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> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple

by retube 11y ago

> Today, the top 1% control fully half of the planet's wealth This is a meaningless statistic given negative wealth is possible (indeed common). By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. A potentially better measure of wealth would be say energy consumption which is highly correlated with living standards. Of course the other point is that whilst inequality may be increasing, if measured in absolute cash terms, is that a bad thing if the living standards of the poor are being universally raised? A billion people in India and China have entered the middle class in the last 20 years. It's ironic that the perceived decrease in wealth of the middle class in the US is exactly because on a global scale inequality, at least amongst the middle 80% is decreasing: an increasing percentage of wealth created is being distributed east-wards rather than remaining concentrated in the historically dominant economic powers of North America and Europe.

random_rr 11y ago
Yeah... the example you gave is meaningless. Knowing that wealth concentrates in 1% of human beings is not a meaningless statistic.
EGreg 11y ago
I disagree, simply because it comes down to how much money the MBA graduate has available to him at any given time, given the country's laws. No one is asking him to pay it off all at once. Having a loan you have to pay off over 30 years amortizes your losses, allowing you to have a net profit every month. And if he ever had the situation of the slum dweller, he could declare bankruptcy AND get rid of the student loan by claiming "extraordinary hardship". Finally, the social programs in this country mean that even a homeless, jobless person is richer than some employed people in Africa or Indian slums.
ksowocki 11y ago
> This is a meaningless statistic It's only meaningless if you cherry-pick your examples and draw your opinions from those examples. For 99 percent of the population, wealth is a fair reflection of the actual comparative wealth of individuals.
- retube 11y ago
  It's hardly cherry picking. I don't know exactly the percentage, but let's say 50% of the US population is net in debt. So all these people are poorer than the millions in developing nations without a penny to their name? As above, I would argue no, they are not. Hence this statistic doesn't mean much.
  - ksowocki 11y ago
    Your example of a recent MBA graduate is absolutely a cherry picked example. Even if it wasnt cherry picked example, it's still a bad example for your argument because a cohort of MBA graduates will quickly pay off their debt because of their high earning potential. Your entire argument is based upon two faulty assumptions, that people in poorer / developing nations (1) have a lower standard of living than all Americans and (2) have no debts themselves.
  - snowwrestler 11y ago
    The point of the statistic is not living standards, which you are focusing on. The point is who controls the wealth. A person with a negative net worth is not wealthy. The person who holds the note for their debt, is. A loan is an asset on the loaner's books, and yes, it will be included in the calculation of relative levels of wealth.
- cmdkeen 11y ago
  Not in the developed West it isn't. I'm a fortunate young professional in that I have a stonking great mortgage and still owe (some, it is the UK) of my student loan. In wealth terms I'm doing OK but not great, certainly not in liquid / disposable wealth terms as well as before my property. In the long run however my decisions will likely lead to me being much wealthier than if I maximised my present wealth at all times. I'd say for many people in the West that income is a greater factor. I know plenty of posh people who have inherited money but who have decent but not spectacularly well paying jobs. The cost of modern middle class living in the UK quickly reduces much difference between what they can afford and what I can.
  - 11y ago
tezza 11y ago
It is further ridiculous that the wealth itself is circularly defined with being rich. Own a house in Denver = Awesome Own a house in Manhattan = Super Rich Own a Dinghy = Awesome Own a Super Yacht = Super Rich So by this simple example the Denver Dinghy owner is much less wealthy on paper than the Manhattanite with a Super Yacht. But you can see that the Denverite has both a house and a vessel and may not need a yacht or a downtown house. The extra 'wealth' is of no impact to the happy Denver guy.
- ksowocki 11y ago
  > The extra 'wealth' is of no impact to the happy Denver guy. No one is making any arguments based upon happiness or "Awesome"ness or cost of living. And yes, the Denverite is less wealthy than the Manhattanite, supposing that they both own houses that were sold to them at the median price of their geographic area.
  - tezza 11y ago
    Well they should be making arguments on those bases. If non-'wealthy' people have a lot of both the stuff they want and all the stuff they need, then why should we worry that the 1%ers have Patek Phillipe watches with diamonds everywhere and 3 Lamborghinis. I am saying that the 'wealth' reported as being half of all wealth includes so much overpriced opulent stuff we'd never contemplate buying ever.
massysett 11y ago
I suppose you would equalize this by counting the MBA's future wages as an asset. Even after subtracting out his MBA debt, the MBA has much more earning potential than the slum dweller.
- retube 11y ago
  Well of course, but this is not accounted for in Oxfam's analysis, hence it's pretty meaningless.
russell_h 11y ago
Does anyone know how Oxfam computes that "the top 1% control fully half of the planet's wealth"? In particular, if someone has more debt than assets does that count as negative wealth? Negative, in that for the purposes of the calculation it would offset the wealth of others with positive net worth?
snowwrestler 11y ago
> I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. Why not? Perhaps you believe this, because the Harvard MBA has greater prospects for a high-paying job, or maybe they have a family who will support them until they get a job. But those pools of wealth are already be measured where they are--the high-paying job is with a company, and that company represents wealth that is controlled by its shareholders, partners, owners, etc. That wealth is accounted for in the measurement. Same with whatever wealth is held by the MBA's family. Edit: In any case, it's clear where to sort a person with $200k in debt, no matter their future job prospects. They're not in the 1%.
librvf 11y ago
> By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. This is only because this example exaggerates a few obviously valuable assets that are difficult to measure in terms of market value. (a) The Harvard MBA itself, both the "piece of paper" and the experience itself, has no conveniently measurable market value and thus doesn't count as an asset. Yet, it obviously is worth something. (b) The raw human potential. A Harvard MBA graduate is going to be literate and is likely to have many cognitive advantages vs a "mumbai slum dweller". The potential has unmeasured value, degree or not. (c) Social Capital. This not only includes the support networks of family and friends that tend to support new graduates as they bootstrap their careers, but also the general trust of others in society. For example, a Harvard MBA is not likely to have an unreasonably difficult time finding decent roommates in the Boston area, even if they don't have any immediate friends or family available. College degrees are the big investment where the value of asset is essentially not measurable (at best you can look in hindsight). And everyone has raw human potential and social capital, but then everyone has differing amounts. For the other extreme: take away the degree. Replace the cognitive advantages with a mental disorder (say, an addiction or a psychiatric disorder). Remove the social capital. Take all that away, and you'll be more likely to find a homeless person or someone heavily dependent on the government to survive.

