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We are the 90%

October 7, 2011

I know the Occupy Wall Street protestors want to be as inclusive as possible and that’s why they’ve adopted the slogan “We are the 99%”.  There’s even a Facebook page by that name.  There’s some merit to framing the debate this way but it’s not fully reflective of how power’s concentrated in the United States.  A very tiny elite certainly do own the country and monopolize the rewards of industrial society.  But it’s a bit more than 1%.

(Data obtained from this highly recommended site but presented differently.)

While the most extraordinary concentration’s at the very top, those in the next tranche down are quite obviously members in very good standing within the ownership class.  If we back out the wealth held by the top 1%, then the bottom 99% is left with just 57% of the original pie.  How is this vastly diminished sum distributed among the “we are the 99%”?  Well, a whopping 51% of it goes to the top 4%, and just 12% to the bottom 81%.

The inequality of wealth data clearly illustrate the serf-like nature of US society in which massive majorities own nothing and have little or no security.  If the fight is against inequality, as it so obviously should be, then a far more accurate slogan is “We are the 90%” or for maximum inclusiveness, “We are the 95%”.

From → Wealth & Poverty

4 Comments
  1. Clonal Antibody permalink

    Jim,

    There is a very big difference between the very top 1% and the 99%. This is clearly shown in published papers in the econophysics of wealth accumulation. The top 1% relies upon rent seeking for wealth increases, while for the bottom 99%, wealth is a much more random phenomenon, reliant to a much greater degree on work, consumption and zero sum games. The bottom 99%’s wealth and income is determined more or less by a Boltzmann-Gibbs law, while the top 1%, relying upon rent seeking, is determined by the Pareto distribution.

    This comes primarily from two very human tendencies – a) A human inclination to engage in zero sum games (otherwise known as gambling.) and the other b) A desire to get a free lunch, or “not having to get my forehead wet” also known as “let your money work for you” – in other words rent seeking behavior, once a certain amount of wealth has been accumulated.

    This is exacerbated by a third tendency, which is a desire to leave behind some of our wealth to our progeny.

    These three forces together lead to the impoverishment of large segments of society.

    The New Scientist article “Why it is hard to share the wealth” in conjunction with “Now that’s power” makes for an interesting juxtaposition. The implication is that the richest 1% of the population’s income is described by Pareto’s Law — meaning that if you’re born into that kind of money, you’ll only get richer, no matter what you do. And the poorest 99% of the population’s income is explained by Boltzman’s Law — describing random movement of gases in an enclosed area, and meaning that even if you’ve struggled up to the leftend of the Pareto curve, you’re far more likely to get poorer than to make it to the 1% elite. So much for the American Dream.

    The above is not to say that free markets mean wealth equality for the bottom 99%, but rather, that they are in the “dog eat dog” world governed by the Boltzmann-Gibbs laws.

    There are quite a few papers on wealth inequality – An analytic treatment of the Gibbs-Pareto behavior in wealth distribution, or there was the 2005 conference in India on the subject? – The Econophysics of Wealth Distributions

    Another paper presented at the same conference – Lagrange Principle and the Distribution of Wealth said

    The Lagrange principle L = f + λ g → maximum! is used to maximize a function f(x) under a constraint g(x). Economists regard f(x) = U as a rational production function, which has to be maximized under the constraint of prices g(x). In physics f(x) = ln P is regarded as entropy of a stochastic system, which has to be maximized under constraint of energy g(x). In the discussion of wealth distribution it may be demonstrated that both aspects will apply. The stochastic aspect of physics leads to a Boltzmann distribution of wealth, which applies to the majority of the less affluent population. The rational approach of economics leads to a Pareto distribution, which applies to the minority of the super rich. The boundary corresponds to an economic phase transition similar to the liquid − gas transition in physical systems.

  2. Clonal Antibody,

    I don’t necessarily disagree with your opening statement “There is a very big difference between the very top 1% and the 99%.” But there’s nothing magic about the 1% cutoff. I think the wealth distribution data shows pretty clearly that we have a sharp divide in this country between those who own and those who don’t. And that divide, looking at the graph in the post, seems pretty clearly to lie in the top 5%, not 1%. In fact, the bottom 99% is just about as mal-distributed as the whole, with over 50% of wealth going to just the top 4%. Who are the top 4%? Many, probably most, are in professions that have established their very own rent seeking institutions that limit competition. I don’t think it makes sense to think this very privileged ownership tier is part of a political coalition that is fighting against inequality.

    One last point: I think it’s important to keep in mind that the political battle isn’t against individuals who happen to be wealthy but against the system that promotes such concentration.

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