Re: Wealth Distribution

From: Mike Lorrey (
Date: Wed Jul 25 2001 - 11:31:10 MDT

Carlos Gonzalia wrote:
> >From: "Lee Corbin" <>
> >
> >Carlos wrote
> >
> >> But the statistics I've read for Argentina show a continued
> >> increase in income concentration on behalf of the 10% or so
> >> of the population that forms the upper class.
> >
> >Can you also claim that the increase in *concentration* among
> >the upper clase takes place without the other classes actually
> >becoming better off (in real terms) too?
> I think I can. According to our National Institute of Statistics
> and Census 'Permanent Home Inquiry 99', in the Great Buenos Aires
> zone (the richest part of the country, and home to about 30%
> of the total population), the upper class experienced an income
> increase of 5%, while the middle and lower classes experienced
> an income reduction of 10% during that year. Gini coefficients
> for income distribution has gone from 0.365 to 0.439 since 1980.
> The poorest 20 percent of the population has seen their mass
> income reduce from 4.6% ot total to 3.9% of total since 1989.
> I can't find the rise for the richest 20 percent (I think it
> was around 45-50% of the total mass income at 1989), but
> the Inquiry 99 shows them getting the 55.2% of the total mass
> income at that moment. These figures are mentioned in a recent
> paper by Laura Tedesco in the Bulletin of Latin American Research
> 19, pp. 527-545.

Carlos, comparing their share of the whole is not meaningful. First, you
need to state what the cost of living was and now is, then compare the
change in the mean for the lowest 20% against that versus the richest

> >I claim that an *increase* in the *concentration* of top-class
> >wealth is a positive sign, because (I also claim) it is so
> >historically well-correlated with general advances in society
> >and richer economies.
> No dispute there. The upper classes can get as rich as they want
> or are able to, it will certainly help the country unless they don't
> re-invest their earnings (as they are culturally prone to do, to the
> happiness of bankers in Switzerland and the Caribbean havens).

Tax havens become attractive when local taxation is seen as overly

> On the other hand I think there is nothing possitive when it happens
> at the same time (due to, if one gets paranoid?) the lower classes not
> getting any of the benefits for the privatizations and the pseudo-free
> markets so created. In this case, the situation seems to be even
> worse, as the lower classes have seen their income reduced in very
> real terms.

THis can't be determined unless you compare actual income against the
standard of living.

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