Wealth Inequality and How to Change it | Jan Tobochnik | TEDxKalamazooCollege

Dr. Tobochnik uses his decades-spanning expertise in computer simulations to present a simple model that shows how wealth inequality is intrinsic to economic activity. He further tweaks the models to demonstrate various mechanisms that can effectively reduce wealth inequality.

Jan is a distinguished professor of natural science at Kalamazoo College and has worked in the Physics and Computer Science program since 1985. He received his bachelor's degree at Amherst College and received his PhD in Physics from Cornell University.

He has co-authored multiple undergraduate textbooks, including Statistical and Thermal Physics with Computer Applications (2010), and An Introduction to Computer Simulation Methods: Applications to Physical Systems (2007). Past editor of the American Journal of Physics, fellow of the American Physical Society since 1999. At Kalamazoo College, his primary research interests are in condensed matter physics.

[shanem]

This needs to be presented at the Main TED Condference.

[Macrocompassion]

The law locks up the man or woman
Who steals the goose from off the common
But leaves the greater villain loose
Who steals the common from off the goose.

The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine.

The poor and wretched don’t escape
If they conspire the law to break;
This must be so but they endure
Those who conspire to make the law.

The law locks up the man or woman
Who steals the goose from off the common
And geese will still a common lack
Till they go and steal it back.

[TheOblivionMemeGuy]

Lol the graph looks just like amazon sitting on all their cash.

[TribeWars]

The economy is not a zero sum game and exchange only happens if there is a mutual benefit in doing so. The core assumptions on this model are complete bunk.

[orbit]

no mention of credit in this presenation. taxes arent the only way to distribute wealth.

[alfredofloyd]

household income inequality is misleading

[hud]

Quite getting all your tenured friends together to talk about what could be done, and take some of that money you made talking and creating absolutely nothing and give it to the people who have been supporting you with food water and shelter.

[efalken]

A physicist decides to do economics!  Unsurprisingly, he didn't check that the assumptions made any sense. In his simulations, people trade randomly, there is no tradeoff between consumption and savings or labor and leisure, no nexus between savings and investment, no differential ability, externalities, nothing. He finds in such a system, you get all the money going to one guy, so you might as well tax him on wealth. 

If aggregate wealth is exogenous and market transactions are random muggings, you should really move to a nice socialist country, which would clearly dominate Western neoliberal democracies, with their markets taking up 60% or so of market activity. There are several, and I'm sure they need physicists.

[roylangston]

Sorry, Jan, but your model is absurd, unrelated to economic reality, and of no informational value. You missed the key facts:

1. There is no production in your model. Production increases total wealth.

2. People trade voluntarily because BOTH sides believe they profit.

3. Inequality is natural because people are all different, not because exchange is random.

4. Extreme inequality is caused not by production and consensual exchange, but by privilege: legal entitlements to benefit from the uncompensated abrogation of others' rights. Privileges such as land titles, IP monopolies, bank licenses, broadcast spectrum allocations, mineral rights, etc. all increase inequality. The super-duper uber-rich are almost 100% owners of such privileges, which enable them to take most of what is produced without contributing commensurately (or in many cases, at all) to production.

5. Piketty was proved wrong. Matthew Rognlie of MIT proved that the excessive returns to what Piketty erroneously calls "capital" were in fact entirely accounted for by the return to housing -- i.e., land (land appreciates, buildings depreciate). In a simple capitalist economy, landowners are legally entitled to take everything from everyone else, because of the operation of two economic laws: the Law of Rent and the Henry George Theorem. Our modern capitalist system just diverts some of that flow of wealth from landowners to the owners of the other privileges listed above.

Clear?

[Macrocompassion]

The simulations are based on an incorrect models. The right model is described below. Now wealth might be defined to include land values and if so then there is a lot of wealth in the land but not all of it. By taxing land values instead of all of the wealth, the advantages which this speaker describes is made even greater because there is a tendency for the opportunities to be better shared. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!

[thetruthfulchannel]

Bill Gates created Microsoft. Jan Tobochnik created this boring presentation.

[mattavery]

Wealth/status you know about economics is wrong!

[coopsnz]

Some people work 350 days a year, the poorest don't