The Mathematics of Inequality | Tufts Now
Using a mathematical model devised to mimic a simplified version of the free market, he [Bruce Boghosian] and colleagues are finding that, without redistribution, wealth becomes increasingly more concentrated, and inequality grows until almost all assets are held by an extremely small percent of people.
“Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair,” he said. “Our model, which is able to explain the form of the actual wealth distribution with remarkable accuracy, also shows that free markets cannot be stable without redistribution mechanisms. The reality is precisely the opposite of what so-called ‘market fundamentalists’ would have us believe.”
Boghosian was first intrigued by this question when he spent four years living in Armenia, starting in 2010, as president of the American University of Armenia. With an unfettered free market after the fall of Soviet rule, he saw Armenia increasingly become a country with a very small number of rich people, and a great number of poor people, he said.