Redistributing income through hierarchy

Blair Fix

No 2021/04, Working Papers on Capital as Power from Capital As Power - Toward a New Cosmology of Capitalism

Abstract: Although the determinants of income are complex, the results are surprisingly uniform. To a first approximation, top incomes follow a power-law distribution, and the redistribution of income corresponds to a change in the power-law exponent. Given the messiness of the struggle for resources, why is the outcome so simple? This paper explores the idea that the (re)distribution of top incomes is uniform because it is shaped by a ubiquitous feature of social life, namely hierarchy. Using a model first developed by Herbert Simon and Harold Lydall, I show that hierarchy can explain the power-law distribution of top incomes, including how income gets redistributed as the rich get richer.

Keywords: corporation; despotism; government; hierarchy; income; distribution; inequality; power (search for similar items in EconPapers)
JEL-codes: C01 E13 O47 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-hme and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/244731/1/1775639487.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:capwps:202104

Access Statistics for this paper

More papers in Working Papers on Capital as Power from Capital As Power - Toward a New Cosmology of Capitalism
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics (econstor@zbw-workspace.eu).