Assignment 3


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Assignment 3

  1. 1. The Matthew Principle Why the Rich Get Richer and the Poor Get Poorer Sarah Meek History 4 Dr. Arguello
  2. 2. Secular Cycles <ul><li>Meaning – making precise predictions on an above-average period or below-average period </li></ul><ul><ul><li>By recording the change of population numbers, prices and real wages, elite numbers and incomes, state finances, and sociopolitical instability </li></ul></ul><ul><ul><li>Most pervasive rhythms of history </li></ul></ul><ul><li>Affects all aspects of social life </li></ul><ul><ul><li>The phase of the secular cycle determines the trend in social and economic inequality </li></ul></ul><ul><ul><ul><li>Economic inequality has a large effect on peoples willingness to participate and cooperate </li></ul></ul></ul>
  3. 3. Sugarscape <ul><li>A computer modeling program developed by Robert Axtell and Joshua Epstein </li></ul><ul><ul><li>Developed as a model for the economy containing sugar and spice </li></ul></ul><ul><ul><li>Designed so one could control the changes effecting social and economic stratification </li></ul></ul><ul><li>Agents went around looking for these goods, saving them, and then using them </li></ul><ul><li>Founders added trade to their model </li></ul><ul><ul><li>Agents then began exchanging sugar and spices and learned how to price these items depending on their supply and demand </li></ul></ul>
  4. 4. The Rich Get Richer and the Poor Get Poorer <ul><li>Axtell and Epstein added to their model an ability to trade </li></ul><ul><li>Agents began exchanging sugar and spice </li></ul><ul><ul><li>The price was established depending on ones supply and demand for the good </li></ul></ul><ul><ul><li>As time went on, the wealthy (those who stored sugar and spice) began to distribute goods more unequally </li></ul></ul><ul><li>There were fewer rich and more poor as time progressed </li></ul>
  5. 5. <ul><li>The goal was to create a simple mathematical model, such that property can be inherited or sold and bought </li></ul><ul><li>For this to work one would have to first assume that the property is divided equally amongst children </li></ul><ul><ul><li>Different families have different # of children </li></ul></ul><ul><ul><li>More children per family means smaller wealth/land for each child </li></ul></ul><ul><ul><li>Leads to stratified society </li></ul></ul><ul><li>Secondly one would have to predict that the oldest child might inherit everything </li></ul><ul><ul><li>Introduces inequality a lot quicker </li></ul></ul>Model of Matthews Theory
  6. 6. Model of Matthews Theory Continued <ul><li>Marriage is as well an important consideration for this theory </li></ul><ul><ul><li>What happens when a man and women join their inheritance together </li></ul></ul><ul><ul><li>More likely that a wealthy man will marry a wealthy women </li></ul></ul><ul><ul><ul><li>Fast rate of inequality </li></ul></ul></ul><ul><li>Problem with Model of Matthews Theory </li></ul><ul><ul><li>Eventually it would reach an “inequality extreme” </li></ul></ul><ul><ul><ul><li>Meaning one person in time would own all the property, causing a high amount of unemployment and poverty </li></ul></ul></ul>
  7. 7. How does Wealth Inequality Translate to Income Inequality <ul><li>Land on its own does not establish an income, a person needs to do the work in order to produce food </li></ul><ul><ul><li>The richer families had the privilege of hiring poor workers </li></ul></ul><ul><ul><ul><li>If there is more land than labor force then there is inefficiency </li></ul></ul></ul><ul><ul><ul><ul><li>Labor shortage, increase in wages for workers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>If this happens the wealthy can start renting out there land to the workers, but since there is a small demand, the price of renting would be cheap </li></ul></ul></ul></ul><ul><ul><ul><li>If there is more labor force than available land </li></ul></ul></ul><ul><ul><ul><ul><li>Labor surplus, decrease in wages for workers, unemployment, high rent </li></ul></ul></ul></ul><ul><li>Overpopulation is a huge force driving inequality </li></ul>
  8. 8. Causes that Reduce Inequality <ul><li>When there is a Plague or when there is a spread of diseases, the Inequality drops </li></ul><ul><ul><li>This usually makes the population rate decrease, which causes workers to be scarce, but their income high </li></ul></ul><ul><ul><li>Lots of jobs as well </li></ul></ul><ul><ul><li>High instability means low inequality which usually effects the really rich and the really poor, but the middle class in only effected a little. </li></ul></ul><ul><li>War as well can cause the inequality to drop </li></ul><ul><ul><li>Many people go off to war leaving their work behind </li></ul></ul><ul><ul><li>Making many jobs for all </li></ul></ul><ul><ul><li>Causing those left behind to have a large pay increase </li></ul></ul>