Richest 2% Own Half the World's Wealth 1330
kop writes "The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute. Most previous studies of economic disparity have looked at income, whereas this one looks at wealth — assets minus debts. The survey is based on data for the year 2000. Many figures, especially for developing countries, have had to be estimated. Nonetheless, the authors say it is the most comprehensive study of personal wealth ever undertaken." The study itself is available from the World Institute for Development Economics Research.
What I'd like to see is a comparison (Score:5, Interesting)
It is possibly very hard to create such comparison given that probably the definition of wealth changed, the definition of feudal times is loose, the overall human population was much less and the world used to be much more fragmented back then. I think that 500 years is a nice round number, so a comparison between 1500 and 2000 could be made with some difficulty. Hard, but I don't think it's impossible.
Currently my gut feeling tells me that the "wealth" used to be even more centralized in those times, but we probably made some progress in social equality since then. I'd be interested to see in the amount of progress though.
Re:Pareto Distribution (Score:3, Interesting)
Communism or Socialism (Score:2, Interesting)
It's in situations like these that I support communism or even its loose form (socialism). In many cases these rich folks are able to remain rich because of influence peddling, crony-ism, threats and corruption. In these Unites States, the above unwelcome features have become so apparent that our congress has also become the "no action congress."
Can somebody tell me what significant thing congress did in this term? Nothing was done for the common man. In 365 days of the year, congress will sit for about 110 days, and pull US$165,000 in salaries alone for congressmen and women. Overall, the picture is not good at all.
Re:But... (Score:2, Interesting)
How unfair! (Score:5, Interesting)
Seriously, the wealthy of the world can be divided into kleptocrats, heirs, and entrepreneurs. As far as I'm concerned, you can shoot the former. Certainly not the second, though you may debate the merits of inheritance tax (which I'm personally against). Mess with the third at the peril of your nations well being.
Re:What's worse (Score:2, Interesting)
Re:What I'd like to see is a comparison (Score:4, Interesting)
And, to top it all off, he has the right -- nay, the sacred duty -- to report you to the Holy Inquisition for heresy or just not being a good Christian, and woe to you if you actually criticize him. Situations were pretty much identical in, say, China under the Mandarins and during most of the history of the Moslem countries.
Needless to say, the Middle Ages were not exactly equalitarian: thank the enlightnment for making things change, a little. So comparing, say, feudal Europe with modern-day Canada really is comparing Apples and Oranges.
Re:But... (Score:4, Interesting)
Housing has been rather screwy lately after the mad rush we had in '05. Like all things, the market eventually starts to correct itself. Gotta love supply and demand.
Re:Pareto Distribution (Score:5, Interesting)
reset the economy (Score:2, Interesting)
Re:Pareto Distribution (Score:3, Interesting)
Re:What I'd like to see is a comparison (Score:4, Interesting)
Another poster made the critique that the wealth distribution doesn't take into account the scientific and social progress since then. Now that's talking about apples and oranges! Yes, I'm aware that those things have changed but they have no relevance here. (Unless you consider scientific knowledge wealth, which I do, but they are usually treated separately from traditional wealth because it is much harder to put into numbers, etc.) What I would be interested in is the change of wealth distribution over a long period of human history. I by no means am saying that the number produced would be indicative of progress as the other poster seems to think. It would be just interesting to see, so you know, you can have another datapoint to put current numbers and trends into context.
Re:What's worse (Score:3, Interesting)
Also, $61k in assets does sound fairly affluent, when you remember to subtract liabilities such as student loans, mortgage, credit card debt, and car loans from your assets.
The farmers are in the top 10% because they're sitting on increasingly valuable land that can only make so much when used for food production. It's totally nonliquid unless they sell out to ADM or a tract home developer. The federal assistance ensures that we have farmland and farmers around in case we need to stop importing so much of our food for some reason.
check your status here... (Score:2, Interesting)
Missing econ theory? (Score:3, Interesting)
I might be exposing my ignorance on the subject (I have had hardly any economics education), but it seems to me that there should be something we can do as a pre-emptive release valve for wealth maldistribution. We start out with a relative imbalance, but not too much, say 70/30. This imbalance is not due to unfair advantage. It's just because some people are a more [industrious|clever|capable] than others [1].
The "problem" starts when the accumulation of assets among the more-capable accelerates, a phenomenon that I believe is due to the selfish exploitation of systems. (This is quite probably an evolutionary strategy, so it may not go away soon.) This, of course, is precisely what Marx was on about, and his prediction is that the imbalance will grow to the point that the have-nots will rise up in arms and simply take back what was taken from them (i.e., the release valve is opened). I think history has shown this to be fairly accurate, the French, American, and Russian revolutions being three recent examples.
