Philip Rosedale Created This Amazing Simulation to Explain Wealth Inequity

What you're looking at above is a fascinating simulation from Philip Rosedale, who is known more for simulating virtual worlds. This project, however, is coded to help explain one of the real world's most vexing problems: Why do the rich get richer? While government regulations (or lack thereof) are a major factor, Philip's simulation is coded to illustrate a certain inevitability to wealth inequities, even when people start in a theoretical equal position. As he explains:

Consider a group of a couple hundred people, wandering around in a big town square, where initially everyone has the same amount of money. Whenever two of them run into each other, they make a transaction. To make these transactions random and unbiased, imagine it goes like this: Pick a random amount of money that is less than the amount held by the poorer of the two. Then flip a coin to determine who gives that amount to the other. That’s all there is to it. In the real world we would imagine that the seller gave in return some good or service of the same value to the buyer, but for the purpose of analyzing how wealth moves around over time, we don’t need to bother with that...

But let it run for just a few minutes, and things look very different! Of 250 people, 5 rich ones have all the money (green), and 96% of the population is poor (red). We can call that big one ‘Elon’. The Gini Index is shown at the lower left, which is a widely used way of measuring wealth inequality. Zero means that everyone has the same amount and 100 means that one person has all the money. 

Much more here. I don't know if he intended this, but Philip's simulation is an effective response to Robert Nozick's infamous "Wilt Chamberlain argument", in which the libertarian philosopher made the case that wealth inequities are justified if people starting at an equal state of wealth voluntarily make some of them much richer. (In Nozick's argument, pay a famous basketball player a lot of money to watch him play.) This simulation, by contrast, shows that inequities, once established, become intractable.

If this seems pessimistic, don't worry -- Philip tells me he has a solution in the works:

"Wealth-tax-powered basic income, could be encoded as algorithm in a cryptocurrency.  Doesn’t require big companies or government to get going.  Will post the simulation in a few days." (Unsurprisingly, Philip supported Andrew Yang's Presidential campaign.)

And yes, he adds, "Virtual worlds might be able to help demonstrate the concept." All of which is a strong argument to subscribe to Philip Rosedale's Substack.

Comments

[irihapeti]

a wealth-based tax solution is correct. Income and/or consumption based tax doesn't change the answer to the why-do-the-rich-get-richer question