Originally published on Economics from the Top Down. As social animals, humans live and die by the success of our groups. This raises a dilemma. What’s best for the group is often not what’s best for individuals within the group. If you’re surrounded by a group of trusting individuals, it’s best for you to lie […]
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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 […]
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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 […]
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Shimshon Bichler and Jonathan Nitzan Abstract According to the theory of capital as power, capitalism, like any other mode of power, is born through sabotage and lives in chains — and yet everywhere we look we see it grow and expand. What explains this apparent puzzle of ‘growth in the midst of sabotage’? The answer, […]
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Originally published on Economics from the Top Down. Income, I’ve come to believe, is shaped largely by rank within a hierarchy. If you’re at the top of a hierarchy, you’ll earn a handsome sum. But if you’re at the bottom of a hierarchy, you’ll earn a pittance. As a hard-nosed scientist, I’m always looking for […]
Continue ReadingOriginally 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 […]
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Originally published on Economics from the Top Down. In The Social Environment as a Cause in Economics I argued that human behavior has two parts: Individual variation An environment that acts on this variation To illustrate these two parts, I used the example of the peppered moth. This species comes in two colors — black […]
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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 […]
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Originally published on Economics from the Top Down. When it comes to earning income in a hierarchy, it’s not what you know that matters. It’s who you control. This was the provocative idea that I proposed in Part 2 of this series on an evolutionary theory of resource distribution. In this post, I put this […]
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Originally published on Economics from the Top Down. A 25% chance. That’s the likelihood that when I tell someone I’m searching for a job, they’ll say: Remember, Blair … to land a job, it’s not what you know that matters. It’s who you know. OK, maybe I’m exaggerating this chance. Still, it’s an open secret […]
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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. […]
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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 […]
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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 […]
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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 ReadingOriginally published on Economics from the Top Down. Do you believe in free markets? Do you think that unfettered competition is the best way to organize society? If so, this post is intended to shake your faith. No, I’m not going to argue that free markets are bad. Instead, I’m going to show you some […]
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ABSTRACT Where should we look to understand the origin of inequality? I propose an unusual window of evidence — modern societies. I hypothesize that evidence for the origin of inequality is encoded in the institutional structure of industrial societies. To test this idea, I use a model to project modern trends into the past. This […]
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According to the theory of capital as power, capitalism, like any other mode of power, is born through sabotage and lives in chains – and yet everywhere we look we see it grow and expand. What explains this apparent puzzle of ‘growth in the midst of sabotage’? The answer, we argue, begins with the very […]
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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 […]
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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 […]
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Working Paper No. 2014/02 Blair Fix, “Rethinking Profit: How Redistribution Drives Growth” Using a combination of heterodox economics and biophysical analysis, this paper investigates the relationship between economic distribution and the growth of material throughput. Empirical results show that the growth of “useful work” correlates with redistribution towards pro fit. Furthermore, increases in energy consumption are correlated […]
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