A Globalization of Extremes: The Middle Classes Facing the Return of Pareto Distributions and Power-Laws

Wednesday, July 16, 2014: 2:30 PM
Room: 503
Oral Presentation
Louis CHAUVEL , Institute of research on socioeconomic inequalities, University of Luxembourg, Walferdange, Luxembourg
We are primarily taught that Quetelet’s normal distribution is the key of social knowledge. This could be true for the middle classes but in the sociology of the top end of the economic distribution, this is entirely wrong: wherever the concentration of socioeconomic power is observed, the Gauss distribution gives no appropriate representation and the Gibrat’s log-normal as well. This is more than statistical laws but the heart of the sociology of extreme classes where extreme values are outrageously overrepresented. CEO’s compensation, wealth accumulation, position in the hierarchy of internet and fame, scientific quotations follow extreme distribution shapes. This is the realm of the Extreme value theory related also to advantage that go with the “Matthiew effect” (the rich get richer and the poor get poorer) typical of hoarding processes on scarce resources. These processes going with the Pareto curve mean that the logarithm of the gains is inversely proportional to the logarithm of the rank in the hierarchy.

In the sociology of extreme classes, the Pareto law and power tail distributions are vital for representation of functioning of elite categories, of wealth concentration, accumulation and transmission. In the old industrial world, where old money (i.e. family wealth) is a central source of power, the normal distributions fail in the explanation of family structures functioning, assertive mating, homogamy, and economic power transmission. Here, the Extreme value theory reveals new realities. At the top we detect extreme concentration of wealth, ab-normal social behavior, including over-homogamy, or massive participation in the political sphere. 

Today, the global emergence of an extreme class means the destabilization of the Quetelet based "Golden Age middle class" and of the "wage earner middle class based society" and the expansion of the Pareto based wealthy-power-elite as a global re-emergence of the model of the European Belle Époque capitalism.