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World's 26 richest people own as much as poorest 50%, says Oxfam

yason 8y ago
The inequality of assets and income is an unfixable problem, but that is not the problem. There are people who are really good at starting and growing businesses, investing, taking risks, and thus accumulating wealth. Then there are people, some of who are really bad at that but mostly some of who aren't just that much interested and driven by that. Then there are people who are really good at effectively getting rid of any wealth they manage to obtain. Let's call this being good at money. There is nothing wrong with that. Programmers are like that. There are some who are really, really good at it. Then many who are pretty decent, then a lot who are mediocre but still not negative, and then there are programmers whose output is outright negative. Education helps a little: it can help with the constant factor but those who are good they really are good regardless or despite the education. So similarly to as you can't expect to train the whole humankind to become decent programmers I'm pessimistic about being able to educate the whole humankind out of poverty. If we redistributed the world's wealth equally to all people on the planet the distribution would revert back to what the shape it has now in a matter of years or decades. Surely, there would be previously poor people with a knack for money who would be wealthy and there would be previously wealthy people who could not recreate the wealth they obtained by luck or by inheritance. But we would eventually recreate the situation where few people hold most of the assets. The peak of the distribution would just amplify over time as having wealth makes it easier to make more wealth, so the rich get richer and the poor get only fractional improvements. There is a problem if the poor people can't make a living even if they are willing to put in the effort on their part. The systemic inefficiencies to lock a person's position in permanent poverty, the high fixed costs of living that prevent accumulating savings, lack of food, roof or medical support rendering people incapable to restart or begin a financially sustainable life, or money being able to buy justice or privileges that trump other people's rights. These are the problems and not the fact that one person has a billion times more assets than some other person. There are solutions we've tried and mostly failed. We can try to transfer wealth back from the rich to subsidise the poor. But poverty is often also about the mindset, and it is well known you can't refill a well merely by carrying water into it. The water just flows back to where it came from. We can try to make living not so dependent on one's income and assets but that means disrupting the natural markets for both jobs and goods, which not only accumulates inefficiencies due the diminished effect of businesses' healthy deaths but generates a reflecting black market that has no regulation. We can try to create more jobs as historically work has been a good medium to redistribute wealth but it seems that jobs are becoming less like that. There are very high-paying jobs for a small group of people and very poorly paid work or no work for lots of people. Trying to fix the inequality of wealth distribution in order to combat poverty is, in my opinion, fixing the symptom and not the cause.
- crc32 8y ago
  > We can try to transfer wealth back from the rich to subsidise the poor. But poverty is often also about the mindset, and it is well known you can't refill a well merely by carrying water into it Are you saying that poor people are poor because of their own ignorance or poor behaviours? And therefore if you give them money they'll just piss it away?
  - yason 8y ago
    Nope but because they're subjected to an environment that only operates in terms of poverty. Living in poverty is likely to develop a mindset, in order to survive, that won't scale pulling you back out of poverty. That is, where you never start making smart financial decisions or plan ahead because, you know, the life is a mess enough because of various factors due to having little or no money or peers telling you to act otherwise. There have been a number of discussions and even anecdotal comments on HN to probe into this. For example, feeling lucky at Google gave me this: https://news.ycombinator.com/item?id=16461773 https://news.ycombinator.com/item?id=16461773
    - crc32 8y ago
      In your original comment you said "If we redistributed the world's wealth equally to all people on the planet the distribution would revert back to what the shape it has now in a matter of years or decades" - so it sounded to me as though you were against this, on the basis that it would not solve the problem. > Nope but because they're subjected to an environment that only operates in terms of poverty. So let's say you have now identified a root cause, and assuming we're looking for a solution - how do we fix this without a redistribution of wealth?
grondilu 8y ago
Isn't there a law about networks or something that explains these kinds of things? Basically, "money goes to money"? Is so, does the discrepancy described in this article fit within this theoretical framework?
- atc 8y ago
  Pareto distribution.
altvali 8y ago
"World's 8 richest people have same wealth as poorest 50%" - Oxfam, 2017 "World's 26 richest people have same wealth as poorest 50%" - Oxfam, 2019 Not exactly the most convincing proof of "the widening gap". I'm not saying that the inequality hasn't increased, just that you need a different metric for showing it.
- salty_biscuits 8y ago
  Looking at the tails is always going to be noisy. Gini coefficient should do.
- onetimemanytime 8y ago
  Poorest 50% probably have close to zero networth. Maybe some may have some sort of "house," or property, but that's about it. Another good point they make: VAT (sales tax in USA) is over 20% in a lot of countries. That's in addition to income tax, pension (SS) contributions etc etc. Basically, you pay at least 20% tax virtually on everything. The governments usually collect that at the customs point of entry, and then it is passed down to the ultimate buyers.
  - vidarh 8y ago
    > Basically, you pay at least 20% tax virtually on everything. This is misleading. Firstly, in most countries with VAT, goods considered basic necessities, like food, tends to be zero rated or have lower VAT rates. Secondly, VAT is only paid on goods and often services you buy, not on e.g. mortgage payments or other debt, or rent (most places). As an example, though at an income well above average, last time I checked VAT raised my effective tax rate by ~4 percentage points, despite the 20% UK headline VAT rate. Very low earners also tends to pay relatively little VAT, as a much larger proportion of their income tends to go to rent or things that are exempt. As a result most poor people pay those 20% (or whatever local rate) at only a small proportion of their overall income. VAT is still a problematic tax, as it has a disproportionately negative effect for poor people once they do earn a bit extra and want to spend it on something not considered a basic necessity (and the categories that are exempt do tend to be quite narrow). It can certainly drive their effective tax rate up well above the headline income tax rate for their income level even with very small proportions of income spent on full rated things. It also causes a "bulge" effect, where low to middle earners sees the largest effect (as high earners tends to invest and save a large proportion of their income; and in the UK and many other places are also more likely to afford to take advantage of a lot of other tax breaks)
