How Much Inequality Is Fair?: Mathematical Principles Of A Moral, Optimal, and Stable Capitalist Society

List of Tables

List of Figures

Extreme Inequality in Income and Wealth

1.1 Rise of the Top 1% and Fall of the Bottom 90%

1.2 Executive Pay and High CEO Pay Ratios

1.3 Economic Inequality: What Do People Consider Fair?

1.4 Why Is Extreme Inequality Worrisome?

1.5 A New Mathematical Theory of Fairness in a Capitalist Society

Foundational Principles of a Fair Capitalist Society

2.1 Philosophical Perspectives: Mill, Rawls, Nozick, and Dworkin

2.2 A System-Theoretic Perspective

2.3 What Is the Purpose of a Society?

2.4 BhuVai: A Hybrid Utopian Society of Universal Happiness

Distributive Justice in a Hybrid Utopia

3.1 Income Distribution in BhuVai: Formulating the Problem

3.2 A Microeconomic Game-Theoretic Framework: “Restless” Agents Model

3.3 Potential Game Formulation of Free-Market Dynamics

3.4 Is There an Equilibrium Income Distribution?

3.5 Connection with Statistical Thermodynamics

Statistical Thermodynamics and Equilibrium Distribution

4.1 Brief History

4.2 “Molecular Society”: Microstates, Macrostates, and Multiplicity

4.3 Phase Space, Entropy, and Statistical Equilibrium

Fairness in Income Distribution

5.1 Complex Teleological Systems

5.2 Statistical Teleodynamics: Intrinsic and Extrinsic Properties

5.3 Phase Space in Statistical Teleodynamics

5.4 What Is the Equilibrium Income Distribution in BhuVai?

5.5 Is the Equilibrium Distribution Fair?

5.6 Entropy: Correcting the Misinterpretations

5.7 Replicator Dynamics

5.8 Is the Ideal Free Market Morally Justified?

5.9 Is the Equilibrium Income Distribution Stable?

5.10 Fairness, Stability, and Robustness of a Free-Market Society

5.11 Comparison with Walrasian General Equilibrium

5.12 Bipopulation Game

5.13 Midpoint Summary

Global Trends in Income Inequality: Theory Versus Reality

6.1 Comparing Theory with Reality

6.2 A New Measure of Fairness in Income Inequality: ψ

6.3 Scandinavia: Almost Utopian

6.4 Potential Loss of Growth due to Extreme Inequality

6.5 Are the Rich Different from You and Me?

6.6 Gini Coefficient versus ψ

6.7 One-Class and Two-Class Societies: Simulation Results

What Is Fair Pay for Executives?

7.1 Theory’s Predictions for Large Corporations

7.2 How Much of a Company’s Success Is due to the Executives?

Final Synthesis and Future Directions

8.1 Mathematical Foundations of a Utopian Capitalist Society: Maximum Fairness as the Design Principle

8.2 Statistical Teleodynamics: Macroview

8.3 Statistical Teleodynamics: Microview

8.4 Significance of the Utility Function and Its Parameters

8.5 Can a Simple Model Handle Free-Market’s Complexity?

8.6 What About Economic Growth?

8.7 Comparison with Econophysics

8.8 Future Directions: Theoretical and Empirical Studies

8.9 Summary and Final Thoughts

Bibliography