ABSTRACT What is the unit of analysis in economics? The prevailing orthodoxy in mainstream economic theory is that the individual is the ‘ultimate’ unit of analysis. The implicit goal of mainstream economics is to root macro-level social structure in the micro-level actions of individuals. But there is a simple problem with this approach: our knowledge … Read More
ABSTRACT What explains the power-law distribution of top incomes? This paper tests the hypothesis that it is firm hierarchy that creates the power-law income distribution tail. Using the available case-study evidence on firm hierarchy, I create the first large-scale simulation of the hierarchical structure of the US private sector. Although not tuned to do so, … Read More
Based on worldly experience, most people would agree that firms are hierarchically organized, and that pay tends to increase as one moves up the hierarchy. But how this hierarchical structure affects income distribution has not been widely studied. To remedy this situation, this paper presents a new model of income distribution that explores the effects … Read More
Due in no small part to the work of Thomas Piketty, the empirical study of income inequality has flourished in the last decade. But this plethora of new data has not led to a corresponding theoretical revolution. Why? The problem, I believe, is an unwillingness to question and test the basic assumptions on which current … Read More
What accounts for the growth of US top income inequality? This paper proposes a hierarchical redistribution hypothesis. The idea is that US firms have systematically redistributed income to the top of the corporate hierarchy. I test this hypothesis using a large scale hierarchy model of the US private sector. My method is to vary the … Read More
This article discusses the aggregation problem and its implications for ecological economics. The aggregation problem consists of a simple dilemma: when adding heterogeneous phenomena together, the observer must choose the unit of analysis. The dilemma is that this choice affects the resulting measurement. This means that aggregate measurements are dependent on one’s goals, and on … Read More
Blair Fix, whose publications are available on this site, was interviewed by Post-Scarcity Anarchism. The interview covers his research on energy use and the relationship between hierarchy and personal income. Worth the listen!
This paper proposes a new ‘power theory’ of personal income distribution. Contrary to the standard assumption that income is proportional to productivity, I hypothesize that income is most strongly determined by social power, as indicated by one’s position within an institutional hierarchy. While many theorists have proposed a connection between personal income and power, this paper is the … Read More