No. of Recommendations: 1
Banksy,
You need to learn about power laws.
Income and wealth do not scale to a normal distribution,they scale according to some variant of a power law.
Raging against the fact that a certain fraction of people are inordinately wealthy based on the false assumption that wealth and income "should" scale according to a normal distribution, just shows a lack of mathematical understanding on your part.
Let's take a look at a completely different example: The stock market.
I can't remember the precise numbers but as I recall, approximately 4% of ALL publicly traded companies for the past 100 years or so accounted for ALL of the profits/dividends in the U.S. stock market. MOST companies either lose money or at best maybe average around what a Treasury bill makes. It's the very few outliers (Amazon, Google, etc.) that make HUGE profits that pull the overall average up.
That's why over the long term most folks will make the most money with the least risk by investing in broad based index funds with low fees rather than trying to do individual stock picking. Picking the winners very difficult beyond chance for the vast majority of both retail as well as professional investors, certainly over 20 years or more.
So, gains and profits and dividends in the stock market do NOT follow a normal distribution.
Is that "unfair"? Should a highly successful company like Google or Apple be forced to distribute their "excess profits" to the less successful companies at the end of each year?
Why? How would it make any sense to do that?
