What is freedom?

Normal and Lognormal Distributions of Income and Wealth



A normal distribution of incomes has a bell shape. Real economic growth may be faster in such economies because people generally buy into the growth process. Competition in normal economies tends to be benign and leads to higher overall incomes without distortion of the overall incomes distribution. There are few normal economies, but we are under the illusion that they are the actual norm!

People have normal income distribution illusion not seeing that they are relatively worse off than they think they are.

A lognormal incomes distribution is not so bell shaped and tends to reflect economic growth arising from economies of scale, inflation, monopolization, restrictive practices, unfair competition, hoarding, black market activity, poor overall education, disasters, wars, goose stepping and comradery in societal organization, and so on!

Most people live in communities where the lognormal distribution of incomes prevails and they are not aware of how much of of skew in the distribution against them actually exists. This is relative incomes or relative wealth illusion. That is, not seeing the poor distribution when it is staring them in the face. They might even deny it's prevalence.

Some lognormal tendency arises out of competition if the distribution of supports for competition are already badly distributed. The log normal has in fact become normal because economists have their own illusions of not seeing bad or unfair competive conditions that are staring them in the face. They deny they are bad, that they exist or both!

Listen! You are in a bad income distribution situation if you think like a foot ball fan, goose step, or seek comrade. These are not normal behaviours but the consequence if your group fed illusions! Step outside of them and see yourself as an individual who is being skrewed by a biased mentality of the herd animal.

Raise your sights to that of an active liberated individual. Liberty, equality and fraternity are not normal. Fraternity is not comradery but respect for others! Equality is eqality of opportunity...thoroughly enforced and not the illusion of opportunity, and liberty is being a self sufficient individual and not a codependent member of a semi- feudal society!

Wither the Middle Class

Growth, Democracy and the Middle Class






Economic growth if not distributed according to the normal dustribution leads to a persistent social syndrome which is the decline of the middle class and the birth of the goose stepping and comradery classes.

Too fast nominal economic growth leads to a lognormal distribution of incomes and depoverishment of the middle class. In it's worse cases of extremely rapid nominal income growth the distribution of incomes is a very highly skewed lognormal distrution with almost every one in the base of low incomes and a very few in the top tail.

How does an economy remain normal instead of lognormal in it's distribution of incomes? Easy answer!! To create a normal income distribution one has to have a normal economic generator of incomes.

Thus one has to avoid several generators of the lognormal growth pattern in nominal incomes and wealth.

The main one is inflation in sectors of long term investment, the so called capital goods sectors such as housing, automobiles, land, plant and machinery, and even education and skilled individuals.

Second in importance is overall inflation, which generally can be contained by limiting money supply growth rates.

A third is monopolies. These tend to destroy a normal distribution of incomes. They are usually based on technical economies of scale, but can arise from patents, monosony or monopolizing protections of government, government organizations, unrestricted uncompetitive practices, acquisitions and mergers financed through credit.

Such distortions as listed above are inherited from and promote modern forms of feudelism based on lognormal distributions of the benefits of economic growth. They predispose societies towards instability and unnecessary or excessively rapid evolutionary economic changes that lead to boot stepping or comradery mentalities.