skilled 8y ago
I wonder why so many of these people are choosing to spend time in their office 'cubicles' rather than travel the world and do good things. Like seriously, what is the barrier/problem here? Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts. We in the West love to complain about our 'problems' but a lot of us honestly don't have a clue what's happening elsewhere on the planet. And, of course, I am not talking just about the helping aspect of it, but also the opportunity to be exposed to some of the planets hidden beauty, places that only a handful of people will ever get to see. Maybe it's because I am so free-spirited, and don't really value my own life as above anyone else's. Although 7.5B people sounds a lot, this Earth is nothing more than a planetarium. The grip that the Human Ego has on materialistic identity so absolutely bizarre. I'm not saying every giga-rich person is like this, certainly, some are contributing to philanthropy and other projects, and perhaps I am myself mixing together two issues here, but this kind of philosophy interests me a lot.
- JumpCrisscross 8y ago
  > Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts Travelling to remote places and doing things that feel impactful is generally an inefficient way to do good. I’m not criticising it per se. For edge-case problems, it’s the only solution. But if you want to enact change at scale, you’ll be doing it from the same places other human institutions enacting change at scale are.
- onetimemanytime 8y ago
  >>Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts. So you spend $4500 on travel tickets to help a family gather wood? Labor, they have plenty. Now if you brought a water pump or a solar panel is different. A lot of "charities" in USA do that. Gather millions a year, pay themselves a nice salary and go distribute flyers once a month.
matthewfelgate 8y ago
Who cares? This focus on rich people is a distraction from eliminating poverty. It's a stupid and simplistic solution just to take money from rich people. I wish Oxfam would stop stoking these silly socialist fires.
- eponeponepon 8y ago
  How do you propose that poverty be eliminated without some people holding proportionally less of the world's money?
  - james_s_tayler 8y ago
    The don't need to hold proportionally less. It's a red herring. The focus rather should be on health/nutrition outcomes, education outcomes, physical safety, quality of housing. And this question is... is it getting better? Factfulness says yes. Slowly, but surely, yes.
  - tonyedgecombe 8y ago
    Most of their wealth isn't money, it's property, land and businesses.
  - agent008t 8y ago
    It's not about money. In fact, money is the completely wrong way to think about it. The vast majority of the wealth of the wealthy is in the form of ownership of businesses that efficiently produce goods and services for others (not for themsevles - this is important). If you take these businesses away from them and give them to the poor (who are likely not going to be that great at managing said businesses), the effect would be to make the poor poorer, as well as humanity as a whole.
lanevorockz 8y ago
Inequality is irrelevant, the trick is to make poverty non desirable but at the same time comfortable. It would give them basic decency to not be exploited. Education resources (books/online courses) should also be provided for free.
- eponeponepon 8y ago
  Comfort is exactly what people seek. You can't make something both comfortable and undesirable. If you're prepared to countenance a world where all people live a comfortable life, then you're implicitly countenancing a world where all people have equal worth - monetarily and otherwise.
  - tomp 8y ago
    They also seek sex, status, domination, power, wealth, fame, ...
  - james_s_tayler 8y ago
    I think the baseline of comfort that we're aiming for is beyond what most of us in the West have. I think the late Hans Rosling's "level 3" probably isn't much less well off in terms of emotional well-being than level 4. And level 3 is significantly cheaper than level 4, so it's not unimaginable that eventually everyone gets at least there over a few hundred more years.
  - roenxi 8y ago
    > If you're prepared to countenance a world where all people live a comfortable life, then you're implicitly countenancing a world where all people have equal monetary wealth - monetarily and otherwise. A world where all people have equal worth is a world where nobody has anything, because there will always be someone who will trade their worth for present pleasures and then have less than everyone else. It is possible to have a perfectly unequal world where everyone is comfortable, and one entity controls everything. Indeed, something approximating this is the idealised equilibrium that underpins what 'a good capitalist society' could look like, if faeries were real. The idea in practice is that the people who make the best decisions get all the wealth, so resources are productively utilised, then anyone who wants something does enough wok to produce it (but working in their own area instead of building it themselves). The problem in the modern era is stuff like the 2008 financial crisis, where the mechanisms to take money away from idiot capitalists (ie, bankruptcy of major corporations) have been short-circuited and disabled.
cperciva 8y ago
If this is the same methodology as they've used in the past, I personally own as much as the poorest 30% of the world. (And so do you.) Aggregating wealth gets weird when you look at debt and measure net wealth.
- kamaal 8y ago
  I think the point is also about access to a certain degree of privilege. Merely being born in what is considered currently the western civilization or hemisphere- Basically Europe, US, Canada and Australia- Gives you access to a lot of economic and social opportunity. Which includes things like free primary and secondary education, heath care, pensions, social security, food stamps/security, infrastructure, easy mobility etc etc. Your average US citizen has more to their disposal(in terms of any metric you can possibly measure) than people in South Asia or Africa.
ak39 8y ago
26 (left most) = 3'500'000'000 (right most) That is one staggering statistic. If I were one of those 26 people, I'd consider myself a superhero. Wake up every morning knowing that I am capable of saving and improving lives of an entire (small) country!
- tonyedgecombe 8y ago
  I suspect they mostly wake up wondering how they can make even more. You need an insatiable appetite to get on that list. Poor buggers.
  - deleted 8y ago
    [deleted]
  - peteretep 8y ago
    > You need an insatiable appetite to get on that list. Poor buggers. Mmmm, some. Of the 26 I found, 7 inherited.
- sgjohnson 8y ago
  But please tell me how. Providing them all with clothing, housing, food and healthcare wouldn't solve anything. As a matter of fact, it would only make matters worse. It'll lead to a increase in birth rates without actually addressing the problem at the core. They have to be taught trade, not provided for. A healthy capitalist economy must be created in those places. It's giving the man a fish vs teaching the man how to fish.
  - yesbabyyes 8y ago
