This type of economic transaction involves political leaders or central elite accumulating goods/labor and then allocating those commodities in a different way, often to achieve more social equality or to gain social status:.

Redistribution is a type of economic transaction that involves political leaders or central elite accumulating goods/labor and then allocating those commodities in a different way, often to achieve more social equality or to gain social status.

Explanation:

Redistribution implies the redistribution of goods and wealth through a central authority. This authority collects surpluses in the form of tributes or taxes and then distributes them among the lower classes.

Not only in redistribution economies, but also in modern mixed economies there is still redistribution through state-collected taxes. The underlying motive is income leveling. Redistribution can be vertical, but also horizontal, intergenerational or intragenerational.

Vertical redistribution generally attempts to redistribute wealth from rich to poor. This is done, for example, with progressive income tax and subsidy.

If redistribution is not based on income or wealth, but on the basis of specific needs, then horizontal redistribution is used. This may be the case with public health care.

Among other things, old-age provisions are intergenerational redistribution when the pension of the elderly is paid by a younger generation. If one puts money aside, one can speak of intragenerational redistribution.

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