Caveat: I am not an economist, I just like playing with numbers.
Consider an economy with 3 classes of people.
Class C: 50% of the population, earning an average of $50,000 per year, and spending all of it.
Class B: 49% of the population, earning an average of $100,000 per year, spending $95,000, and investing $5,000.
Class A: 1% of the population, earning an average of $1,000,000 per year, spending $300,000, and investing $700,000.
Assuming equal rates of return, class A will receive 74% of any gain in wealth.
Take modest growth of 3.03% per year for 60 years. The total wealth W has now grown to 6W.
Even if they started with nothing, class A now has 3.7W, almost 2/3 of the total wealth.
With you so far. And, Paddington, sir?
Those figures look about right, but I'm not sure about your terminology. When you say "74% of any gain in wealth" don't you mean that they own 74% of whatever it is they all invest in?
Mark - what I mean is that whatever the 'growth in wealth' actually is, class A get 74% of it.
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