So accepting that this is the inevitable result of accelerating imbalance, an intelligent course of action would be the invention of an economic mechanism that effectively bleeds wealth back to the proletariat, thereby providing release and staving off revolution. This should make sense to the wealthy as well! A stable system in which they are assured their wealth ought to be better than a short-term system that will lead to their heads being cut off.
Even though there are some mechanisms like this already (e.g., progressive taxation), they are apparently not effective. What's the blockage here? Why can't this be figured out? I am enough of a cynic to think that the main blockage is the arrogant belief of the wealthy that they can suppress revolution indefinitely. However, has there been any good mechanism proposed to address this issue?
[1] cf. Beggars in Spain [amazon.com] for a good treatment of the economic responsibility of the more-capable viz. the less-capable.
Re:Pareto Distribution (Score:1, Interesting)
We blame the for the unethical influence they use to pervert the rules the rest of us live by.
This wealth is not the result of honest effort, nor could it be. The truth is, most wealth is transfered, not earned.
Impoverished Americans are in the top 12% globally (Score:3, Interesting)
How Is My Comment Idiotic? (Score:3, Interesting)
They aren't without money, they have 20% of the wealth. If this 20% of wealth were enough to feed/cloth/shelter them then this would actually be a desirable situation because everyone would be living and working toward being productive for the economy. I guess I should state the disclaimer that I believe in capitalism fused with democracy.
No, I don't keep asking myself why Chavez keeps winning. It's painfully obvious to me. They think that the way our system works in the United States is bad for them and I agree with them. Chavez offers them an alternative and, at the end of the day, everyone is lying to the people of Venezuela a little bit one way or another. Socialism is right for some countries but wrong for others. The United States has seemingly unlimited resources which makes capitalism very very good. Venezuela has resource issues & corruption which are both very very bad for capitalism. If the people feel that socialism will help them in the short run to get up and running, I hope they experiment with it. But I am a firm believer that once there is money & resources present to make an economy take off, I certainly hope they switch back to capitalism because that's where you really start to see your people strive to achieve great things. The great thing about socialism is that everybody eats. The bad thing about it is that everybody eats the same food--so why should I work harder at my job? What's motivating me to work my ass off in the fields while some computer scientist programs in an air conditioned office, in the end we both get the same thing.
I'm not sure why you called me idiotic. Nowhere did I say that the current situation in the world is perfect or good--in fact I pretty much said it was a bad situation considering that you have to be wealthy to get more wealth. I'm not sure what I said to put a thorn in your side. If my comment sickens you, fine, tell me why but calling me an idiot doesn't really help me that much.
Re:Pareto Distribution (Score:3, Interesting)
Do people remember the Unabomber? If we can believe that his true motivation was to create a ruse and call attention to his manifesto, as he claimed, and discounting the possibility for a second that he is batshit crazy, then I believe what the core of his manifesto is saying is that technological progress is enslaving humans.
While he might be^W^Wmost certainly is crazy, the effect of technology on society warrants at least a detailed discussion.
I do believe that technological progress is making the division between rich and poor less important. When for most of the world the struggle for getting "rich" by the standards of the age meant having food to eat, then it was much more important than in today's age when, while still huge numbers of humans are in horrible conditions, a growing number of us can be considered rich (compared to the times before), although not relatively (compared to today's wealthiest). I guess society is much happier being liveably poor than being just poor.
I also don't think that this is a natural progression of events, as in that it couldn't have happened otherwise. There is potential to change in either direction, from misusing technology to using it better. It is an open question whether we're heading towards another feudal society again, or a socialist utopia. Or anything in between. I don't think the answer is obvious.
Re:What's worse (Score:5, Interesting)
What's better for a group of a million people?
Each of them get +$5, or one of them gets $5 million?
If the "one" is an entrepreneur or small businessman, he can likely parlay that $5 million into a significant investment to grow his business, and probably result in at least 5-6 PERMANENT jobs with an annual salary/value of $30k-$40k per year. That additional workforce could allow him to grow his business further, possibly snowballing into more jobs, more business, etc. This ALSO means more tax revenue for the local government, more $ for schools, playgrounds, streets, fire depts, etc.
This is called growth, and it's a good thing for a community.
Does it help everyone equally? NO, and that's why it's so offensive to the leftish
Is it possible that the $5 mill goes to some indolent rich person who wastes it? Sure (and this is pretty much what the
Re:How unfair! (Score:1, Interesting)
Yeah, or Denmark [wikipedia.org] (second lowest income inequality). Oh wait, that's not an impoverished third world nation, what were I thinking?
