Interesting little piece on wealth distribution:

Specifically, the number of people with some value of wealth w is proportional to 1/wE. Pareto claimed that E is generally has a value of between 2 and 3. The bigger this value, the greater the extent to which extreme wealth is suppressed - and the more socialist the economy.

Burda's group define liberal economies as those in which E is less than 2, and social economies as those in which E is greater than 2.

Interesting little piece on wealth distribution:

Specifically, the number of people with some value of wealth w is proportional to 1/wE. Pareto claimed that E is generally has a value of between 2 and 3. The bigger this value, the greater the extent to which extreme wealth is suppressed - and the more socialist the economy.

Burda's group define liberal economies as those in which E is less than 2, and social economies as those in which E is greater than 2.

.....

It looks to me like a larger E means much more difference between high and low incomes (Third world model) and a smaller E introduces a larger middle class. So a larger E does not limit high wealth, it simply limits the number who have a high wealth, while increasing the number with very little and squeezing the middle class, which is the 'regressive', not-socialist situation.
I beg for validation, even by way of refutation.

] Pareto claimed that in just about every society, the
] probability of having a certain wealth follows the same
] mathematical relationship for the best-off members of
] society. If you plot a graph of per-capita wealth against
] the number of individuals who are worth each amount, the
] curve is always the same - it has a mathematical form
] called a power law.

More social power laws.