Economic Conditions
The first condition is an unequal distribution in the first place. Without this there is nothing for the new wealth to 'condense' onto. J. P. Bouchaud & M. Mezard argue that:
It is a well known fact that the individual wealth is a very broadly distributed quantity among the population. Even in developed countries, it is common that 90% of the total wealth is owned by only 5% of the population.They say that the distribution of wealth throughout the population is closely described by a Pareto-tails function, which decay as a power-law in wealth. (See also: Distribution of wealth and Economic inequality).
The second condition is that a small initial inequality must, over time, widen into a larger inequality. This is an example of positive feedback in an economic system. A team from Jagiellonian University produced statistical model economies showing that wealth condensation can occur whether or not total wealth is growing (if it is not, this implies that the poor could become poorer).
Read more about this topic: Wealth Concentration
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