Wealth Redistribution and Mutual Aid: Comparison Using Equivalent/Non-Equivalent Exchange Models of Econophysics

Abstract

Given wealth inequality worldwide, there is an urgent need to identify the mode of wealth exchange through which it arises. To address the research gap regarding models that combine equivalent exchange and redistribution, this study compares an equivalent market exchange with redistribution based on power centers and a non-equivalent exchange with mutual aid using the Polanyi, Graeber, and Karatani modes of exchange. Two new exchange models based on multi-agent interactions are reconstructed following an econophysics-based approach for evaluating the Gini index (inequality) and total exchange (economic flow). Exchange simulations indicate that the evaluation parameter of the total exchange divided by the Gini index can be expressed by the same saturated curvilinear approximate equation using the wealth transfer rate and time period of redistribution, the surplus contribution rate of the wealthy, and the saving rate. However, considering the coercion of taxes and its associated costs and independence based on the morality of mutual aid, a non-equivalent exchange without return obligation is preferred. This is oriented toward Graeber's baseline communism and Karatani's mode of exchange D, with implications for alternatives to the capitalist economy.

WE economy: Potential of mutual aid distribution based on moral responsibility and risk vulnerability

“…This is because of the reduced contribution of free-rider wealth, which reduces the impact of profits and losses. This has been shown in the literature [ 26 , 28 ] as a proportional relationship between the amount of contributions and the Gini index (i.e., the Gini index decreases as the amount of contributions is reduced). The Gini index g of the WE-M-M-FR model (dark green) is larger than that of the WE-M-M model (green).…”

“…In Fig 7A, the horizontal axis is the range of ρ Mi and the vertical axis is the Gini index g. By changing the constant 0.8 in the formula for ρ Mi in Eq (1) from 0.2 to 0.8, the upper limit of the range of ρ Mi is changed from 0.4 to 1. The transfer rates ξ are set to 0.3, 0.5, and 0.7, which are equivalent to setting t p to 1.67×10 4 , 10 4 , and 0.71×10 4 respectively, because the effect of the redistribution of joint ventures depends on ξ/t p [28]. The JV-M-M (blue), JV-M-MR (purple), WE-M-M (green), and WE-M-MR models (dark green) have smaller Gini indices g as the upper limit of ρ Mi decreases.…”

“…According to reviews in this field, various wealth distribution models have been proposed based on the analogy of the kinetic energy exchange of gaseous particles and other dynamics, and wealth distributions and inequalities, such as exponential, power, gamma, and delta distributions, have been considered [ 21 , 22 ]. Recent studies have modeled income and inheritance taxes [ 23 ], social class and inheritance [ 24 ], tax exemptions for the poor [ 25 ], contributions of surplus stock [ 26 ], interest businesses, joint ventures and redistribution [ 27 ], and redistribution and mutual aid [ 28 ]. However, none of these models have addressed moral responsibility and risk vulnerability.…”