What Trait Affects Income the Most?

Originally published on Economics from the Top Down. If the history of science has taught us anything, it’s that we can’t trust our preconceptions about how the world works. All human societies have developed stories about their place in the cosmos. Almost without exception, these stories were wrong. True, we’ve killed many of the old […]

Continue Reading

What if the Government is Just Another Firm? (Part 2)

Originally published on Economics from the Top Down. Governments are different than firms, right? Perhaps not. In Part 1 of this series, I argued that when it comes to size, governments behave like they’re ‘just another firm’. In this post, I’m going to extend the evidence. I’ll first show you that as economies develop, governments […]

Continue Reading

Fix, ‘How the Rich Are Different: Hierarchical Power as the Basis of Income Size and Class’

ABSTRACT This paper investigates a new approach to understanding personal and functional income distribution. I propose that hierarchical power — the command of subordinates in a hierarchy — is what distinguishes the rich from the poor and capitalists from workers. Specifically, I hypothesize that individual income increases with hierarchical power, as does the share of […]

Continue Reading

The Power Ethos in the US Military

Originally published on Economics from the Top Down. In How Hierarchy Can Mediate the Returns to Education I examined the pay structure of the US military. I found that hierarchical rank is (by far) the strongest determinant of military pay. Here I want to show you that there is a regularity to military pay. In […]

Continue Reading

2020/01: Fix, ‘Economic Development and the Death of the Free Market’

ABSTRACT Free markets are, according to neoclassical economic theory, the most efficient way of organizing human activity. The claim is that individuals can benefit society by acting only in their self interest. In contrast, the evolutionary theory of multilevel selection proposes that groups must suppress the self interest of individuals. They often do so, the […]

Continue Reading

Fix, 'An Evolutionary Theory of Resource Distribution'

ABSTRACT This paper explores how the evolution of human sociality can help us understand how we distribute resources. Using ideas from sociobiology, I argue that resource distribution is marked by a tension between two levels of natural selection. At the group level, selfless behavior is advantageous. But at the individual level, selfish behavior is advantageous. […]

Continue Reading

Fix, 'Personal Income and Hierarchical Power'

ABSTRACT This article examines the relation between personal income and hierarchical power. In the context of a firm hierarchy, I define hierarchical power as the number of subordinates under an individual’s control. Using the available case-study evidence, I find that relative income within firms scales strongly with hierarchical power. I also find that hierarchical power […]

Continue Reading

The Allure of Marxism … And Why It’s a Mistake

Originally published on Economics from the Top Down. Karl Marx is probably the most important social scientist in history. But while his influence is beyond compare, Marx’s legacy is, in many ways, disastrous. Few thinkers have inspired so many people to commit crimes against humanity. Think of Stalinist gulags. Think of the Ukrainian famine of […]

Continue Reading

As it Dies, We Talk About the ‘Free Market’ More

Originally published on Economics from the Top Down. In The Growth of Hierarchy and the Death of the Free Market, I argued that economic development involves killing the free market. What was the evidence? As energy use increases, so does the relative number of managers. This growth of managers, I argued, indicates that economic development […]

Continue Reading

Fix, 'Energy and Institution Size'

ABSTRACT Why do institutions grow? Despite nearly a century of scientific effort, there remains little consensus on this topic. This paper offers a new approach that focuses on energy consumption. A systematic relation exists between institution size and energy consumption per capita: as energy consumption increases, institutions become larger. I hypothesize that this relation results […]

Continue Reading

Putting Power Back into Growth Theory

Blair Fix Abstract Neoclassical growth theory assumes that economic growth is an atomistic process in which changes in distribution play no role. Unfortunately, when this assumption is tested against real-world evidence, it is systematically violated. This paper argues that a reality-based growth theory must reject neoclassical principles in favour of a power-centered approach. Building on […]

Continue Reading