Entrepreneurs, Chance, and the Deterministic Concentration of Wealth

In many economies, wealth is strikingly concentrated. Entrepreneurs–individuals with ownership in for-profit enterprises–comprise a large portion of the wealthiest individuals, and their behavior may help explain patterns in the national distribution of wealth. Entrepreneurs are less diversified and more heavily invested in their own companies than is commonly assumed in economic models. We present an intentionally simplified individual-based model of wealth generation among entrepreneurs to assess the role of chance and determinism in the distribution of wealth. We demonstrate that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%. Specifically, concentration of wealth results when the rate of return on investment varies by entrepreneur and by time. This result is robust to inclusion of realities such as differing skill among entrepreneurs. The most likely overall growth rate of the economy decreases as businesses become less diverse, suggesting that high concentrations of wealth may adversely affect a country's economic growth. We show that a tax on large inherited fortunes, applied to a small portion of the most fortunate in the population, can efficiently arrest the concentration of wealth at intermediate levels

Work orientations, well-being and job content of self-employed and employed professionals

Drawing on psychology-derived theories and methods, a questionnaire survey compared principal kinds of work orientation, job content and mental well-being between self-employed and organisationally employed professional workers. Self-employment was found to be particularly associated with energised well-being in the form of job engagement. The presence in self-employment of greater challenge, such as an enhanced requirement for personal innovation, accounted statistically for self-employed professionals’ greater job engagement, and self-employed professionals more strongly valued personal challenge than did professionals employed in an organisation. However, no between-role differences occurred in respect of supportive job features such as having a comfortable workplace. Differences in well-being, job content and work orientations were found primarily in comparison between self-employees and organisational non-managers. The study emphasises the need to distinguish conceptually and empirically between different forms of work orientation, job content and well-being, and points to the value of incorporating psychological thinking in some sociological research