The political-economy of conflicts over wealth: why don't the rabble expropriate the rich?

The most striking feature of liberal democracies is the coexistence of large inequalities of wealth with a roughly egalitarian distribution of voting power. So far most attempts to explain this have asked ‘why don’t the poor form a coalition to expropriate the rich?’ This paper argues that this is not necessarily the best way to interpret the problem and attempts to provide an alternative unified political-economic model that is more consistent with standard assumptions about voting. This is done by studying what would happen if every possible coalition could form in a wealth distribution game. Among the main findings is that, if the marginal contribution of every individual to production is increasing sufficiently, there is a stable distribution of the product. This may include the egalitarian distribution. If individuals are not so valuable there is no stable distribution.