Worldwide the top 1% control over half all wealth

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Internationally the discussion about wealth and inequality continues unabated.

Even mainstream institutions are joining the debate to “warn” their masters that unrestricted growth in inequality could prove dangerous – economically and politically. These include the OECD, the United Nations, the International Monetary Fund and the World Economic Forum. This is rather ironic today given that the policies that have accelerated the rise in income inequality and wealth redistribution upwards include all these same institutions.

An insurgent revolt in US politics on both the left and the right has inequality at its core. The maverick candidacy of Bernie Sanders for the Democratic Party presidential nomination in US has even put a discussion of socialism on the agenda.

The extent of the wealth inequality globally is much worse than previously estimated according to recent reports.

The Credit Suisse annual growth survey notes that since the global financial crisis inequality has grown and the top one percent globally now own half of all household wealth in the world. The wealth increase is also more unequal than before. Since 2008, “middle-class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend, which saw the share of middle-class wealth remaining fairly stable over time.”

The number of millionaires around the world increased by 146 per cent since 2000, and there were now more than 120,000 ultra-high net worth individuals – each worth more than $US50 million (NZ$73m).

The situation in the US is an even more extreme example. A report on the Forbes 400 wealthiest US citizens by the Institute for Policy Studies in the US calculates that the top 20 wealthiest people now own more wealth than the bottom 50% of US residents. For the top 20 that averages about $36 billion each.

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column in Al Jazeera by Pulitzer prize winning journalist David Clay Johnston believes the report seriously underestimates the actual wealth concentration because the Forbes list is based on publicly available information.

In the UK the story is the same. This week The independent reports that “The richest 1 per cent of the population have as much wealth as the poorest 57 per cent combined, according to Office for National Statistics figures.”

What can be done about this inequality is taken up by Nobel laureate Joseph Stiglitz. Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity can be downloaded. The first half of the book is devoted to how the US got itself into the situation it has. Much of it he points out was a consequence of deliberate policy that has continued today. He notes that 91% of all income growth between 2009 and 2012 was enjoyed by the wealthiest one percent of Americans.

In the second half of the book he has a detailed prescription of the type of policies that are needed to turn the situation around. Sitiglitz wants to save capitalism from itself. He believes the system can be made to work.

But, given the reality of US politics that he who pays the piper calls the tune, Stiglitz must suspect this is a naive hope.

As David Clay Johnston wrote in Al Jazeera:

Just 158 families, along with companies they own or control, provided nearly half the contributions to the presidential candidates in both parties, though giving was heavily skewed to Republicans.

The result is policies that take from the many and redistribute to the already rich few through stealth techniques that rarely make the news but can be found in the public record. Among these policies are a failure to enforce the laws of business competition, severe restrictions on unions and subsidies galore for big companies.

Five years ago, the 400 households reporting the largest incomes on their tax returns captured an astonishing 6 percent of all the increased income in America, as I revealed a year ago. Such massive inequality reflects not market economics but political influence that tilts the economic playing field.

And because of their political influence, those at the very top get tax favors, especially the deferral of taxes into the distant future, which transforms the burden of taxes into a bonanza of increased profits.

If you wonder why Washington doesn’t seem to fix problems that affect most Americans, this is the answer: Politicians take care of the hands that feed them, the donor class.

Something radical needs to be done to effect any real change. New movements need to be built that can turn the victims of the system into their own agents of liberation. That process is beginning with the Fight for $15 and Black Lives Matter and is reflected, in part, in the anti-corporate language of both Sanders and Trump.

For humanity’s sake let us hope there is a progressive not a reactionary solution found.

17 COMMENTS

  1. According to the global rich list tracking website, sometime working ~40 hours per week in New Zealand on the minimum wage is ranked at approx the top 4% in the world (per income). That’s not too bad for a poor little country floating about in the South Pacific. What’s the best way to help the 3 billion or so people across Africa, Asia and India up out of the real poverty that they live in? Do we donate money directly to them? Or help their economies grow (sustainably and greenly) so that there is enough wealth creation generated so that they can also enjoy a minimum wage that puts them on the equivalent of the current top 4% just like we have here in this beautiful country of ours? I would like to see them lifted to our living level, rather than lowering our standard of living to meet theirs (as equality really is just a mathematical construct).

    • That’s not too bad for a poor little country floating about in the South Pacific.

      We’re not a poor country and we’d all be a hell of a lot better off if we didn’t have the rich or foreign owners coming in and buying us out and looked to developing our economy rather than just being a farm.

  2. ” I would like to see them lifted to our living level, rather than lowering our standard of living to meet theirs (as equality really is just a mathematical construct).”

    Really, Barry???

    Give me all your money. After all, handing your income over to me would be just “a mathematical construct”.

    Idiot.

    • What Barry really means is that The World Bank should give them a loan for ‘infrastructure projects’. That way we don’t have to do anything, corporations (mostly US based) make profits, and in 5 years time, when the poor have been stripped of what little they had in the first place, we can blame them for getting into debt and not being able to pay it back. It’s a neat little cycle that makes it easy to profit from the poor without needing a conscience.

    • How about we both donate 95% of our gross salaries (leaving $2k per year) to the international central wealth redistribution fund, so then we will be on a fair amount of income and all inequality can be wiped out. Because $2k per year puts you right on the median income worldwide (according to http://www.globalrichlist.com/) and only when we’re all earning that much will equality exist.
      Except in Zimbabwe you’d be rich and here we’d be eating dirt. Because of maths and the exchange rate between economies. Here in NZ, we are the evil 5% at the top. Not the rich NZ’ers, but each and every one of us.

      • Except in Zimbabwe you’d be rich and here we’d be eating dirt.

        Wrong. The market would adjust.