(Zimbabwe actually has greater inequality than the good old US of A.)
Re:Not just true for humans (Score:5, Interesting)
Another interpretation of the statistics would be that the bottom 50% aren't paying much taxes because.... they don't have any money to pay taxes with. But I like your logic better. Allow me therefore to paraphrase:
Statistics show that the top 50% all die eventually.
Consequently, the bottom 50% obviously live forever!
This is A Conspiracy Against Rich People ®. THE GOVERNMENT MUST CUT TAXES FOR POOR, UNDERPRIVILEGED RICH PEOPLE!
Re:Not just true for humans (Score:5, Interesting)
0.001 euro's and you get: You're in the TOP 68.98% richest people in the world!
Now try 0 euro and the result is: You're in the TOP 68.98% richest people in the world!
Amazing 31.02% procent of the world population has an income of less than nothing!
It's the same for negative numbers.
Re:Not just true for humans (Score:5, Interesting)
The problem is that President Bush signed an across the board tax cut. Each bracket's taxes were lowered by the same percentage. Since 50% of the people were generally not paying any taxes at all anyway, they complained the tax cuts were for the "rich" and that lower income people (lower 50%) received no benefit at all.
Well, yes, the argument is true - people paying no taxes don't generally benefit from tax cuts, but I fail to see a valid complaint. In fact, after the tax cuts, because now even fewer people are paying any taxes at all, the "rich" are actually paying a higher percentage of the income tax burden than they were before.
An interesting analogy [polipundit.com] that I've always liked.
There's also the myth that the disparity of income is increasing between the rich and the poor. Well, if person "a" earns $1,000,000 and person "b" earns $50,000, then person "a" makes $950,000 more than "b". If they both increase their income by 10%, then "a" makes $1,100,000 and "b" makes $55,000. A difference of $1,045,000. OMG! The income disparity is increasing! But their relative buying power remains exactly the same!
People are not putting things in perspective when they complain about the disparity between the rich and poor. They don't even take into account that someone making $100,000 in San Fransisco has very little buying power compared to someone making $50k in Atlanta - and the guy in S.F. is paying disproportionately higher taxes because cost of living is not a factor in calculating taxes owed.
Re:Not just true for humans (Score:3, Interesting)
Re:Communism or Socialism (Score:3, Interesting)
sales tax (Score:3, Interesting)
Re:Pareto Distribution (Score:1, Interesting)
Re:You act as if this is some sort of problem (Score:4, Interesting)
This is to be expected. People work disproportionately as well. High intelligence is distributed in a very similar curve.
So, you are assuming that wealth is distributed along some merit based system based on hard work and brains? So, how do explain the railroad moguls who built their fortunes by exploiting immigrant Chinese labor, and forcing small farmers off their land with hired guns and goon squads? How about the textile families who forced women, immigrants, and children to work 10 - 15 hours a day, six days a week for most of the late 19th and early 20th century? How about the British colonial officials who were carried around on litters to supervise the production of Indian tea?
Looking at the other side of the coin, how do explain Paris Hilton? Are trying to tell me that she sits where she is because she is brilliant and hard-working?
All this boils down to a fundamentally flawed assumption on your part about great wealth is accumulated. It doesn't happen through hard work. It happens when capital is amassed and then reinvested in the generation of yet more capital. In other words, a cycle of accumulation that can work even if the owner of the wealth doesn't do anything but raise himself up off the couch long enough to say "I pay you to make money, so you better go get more, or I will not pay you again." Since the distribution of wealth has been uneven since before the renaissance, hard work need have little to do with it.
Think back to the 1900s, or even late 1800s. People that were just scraping by would often not even survive.
Ok, it is true that in the 18th and 19th century it was even harder to get wealthy (or just get by) then it is today. However, in the 1940s through 1970s, there was a general reduction in the disparity between rich and poor. It was at this time that many fortunes were made in manufacturing, oil exploration, housing, and other war time and post-war activities. But taxes were much higher and the distribution of wealth today is more like it was in the 1900s, when it was very difficult to get rich when, then it is like the mid-20th century, when there was more socio-economic mobility. Uneven wealth distribution and social mobility are inversely proportional, my friend.
Just because there are enormously wealthy people doesn't mean you're prevented from acquiring wealth yourself. in fact, it makes you all the more likely to be able to get rich.