    The man knows how to fish. Unfortunately for him, the fisheries are collapsing, because someone who wants to become wealthy is sending trawlers from halfway around the world, taking all the fish and leaving destruction in their wake. The man also knows how to farm. What looks like forest, or jungle, to you, is actually the man's farm--has been, for generations. But that was last year: men came with guns, fenced off the forest, logged it, and now it's all a palm oil plantation, stretching toward the horizon in all directions. The man and his family were offered "jobs", earning a pittance, barely enough for survival, buying rice imported from halfway across the world. Because some other man wanted to be wealthy. The man can't manage his resources, because there is no legal framework for him to do it. The people who claimed to create a free-market, "teaching the man how to fish", etc, actually created the present situation, so may be looked at today with some suspicion.
marcoperaza 8y ago
This is really misleading, as most people have very small or negative net worths. A homeless guy with a few bucks in his pocket has a higher net worth than most young doctors or lawyers. The statistic as presented could make one think that you could just rob these 26 people and solve world poverty with their money. That’s just not true. What makes the world go round is not the stored up wealth of the ultra rich, but the much much greater sum of total output produced by the economy every year.
james_s_tayler 8y ago
Any parameter pushed to the extreme produces perversion. I don't get this obsession with how much those at the top managed to accrue. My only metric is is it getting better on average for me and other people? I hope capatilism lasts another couple of hundred years and everyone gets to level 3 or 4 and no one can harp on about "but the 1%!" anymore like a whiny entitled asshole because eventually everyone will have it, if not good, at least acceptable. It's a pretty long process. It's only taken 300 years to get where we are. Even the last 30 years have been remarkable. Give it another 50 to 100 years. 200 even. Be patient ffs.
- vidarh 8y ago
  It's not an obsession. It's an easy way of illustrating a point that gets a portion of people to consider the current situation unfair and do more to change things. They keep publishing these because they keep getting press attention and as a result get more support and are able to improve the lives of more people. > like a whiny entitled asshole I won't say what I think about calling someone entitled assholes for wanting less death and suffering.
  - james_s_tayler 8y ago
    It is an obsession. My claim is that you cannot compute a priori whether it is fair or not because it's not possible to consider both the present reality and the alternatives and fast-forward time in your mind and know exactly how all the possible worlds play out. You can't actually even get close. Humanity runs on one algorithm and that's guess and check. For stuff this complicated as to which way of organizing things actually results in less death and suffering this is necessarily so. Else we would just have sat down, worked it out and followed that course of action. The river of history runs the experiment for us and it's the only way to honestly compute results.
    - vidarh 8y ago
      We're all part of influencing that algorithm, so this is a ridiculous argument. We can choose to do nothing, or we can choose to try. Yes, we won't know if the results are good or not, but that is a shitty reason for doing nothing. As for this argument being an obsession, I think you miss the point: It's a PR campaign. They've used it year after year, because it works. It gives them press attention. It results in increases in donations. It helps them achieve their goals. If it's their goals you find "obsessive", then so be it. But this focus on the richest is pragmatic: It's something cheap they know they can milk year after year. I doubt most people at Oxfam goes around thinking all that much about the 26 richest people in the world - more likely they're busy actually trying to run their programs and keep them funded.
maratc 8y ago
A reminder: it's usually not a good idea to sum up the net worth of the poor, as many people who are net-negative (have debt) will bring down a couple thousand of actually poor people. The poorest person in the world by net worth is Jérôme Kerviel [0], the Paris banker, who is worth about -5 billion euros. You can add the entire net worth of all the population of a couple of African countries to get to total net worth of 0. [0] https://en.wikipedia.org/wiki/Jérôme_Kerviel https://en.wikipedia.org/wiki/Jérôme_Kerviel Edit: Rebuttal for their previous report: http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding-up-the-wealth-of-the-poor/ http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding...
- rabidrat 8y ago
  > In March 2014, a French high court upheld Kerviel's prison sentence but ruled he would not have to repay €4.9bn.[36] I was hoping he was actually billions in the hole, but no, he's out of prison and working and not responsible for repaying any amount of the debt.
  - hocuspocus 8y ago
    Sure, let's put the junior trader in prison and not do anything about SocGen's management utter incompetence. FYI Kerviel's job termination was ruled abusive and the French government is now asking SocGen to pay back the 2.2bn tax break they got in 2008.
  - lmilcin 8y ago
    It would actually be impossible for him to do this. Nobody will let him anywhere near a job that would let him earn any sum of money that could make a difference on a 4th or 5th digit of that sum even if he worked for the rest of his life for this.
    - neuronic 8y ago
      You could really argue in all directions here. If he remained in prison all that he would do is to accumulate even more cost. But if not, he might become a welfare case (is he?) unless he lowers himself to do some honest work.
mrleiter 8y ago
Capital accrues capital faster than income ever can. This gap is one of the reasons why we have right wing populists. They offer easy answers to a complex problem - namely low income growth, jobs and immigration.
piokoch 8y ago
Pretty interesting. One thing that bothers me is "The way our economies are organised means wealth is increasingly and unfairly concentrated among a privileged few while millions of people are barely subsisting". I don't fully understand "unfairly" in this context. According to the thefreedictionary this word means: 1. Contrary to justice or a sense of fairness 2. Contrary to laws or conventions, especially in commerce; unethical: unfair dealing. 3. Not kind or considerate: It was unfair of me to laugh when he felt so sad. I am not sure I understand which of those description of unfairness applies to, say, Jeff Bezof (mentioned in the article). I have only limited knowledge about him, but I haven't heard that he had done anything that could be described as "unfair". One might even argue the opposite - he enabled many people to but cheaper goods in an easier way and he also enabled many people to sell goods efficiently and earn good money in this way.
- patstew 8y ago
  Last year Jeff Bezos earned more money than every other Amazon employee put together. Does this distribution of rewards fairly reflect the contribution of each person to Amazon's success? If either Bezos or every other employee died in an accident, which would cause more damage to Amazon? Even accepting that Bezos deserves a huge pile of money for his achievements, and that the economic system isn't his fault, it would be reasonable to view the status quo as "contrary to justice or a sense of fairness".
