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Symposium 2014

Virtual Library File - Is Justin Timberlake a Product of Cumulative Advantage?

The Challenge

Inequality is rising in most parts of the world, irrespective of whether one looks at it in terms of annual income, in terms of wealth (i.e. of accumulated capital and other assets) or in terms of o ...

Inequality is rising in most parts of the world, irrespective of whether one looks at it in terms of annual income, in terms of wealth (i.e. of accumulated capital and other assets) or in terms of opportunity. In most high-income countries, the share of national income earned by households at the top of the income distribution has soared since the past decades (from the 1980s onward). As the World Top Incomes Database shows, the income share of the richest households continued to climb during and after the crisis of the past few years. In 2012, the income of the top 1% of households accounted for 22.5% of total income; the highest figure since 1928. One explanation is that globalization expands the market for a small group of people with sought-after talent, but competes away the income of ordinary employees. In turn, the competition among countries for skilled individuals constrains the ability of governments to maintain high tax rates on the wealthy.

As anyone who follows the business of culture is aware, the profits of cultural industries depend disproportionately on the occasional outsize success — a blockbuster movie, a best-selling book or a superstar artist — to offset the many investments that fail dismally. What may be less clear to casual observers is why professional editors, studio executives and talent managers, many of whom have a lifetime of experience in their businesses, are so bad at predicting which of their many potential projects will make it big.