is this wrong? [equal distribution of deceased estates wd lower capital formation]?

Question

galbraith ['dean of economists'] says that capital formation is highest [= money cheapest] in egalitarian states eg scandinavia - & zero in extreme richpoor states eg middle east

note the distribution does not alter the AMOUNT of money

i guess that capital formation [savings] is highest in egalitarian states because there is a PLATEAU of success for everyone who works - when ppl arrive & see they have arrived [equal pay for equal work, no pay for no work ie no overpay, no work for no pay ie no underpay] they can relax & save

they are not: on a steep slippery slope between wealth & poverty, having to claw always to keep position - the safety net is just below all, there is no overwealth to demoralise, to belittle avg returns for avg work, no poverty to have to claw away from, there are low expenses & stresses of poverty & wealth [war & crime], no overpower above to fight off

Answer 1

Well, Galbraith was wrong on this one (he was known for good writing, not for correct interpretation of quantitative data). Capital formation relative to income is highest among the Chinese, regardless of where in the world they live (the phenomenon was first noticed in Hong Kong and Singapore, then in Taiwan, now the mainland is showing a similar pattern). The reason is very simple; the Chinese save and invest for their children's benefit...

You are right when you say that distribution does not alter the amount of money. But you forget that distribution alters society's marginal propensities to consume and save...