Source Jim Devine
Date 05/12/14/20:34

December 11, 2005/New York TIMES

Victor Yakovenko, a physicist at the University of Maryland, happens
to think that current patterns of economic inequality are as natural,
and unalterable, as the properties of air molecules in your kitchen.

He is a self-described "econophysicist." Econophysics, the use of
tools from physics to study markets and similar matters, isn't new,
but the subfield devoted to analyzing how the economic pie is split
acquired new legitimacy in March when the Saha Institute of Nuclear
Physics, in Calcutta, held an international conference on wealth

Econophysicists point out that incomes and wealth behave suspiciously
like atoms. In the United States, for example, beneath the 97th
percentile (roughly $150,000), the dispersion of income fits a common
distribution pattern known as "exponential" distribution. Exponential
distribution happens to be the distribution pattern of the energy of
atoms in gases that are at thermal equilibrium; it's a pattern that
many closed, random systems gravitate toward. As for the wealthiest 3
percent, their incomes follow what's called a "power law": there is a
very long tail in the distribution of data. (Consider the huge gap
between a lawyer making $200,000 and Bill Gates.)

Other developed nations seem to display this two-tiered economic
system as well, with the demarcation lines differing only slightly.

To an econophysicist, the exponential distribution of incomes is no
coincidence: it suggests that the wealth of most Americans is itself
in a kind of thermal equilibrium. To change it, "you will have to
fight entropy," Yakovenko says. That people aren't mindless atoms and
that governments try limited wealth redistribution doesn't really
matter, he adds: large, complex systems have their own statistical
logic that trumps individual, and state, decisions. In March,
Yakovenko told New Scientist that "short of getting Stalin," efforts
to make more than superficial dents in inequality would fail. Recent
increases in inequality in the United States, he adds, stem from the
rising fortunes of the top 3 percent; there has been little change in
the rest of the distribution.

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