        Besides, the real problem is private ownership of the infrastructure and resources of a country.

  3. Many have gained their wealth through improper business practices and alleigance with Governments, NZ is no exception.

  4. The one percent are considered to be the “deserving makers and shakers”, I suppose. I went out to do my Christmas shopping, and I was shocked again, how hate filled and “competitively minded”, actually “narrow minded” so many fellow NZers are these days. There was not one friendly and happy face in the Countdown or Pak’n Save supermarkets I visited, only a few checkout operators, most from Philippines and India “smiled”, that was, because they are told by their bosses to “smile”.

    People do not look you into the eyes anymore, they are like magnetised at products they look at on the shelves, they are like brain washed, conditioned to the extreme, to “consume”, as “to consume” is like “to be or not to be” these days.

    Wallets, credit cards and payment cards were flashed around me, all to prove, “I belong”, hey “I belong”, to the “community” of “brainwashed consumers”, that have to “prove” that they “belong”, by paying for products all else buy.

    So that is “Christmas” 2015, I call it the “Mammon Feast”, the “Feast of Consumerism Gone Mad”, and nothing else seems to matter, they do not even identify each other as “humans” anymore, they are “competitive shoppers”, grabbing off the shelf what they need, before someone else dares get their “dirty hands” onto it.

    It is ME, I, ME, FIRST, and I AM, the CONSUMER, the PAYER, the MASTER at the checkout, that is my “purpose”, as there is NO other purpose to be anymore.

    I observe that there has been and is NO social and cultural evolution taking place anymore, as that would necessarily and logically involve a sense of sharing and committing, as we face the greatest threats to human existence there has ever been, such as climate change, climate disaster, economic and social collapse also. But denial is the rule of the day, sticking the heads deep into the sand, as “growth” that is ALL that matters, growth in GDP, in Xmas spending, in credit takeup and in population also, we are told, we need more people, more workers, more consumers, more of EVERYTHING, and the Paris meeting on Cop whatever, does not seem to matter at all, it is just business as usual, as business is the rule of the day, and NOTHING else seems to matter.

    Trouble is, all resources are finite, has any consumer, endless credit financed Xmas shopper and other idiot bother to check? They rely on the capitalist system we have, and it is dominated by the elite, that “sort of 1 percent”, they have only ONE interest, keep things ticking over, and going as it is, so the money keeps flowing into the few accounts that matter to them, and that is our present day “economics”.

    Obama and Key may talk stuff, but it is trivial, irrelevant, without meaning, same as the “Paris Agreement”, it will never be honoured and done, it will be off onto the cliff, no matter what, for most of us, we are doomed to be pushed over it, and we are just “collateral damage”, “Human Refuse” so to say, dispensable, and the elite explore now, besides of remote island refuges for survival, some exploration of SPACE, the last resort, good luck?!

    • I agree with you Mike people are becoming agressive robots all obsessed with consumerism… Same attitude on the roads people just have to get past the next driver they just can’t help themselves. It’s a pervasive competitive attitude that can only result in failure of society.

    • I went out to do my Christmas shopping, and I was shocked again, how hate filled and “competitively minded”, actually “narrow minded” so many fellow NZers are these days.

      The Case Against Competition

      Competition is a recipe for hostility. By definition, not everyone can win a contest. If one child wins, another cannot. This means that each child comes to regard others as obstacles to his or her own success. Forget fractions or home runs; this is the real lesson our children learn in a competitive environment.

      Competition leads children to envy winners, to dismiss losers (there’s no nastier epithet in our language than “Loser!”), and to be suspicious of just about everyone. Competition makes it difficult to regard others as potential friends or collaborators; even if you’re not my rival today, you could be tomorrow.

      This is not to say that competitors will always detest each other. But trying to outdo someone is not conducive to trust — indeed, it would be irrational to trust someone who gains from your failure. At best, competition leads one to look at others through narrowed eyes; at worst, it invites outright aggression. Existing relationships are strained to the breaking point, while new friendships are often nipped in the bud.

      Again, the research — which I review in my book No Contest: The Case Against Competition — helps to explain the destructive effect of win/lose arrangements. When children compete, they are less able to take the perspective of others — that is, to see the world from someone else’s point of view. One study demonstrated conclusively that competitive children were less empathetic than others; another study showed that competitive children were less generous.

      We do it to ourselves at the behest of the psychopathic capitalists who are only out to make themselves richer.

  5. ‘The maverick candidacy of Bernie Sanders for the Democratic Party presidential nomination in US has even put a discussion of socialism on the agenda.’

    ‘…even a discussion of socialism’? Really? That is Republican rhetoric! The very foundation of today’s once democratic Western societies was once based on ‘socialistic’ principles. It may be hard to remember for some, but decent compassionate men and women have fought and died in the name of ‘social democracy’. A heritage which we have let greedy and largely pathological ‘leaders’ trample over since the Thatchers, Reagans, Muldoons and Roger Douglas. It is about time we called the culprits by name and put them where they belong: In institutions for the compassionately bereft. There they may play their wars against humanity on a virtual app, while the rest of us regains our humanity. Merry Chrismas.

  6. The top 1% wealth holder appear to have 65 times the wealth of the bottom 3.5 billion poorest.

    The Guardian 20 Jan 14

    “The wealth of the 1% richest people in the world amounts to $110tn (£60.88tn), or 65 times as much as the poorest half of the world, added the development charity, which fears this concentration of economic resources is threatening political stability and driving up social tensions.”

    85 people collectively have as much as 3.5 billion poorest.

    That is the top 11 billionth of a percent.

    http://www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world

    We need to sharpen up something.

  7. Correction
    The top 85 wealth holders who hold half of mankind’s wealth are 1.1million of a percent of mankind. [ previous figure a calculator error. ]

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