  - guykdm 8y ago
    Your "harm" by elimination based metric seems rather arbitrary. This rather big bunch of current Amazon employees, if they were cobbled together in a building before they were hired by Bezos, would they have spontaneously created the company? Most probably not. The market sees fairness and reward as proportional to actual creation. This seems just as valid as your abstract reasoning.
    - patstew 8y ago
      It's not really a metric, just an absurd example to illustrate a point. In answer to your example, I would say probably yes, but not exactly the same and it wouldn't be called Amazon. Amazon bought up and merged competitive companies on its way to success. If Amazon didn't exist, it's likely one of those, or another competitor that fell by the wayside would've taken its place. I think it's extremely unlikely that most of the hard work, good decisions, clever innovations etc that led Amazon to win can be attributed to Bezos personally, as most of the spoils have.
15characterslon 8y ago
Also the world's richest 50% own more than the poorest 50%.
justanegg 8y ago
Rich Shaming
porjo 8y ago
It's a great temptation to point the finger at 'those filthy rich people over there' but to someone else you and I are those filthy rich people. Let's all have an attitude of gratitude, and not forget that wealth isn't a zero sum game. Make the most of what you've been given, and leave the world a better place.
- onion2k 8y ago
  To paraphrase your argument; "You have 1,000 times more wealth than a poor person so you can't say it's bad that someone else has 1,000,000,000 times more." You know what, I absolutely can.
  - porjo 8y ago
    Sure, go right ahead - just don't be self righteous about it. Don't become what you hate in that other person.
- xg15 8y ago
  Explain to me how certain relevant aspects of wealth such as food, housing, energy or not wrecking the planet are not a zero sum game.
  - oblio 8y ago
    Well, this game can be played cooperatively or adversarially. For the latter approach, everything is a zero sum game. Getting back to your points: > food We already (can) produce way more food than we consume. The main problem is distributing it and the lack of economic incentives to make this distribution global and fair. > housing We have the tech and resources to provide everyone adequate non-slum housing. It's again a problem of global and fair distribution. More than that, more people need to accept that we need more high density urban environments. This point will come back later :) > energy From an energy point of view, we're kind of at the "food" point. The real challenge is converting energy production to renewables. Which brings us to... > not wrecking the planet We absolutely have all the tech and know-how to not wreck the planet. But it's a tragedy of the commons. Not wrecking the planet is the final end game, the ultimate cooperative move. Heck, it's the final anti-zero sum game move.
nootropicat 8y ago
This is a bad comparison not only because of debt, but because that is a valuation of productive capital they own. Nobody can eat shares. The only thing that would happen after a 'fair redistribution' is that party's bureucrats would replace current managers in their former companies. The fate of PDVSA shows the ultimate result. What the ultra-rich actually consume is a tiny fraction of their net worth.
- lostmsu 8y ago
  The same goes the other way too though. Nobody can consume 1,000,000,000 loafs of bread.
randyrand 8y ago
Imagine there was another planet in another galaxy that had 100x the wealth as earth. Would it even matter? Sometimes I think these global comparisons are like comparing different planets. Who really cares? It's our immediate surroundings that matter.
- deleted 8y ago
  [deleted]
- dannyw 8y ago
  Less wealth at the top, means more wealth all around. Your analogy is flawed, unless you think things like progressive taxation, social support / transfer payments, and closing rich’s tax havens and loopholed are equivalent to a galaxy far far away.
  - manigandham 8y ago
    Wealth is not zero sum.
    - dannyw 8y ago
      The distribution of finite resources on this planet is a near zero sum question.
- crc32 8y ago
  Research suggests that we value relative wealth more than absolute wealth. [1] This means that inequality is important for social stability - does social stability matter? There are possibly other reasons as well - you could argue rich people invest differently, which has implications for the global allocation of resources. [2] [1] http://science.sciencemag.org/content/318/5854/1305.full?ijkey=wQeHRuQG0gS/w&keytype=ref&siteid=sci http://science.sciencemag.org/content/318/5854/1305.full?ijk... [2] https://www.theglobeandmail.com/investing/globe-wealth/article-how-do-the-wealthy-stay-that-way-they-dont-invest-like-the-rest/ https://www.theglobeandmail.com/investing/globe-wealth/artic...
- vidarh 8y ago
mruts 8y ago
Wealth inquality (up to a point, of course) is, in general, actually a good thing. The more concentrated wealth is, the more easily and more cheaply it can leveraged to affect change. A good example might be the Gates Foundation. Through Bill Gates’ concentration of wealth, he can allocate money to help the world with very little friction and overhead Other examples include VC or hedge funds. While they don’t own the money themselves (they merely aggregate and invest it on the behalf of others), the reason this happens is because it’s much more profitable and efficient to invest one large pot of cash vs many small pots of cash. PS: If someone wants to bring up that index funds are better, it’s still the same principle at work. The expense ratio of a S&P 500 index fund are much smaller than what most individuals could manage themselves.
- piahoo 8y ago
  tldr; wealth inquality is good, because it is easier to distribute wealth (fight with wealth inquality) disease is good, because it easier to fight with disease when you are ill
  - username90 8y ago
    I think it is better that Gates has billions to distribute to poor people rather than each American millionaire having a couple of thousand dollars extra to spend on their vacations.
- UweSchmidt 8y ago
  It's the wealth inequality that creates the problems for so many people in the first place. Superrich people are basically royalty at this point. Affecting change as they see fit, mostly busy with themselves.
- casual_slacker 8y ago
  It's an interesting point seldom discussed: governments use money in boring safe ways, eccentric rich people "waste" money in unique and unpredictable ways. Both seem essential to the equation of production, just maybe not in the current proportions.
guykdm 8y ago
When you're very poor almost all of your assets are your earning capacity which isn't counted. So a top notch MIT graduate who participated with say 5$ in the cost of his education and can now earn a lot (which can be seen as a yielding asset) is now counted as 5$ poorer. Human capital isn't counted.
poilcn 8y ago
~34% of world population are children and teenagers. Of course they own nothing. Then there are young adults who just entered labor market and they don't have anything as well. So, it's roughly 40% of the world population. Plus debts mentioned by others.
methodiosmel 8y ago
So what?

