Full text: Income Distribution: Line of Reasoning (Fassung 2)

a he new men aloe ±icz tend to have wealth - simply because their 
largo in come enable then to save a lot. However, to r wealth is 
not e s urce of their income and ist will in genral bo 
snail as comparedwith the wealth they would have to have in 
or or to get fron it alsone the income they actually avo. 
In order to take account of the e relations we should have 
o wcrS out a process in wealth and incone, with allthe 
feed-backs between the two. 
One night- purely formally- calculate a fictici us capital 
resulting fron the application of the return rate real wealth 
to the incone f ho mana or. Then formally all income would 
bo shown as return fwealth. lie proporti n of real w alth in 
ho total would be the lower the newer the men would he. 
II.Simon gives an exolanaii n f the earnings of managers 
w ich i s based on the hi erarchy measured by scale f 
o er tions, and on the relati n between tho grade and the 
payment? there are again two exponential on tho face .f it 
geonetr cal)listribu;i ns involved. Tho theory night bo 
g noral.se to aoply to stars, specialists. :ro is one 
fa it in tIt is not a no el of a Pr cess, rosooabligi this 
the the ri.os of Roy etc. To he satisfactory, the hiora chy 
f oyncats would have to be shown to evolve fron a historical 
recess which c m i ues. 
See .bimon, Hie c>®.' ensati n ox Executives. Socio ©try 1)57* 
based on v ircal i veotigations by fioboz*to,- 
A general theory ol executive con sensation based m 
statistically tented propositions. Qu.J.E.1956 
Bases of a historic a explana in would that tho 
scale f cr-o.r ti ns i creases in time, or rather that there s 
a diffusi n of the schale of operations in the course f ti e. 
hi f:.oi n vo* tho space f income :.yno ts. 
Reason for the iiff uoion is si:.ply the pro imp cor lexity of 
the noon ’ ic system. 
1q£ ro tho • orn ovrl aments we have already he* iclal ly tho 
sane pattern i ' t o classic ! di isi n o ' l.aour which 
i creased the mars et f the producer (craftsmen) ar .l ere- ed 
i: one rifferentials. 
The payments h : erarchy is full f irra i nal factors 
and bo explained by soci logical factors, as <in rightly argues. 
(Tni of the engineers in Austria !

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