Here you make the assumption that everyone aspires to be a multi-billionaire. That seems flawed, as well. Many judeo-christian and non-western moral teachings warn of the dangers associated with accumulating great fortunes. There are many wealthy people who are perfectly decent folks, but, to paraphrase comedian Chris Rock, in many cases, it is true that "behind every great fortune lies a great crime."
Quit being so classist. Just because others have done well doesn't mean you can't, but you surely can't if all you do is gripe about how you deserve more money without doing anything to earn it.
Tell me again who's being classist here? Your argument basically affirms socio-economic distinctions - the differences between the rich and poor (also known as classes) - as part of the natural social and moral order. If any argument is "classist," it would be yours.
And by the way, speaking of people who gripe about deserving more money without doing anything to earn it, may I refer you again to Paris Hilton?
I've never been 100% certain whether tremendous wealth has positive or negative social consequences, but at least I have some kind of notion of reality.
Re:Not just true for humans (Score:5, Interesting)
This 2% b.s. is a pretty meaningless statistic, all things considered. You only need to be making 44k a year to hit that.
ironically (Score:1, Interesting)
Also ironic is that studies show that income does not correlate to happiness. It seems that once basic needs are met, the percentage of people that are happy is constant. Again, I'd prefer to be rich and happy than poor and happy. But an interesting stat none the less.
And finally, as someone who has traveled to several dozen countries on 4 continents, I'm rather struck by how the US (and Canada) is not very far ahead of most of the world. We have more stuff, but we're not all that different. Most people aren't being bombed, most people have homes, and most people have food and water. There seems to be a misperception here and in other countries that Americans are to be hated because they are different.
And a final irony for you. Canada is a huge country. Plenty of room to spread out. Yet 90% of the population lives within 200 miles of the US. Seems that not everyone there is a bitter, narrow minded jerk-wad like you. If they were ("no one likes Americans") they'd be living a bit farther north.
Re:Not just true for humans (Score:4, Interesting)
If I can give another analogy of two people making $75k a year.
One guy rents a nice apartment in the uptown area of the city he works and leases a new car every two years and doesn't save enough to invest an significant amount.
The other guy scrimps and saves and invests all he can manage. He lives in a moderate house near the city, but not in it, and drives a financed automobile until it becomes economically wiser to trade it in then to keep repairing it.
The second guy has paid income tax on all the money he's earned; the money he's invested is taxed money. So the money he makes in capital gains is a lot less than it would be... this is the benefit of 401ks, you get to invest the money pre-taxes, but then you have to pay taxes on it when withdrawn. A Roth IRA isn't taxed because it's built with already taxed money.
Taxing capital gains is a form of double taxation. This is why you need to start off your argument with "if I was sitting on a huge pile of money" as opposed to "if I earned a huge pile of money that was already taxed."
So you look at the caricatures of wealthy people; the Paris Hilton's and Nicole Richies of the world, the poster children for excess, and complain they aren't paying taxes because it was "given" to them by their parents. But these people represent only a tiny fraction of the wealthy people in this country. The whole system of taxation we currently have simply punishes people for achievement. It's one of the reasons I support the Fair Tax. Poor people (below poverty levels) not only wouldn't pay a damn penny in taxes, but they'd get more money and have more spending power then they do now even if prices didn't go down. It's a system where you're punished for spending on non-necessities. Who spends the most on non-necessities? People like Paris Hilton and Nicole Richie - these are the people you think of when wealth envy rears it's ugly head, aren't they the people you want to "punish" for being born rich?
taxation's primary benefactors are the rich (Score:2, Interesting)
Re:Not just true for humans (Score:3, Interesting)
Re:Not just true for humans (Score:3, Interesting)
Point being: you have thirdworld literacy/numeracy numbers (18% in one of the southern states...18%! Saw this on CNN (of course on a friday, when all the rest of the bad news gets put out) and couldn't believe it, so I went online to track the numbers from the source...holy shit! And some of the other southern states were just as bad. And then there's poverty and incomediscrepancy, which is also huge in the US, as is healthcare availability, or insurance, or employment (which you guys count in a really strange way...if you've beenunemployed for a certain amount of time, you suddenly aren't counted as being unemployed anymore! Clever!).
And then the US turns around and spreads it's system to wherever there's oil to be found. Like they're waiting for the US' brand of freedom, which basically entails the right to be wiretapped whenever, picked up and locked away without habeas corpus or due process and for politicians to baldfaced lie about whatever they feel like,
I live in one of the richest countries on earth, and I hate the US government too. And I'm starting to hate the US citizenry for letting it happen for 6 years...you didn't fix it or educate your fellow citizens, so it