Re: power law distribution of capitalist income

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Fri Jun 13 2003 - 07:18:03 EDT

Ian Wright wrote:

> Hello Paul,
> Dragulescu & Yakovenko refer to IRS data for individual income in
> the USA in 1997 in a preprint of theirs ("Statistical mechanics of
> money, income and wealth: a short survey"). I think the data can
> be downloaded from They notice
> that the income PDF changes for very high incomes above
> 100k$/year to a Pareto power law (they claim that for the rest
> of the distribution the data fits an exponential law, but I think
> this may be hasty). More generally, since Pareto it's been
> recognised that a power law provides a good fit for the
> distribution of high incomes, but a poor fit for the whole range.
> My interpretation is that it is significant that the distribution of
> high incomes has a different functional form to the vast majority
> of incomes. My guess is that it corresponds to the two major forms
> of income in capitalism: wage-labour and profits.
> -Ian.
> _________________________________________________________________
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This would imply that we need more detailed and structured
simulations to see if we can get these distributions.
I have never disagregated the classes in this way,
I have only been concerned with disaggregation of
the productive sector.

Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

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