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

Income distribution: Line of Reasoning 
Eliminate all reference to demand and supply 
The basic dichotomy is that of grade £ a Stock) and payment per gradey 
u rade is 
wealth, rank in a hierarchy of offieials(seniority), 
degree of skill or specialisation, place in educational hierarchy, 
sometimes place in a hierarchy of gifts and talents. 
\ The age may better be seen as a separate dimension, or as an 
^influence on the grade. 
The grade should be mesasurable wihj^in each field, either 
directly or indirectly ( scope of operations; with managers it 
would be siye of company or organisation and rank in the organisation ), 
It might be connected with a historical element - years of training 
or education, seniority); the whole development may have a 
historical element - technological and organisational development. 
Between various fields,however,there is no direct 
comparison ( although the cost of education etc would offer 
such a possibility, this is not always fully relevant in practice 
and in the gase of gifts it does not apply ). The comparison 
is in effect based on considerations oprestige of the calling fr^ 
traditional standards^ etc, factors irrational from the economists 
point of view.It is acts of_economic policy on the side of employers 
which decide finally these standards. It follows that the 
grading remains undefined as between professions^ callings, fields, 
and the comparison is affected only on the plane of payments. 
We can therefore get distributions with respect to grade only in 
the various separate fields - managers, footballers, ski as or 
filmstars etc. From this are derived distributions with respect ^t£? 
payment; they have then to be mixecpith distributions of the 
41 the JpK/vVw? ' ifT" £*>1^ 
Obtained - in practice the Pareto coefficient - in tjie 
whole population of income earners in order to obtain the 
distribution of income for tthis population. 
Reconciliation of the pattern of distribution for the w^hole 
and for the constituent parts: The miaing has to explain that 
( that presupposes large numbers of professions etc )♦ 
Perhaps the result obtained for the wealth distribution - that 
XMX#XP&MXXX&XXXMXpMS^/i s independent of the distxxfex 
distribution ».r.t.payment) 
payment per grade (return on wealthVcan he generalised, but that 
does not seem to contribute to/che question of standards of various 
professions. /

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