Personal Income and Hierarchical Power

Fix, Blair

doi:10.31235/osf.io/pb475

Cited by 9 publications

(9 citation statements)

References 19 publications

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“…There is a strong correlation. A similar correlation exists between changes in income and changes in hierarchical power [81]. In an idealized hierarchy, the total number of subordinates (blue) tends to grow exponentially with hierarchical rank (red).…”

Section: Hierarchical Power and Incomementioning

confidence: 68%

Energy, Hierarchy and the Origin of Inequality

Fix¹

2018

Preprint

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Where should we look to understand the origin of inequality? I propose an unusual window of evidence --- modern societies. I hypothesize that evidence for the origin of inequality is encoded in the institutional structure of industrial societies. To test this idea, I use a model to project modern trends into the past. This model takes the modern relation between energy, hierarchy, and inequality and creates a hindcast of the origin of inequality. The results are broadly consistent with the available evidence. The model predicts an explosion of inequality with the transition from hunter-gathering to agriculture, followed by a plateau. This finding potentially opens a new window of evidence into the origin of inequality.

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Section: Hierarchical Power and Incomementioning

confidence: 68%

Energy, Hierarchy and the Origin of Inequality

Fix¹

2018

Preprint

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“…Power-Income Hypothesis: Within a hierarchy, individual income is proportional to hierarchical power I have previously tested the power-income hypothesis using case studies of firm hierarchy. I have found that in case-study firms, relative income tends to grow with hierarchical power [47]. Fig.…”

Section: A Theory Of Income Distribution Based On Hierarchical Powermentioning

confidence: 85%

How the rich are different: hierarchical power as the basis of income size and class

Fix

2020

J Comput Soc Sc

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This paper investigates a new approach to understanding personal and functional income distribution. I propose that hierarchical power-the command of subordinates in a hierarchy-is what distinguishes the rich from the poor and capitalists from workers. Specifically, I hypothesize that individual income increases with hierarchical power, as does the share of individual income earned from capitalist sources. I test this idea using evidence from US CEOs, as well as a numerical model that extrapolates the CEO data. The results indicate that income tends to increase with hierarchical power, as does the capitalist composition of income. This suggests that hierarchical power may be a determinant of both personal and functional income.

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“…But by using models, we can make estimates. For instance, using an empirically informed model, I have found that hierarchical rank affects US income more than any other factor for which data is available (Fix, 2018c). I have also found that firm hierarchy may be responsible for generating the power-law tail of US income distribution (Fix, 2018b).…”

Section: Discussionmentioning

confidence: 99%

The Trouble with Human Capital Theory

Fix¹

2018

Preprint

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Human capital theory is the dominant approach for understanding personal income distribution. According to this theory, individual income is the result of ‘human capital’. The idea is that human capital makes people more productive, which leads to higher income. But is this really the case? This paper takes a critical look at human capital theory and its explanation of personal income distribution. I find that human capital theory’s claims are dubious at best. In most cases, the theory is either not supported by evidence, is so vague that it is untestable, or is based on circular reasoning. In short, human capital theory is a barrier to the scientific study of income distribution.

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Personal Income and Hierarchical Power

Abstract: This paper examines the relation between personal income and hierarchical power. In the context of a firm hierarchy, I define hierarchical power as the number of subordinates under an individual's control. Using the available case-study evidence,

Cited by 9 publications

References 19 publications

Energy, Hierarchy and the Origin of Inequality

Energy, Hierarchy and the Origin of Inequality

How the rich are different: hierarchical power as the basis of income size and class

The Trouble with Human Capital Theory

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