Fractal Wealth Distribution


The genesis of this Estate Planning War Chest Blog were the ideas and information planted in my mind by Jeffrey A. Winters from his book Oligarchy (2011).  How does it come to be that in all societies there are always a small minority of very wealthy, powerful individuals and a large majority of very poor individuals?  Winters’ carefully researched book articulates the mechanism by which this occurs.  Wealth defines Oligarchs and empowers them, which inherently exposes them to threats.  Coercive wealth defense to protect property draws the battle lines in the economic war that humans have always and will always wage against each other.

The image above is a fractal, a never ending, infinitely complex, repeating pattern.     The math of these things is fascinating – read the Wikipedia entries for fractal, Mandelbrot set, Fibonacci sequence and the golden ratio – mind-blowingly cool!  Anyway, wealth distribution is fractal.  The basic pattern is a huge number of poor people (70%), a smaller number of “the mass affluent” (30%, that’s us) and a tiny group of the elite wealthy (the ‘one percent’).  This pattern repeats within each group:  Within the ‘one percent’ there is a large group of really wealthy folks, a smaller group of extremely wealthy people and a tiny number of dynastically wealthy (top 1/10 of 1% – the Oligarchs, as Winters explains, who have enormous material power resources).  Then, within that 1/10 of 1%, the pattern repeats.  The complexity is dizzying, but, like the repeating black circle pattern in the fractal above, it’s undeniable.

I came to see this forest view of wealth after years of working in the trees of the wills and trusts industry.  The fractal pattern became significantly more pronounced after the Great Recession.  It magnifies the power of the super wealthy because they are so stratospherically richer than everyone else.  I am a happy warrior for the Mass Affluent.  The wealthy elite will not lose their power for the reasons sets forth in the book Oligarchy.  Whether that’s a good thing or a bad thing (for you) is the subject of next week’s Estate Planning War Chest.


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