If you can understand this phenomenon, then you can understand income inequality. You may not like income or wealth inequality, but you will begin to understand it. You also may not like the reason for it, that's because you are responsible for it.
What is Kool Aid? What is a Band-Aid? What is a Xerox machine? What are Kleenex? These are all household names in America. They are marketed brands that have become so popular that their very name 'describes' what they are. Kool Aid is a flavored drink mix. A Band-Aid is a bandage. A Xerox machine is a photocopier and Kleenex are facial tissues. But even if you have none of these specific brands in your home, if you use Wylers, Curad, Canon or Puffs products, you still know the names. Even after their actual market share has declined, you still know them for their market victories.
I want you to imagine that you are going shopping. Think of everything you put on your shopping list. As a matter of fact, the next time you go shopping try this experiment. Rank everything on your shopping list in price order from lowest to highest, and now imagine you are doing it for a whole month's worth of groceries. Make a big list, a list that includes just about everything in your refrigerator and cabinets right now. What brand of milk do you buy? Do you always buy the same brand? What about bacon? What about cereal? When you buy meat, do you buy the same cuts? What about beer?
Now lets go in another direction. How about clothes? Your underwear. What brand? Have you changed it recently? Laundry detergent? What about your washing machine? Who did you make rich when you bought that? Is it the same brand as your dryer? They don't have to be the same company, you know. Any washer will work with any dryer, but chances are you decided to make the same company richer than to spread the wealth around.
OK your car. Do you buy gas at the same gas station? You can mix gasolines. Do you? What about tires? It would probably be inconvenient for you to have gone to a different college for each of your years, but you could have spread that wealth around. You could have gone to a college nobody ever heard of and learned exactly the same. Chances are that if you got a B in Calculus at Harvard, you would have gotten the same B at Oklahoma State. Calculus is calculus, right?
Why do you choose what you choose? Two reasons. Because you have a choice and because the results are satisfactory. It stands to reason that the less you care, the more likely you will just go with the flow and send your money to something familiar and popular. If you are not brand loyal, you are likely to buy what's popular. OK think potato chips. If you don't care, you'll probably by Lays. Most Americans do. Even if you've never eaten one, you are very likely to know they exist. And the smaller brands are not likely to get your notice. But a potato chip is a potato chip, right?
These are well-known phenomena, market share and mind share. So how likely is it that you could invert market share? What about mind share? Well, think about what's funny. You laugh all the time, right? Videos about cats or babies can make you laugh. How about a video of a British baby biting his big brother's finger? Ah. That one is special. It can't get unfamous. Who is the funniest comedian? You can't undo their acts or their movies. Imagine how much work it would take for you to create a comedy phenomenon that would make people forget Charlie Chapman ever existed. What would it take to erase the memory of Marlboro in the world of cigarettes. Erase Shakespeare from English literature? It cannot be done. You'd need an alternative universe.
Human beings are social animals, creatures of habit. We learn lessons and we have long memories. If we were goldfish, then our lives would not have these long tail phonemena. What if our memories were only 3 months long? What would be our favorite movie? We wouldn't have loyalties and we wouldn't be drawn to anything popular. We wouldn't teach our children what we know. We would be random and more evenly distributed. No experience would be any more satisfying than any other. But we are not goldfish. The idea of us never kissing the same person twice until we have equally distributed our love is revolting to us. You cannot rid human beings of their evolution. Evolution takes a long time. That is why evolution is sustainable. It builds on what already is, it makes what is most bulletproof, most popular.
The inequality of wealth is a reflection of human nature. We stick to what works. We value loyalty. We cannot erase our memory. When something particular gets popular, it stays popular (market share) and if it get famous (mind share) beyond a tipping point, it become synonymous with what it typifies. Even when a Cadillac is no longer the 'Cadillac' of automobiles, we still know what that means, and it will go down in history that way.