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Good post Livio.

Help me understand one thing. What exactly is "probate"? Is there separate data on probates and estates? I got confused by your paragraph beginning:

"The approach used to adjust the data was what is known as the estate multiplier technique ....."

If you have wealth data on everyone who dies, and assume that death, conditional on age and sex, is independent of wealth, I can see how you can estimate the wealth distribution from that plus demographic data on age and sex. But I got lost on the probate stuff.

BTW, do you also have data on number of surviving children, by wealth? Thinking of the Alms economist, whose name escapes me.

Probate is the process of registering and administering an estate according to a will. A probated will is one that has been fulfilled and all claims against the estate resolved.

Probate also means proving a will is valid and dealing with any objections. Surrogate Courts were created for this purpose though they have now been subsumed into the Superior Court of Justice.

At the time Livio is studying I imagine farms and their associated assets and liabilities (buildings, livestock, loans outstanding) were by far the largest category.

A further point of interest is that Livio very likely included members of my family in his study.

Nick:
Determinant is on the mark re probate but for the record:

The primary data source is the probate records of the Ontario surrogate courts. Under the Surrogate Courts Act, 1858 (Statutes of Canada, 22 Vict., Cap. 93, 1858) a surrogate court with the power to issue grants of probate and administration valid throughout the province was established in each Ontario county, replacing the centralized Court of Probate established in 1793. Probate was an institutional arrangement, which transferred property from the dead to the living and one applied for probate in the county or district where most of one's property was located. The process of probate served to grant administration over the estate of the deceased, authenticate the will and provide evidence as to the character of the executor. In intestate cases (without a will) the application to the court for administration was made by an interested party (usually the widow or next of kin but sometimes a creditor) and once granted, distribution of the estate was made according to law.

I do have data on number of children.

Determinant:
Real estate, livestock, etc... were very large and important asset categories given the agricultural nature of the economy. However, there was also a surprisingly large amount of financial asset holding - bank accounts, mortgages, bonds, life insurance, etc...May do another post later on composition. I've taken down quite a few Ontario wills even outside Wentworth Co. so I may have a fair number of people's ancestors.

Cheers.

"Should we take this as proof that poverty is inevitable?"

The above data do not apparently reflect poverty (at least not in the sense I think of it). Rather, it reflects wealth inequality. I would say that a well-functioning capitalist economy always begets inequality, which rises exponentially between realignments. I am not as familiar with Canada's (and Wentworth's) economic histories, but I would point to the radically different tax rate, growth, employment and government expenditures in 1930s-50s US vs. today as an example. Taxes on the very rich have dropped, entitlements reduced, and often under the administrations of Democrats who claim to oppose such measures. I think this points to a specific clique managing government, but the inequality is unsustainable per the loss of demand that it incurs.


Interesting. I take it that Canadian probate law is much the same as Australia's or Britain's? IE that only estates above a certain size required probate? If so, the probated only figures for 1892 are probably more reflective of the actual distribution of wealth. Poorer people - and this would include many small farmers and similar - probably did not bother (I know my small-holder ancestors did not).

This is one perspective. Another would be the social one - that many of the welfare state initiatives mentioned did not so much redistribute wealth as redistribute the power associated with it. The citizen who can rely on a pension, knows that unemployment assistance is available, is a member of a union, and need not fear that sickness will leave him or her destitute is in a very different position vis-a-vis the wealthy than one without these protections. This is reflected in the economy in confidence, in types of manufacture and consumption and in policy.

One might also note that markets do tend - unless continually corrected - to concentrate wealth (see, eg, that astonishing concentration of land ownership in the UK in the heyday of the UK upper classes around 1850). What would the figures look like without government intervention? Pakistan perhaps?

DF Sayers: "the inequality is unsustainable per the loss of demand that it incurs."

Hmmm. I would have thought that the loss of demand would tend to perpetuate inequality, through the loss of opportunity.

Possibly related, Greg Clark on upward mobility in England over time and the possible emergence of a permanent underclass:
http://www.econ.ucdavis.edu/faculty/gclark/papers/Ruling%20Class%20-%20EJS%20version.pdf

I agree with DF Sayers in that these figures do not demonstrate poverty, just inequality. Did the bottom decile 100 years ago have low infant mortality rates, ready access to clean water, reliable electricity, and easy and cheap access to entertainment (through e-books, phones, tv and internet)? Today's bottom decile have a higher standard of living than the bottom decile of a century ago, and yet it is offered that "poverty is inevitable" because there is inequality?

http://robertreich.org/post/6595110483
Comments on this? I like these vulgarisations but they are hard to criticize without the proper training and especially data. The sociological and political aspects are obviously simplistic, but I was wondering about the economic aspects.

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