The inequality of assets and income is an unfixable problem, but that is not the problem. There are people who are really good at starting and growing businesses, investing, taking risks, and thus accumulating wealth. Then there are people, some of who are really bad at that but mostly some of who aren't just that much interested and driven by that. Then there are people who are really good at effectively getting rid of any wealth they manage to obtain. Let's call this being good at money. There is nothing wrong with that. Programmers are like that. There are some who are really, really good at it. Then many who are pretty decent, then a lot who are mediocre but still not negative, and then there are programmers whose output is outright negative. Education helps a little: it can help with the constant factor but those who are good they really are good regardless or despite the education. So similarly to as you can't expect to train the whole humankind to become decent programmers I'm pessimistic about being able to educate the whole humankind out of poverty. If we redistributed the world's wealth equally to all people on the planet the distribution would revert back to what the shape it has now in a matter of years or decades. Surely, there would be previously poor people with a knack for money who would be wealthy and there would be previously wealthy people who could not recreate the wealth they obtained by luck or by inheritance. But we would eventually recreate the situation where few people hold most of the assets. The peak of the distribution would just amplify over time as having wealth makes it easier to make more wealth, so the rich get richer and the poor get only fractional improvements. There is a problem if the poor people can't make a living even if they are willing to put in the effort on their part. The systemic inefficiencies to lock a person's position in permanent poverty, the high fixed costs of living that prevent accumulating savings, lack of food, roof or medical support rendering people incapable to restart or begin a financially sustainable life, or money being able to buy justice or privileges that trump other people's rights. These are the problems and not the fact that one person has a billion times more assets than some other person. There are solutions we've tried and mostly failed. We can try to transfer wealth back from the rich to subsidise the poor. But poverty is often also about the mindset, and it is well known you can't refill a well merely by carrying water into it. The water just flows back to where it came from. We can try to make living not so dependent on one's income and assets but that means disrupting the natural markets for both jobs and goods, which not only accumulates inefficiencies due the diminished effect of businesses' healthy deaths but generates a reflecting black market that has no regulation. We can try to create more jobs as historically work has been a good medium to redistribute wealth but it seems that jobs are becoming less like that. There are very high-paying jobs for a small group of people and very poorly paid work or no work for lots of people. Trying to fix the inequality of wealth distribution in order to combat poverty is, in my opinion, fixing the symptom and not the cause.

