Pudding.cool has a good visual essay on the yard-sale model of economics, which shows that wealth has a tendency to accumulate more in the hands of people who are already wealthier. This is because a richer person has more opportunities to regain lost wealth than a poorer person. The wheels of the model turn every time someone somewhere spends money on something, to the extent that, in Pudding.cool’s words, “our economy [could be] designed to create a few super rich people”.
The model is reminiscent of one that physicist Brian Skinner set out in a preprint paper in December 2019, to describe the effects of “prestige bias” in the path of an individual who is going through successive rounds of evaluation. In his model, each candidate could belong to one of two classes: “prestigious” or “non-prestigious”. They are sorted into a class based on an evaluation that includes an examination. One of the two cases considered in the model is when the “evaluators acquire no new knowledge about the candidates after the evaluation”, including the very realistic possibility that the examination is too non-specific vis-à-vis some trait or aptitude that it is supposed to measure. In this case, they base some part of their decision – on the class to which a candidate belongs – on the results of evaluation that came before.
So if a candidate has been classified as “prestigious” (or “non-prestigious”) once before, the odds of their being classified as “prestigious” (or “non-prestigious”) in future increase as well.
The Pudding.cool article concludes by considering one well-known remedy to wealth being concentrated in the hands of a few: wealth redistribution. That is, taking some fraction of the tax collected from the people and splitting it between all of them. A simple simulation embedded on the page found that while the measure wouldn’t prevent wealth accumulation altogether, it could significantly lower wealth inequality.
Could a similar period ‘prestige redistribution’ exercise mitigate the difference between “prestigious” and “non-prestigious” candidates?
Perhaps – an inchoate answer based on the outcomes of affirmative action policies in India, which ‘redistributed’ some components that accrue to people with prestige, such as access to education in state-run schools and colleges, jobs in offices, etc. They were grounded in sound principles of social justice. By some measures, they have succeeded. However, their goals have become endangered of late with the government’s decision to admit economic disadvantages in the criterion of backwardness, allowing groups not facing social discrimination to also reap the programme’s benefits while masking India’s inability to meet its promises of growth.
This said, and as we often witness in educational and professional settings in India itself, simply moving around the material consequences of prestige wouldn’t change people’s convictions and attitudes, and could in fact brew resentment.