« | Home | Recent Comments | Categories | »

Combined wealth of the 85 richest people is equal to that of poorest 3.5 billion

Posted on January 20th, 2014 at 9:11 by John Sinteur in category: Robber Barons -- Write a comment

[Quote]:

Global inequality has increased to the extent that the £1 trillion combined wealth of the 85 richest people is equal to that of the poorest 3.5 billion – half of the world’s population – according to a new report from development charity Oxfam.

  1. Hey, 200 years ago the top 5 (?) royals probably controlled, what, 80% of the land surface of the Earth? Progress!

    Or, hey, the most egalitarian situation was probably before nation states evolved and all the hunter-gatherers were starving equally!

    The inequality wouldn’t matter if the standard of living of the bottom half were actually decent.

  2. No only that, but things have improved markedly the last fifty years or so. We’ve never been better than today.

    And it’s not good enough.

  3. “Those who cannot remember the past are condemned to repeat it.” Just ask Marie Antoinette.

  4. @John: Here’s a thought experiment I’m curious to get a reaction on. In the book business, the top 10 of authors alone make about half a billion dollars per year [1]. Now, I don’t have stats, but I think we can agree that there are very few authors making a million dollars per year, and tens of thousands who write books but never even get published despite the fact that they may be working just as hard.

    Is this unfair? Should there be some redistribution from successful authors to make it possible for poor, unpaid writers to keep doing their job?

    [1] http://www.parade.com/64073/viannguyen/highest-paid-authorsfifty-shades-e-l-james-beats-stephen-king-j-k-rowling/

  5. Yes, it’s just as unfair, technically speaking. Should there be redistribution?

    No.

    This unfairness is not treated equally because it is not a threat to world stability. Income inequality is. As soon as book authors start talking about Marie Antoinette, I will reconsider.

    And yes, I know that is not fair of me.

  6. Only addressing unfairness when it threatens stability seems… cynical?

    I think the thought experiment gets more interesting when you imagine the Writer’s Guild being a democracy that can tax its members’ income. Would they vote to tax the top authors to pay stipends for struggling authors to keep writing?

  7. If being unfair about certain things because the survival of the species is at stake is called cynical, then, yeah, go ahead and call me cynical.

    There’s another problem with your analogy. If a member of the Writer’s Guild disagrees with the taxing decisions of the guild and the way the guild redistributes income between members, there’s always the option of finding a different occupation, writing books isn’t the only game in town. It may not be a practical option in a few cases, and it may also not bring wealth to the defecting member, but the option is real.

    However, when it comes to money, income and wealth, there’s no way to decide to use a different system, current currency systems have no competition. Perhaps we need to colonize a few hundred planets to fix that, but until then, there you are.

    You can stop writing books and start flipping burgers or sweeping floors. It is just about impossible to stop using money.

    If you can’t win because the game is fixed, and there’s no way to stop playing the game, there’s only so much effort you will put into un-fixing the game before you resort to violence.

  8. Some people think this is Fantastic!

  9. RE: cynical — you took that in the opposite direction of the one I expected. It’s not cynical to do this rather than do nothing; it’s cynical (I think) to do but only that necessary to prevent the collapse of civilization rather than more.

    Ah, I forgot to tell you that the Guilds are hard to get into. You can’t just leave your guild and pop over to the janitorial guild. If the guilds let in just anyone, then everyone would run over to the one with the best benefits.

    Sounds more like countries, eh?

    This is where I have my days when I think maybe we should let the Tea Party succeed at strangling the U.S. federal government down to national defense and a few other basics. Then we can move all the rest down to the states and have bigger policy differences between states and have some more experimentation in how different choices work out. But…

  10. Sounds more like countries, eh?

    More than you know. Why is it that capital must be allowed to move around as freely as possible, while people still encounter borders everywhere?

  11. Strange comparison, if you ask me. But OK. Would you personally object to money showing up in your back yard? How about a dozen strangers camping out and making their home there?

