Editing Distribution of wealth (section)

====Correlation between being rich and earning more====
Given an initial condition in which wealth is unevenly distributed (i.e., a "[[wealth gap]]"<ref name="AP-20140127">{{cite news |last1=Rugaber |first1=Christopher S. |last2=Boak |first2=Josh |title=Wealth gap: A guide to what it is, why it matters |url=http://apnews.excite.com/article/20140127/DABJ40P00.html |date=January 27, 2014 |work=[[AP News]] |access-date=January 27, 2014 }}</ref>), several non-exclusive [[economic]] mechanisms for wealth condensation have been proposed:
* A correlation between being rich and being given high-paid employment ([[oligarchy]]).
* A [[marginal propensity to consume]] low enough that high incomes are correlated with people who have already made themselves rich ([[meritocracy]]).
* The ability of the rich to influence government disproportionately to their favor thereby increasing their wealth ([[plutocracy]]).<ref>{{cite book|title=The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos|url=https://archive.org/details/newgoldenagecomi0000batr|url-access=registration|first=Ravi|last=Batra|publisher=Palgrave Macmillan |date=2007 |isbn=978-1-4039-7579-9|access-date=October 21, 2011}}</ref>

In the first case, being wealthy gives one the opportunity to earn more through high paid employment (e.g., by going to elite schools). In the second case, having high paid employment gives one the opportunity to become rich (by saving your money). In the case of plutocracy, the wealthy exert power over the legislative process, which enables them to increase the wealth disparity.<ref>{{cite web|url=http://channer.tv/monday.htm,%2007-25-11.htm|title=TV interview with Dr. Ravi Batra|first=Harold Hudson|last=Channer|date=July 25, 2011|access-date=October 21, 2011}}</ref> An example of this is the high cost of political campaigning in some countries, in particular [[campaign finance in the United States|in the US]] (more generally, see also [[Political finance#Plutocratic finance|plutocratic finance]]).

Because these mechanisms are non-exclusive, it is possible for all three explanations to work together for a compounding effect, increasing wealth concentration even further. Obstacles to restoring wage growth might have more to do with the broader dysfunction of a dollar dominated political system particular to the US than with the role of the extremely wealthy.<ref name=":0">{{Cite book|title=Learning by Doing: The Real Connection between Innovation, Wages, and Wealth|last=Bessen|first=James|publisher=Yale University Press|year=2015|isbn=978-0300195668|pages=226–27|quote=The obstacles to restoring wage growth might have more to do with the broader dysfunction of our dollar- dominated political system than with the particular role of the extremely wealthy.}}</ref>

Counterbalances to wealth concentration include certain forms of taxation, in particular [[wealth tax]], [[inheritance tax]] and [[progressive tax]]ation of income. However, concentrated wealth does not necessarily inhibit wage growth for ordinary workers with low wages.<ref>{{Cite book|title=Learning by Doing: The Real Connection between Innovation, Wages, and Wealth|last=Bessen|first=James|publisher=Yale University Press|year=2015|isbn=978-0300195668|pages=3|quote=However, concentrated wealth does not necessarily inhibit wage growth.}}</ref>

The investor, [[billionaire]], and [[philanthropist]] [[Warren Buffett]], one of the wealthiest people in the world,<ref>{{cite web |title=The World's Billionaires |url=https://www.forbes.com/billionaires/list/ |url-status=live |archive-url=https://web.archive.org/web/20130403013841/http://www.forbes.com/billionaires/list/ |archive-date=3 April 2013 |access-date=1 May 2018 |website=forbes.com}}</ref> voiced in 2005 and once more in 2006 his view that his class, the "rich class", is waging class warfare on the rest of society. In 2005 Buffet said to CNN: "It's class warfare, my class is winning, but they shouldn't be."<ref>[http://edition.cnn.com/2005/US/05/10/buffett/index.html Buffett: 'There are lots of loose nukes around the world'] {{webarchive|url=https://web.archive.org/web/20160430104340/http://edition.cnn.com/2005/US/05/10/buffett/index.html|date=30 April 2016}} CNN.com</ref> In a November 2006 interview in ''[[The New York Times]]'', Buffett stated that "[t]here’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning."<ref name="Buffett_warfare">{{cite news |last=Buffett |first=Warren |date=26 November 2006 |title=In Class Warfare, Guess Which Class is Winning |url=https://www.nytimes.com/2006/11/26/business/yourmoney/26every.html |url-status=live |archive-url=https://web.archive.org/web/20170103165340/http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html |archive-date=3 January 2017 |newspaper=The New York Times}}</ref>