crc32 8y ago
> We can try to transfer wealth back from the rich to subsidise the poor. But poverty is often also about the mindset, and it is well known you can't refill a well merely by carrying water into it Are you saying that poor people are poor because of their own ignorance or poor behaviours? And therefore if you give them money they'll just piss it away?
- yason 8y ago
  Nope but because they're subjected to an environment that only operates in terms of poverty. Living in poverty is likely to develop a mindset, in order to survive, that won't scale pulling you back out of poverty. That is, where you never start making smart financial decisions or plan ahead because, you know, the life is a mess enough because of various factors due to having little or no money or peers telling you to act otherwise. There have been a number of discussions and even anecdotal comments on HN to probe into this. For example, feeling lucky at Google gave me this: https://news.ycombinator.com/item?id=16461773 https://news.ycombinator.com/item?id=16461773
  - crc32 8y ago
    In your original comment you said "If we redistributed the world's wealth equally to all people on the planet the distribution would revert back to what the shape it has now in a matter of years or decades" - so it sounded to me as though you were against this, on the basis that it would not solve the problem. > Nope but because they're subjected to an environment that only operates in terms of poverty. So let's say you have now identified a root cause, and assuming we're looking for a solution - how do we fix this without a redistribution of wealth?

grondilu 8y ago

Isn't there a law about networks or something that explains these kinds of things? Basically, "money goes to money"? Is so, does the discrepancy described in this article fit within this theoretical framework?

atc 8y ago
Pareto distribution.

altvali 8y ago

"World's 8 richest people have same wealth as poorest 50%" - Oxfam, 2017 "World's 26 richest people have same wealth as poorest 50%" - Oxfam, 2019 Not exactly the most convincing proof of "the widening gap". I'm not saying that the inequality hasn't increased, just that you need a different metric for showing it.

salty_biscuits 8y ago
Looking at the tails is always going to be noisy. Gini coefficient should do.
onetimemanytime 8y ago
Poorest 50% probably have close to zero networth. Maybe some may have some sort of "house," or property, but that's about it. Another good point they make: VAT (sales tax in USA) is over 20% in a lot of countries. That's in addition to income tax, pension (SS) contributions etc etc. Basically, you pay at least 20% tax virtually on everything. The governments usually collect that at the customs point of entry, and then it is passed down to the ultimate buyers.
- vidarh 8y ago
  > Basically, you pay at least 20% tax virtually on everything. This is misleading. Firstly, in most countries with VAT, goods considered basic necessities, like food, tends to be zero rated or have lower VAT rates. Secondly, VAT is only paid on goods and often services you buy, not on e.g. mortgage payments or other debt, or rent (most places). As an example, though at an income well above average, last time I checked VAT raised my effective tax rate by ~4 percentage points, despite the 20% UK headline VAT rate. Very low earners also tends to pay relatively little VAT, as a much larger proportion of their income tends to go to rent or things that are exempt. As a result most poor people pay those 20% (or whatever local rate) at only a small proportion of their overall income. VAT is still a problematic tax, as it has a disproportionately negative effect for poor people once they do earn a bit extra and want to spend it on something not considered a basic necessity (and the categories that are exempt do tend to be quite narrow). It can certainly drive their effective tax rate up well above the headline income tax rate for their income level even with very small proportions of income spent on full rated things. It also causes a "bulge" effect, where low to middle earners sees the largest effect (as high earners tends to invest and save a large proportion of their income; and in the UK and many other places are also more likely to afford to take advantage of a lot of other tax breaks)

skilled 8y ago

I wonder why so many of these people are choosing to spend time in their office 'cubicles' rather than travel the world and do good things. Like seriously, what is the barrier/problem here? Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts. We in the West love to complain about our 'problems' but a lot of us honestly don't have a clue what's happening elsewhere on the planet. And, of course, I am not talking just about the helping aspect of it, but also the opportunity to be exposed to some of the planets hidden beauty, places that only a handful of people will ever get to see. Maybe it's because I am so free-spirited, and don't really value my own life as above anyone else's. Although 7.5B people sounds a lot, this Earth is nothing more than a planetarium. The grip that the Human Ego has on materialistic identity so absolutely bizarre. I'm not saying every giga-rich person is like this, certainly, some are contributing to philanthropy and other projects, and perhaps I am myself mixing together two issues here, but this kind of philosophy interests me a lot.

JumpCrisscross 8y ago
> Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts Travelling to remote places and doing things that feel impactful is generally an inefficient way to do good. I’m not criticising it per se. For edge-case problems, it’s the only solution. But if you want to enact change at scale, you’ll be doing it from the same places other human institutions enacting change at scale are.
onetimemanytime 8y ago
>>Even if I had only a million dollars to freely spend, I would still choose to travel and make an impact where it counts. So you spend $4500 on travel tickets to help a family gather wood? Labor, they have plenty. Now if you brought a water pump or a solar panel is different. A lot of "charities" in USA do that. Gather millions a year, pay themselves a nice salary and go distribute flyers once a month.

matthewfelgate 8y ago

Who cares? This focus on rich people is a distraction from eliminating poverty. It's a stupid and simplistic solution just to take money from rich people. I wish Oxfam would stop stoking these silly socialist fires.