by retube 11y ago

random_rr 11y ago

Yeah... the example you gave is meaningless. Knowing that wealth concentrates in 1% of human beings is not a meaningless statistic.

EGreg 11y ago

I disagree, simply because it comes down to how much money the MBA graduate has available to him at any given time, given the country's laws. No one is asking him to pay it off all at once. Having a loan you have to pay off over 30 years amortizes your losses, allowing you to have a net profit every month. And if he ever had the situation of the slum dweller, he could declare bankruptcy AND get rid of the student loan by claiming "extraordinary hardship". Finally, the social programs in this country mean that even a homeless, jobless person is richer than some employed people in Africa or Indian slums.

ksowocki 11y ago

> This is a meaningless statistic It's only meaningless if you cherry-pick your examples and draw your opinions from those examples. For 99 percent of the population, wealth is a fair reflection of the actual comparative wealth of individuals.

retube 11y ago
It's hardly cherry picking. I don't know exactly the percentage, but let's say 50% of the US population is net in debt. So all these people are poorer than the millions in developing nations without a penny to their name? As above, I would argue no, they are not. Hence this statistic doesn't mean much.
- ksowocki 11y ago
  Your example of a recent MBA graduate is absolutely a cherry picked example. Even if it wasnt cherry picked example, it's still a bad example for your argument because a cohort of MBA graduates will quickly pay off their debt because of their high earning potential. Your entire argument is based upon two faulty assumptions, that people in poorer / developing nations (1) have a lower standard of living than all Americans and (2) have no debts themselves.
- snowwrestler 11y ago
  The point of the statistic is not living standards, which you are focusing on. The point is who controls the wealth. A person with a negative net worth is not wealthy. The person who holds the note for their debt, is. A loan is an asset on the loaner's books, and yes, it will be included in the calculation of relative levels of wealth.
cmdkeen 11y ago
Not in the developed West it isn't. I'm a fortunate young professional in that I have a stonking great mortgage and still owe (some, it is the UK) of my student loan. In wealth terms I'm doing OK but not great, certainly not in liquid / disposable wealth terms as well as before my property. In the long run however my decisions will likely lead to me being much wealthier than if I maximised my present wealth at all times. I'd say for many people in the West that income is a greater factor. I know plenty of posh people who have inherited money but who have decent but not spectacularly well paying jobs. The cost of modern middle class living in the UK quickly reduces much difference between what they can afford and what I can.
- 11y ago

