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Testing the universality of the ruling class and money as power
Over the last 300 years across dozens of societies, the top 1% has always owned more than 15% of the total wealth
One hypothesis of mine is that in any society there is a ruling class composing less than 1% of the population due reasons concerning economics and genetic human differences. This “Patriciate” is supposed to be coordinated (they know each other at high rates), hold the positions of power, and get their way on policy, on top of being rich.
Another hypothesis of mine is that an accurate measure of wealth is a sufficient measure of someone’s “power.” A president isn’t very “powerful” if he can’t have an estate constructed for him in Florida if he so chooses. I call this “Credit Theory”. It’s formally based on utility function analysis and the rational individual model in economics.
Taking these two ideas together, we predict that in any society, 1) wealth will be highly concentrated in the hands of the few, and 2) that few will be a coordinated ruling class that occupies the key positions of power and 3) they get their way on government policy.
In this article I test the first hypothesis using existing data.
To see if wealth is always highly concentrated across societies, we just have to sample societies and measure their wealth concentration. I sampled 47 p99 (percent of total wealth that the top 1% own) values across different times and places from the existing literature. It never went below 15%.
The mean differences were in between 0.01 < p < 0.05.
It would be extremely nice to have more old p99 values to see if there is a real trend of lowering p99 values. At least one paper has argued that p99 values are increasing over the long term and only decrease with catastrophes like WWII. They decreased with WWII and have been increasing since.
More data is needed to be certain how these values change with time. However, it would seem that even in communist societies, wealth is always highly concentrated (p99 > 0.15). This is consistent with Patriciate and Credit Theory.
I also correlated the 2017 values with other economic statistics. We didn't find much except for a nice relationship between the amount of wealth the top 10% own and the amount the 1% own. It relates very closely. This allows us to predict p99 values from p90 values with decent accuracy.
I am thinking about putting a bounty on more p99 or p90 values. I looked for about 2 days and am tired of it but I’m not sure if I exhausted the literature. Comment if you think this is a good idea.
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