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Capitalist income and hierarchical power: A gradient hypothesis

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  • Fix, Blair

Abstract

This paper offers a new approach to the study of capitalist income. Building on the "capital as power" framework, I propose that capitalists earn their income not from any productive asset, but from the legal right to command a corporate hierarchy. In short, I hypothesize that capitalist income stems from hierarchical power. Based on this thinking, I hypothesize that the capitalist fraction of an individual's income is a gradient function of hierarchical power (which I define as the number of subordinates under one's control). Using data from US CEOs, I find evidence that this is true. Furthermore, a hierarchical model of the United States that generalizes this data accurately reproduces many aspects of the US distribution of capitalist income, including the relation between income size and capitalist income fraction. This evidence suggests that the ownership structure of US society is closely linked to the hierarchical structure of firms. This has important implications for the study of income distribution.

Suggested Citation

  • Fix, Blair, 2018. "Capitalist income and hierarchical power: A gradient hypothesis," Working Papers on Capital as Power 2018/06, Capital As Power - Toward a New Cosmology of Capitalism.
    • Handle: RePEc:zbw:capwps:201806
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    Cited by:

    1. Fix, Blair, 2018. "The Growth of US Top Income Inequality: A Hierarchical Redistribution Hypothesis," SocArXiv suqnk, Center for Open Science.
    2. Fix, Blair, 2018. "The Trouble with Human Capital Theory," SocArXiv ax6k7, Center for Open Science.
    3. Fix, Blair, 2018. "The trouble with human capital theory," Working Papers on Capital as Power 2018/07, Capital As Power - Toward a New Cosmology of Capitalism.
    4. Fix, Blair, 2018. "The growth of US top income inequality: A hierarchical redistribution hypothesis," Working Papers on Capital as Power 2018/05, Capital As Power - Toward a New Cosmology of Capitalism.

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    More about this item

    Keywords

    capitalist income; hierarchy; power; functional income distribution; personal income distribution; inequality; capital as power;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches

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