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The Pareto law is not true
in an altruistic society

An econophysics simulation of altruistic economy

 

Richard Trigaux

 

Econophysics claims to scientifically explain economy with comparisons to physical systems. So it demonstrates the Pareto «law», which states that the distribution of wealth always occurs in a very unequalitarian way, between a very few rich, a minority middle class, and a large majority of poor. This law is always checked in the publications of the econophysicists, which put on stage only actors that they call «rational», understand... perfectly egocentric!!! Evidence tells us that social inequalities come only from there, ant not of who know mathematical necessity.

It was anyway interesting to have a scientific demonstration of this, with putting only altruistic actors in a simulation. So I wrote a small econophysical simulation in Javascript, to see what happens in this case. As common sense predicts, as soon as we introduce some altruism, the shameful Pareto law completely vanishes, to show a much more fair distribution of wealth. There is no need of mathematics to understand that. But I also found an interesting result, which scientific value is worth the «Pareto law»: In an altruistic society the distribution of wealth occurs after a Gauss law, much more equalitarian.

  However the publication of a science result must always be made after a preliminary step of peer referee, to be warrant of its validity and value. So I engaged this step in September 2003 while sending my work to various scientists having published in the field. After some negative replies sometimes funny, this study is at last published in March 2005, in Physica A, an important review of physics and statistics belonging to Elsevier publishers, which also has a rubric on econophysics.

 

Official publication in Physica A (Science Direct)

(article n°35, March 15, 2005, volume 348, page 453-464)

 

Copy of the publication on this site ( .pdf document, 150ko)

This document is partly understandable by all, except the mathematics part and the detailed discussion.

Download the spreadsheet of the results (Microsoft Excel document, 77ko)

 

The simplified simulation, for all (web page)

The full simulation, with numerical results (web page)

 

The True Economy

Links on Fair Trade and ethic investment

 

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Common sense remarks on econophysics

 

When I presented my paper, the peer referee asked me to rewrite it in a style «less philosophical». I just had to accept this, as General Epistemology still has today only the statute of a personal idea, not recognized by the scientific community. So I could not base a demonstration on it.

Nevertheless economy is a domain which dramatically interacts with happiness, personal and social life, ecology. If, in the name of a scientific approach, we refuse to study these relations, so we cannot study economy. We study economy in its context, or not at all. The problem is that the econophysicists pretend to comply to the requirements of a scientific approach while rejecting all the philosophical aspects, except one very peculiar «philosophy»: the capitalist concepts of egocentricity and competition. As by random. Let us say it straightforwardly: this choice is no more scientific than to study only the hippy economy. It is only a prejudice (unconscious, I hope) as in ancient times in astronomy the geocentricism. And conclusions made from such prejudices has no value.

General Epistemology allows to get free of such limitations. First it recognizes the existence of the human consciousness, as an observable object (it is even the first thing we see the morning when awakening) on which we can rationally obtain knowledge. And, admitting the consciousness, it also recognizes its content and properties: The «agents» of economy are not particles, but beings enjoying varied emotions and motives, and the ability to be happy or to suffer. So, where classical science eludes «the philosophy» or «the metaphysic» (while accepting as gospel truth the more amoral and atheist philosophical and metaphysical conceptions) General Epistemology allows to study these domains and screen these philosophical conceptions, among those which are worthy or not, exactly as physical science selected among various physical conceptions such as geocentricism and heliocentricism

So General Epistemology allows to study economy, not in the only case of a competitive stock exchange speculator who crushes whole countries from a single mouse click, but from everyone's point of view: how to ensure our basic needs and the more possible of our cultural needs, for everybody, with the less work and resources consumed. Included into the variety of philosophies and cultures we can encounter into the real world. My book «The True Economy» gives to this, I think, some fair basis.