An excellent paper, accessible in prepress form from the link. In a nutshell the author's thesis is that technology accelerates discontinuities, of wealth as well as everything else, allowing concentrations of wealth far in excess of Pareto (or any other) optimality.
technology accelerates discontinuities, of wealth as well as everything else, allowing concentrations of wealth far in excess of Pareto (or any other) optimality.
It's nonsensical to talk about an "optimal" distribution of wealth.
Also, technology allows for more total production (hence more total wealth), which would be great, but social policies in the western world inhibit the general population from scaling the number of children they have to track labor demand.
I should have referred to a 'Pareto distrubtion' rather than 'Pareto optimality' (which is more properly used to describe production possibility frontiers), but the underlying concept here is that it's quite natural for ~20% of the population to control ~80% of the wealth, on the basis that similar proportions recur throughout nature. I think this is 'optimal' insofar as growth is maximized by such a distribution, but of course you only get such distributions in theoretically perfect markets.
Optimal, at least in this sense, refers to the optimization of a cost function so we can quibble about the cost function used but optimization in general isn't nonsensical. And really, the OP specified that he was using the Patero sense of optimization with a Patero cost function.
I skimmed the whole paper and expected to see some math. There were no equations. While it's possible to have a real model with no math, it's a lot less likely that that's true, and my first inclination is to believe that this has not been rigorously thought through.
The purpose of the paper is to sketch out a field of investigation for social studies by observing cases which contradict the conventional wisdom in that field, as opposed to a rigorous or complete quantitative analysis. I'm sorry if I oversold it by stating why I considered it significant.
I don't think rigor necessitates the use of equations. Ronald Coase's nobel-winning contributions to the field of economics are almost wholly conceptual and devoid of math; at the opposite extreme, over-reliance on Li's Gaussian Copula proved unwise for Wall Street (http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?curr...).
