By K.S. Jayaraman
IANS
Bangalore : Economist Prime Minister Manmohan Singh who yearns for redistribution of wealth may be up against the laws of physics.
When Singh last week called upon corporate leaders to strive for "equitable" wealth and income distribution across society he was asking for something that violates a natural law, physicists say.
Singh said that "rising income and wealth inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social unrest".
But a mathematical study just published says "wealth and income can never be uniform in a society". About five to 10 percent of the population will remain wealthy and 90 to 95 percent relatively poor.
The study by Arnab Chatterjee and Bikas K. Chakrabarti of the Saha Institute of Nuclear Physics in Kolkata and Sitabhra Sinha of the Institute of Mathematical Sciences in Chennai appears in the latest issue of "current science" published by the Indian Academy of Sciences.
Using mathematical models — previously derived for gases and liquids — the researchers show that "economic inequality is ordained by rules of physics and is inevitable in any society".
They say uneven wealth distribution seems to follow "a universal law" that holds true for economies in many different societies: from ancient Egypt, through 19th century Europe, to modern Japan and the US. The same is true of the developing economy of India.
Irrespective of differences in culture, history and social structure, indicators of relative prosperity such as GDP and the economic policies followed in different countries, income and wealth distribution seem to follow the same pattern, they say.
According to the scientists, the 'natural' behaviour of income and wealth inequality comes from picturing the economy as a thermodynamic system in the same way that physicists picture an ideal gas inside a container.
After random collisions and scattering with each other, the gas molecules reach a state of equilibrium with the total energy distributed among the molecules in such a way that a few molecules possess very high kinetic energy while the rest are less energetic.
A plot of wealth distribution shows something similar, the scientists found out. The poorer majority of the population (90-95 percent) — whose number initially rises with income but decays rapidly — follows Gibbs distribution, a thermodynamic model that describes the distribution of energy in an ideal gas in equilibrium.
And the rich, making up five to 10 percent of the population, veers off to the tail of the distribution curve following the "Pareto law" named after Vilfredo Pareto, who first observed this power law in the 1890s.
According to researchers, about 40-60 percent of the total wealth of any economy is possessed by the five-10 percent of the people in the "Pareto tail".
For their studies, the scientists analysed large sets of published data from sources such as income tax returns and net values of assets in societies like Japan, the US, Britain, India, and 19th century Europe.
The study has however raised a debate in the scientific community with some questioning the basis of applying gas models "to artificially created and maintained economic systems".