eponeponepon 8y ago
How do you propose that poverty be eliminated without some people holding proportionally less of the world's money?
- james_s_tayler 8y ago
  The don't need to hold proportionally less. It's a red herring. The focus rather should be on health/nutrition outcomes, education outcomes, physical safety, quality of housing. And this question is... is it getting better? Factfulness says yes. Slowly, but surely, yes.
- tonyedgecombe 8y ago
  Most of their wealth isn't money, it's property, land and businesses.
- agent008t 8y ago
  It's not about money. In fact, money is the completely wrong way to think about it. The vast majority of the wealth of the wealthy is in the form of ownership of businesses that efficiently produce goods and services for others (not for themsevles - this is important). If you take these businesses away from them and give them to the poor (who are likely not going to be that great at managing said businesses), the effect would be to make the poor poorer, as well as humanity as a whole.

lanevorockz 8y ago

Inequality is irrelevant, the trick is to make poverty non desirable but at the same time comfortable. It would give them basic decency to not be exploited. Education resources (books/online courses) should also be provided for free.

eponeponepon 8y ago
Comfort is exactly what people seek. You can't make something both comfortable and undesirable. If you're prepared to countenance a world where all people live a comfortable life, then you're implicitly countenancing a world where all people have equal worth - monetarily and otherwise.
- tomp 8y ago
  They also seek sex, status, domination, power, wealth, fame, ...
- james_s_tayler 8y ago
  I think the baseline of comfort that we're aiming for is beyond what most of us in the West have. I think the late Hans Rosling's "level 3" probably isn't much less well off in terms of emotional well-being than level 4. And level 3 is significantly cheaper than level 4, so it's not unimaginable that eventually everyone gets at least there over a few hundred more years.
- roenxi 8y ago
  > If you're prepared to countenance a world where all people live a comfortable life, then you're implicitly countenancing a world where all people have equal monetary wealth - monetarily and otherwise. A world where all people have equal worth is a world where nobody has anything, because there will always be someone who will trade their worth for present pleasures and then have less than everyone else. It is possible to have a perfectly unequal world where everyone is comfortable, and one entity controls everything. Indeed, something approximating this is the idealised equilibrium that underpins what 'a good capitalist society' could look like, if faeries were real. The idea in practice is that the people who make the best decisions get all the wealth, so resources are productively utilised, then anyone who wants something does enough wok to produce it (but working in their own area instead of building it themselves). The problem in the modern era is stuff like the 2008 financial crisis, where the mechanisms to take money away from idiot capitalists (ie, bankruptcy of major corporations) have been short-circuited and disabled.

cperciva 8y ago

If this is the same methodology as they've used in the past, I personally own as much as the poorest 30% of the world. (And so do you.) Aggregating wealth gets weird when you look at debt and measure net wealth.

kamaal 8y ago
I think the point is also about access to a certain degree of privilege. Merely being born in what is considered currently the western civilization or hemisphere- Basically Europe, US, Canada and Australia- Gives you access to a lot of economic and social opportunity. Which includes things like free primary and secondary education, heath care, pensions, social security, food stamps/security, infrastructure, easy mobility etc etc. Your average US citizen has more to their disposal(in terms of any metric you can possibly measure) than people in South Asia or Africa.

ak39 8y ago

26 (left most) = 3'500'000'000 (right most) That is one staggering statistic. If I were one of those 26 people, I'd consider myself a superhero. Wake up every morning knowing that I am capable of saving and improving lives of an entire (small) country!

tonyedgecombe 8y ago
I suspect they mostly wake up wondering how they can make even more. You need an insatiable appetite to get on that list. Poor buggers.
- deleted 8y ago
  [deleted]
- peteretep 8y ago
  > You need an insatiable appetite to get on that list. Poor buggers. Mmmm, some. Of the 26 I found, 7 inherited.
sgjohnson 8y ago
But please tell me how. Providing them all with clothing, housing, food and healthcare wouldn't solve anything. As a matter of fact, it would only make matters worse. It'll lead to a increase in birth rates without actually addressing the problem at the core. They have to be taught trade, not provided for. A healthy capitalist economy must be created in those places. It's giving the man a fish vs teaching the man how to fish.
- yesbabyyes 8y ago
  The man knows how to fish. Unfortunately for him, the fisheries are collapsing, because someone who wants to become wealthy is sending trawlers from halfway around the world, taking all the fish and leaving destruction in their wake. The man also knows how to farm. What looks like forest, or jungle, to you, is actually the man's farm--has been, for generations. But that was last year: men came with guns, fenced off the forest, logged it, and now it's all a palm oil plantation, stretching toward the horizon in all directions. The man and his family were offered "jobs", earning a pittance, barely enough for survival, buying rice imported from halfway across the world. Because some other man wanted to be wealthy. The man can't manage his resources, because there is no legal framework for him to do it. The people who claimed to create a free-market, "teaching the man how to fish", etc, actually created the present situation, so may be looked at today with some suspicion.

marcoperaza 8y ago

This is really misleading, as most people have very small or negative net worths. A homeless guy with a few bucks in his pocket has a higher net worth than most young doctors or lawyers. The statistic as presented could make one think that you could just rob these 26 people and solve world poverty with their money. That’s just not true. What makes the world go round is not the stored up wealth of the ultra rich, but the much much greater sum of total output produced by the economy every year.