  12. Would you personally object to money showing up in your back yard?

    Can I assume you mean quite a lot of money? Not just a fiver? Then yes, I would object, because it is likely to give me huge headaches with money laundering laws and my inability to explain where it came from.

    And those dozen strangers, even if I personally had no objections, would probably quickly run into so many local law ordinances for trying to camp out in my back yard they’d be swiftly kicked out regardless. Now if they’d rented or bought local residences just like everybody else living around here I’d have no trouble at all.

    Free flow of capital does not mean bags of cash dropped in random back yards, just like free flow of people doesn’t mean just setting up tents anywhere.

  13. You’re wiggling out on technicalities rather than engaging in the thought experiment.

    Take as much money as you think you can comfortably launder, and leave the rest for someone else to find. And you evaded the people question with technicalities. It’s not hypothetical. I’ve had homeless people set up camp in my yard before. The only way that runs afoul of ordinances is if I or my neighbor call the police.

    My point was that there’s an asymmetry: people generally welcome cash that arrives. They don’t necessarily welcome strangers, especially when those strangers compete for jobs and housing, or worse, need support to stay alive.

    The restrictions on immigration aren’t a product of evil corporate agenda. Instead, movement of both money and people used to be restricted. Arguments for liberalizing money-flow have won in most places, but arguments for allowing free migration have not. In part, it’s because money is power and gets its way, yes. And in part it’s because the votes don’t exist in any rich democracy to allow free immigration.

  14. I’m not wiggling out of anything, I’m just forcing you to say out loud what you just did say out loud.

    And you’re correct, that is the way it is. And now for the difficult question: how to improve on that situation.

    One way is to make sure the poor people in the world get richer, or at least, less poor.

    So, back to the original article. Apparently you can double the wealth of the poorest half of the world by shooting just 85 people.

    At what point do the needs of the many outweigh the needs of the few?

  15. Well, poor countries *are* getting less poor. Recent evaluations of progress towards the Millennium Goals says that we’re doing well on those. And see, notably: http://annualletter.gatesfoundation.org/. Gates predicts true starvation-level poverty will disappear around mid-century.

    But instead of one-time fixes like you posit, the real question, of course, is how you make structural improvements; how you set up and then direct the economy so it creates enough decent-wage jobs yet also enough entrepreneurial incentive, etc. That’s still the hard question. But I suspect here we’re on territory that we violently agree on.

    Back to this, though:

    Why is it that capital must be allowed to move around as freely as possible, while people still encounter borders everywhere?

    So why would you say this is? And more interestingly, what’s your argument for how it should be and why it should be that way?

  16. And more interestingly, what’s your argument for how it should be and why it should be that way?

    Oh boy, that’s indeed the big one, right? I really with I had a simple, straightforward answer to this. Fuck, I would settle for a complicated difficult answer. I have none. Except perhaps that note that income equality, which is why why started this whole thread, is one of the things standing in the way of a solution, or at least standing in the way of improvement.

    Gates is right, things *are* getting better. And I concur – starvation-level poverty is likely to disappear. But * *hate* that it takes until mid-century. Surely we can do better than that (and I promise I will stop calling you shirley), and ranting about income equality, where 85 people have as much money as 50% of the world population, is part of it, because that is one of the many things that need to change, that needs to be done *better* than we (as in, the world, collectively) are currently doing.

    Of those 85 people, how many, apart from Bill Gates, recognize this? How many are actively working, in whatever way, to improve this idiocy? Let me be generous, and count Warren Buffet as well. Who else?

  17. I think a global end to bank deposit secrecy would help. (Not that deposits would become public, but that governments should get insight into the deposits of their own citizens in foreign banks.)

    But the top 85 richest people are beyond that. Their riches are in corporate ownership; the accrual isn’t largely throwing off income that can be taxed.

    Another thing that could help is an inheritance tax of 100% on assets above (say) $1 million. I’ve never heard a compelling reason why people should leave that kind of wealth to their kids. Hard to implement.

