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> the 0.00000001% of people who control now half the world's wealth This is nonsense. Your source compares the wealth of the richest few people to the net wort
by voidmain 9y ago
> the 0.00000001% of people who control now half the world's wealth
This is nonsense. Your source compares the wealth of the richest few people to the net worth of the "poorest" 50% of people. Net worth takes into account debt, and it happens that the half of the population with the lowest net worth has a total amount of debt about equal to its total amount of assets, so its total net worth is almost zero. A little more credit card spending, and an eight year old with a nickel in his pocket will have "more wealth than the poorest half". Needless to say this is not anything like half of the world's wealth. The total wealth of individuals is (according to my quick Google search) something like $250 trillion, and that presumably doesn't take into account wealth held by governments.
It's also silly to use net worth to identify the "poorest". Supposedly Donald Trump had a net worth in 1990 of negative 900 million. Your source's calculation would presumably call him the "poorest" person in the world and his presence would subtract $900 million from the wealth of the "poorest half". Is that sensible?
The richest people are very, very rich compared to most individuals. But no individual has much compared to the wealth of the whole world, and I suspect the share is shrinking. In the 19th century JP Morgan bailed out the US government, rather than the other way around!
A more interesting analysis would be to look at the distribution of total lifetime consumption.
- Simon_says 9y agoNone of these net worth calculations of poor people make any sense. If I take out $100k in loans to get an education, the wealth of the world has increased, but the only thing that's recorded on the ledgers of net worth is that I'm $100k in the hole.
- imgabe 9y agoThe bank that owns the loan would record a corresponding $100k asset.
- lstyls 9y agoThis is incorrect. The principal is a liability to the issuer. Income from loan payments are subtracted from the balance as they come in. The cash from the loan is an asset for the borrower, until it is presumptively paid to a third party.
- Simon_says 9y agoYou're not getting my point. Education itself is a form of wealth in terms of increased future earnings; otherwise few would pay for it. That wealth doesn't show up on anybody's balance sheet because it's hard to measure, but it still there. When some millennial says they have negative net worth due to student loans, they're not accounting for the positive value that their education affords them due to the fact they can do skilled labor. Look at it this way -- if a company A has an EBITDA of $20k/year and company B has an EBITDA of $40k/year, the MBAs will have no problem assigning values to these companies. And companies can increase their earnings by going into debt such that their net worth as measured by these calculations can increase. But substitute a human in, and suddenly everybody has negative net worth.
- prostoalex 9y agoPrior to this transaction the bank owned $100k in cash, also valued as a $100k asset. There's no corresponding increase in wealth for the lender.