Let's make it simple: Start a great local coffee shop wherever you live. People like coffee. It's a safe business, right? You know there's demand. All you have to do is create an excellent product that is more appealing than the competition. Then go get some funding, get a loan, mortgage your home or, if you have it, dump your entire life savings into the business to fund it.
Come back in five years and read what you just wrote.
Bouchaud/Mezard's claims have a novel perspective but are consistent with other studies over the years. Society remains in a state of ignorance and denial of this simple idea:
The rich are lucky, not skillful. A person may benefit from his/her skill, but not necessarily from his/her luck. Society should determine the partition of luck/skill in wealth, tax the luck and reward the skill.
[Yes, I would tax lottery winnings very heavily, since they are nearly 100% luck!]
(Would it even take 5 years to go out of business?)
That pretty much sums up my point.
Funnier than that is how most people assume that the capitalist earned his/her wealth and thus deserves to keep it, when in actuality wealth is accrued largely through chance rather than skill. Should one be allowed to keep all winnings in a game that are due to chance? Or should one be limited to that portion of the winnings due to one's skill plus a bit of the portion due to chance (and let government take the remainder)?
"Wealth condensation in a simple model of economy Jean-Philippe Bouchaud, Marc Mezard":
http://lptms.u-psud.fr/membres/mezard/Pdf/00_BM_PA.pdf
As jivardo_nucci said once on this very forum:
* The simulation studies of Bouchaud & Mezard show that, regardless of initial conditions, wealth distribution ends up a Pareto distribution with a small percentage taking almost all of the goods. The take-away of Bouchaud & Mezard's studies: the very rich aren't rich because they earned it (i.e., because they are skillful or knowledgeable), they are rich mostly because they are lucky.
All my life I've assumed that, when people had a going concern or were rich, that they _earned_ their wealth. But Bouchaud & Mezard says they're, for the most part, simply very lucky.
If luck, rather than skill, is the source of one's wealth, then has one "earned" that wealth? How can one lay exclusive claim to something given by chance? I would contend that no such claim can be made.
In particular, I would contend that income gained through luck is fair game for government acquisition through taxation, and if it is possible to distinguish that portion of wealth due to skill from that due to luck (and such appears possible), then the "lucky" portion is open game for acquisition to be spent or redistributed as decided by the powers-that-be.
Wealth Condensation: Why the Rich Get Richer (and the poor poorer): http://iwillknow.jesaurai.net/?p=387 [old broken link]
The Mathematics of Inequality: https://www.austms.org.au/Jobs/Library4.html
FWIW Bouchaud & Mezard are not the only researchers whose models say this:
Chance helps the rich get richer, simulation study finds: http://www.world-science.net/othernews/110722_chance.htm