Here’s a fun hypothesis founded on some ideas:
- Democracy and freedom are desireable conditions.
- There exist income distributions that are incompatible with democracy – consider a society where one person has more wealth than everyone else put together. The game theory optimal thing to do is for everyone to vote to take that person’s money.
- A fat-tailed income distribution is one of these incompatible distributions.
- When left to their own devices, markets tend to produce fat-tailed income distributions.
Which leads us to…
- Democracy and financial freedom are necessarily going to be at odds with each other. When markets are completely deregulated, they result in income distributions for which the game theory dictates that people should vote away the deregulation to maximise their own incomes.
