money printing may be progressive or regressive. And the cost are high: There will not ...


2

I do not believe that your suggested definitions will hold up. Since this is a forum for questions about economics, I do not see the point of proposing a new definition here. Who is going to see it? What you call “income generating wealth” is captured by “wealth” in its standard usages. However, what you exclude (such as bank deposits) will be included in “...


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