Evidence for a Power Theory of Personal Income Distribution

Arbeitspapier

This paper proposes a new ‘power theory’ of personal income distribution. Contrary to the standard assumption that income is proportional to productivity, I hypothesize that income is most strongly determined by social power, as indicated by one’s position within an institutional hierarchy. While many theorists have proposed a connection between personal income and power, this paper is the first to quantify this relation. I propose that power can be quantified in terms of the number of subordinates below one’s position in a hierarchy. Using this definition, I find that relative income within firms scales strongly with hierarchical power. I also find that hierarchical power has a stronger effect on income than any other factor for which data is available. I conclude that this is evidence for a power theory of personal income distribution.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers on Capital as Power ; No. 2017/03

Classification and Topics

• Classification: Wirtschaft
• Subject: income distribution ; hierarchy ; power

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fix, Blair
• Event: Veröffentlichung
• (who): Forum on Capital As Power - Toward a New Cosmology of Capitalism
• (where): s.l.
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/162938
• Last update: 10.03.2025, 11:42 AM CET