distribution

The Columbia Encyclopedia, 6th ed.

distribution

distribution, in economics, the allocation of a society's total wealth among various economic groups. Distribution, in that sense, does not refer to the physical marketing or circulation of goods, which is part of the process of exchange, but to the relative well-being and economic wealth of persons and groups. By classifying people according to their share of the distribution—usually by means of relative income—a picture of society's stratification, and thus its structure, may emerge. Italian economist Vilfredo Pareto developed (1897) one of the best–known theories on the subject, arguing that a pattern of income distribution is evident throughout history, in all societies. Inequalities in distribution are related to inequalities in political power; in most societies, the economically dominant strata tend also to be politically dominant. The division of labor, which necessitates exchange, causes various problems of distribution. Inequalities in distribution among industrial groups making a common product are explained by the relative number employed in each group when compared to the value of what they produce or to the relative amount they get for a specific amount of work. Unequal distribution arises also from inequality in reward to those in the same industrial classification (capitalist, manager, or laborer). The distribution of wealth between the capitalist and manager on the one hand and the laborer on the other has been a major source of social strife in the Western world since the French Revolution, and has been a particularly important theme in the writings of Karl Marx and his followers. Labor unions (see union, labor), through the use of political and economic pressure, have striven for increased wages. The distribution of the world's wealth has, since World War II, become a major issue in international politics, especially as those nations that had previously been the colonized suppliers of raw materials to the industrialized countries have gained political independence and embarked on development programs. In the United States, the National Bureau of Economic Research has done important studies on the distribution of wealth among economic groups.

See F. Levy, Dollars and Dreams: The Changing American Income Distribution (1988); K. M. Perkins, Production, Distribution, and Growth in Transitional Economies (1988).

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