Inequality

A free market simulation

Two hundred identical people, starting from the US median bank balance of $8,200, trade at random as often as Americans do (47 payments a month). Each payment is a random amount, at most 4% of what the poorer of the two has. Nobody is smarter or luckier, yet wealth drifts to the top and the middle class shrinks.

Gini index
0.00
▲▼ set the starting point · 0 is equality, 1 is one person owning it all
Middle class–
Richest 10% own–
Poorest half own–
Year0.0
Over timeGini Middle class
Transaction tax0%
A share of every trade, paid out equally to everyone.
Demurrage0% / year
A yearly tax on wealth held, paid out equally to everyone.
Speed25,000 trades / s
Basic income per person $0.00 / year
Poor–
Middle class–
Rich–
Arcs are trades, payer to receiver (a sample of them at high speed). Total wealth is conserved. Space run / pause · R reset · ↑↓ starting Gini
Sources: Fed Survey of Consumer Finances 2025, Fed Diary of Consumer Payment Choice 2025 · Inspired by FairShare · philiprosedale.com

Why it happens

Alice and Bob start with the same $8,200. On each trade a fair coin decides who pays whom, and the amount is a random share of what the poorer of the two has, because nobody can pay more than they have. (Trades here are up to 10% of the poorer balance, a little larger than in the main simulation, so you can watch it in seconds.)

The coin is fair, so on average neither of them gains. But the stakes are set by the poorer person: whoever is behind risks a large share of what they have on every flip, while the richer one risks only a sliver of theirs.

Betting a share of what you have is a losing game even at fair odds. Lose 20% and then win 20% and you are left with 96%, not 100%. The poorer person is always playing that game with their whole stake, so a lucky streak for either of them hardens into a lasting gap, and the gap feeds on itself as the poorer person's stakes shrink with them.

With two hundred people the same arithmetic plays out between every pair. That is why wealth collects at the top without anyone cheating, and why a dividend funded by a small tax on every trade is enough to hold it in check.