Full text: Income Distribution: Line of Reasoning (Fassung 1)

e accept a§ the general pattern of explanation the interplay of 
the two systems": grades, and payment*for grade differentials, 
the pattern which w a s outlined at the start in connection with 
Champernownes theory. his duality of grades and differentials 
is preferable to that of demand and supply which is too static 
and is bound to lead us astray. 
-*-n the case of earned income the grade would be we a lth, 
and the differential payments would be the return rates on different 
amounts of wealth. ( 
The grade here depends indirectly on time; in other cases -~tfu 
burocratiw pattern - the grade depends directly on time (promotion); 
in still other cases, the grade depends on the qquisition of knowledge 
or skill, aand therefore again on time. In many cases, however, 
the grades are provided by natural gifts , as with the film star, 
the sportsman, and probably also the manager;in all these cases 
learning^ does play a very important role,too, but we could hardly 
expect a close correlation between the time of learning and the grade here. 
Rather, it would seem thq,t there is a natural distribution of gifts 
( not merely genetically , but also ±fe*x due to the influence of the 
milieu and*^childhood influences). This distribution would, most plausibly, 
be rather skew, and that of the grades would therefore be also skew. 
We might asume that it would be exponential or geometrical § theoretical 
reasons might be found in Conng e Palm^4^ghtx e theory f)~. "f £ 
W f 1 
t* s f‘' 
^hile in the case of'^eSFEF the whole weight of the u< 
explan a tion was put on the distribution of wealth, which moreover 
had alreddy all the required qualities which needed only to be shown 
to reproduce themselves in the iy&come distribution, the weight of 
the eyplanatory procedure in these other cases is shifted entirely to 
the distribution of the payment. This is very l a rgely dependent , 
indi^rectly, on processes of economic development evolving in time. 
The information space accessible to the®w£ners of high grades gets 
larger and larger, and with it grows the payment received by that grade. 
We must now argue from the distribution of payments conditional 
on grade, via the distribution of grades, to the distribution of 
payments among persons. 
f/C^ &?.(* ■> rr~ 3 0-1 ATT

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