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Network logic finally plot the results on a graph. You would find, as Pareto did, many individuals at the poorer end of the scale and progressively fewer at the wealthy end. This is hardly surprising. But Pareto discovered that the numbers dwindle in a very special way: towards the wealthy end, each time you double the amount of wealth, the number of people falls by a constant factor. Big deal? It is. Mathematically, a ‘Pareto distribution’ of this form has a notable characteristic, as it implies that a small fraction of the wealthiest people always possesses a lion’s share of a country’s riches. It could be the case that the bulk of humanity in the middle of distribution was in possession of most of the wealth. But it isn’t so. In the United States something like 80 per cent of the wealth is held by only 20 per cent of the people, and the numbers are similar in Chile, Bolivia, Japan, South Africa or the nations of Western Europe. It might be 10 per cent owning 90 per cent, 5 per cent owning 85 per cent, or 3 per cent owning 96 per cent, but in all cases, wealth seems to migrate naturally into the hands of the few. Indeed, although good data is sadly lacking, studies in the mid-1970s based on interviews with Soviet emigrants even suggested that wealth inequality in the communist Soviet Union was then comparable to that of the UK. 2 An underlying order? What causes this striking regularity across nations? Does it simply reflect the natural distribution of human talent? Or, is there some devilish conspiracy among the rich? Not surprisingly, given the strong emotions stirred by matters of wealth and its disparity, economists in the past have, as Galbraith noted, flocked to such questions. Today, these questions again seem quite timely, as, if anything, the degree of inequity seems to be growing. In the United States, according to economist Paul Krugman: The standard of living of the poorest 10 percent of American families is significantly lower today than it was a generation ago. Families in the middle are, at best, slightly better off. Only the wealthiest 20 percent of Americans have achieved income 106 Demos
The science of inequality growth anything like the rates nearly everyone experienced between the 1940s and early 1970s. Meanwhile, the income of families high in the distribution has risen dramatically with something like a doubling of real incomes of the top 1 percent. 3 A similar story could be told for the United Kingdom and many other countries, especially in Eastern Europe, over the past two decades. Something similar is taking place on the global stage. Globalisation is frequently touted – especially by those with vested economic interests such as multinational corporations and investment banks – as a process that will inevitably help the poor of the world. To be sure, greater technological and economic integration on a global scale certainly ought to have the potential to do so. Yet as Nobel Prizewinning economist and former chief economist of the World Bank Joseph Stiglitz notes in his recent Globalization and its Discontents: A growing divide between the haves and the have-nots has left increasing numbers in the Third World in dire poverty, living on less than a dollar a day. Despite repeated promises of poverty reduction made over the last decade of the twentieth century, the actual number of people living in poverty has actually increased by almost 100 million. This occurred at the same time that total world income actually increased by an average of 2.5 per cent annually. 4 What is the origin of these distinct but seemingly related trends? Economists can, of course, offer a great many relevant observations. Stiglitz condemns the international economic policies of the Western nations and the International Monetary Fund as reflecting the needs of special financial and commercial interests regardless of the damage inflicted on the developing nations. One can point also to tax cuts for the very wealthy (a general theme of the 1980s and 1990s, especially in the US and UK), to changes in international markets, the influence of new communication technologies and so on. These are all legitimate and insightful points. Demos 107
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Network Logic Who governs in an int
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About Demos Demos is a greenhouse f
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Open access. Some rights reserved.
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Network logic 10. Your friendship n
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We are some way from being able to
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Network logic urban communities, re
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Network logic a weblog called DearR
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Network logic networks permit, to c
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Network logic we approach such regu
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Network logic Power The changing na
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One of the most important insights
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Network logic Boundaries of identit
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Network logic beliefs, explanations
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Network logic verbal forms of mutua
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Network logic framework for the und
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3. Towards a theory of government K
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Towards a theory of government in f
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Towards a theory of government What
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Toward the theory of government spe
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Towards a theory of government Look
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Towards a theory of government enge
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Seeing the connectedness of things
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Network logic up the political agen
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Network logic against risk: protect
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12. Networks and neighbourhoods the
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Networks and neighbourhoods coordin
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Networks and neighbourhoods where e
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Networks and neighbourhoods Figure
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Networks and neighbourhoods in any
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Delegating judgement and individual
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Network logic culmination of the cl
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Network logic many sectors we categ
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14. The information utility John Ta
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The information utility task will b
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The information utility instrumenta
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The information utility Goods and s
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The information utility other publi
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Smart mobs aren’t a ‘thing’ t
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Network logic ‘People Power’ pe
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Network logic Netwar is an emerging
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Network logic another Lovegety owne
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Network logic performance of partic
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Network logic technology becomes we
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Social movements have always had an
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Network logic experience of diverse
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Network logic Use of network techno
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Network logic The challenges of net
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Network logic domain. Increasing us
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Power does not reside in institutio
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Network logic technological paradig
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Network logic recombinant power, pr
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