The Nice Robber Barons: Elites’ Support in Redistribution as a Seduction Strategy

Abstract

AbstractThis article explores why certain classes achieved social rights peacefully while others had to fight and the counterintuitive elites’ support for redistribution. Using the overlapping-generations model platform, I describe the economy as a political confederation of sub-economies defined by different economic horizons and the political process as a recursivebiform contest. I show that the elites’ support for redistribution is aseduction strategyto calm political tension through temporary transfers to lower classes while maintaining the elites’ steady-state social superiority. I provide necessary conditions for political equilibrium and present an application that provides a theoretical basis for Director’s law.JEL classification: C7, D3, D6, H2, I3.