    I’ve fantasized in the past about making the top income tax bracket proportional to the level of unemployment, or inversely proportional to the income in the bottom quintile of the population. Hey rich people, if the poor aren’t doing well, we’re going to take it out of your income. Get cracking with that job creation!

    But… back on the claimed problem. Take people like Gates, Ellison, and Bezos. Ignore for a moment that you may object to some of the business practices that made Microsoft big. These guys are on the list because they built hugely successful companies. Their wealth is partly virtual–in shares that aren’t liquid assets. Are their riches part of the wealth inequality problem?

    It’s not even clear to me that you can say that it’s a problem because the money is stagnant (not being spent, not circulating). The money’s invested, it’s not in a savings account.

    I think what I come back around to, again, is that it’s not clear to me that the riches at the top are the problem. The problem is generating enough decent jobs for the bottom half.

  18. I think what I come back around to, again, is that it’s not clear to me that the riches at the top are the problem. The problem is generating enough decent jobs for the bottom half.

    Yes, they are the problem. Take, for example, the dividend Walmart gave to their share holders. If they had cut that in half, the company could have given ALL their employees a salary that would have taken them off all government support such as food stamps. This is a perfect example of one family getting money they don’t need at the expense of thousands of others.

  19. So many possible responses. :)

    I do see your point about Wal-Mart. The company seems to be structurally profitable, and 48% of it is owned by the Waltons who therefore rake in half the dividends. It’s within their means to pay their employees better or provide them health insurance. The same can be said for Apple–they’re very profitable, and it’s within their means to make working conditions at Foxconn less stressful.

    But…

    First off, people getting money they don’t need… that’s a low bar. You and I have plenty of money we don’t need. What’s the test for whether that money should somehow be diverted?

    Second, the Wal-Mart wage situation isn’t taking money away from that bottom 50% of Earth’s poorest. Any & all Wal-Mart employees are above the world’s median income and wealth. And paying them more won’t do squat for that bottom 50%. The bottom 50% are that poor because there’s nothing vaguely like a Wal-Mart job within 100km of them. (OK, I exaggerate. But probably true for the bottom 10%.)

    Your point may be that this is a pattern that happens everywhere and in any given place keeps the poor poor and makes the rich richer. Except if you read Gates’ letter, you know that’s not true. Globally, the poor are getting less poor. And a good number of people in China and India are better and better off because the evil corporations got to move jobs over there. Without a profit motive, they’d never have bothered. Without allowing more wealth disparity inside China, it would not have happened either.

    Tricky, I think.

    Would it work to complement the minimum wage with a minimum profit sharing law? (i.e. X% of corporate profits have to be paid out to workers or folded into the next year’s salaries, not proportional to current salary but proportional to hours worked or somesuch.) You’d have to prevent outsourcing/restructuring with shell companies.

    (Mexico apparently has a 10% profit sharing law.)

    Finally, some interesting commentary from a variety of angles, collected by Andrew Sullivan.

  20. Comment seen on David Brin’s feed: “You, personally, almost certainly own more than the bottom 1.7 billion people on Earth — you should feel really, really bad about that and give half of what you own to those 1.7B.”

    This isn’t a random pot-shot. There’s something on the order of 1 billion people living on $1-2 a day. That’s a subsistence level where you don’t own anything of any value. Each of us here owns more than that bottom BILLION people on earth do together.

  21. This isn’t a random pot-shot

    No, but it is a distraction from the basic point. If you want to solve ALL income disparity he’s right, but that’s not the goal. Solving TOO BIG income disparity is. It’s like saying a middle level manager at a large company makes more than the tea lady, so therefore we shouldn’t talk about the multimillion dollar bonus that the CEO got.

  22. That’s just a matter of spin. The question exactly is What’s too big?, and your only answer is “I know it when I see it”.

  23. No, I am merely pointing at things where I think it is too big. What is acceptable for a society is not for me to decide, so that’s about all I can do.

previous post: For the Love of Money

next post: Smartphones get more sophisticated, but their owners do not