Mozi

This chapter turns to the writings of Confucius' first great philosophical rival, Mozi, or Mo Di. From its obscure beginnings, Mohism quickly burgeoned into an influential philosophical school with a firm hierarchy and organization. Whatever their origins, Mohists soon came to be known first and foremost as thinkers. Mozi, the sole surviving repository of Mohist teachings, is extensive and is best understood as a school text. The core of the book is a sequence of what were originally thirty chapters advancing ten basic credos: “Exalting Worthies,” “Upward Conformity,” “Impartial Love,” “Objecting to [Military] Aggression,” “Moderating Expenditure,” “Moderating Funerals,” “The Will of Heaven,” “Clarifying Ghosts,” “Objecting to Music,” and “Objecting to Fatalism.”

Personal Income and Hierarchical Power

This paper examines the relation between personal income and hierarchical power. In the context of a firm hierarchy, I define hierarchical power as the number of subordinates under an individual’s control. Using the available case-study evidence, I find that relative income within firms scales strongly with hierarchical power. I also find that hierarchical power affects income more strongly than any other factor for which data is available. I conclude that this is preliminary evidence for a hierarchical-power theory of personal income distribution.

Hierarchy and the Power-Law Income Distribution Tail

What explains the power-law distribution of top incomes? This paper tests the hypothesis that it is firm hierarchy that creates the power-law income distribution tail. Using the available case-study evidence on firm hierarchy, I create the first large-scale simulation of the hierarchical structure of the US private sector. Although not tuned to do so, this model reproduces the power-law scaling of top US incomes. I show that this is purely an effect of firm hierarchy. This raises the possibility that the ubiquity of power-law income distribution tails is due to the ubiquity of hierarchical organization in human societies.

Management Quality and Firm Hierarchy in Industry Equilibrium

I incorporate a monitoring-based firm hierarchy into an industry equilibrium model with heterogeneous firms. I then use the theory to study aggregate impacts of an economy-wide improvement in monitoring efficiency. This shock generates a selection effect, which favors more hierarchical (i.e., more layers) firms. Interestingly, these implications depend on firms' heterogeneous choices about their hierarchy and completely disappear when firms are homogeneous in terms of the number of layers inside the hierarchy. (JEL D21, L23, L25, M12, M54)