Rich 1% rulers. The Economics of Superstars

The Rich 1% will continue to get richer. Most trends support further enrichment, as engineered since the 1970s deregulation, globalization, securitization, etc. Rich people around the world are uniting to put the screws to the poor 99% in all countries. The rich control the politicians, laws, and military. They practice legal, regulatory arbitrage to find the best location to do business and increase control. The poor 99% are increasingly sick, poorly bred, poorly educated, indoctrinated so they cannot figure out what is wrong or how to fix the current system. They often vote against their own interests because of disinformation from the TV, Radio, movies, internet, etc. I don’t see this setup changing any time in the foreseeable future.

Ideally income and wealth should be distributed in a normal bell curve such as we see in IQ, health and ability to sing, act, talk, dance play ball, etc. It is fair to give greater pay to those with greater performance. However, the free market seems to greatly overpay those with the greater ability. This anomaly was addressed by University of Chicago Professor Rosen 30 years ago. Quite a prophetic article attached. Not an easy read but rewarding to help understand current trends leading to the future. An interesting quote by Alfred Marshall in the conclusion. I cut this paper out of the journal and filed it.

(I have long been impressed with how much trouble students and people have with simple Present Value exponential growth mathematics, normal bell curve calculations, regression, correlation, etc. Why they run into problems with debt, investments, economics, etc.)
Stanford University and its Hoover Institution. At the time of his death, Rosen was Bergman Distinguished Service Professor in Economics at the University of Chicago and president of the American Economic Association. Rosen received his B.S. in economics from Purdue University in 1960, his A.M. and Ph.D. in economics from the University of Chicago in 1962 and 1966 respectively. He was chair of the Economics department at the University of Chicago and colleague to an impressive range of celebrated economists including friend Gary S. Becker. He was elected to the National Academy of Sciences in 1997.

“Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition”, The Journal of Political Economy 82 (1), 1974: 34–55


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