For sometime now I’ve been working on the idea that wealth is being redistributed all the time, just like energy is. One of the most fundamental laws of the universe is entropy. Basically entropy says that energy will move from hot to cold, lots of energy to little of energy, till both are equal. I’m thinking that wealth works the same, wealth wants to move from high to low concentration.
In any system, if energy is allowed to keep concentrating in one part of the system the energy level will eventually reach a level of concentration that breaks the system so that the energy is released. Another participle is that no system or transferring energy is 100% efficient, there is always some energy that gets converted into what is known in engineering as ‘wast heat’. I think that these same principles have corollaries in economics when dealing with wealth.
So what does this mean? First it means that wealth will be redistributed, that is, it will move. That when wealth is moved, there will be some wastage, that 100% of the wealth moving will not reach the destination. That wealth seeks to be absolutely equally distributed across the economy. Finally when wealth is absolutely equally distributed the system will stop.
Gotcha! I bet some of you thought I was going to justify a Socialist view. Well, I’m not, nor am I going to justify a Capitalist system, nor any other Socioeconomic theory. What I’m attempting to do is look at true nature of wealth and how it behaves. Once we know that we can then move on to the questions of what kind of Socioeconomic system is the best, and how do we build it.