tezza 11y ago

It is further ridiculous that the wealth itself is circularly defined with being rich. Own a house in Denver = Awesome Own a house in Manhattan = Super Rich Own a Dinghy = Awesome Own a Super Yacht = Super Rich So by this simple example the Denver Dinghy owner is much less wealthy on paper than the Manhattanite with a Super Yacht. But you can see that the Denverite has both a house and a vessel and may not need a yacht or a downtown house. The extra 'wealth' is of no impact to the happy Denver guy.

ksowocki 11y ago
> The extra 'wealth' is of no impact to the happy Denver guy. No one is making any arguments based upon happiness or "Awesome"ness or cost of living. And yes, the Denverite is less wealthy than the Manhattanite, supposing that they both own houses that were sold to them at the median price of their geographic area.
- tezza 11y ago
  Well they should be making arguments on those bases. If non-'wealthy' people have a lot of both the stuff they want and all the stuff they need, then why should we worry that the 1%ers have Patek Phillipe watches with diamonds everywhere and 3 Lamborghinis. I am saying that the 'wealth' reported as being half of all wealth includes so much overpriced opulent stuff we'd never contemplate buying ever.

massysett 11y ago

I suppose you would equalize this by counting the MBA's future wages as an asset. Even after subtracting out his MBA debt, the MBA has much more earning potential than the slum dweller.

retube 11y ago
Well of course, but this is not accounted for in Oxfam's analysis, hence it's pretty meaningless.

russell_h 11y ago

Does anyone know how Oxfam computes that "the top 1% control fully half of the planet's wealth"? In particular, if someone has more debt than assets does that count as negative wealth? Negative, in that for the purposes of the calculation it would offset the wealth of others with positive net worth?

snowwrestler 11y ago

> I would argue that's not a fair reflection of the actual comparative wealth of the two individuals. Why not? Perhaps you believe this, because the Harvard MBA has greater prospects for a high-paying job, or maybe they have a family who will support them until they get a job. But those pools of wealth are already be measured where they are--the high-paying job is with a company, and that company represents wealth that is controlled by its shareholders, partners, owners, etc. That wealth is accounted for in the measurement. Same with whatever wealth is held by the MBA's family. Edit: In any case, it's clear where to sort a person with $200k in debt, no matter their future job prospects. They're not in the 1%.

librvf 11y ago

> By this simple measure a recent MBA graduate of Harvard with 200k debt and no assets is poorer than a Mumbai slum dweller with 2 rupees in his pocket. This is only because this example exaggerates a few obviously valuable assets that are difficult to measure in terms of market value. (a) The Harvard MBA itself, both the "piece of paper" and the experience itself, has no conveniently measurable market value and thus doesn't count as an asset. Yet, it obviously is worth something. (b) The raw human potential. A Harvard MBA graduate is going to be literate and is likely to have many cognitive advantages vs a "mumbai slum dweller". The potential has unmeasured value, degree or not. (c) Social Capital. This not only includes the support networks of family and friends that tend to support new graduates as they bootstrap their careers, but also the general trust of others in society. For example, a Harvard MBA is not likely to have an unreasonably difficult time finding decent roommates in the Boston area, even if they don't have any immediate friends or family available. College degrees are the big investment where the value of asset is essentially not measurable (at best you can look in hindsight). And everyone has raw human potential and social capital, but then everyone has differing amounts. For the other extreme: take away the degree. Replace the cognitive advantages with a mental disorder (say, an addiction or a psychiatric disorder). Remove the social capital. Take all that away, and you'll be more likely to find a homeless person or someone heavily dependent on the government to survive.