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Showing posts from June, 2007

On Physics and Wealth Disparity

Although economics is often hailed as a boring science, I believe it gives us a sense of the reality around us in its own unique way. As a continuation of ‘Random Connections’ (http://www.esnips.com/web/Observations), I started thinking about a rather simple question – Why aren’t all men at the same level of wealth across the world? Maybe an economist would like to say, “Why doesn’t ‘Wealth parity’ exist across the world? This post looks at the question.

The Wealth Equation Let’s look at some obvious reasons for this wealth disparity. If one looks at the economies around the world, one could probably get a consensus on the following reasons behind the wealth disparity. (This isn't an exhaustive list by any means but it more or less captures the 'capturable') 1) Relative disparity in level of technology, 2) Relative disparity in level of education, 3) Relative disparity in level of regulation in an economy and capital markets and, 4) Population I’m not too sure how much is att…