Following up on my Wealth Condensation post from last month, Chris Douglas has an interesting column up today titled Why the Rich Get Richer that I recommend checking out. Douglas provides a fairly clear and commonsense hypothetical situation that does a good job demonstrating how you can be unduly disadvantaged against competitors who already control a large amount of existing capital -- even though you may far outclass those competitors in intelligence, skill, work ethic and talent.
As a result, those who already own a great deal of an economy's wealth tend to accrue even greater and greater amounts of wealth over time -- a positive feedback cycle, with all the attendant horrors such cycles bring to any dynamic system.
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