How Come 1% Control 40% of the Nation’s Wealth?

Posted on 10/30/2011. Filed under: Uncategorized | Tags: , , |

The accumulation of great wealth is mostly luck according to a mathematical model developed by the University of Minnesota and published in the peer-reviewed journal PLoS ONE. Joseph Farigione, leading author of the paper found the results of the research quite surprising.

According to the paper, one in nine Americans are entrepreneurs and by the inexorable effect of chance and chance alone, a small proportion of entrepreneurs come to possess a disportionate portion of the  total wealth and once they are ahead with exponentially growing capital, they tend to stay ahead. If this tendency is left unchecked, the total wealth of the nation will eventually be accumulated by a few and the result is a permanent plutocracy.

The cause and the results are comparable to a poker game where if the stakes are everything each player possesses, one player ends up with everything. It’s the luck of the draw, not the skill or greater effort by the winner.

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