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£?
I
payment; they have then to be mixecpith distributions of the
41 the JpK/vVw? ' ifT" £*>1^
Obtained - in practice the Pareto coefficient - in tjie
parameters
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. /