james_s_tayler 8y ago

Any parameter pushed to the extreme produces perversion. I don't get this obsession with how much those at the top managed to accrue. My only metric is is it getting better on average for me and other people? I hope capatilism lasts another couple of hundred years and everyone gets to level 3 or 4 and no one can harp on about "but the 1%!" anymore like a whiny entitled asshole because eventually everyone will have it, if not good, at least acceptable. It's a pretty long process. It's only taken 300 years to get where we are. Even the last 30 years have been remarkable. Give it another 50 to 100 years. 200 even. Be patient ffs.

vidarh 8y ago
It's not an obsession. It's an easy way of illustrating a point that gets a portion of people to consider the current situation unfair and do more to change things. They keep publishing these because they keep getting press attention and as a result get more support and are able to improve the lives of more people. > like a whiny entitled asshole I won't say what I think about calling someone entitled assholes for wanting less death and suffering.
- james_s_tayler 8y ago
  It is an obsession. My claim is that you cannot compute a priori whether it is fair or not because it's not possible to consider both the present reality and the alternatives and fast-forward time in your mind and know exactly how all the possible worlds play out. You can't actually even get close. Humanity runs on one algorithm and that's guess and check. For stuff this complicated as to which way of organizing things actually results in less death and suffering this is necessarily so. Else we would just have sat down, worked it out and followed that course of action. The river of history runs the experiment for us and it's the only way to honestly compute results.
  - vidarh 8y ago
    We're all part of influencing that algorithm, so this is a ridiculous argument. We can choose to do nothing, or we can choose to try. Yes, we won't know if the results are good or not, but that is a shitty reason for doing nothing. As for this argument being an obsession, I think you miss the point: It's a PR campaign. They've used it year after year, because it works. It gives them press attention. It results in increases in donations. It helps them achieve their goals. If it's their goals you find "obsessive", then so be it. But this focus on the richest is pragmatic: It's something cheap they know they can milk year after year. I doubt most people at Oxfam goes around thinking all that much about the 26 richest people in the world - more likely they're busy actually trying to run their programs and keep them funded.

maratc 8y ago

A reminder: it's usually not a good idea to sum up the net worth of the poor, as many people who are net-negative (have debt) will bring down a couple thousand of actually poor people. The poorest person in the world by net worth is Jérôme Kerviel [0], the Paris banker, who is worth about -5 billion euros. You can add the entire net worth of all the population of a couple of African countries to get to total net worth of 0. [0] https://en.wikipedia.org/wiki/Jérôme_Kerviel https://en.wikipedia.org/wiki/Jérôme_Kerviel Edit: Rebuttal for their previous report: http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding-up-the-wealth-of-the-poor/ http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding...

rabidrat 8y ago
> In March 2014, a French high court upheld Kerviel's prison sentence but ruled he would not have to repay €4.9bn.[36] I was hoping he was actually billions in the hole, but no, he's out of prison and working and not responsible for repaying any amount of the debt.
- hocuspocus 8y ago
  Sure, let's put the junior trader in prison and not do anything about SocGen's management utter incompetence. FYI Kerviel's job termination was ruled abusive and the French government is now asking SocGen to pay back the 2.2bn tax break they got in 2008.
- lmilcin 8y ago
  It would actually be impossible for him to do this. Nobody will let him anywhere near a job that would let him earn any sum of money that could make a difference on a 4th or 5th digit of that sum even if he worked for the rest of his life for this.
  - neuronic 8y ago
    You could really argue in all directions here. If he remained in prison all that he would do is to accumulate even more cost. But if not, he might become a welfare case (is he?) unless he lowers himself to do some honest work.

mrleiter 8y ago

Capital accrues capital faster than income ever can. This gap is one of the reasons why we have right wing populists. They offer easy answers to a complex problem - namely low income growth, jobs and immigration.

piokoch 8y ago

Pretty interesting. One thing that bothers me is "The way our economies are organised means wealth is increasingly and unfairly concentrated among a privileged few while millions of people are barely subsisting". I don't fully understand "unfairly" in this context. According to the thefreedictionary this word means: 1. Contrary to justice or a sense of fairness 2. Contrary to laws or conventions, especially in commerce; unethical: unfair dealing. 3. Not kind or considerate: It was unfair of me to laugh when he felt so sad. I am not sure I understand which of those description of unfairness applies to, say, Jeff Bezof (mentioned in the article). I have only limited knowledge about him, but I haven't heard that he had done anything that could be described as "unfair". One might even argue the opposite - he enabled many people to but cheaper goods in an easier way and he also enabled many people to sell goods efficiently and earn good money in this way.

patstew 8y ago
Last year Jeff Bezos earned more money than every other Amazon employee put together. Does this distribution of rewards fairly reflect the contribution of each person to Amazon's success? If either Bezos or every other employee died in an accident, which would cause more damage to Amazon? Even accepting that Bezos deserves a huge pile of money for his achievements, and that the economic system isn't his fault, it would be reasonable to view the status quo as "contrary to justice or a sense of fairness".
- guykdm 8y ago
  Your "harm" by elimination based metric seems rather arbitrary. This rather big bunch of current Amazon employees, if they were cobbled together in a building before they were hired by Bezos, would they have spontaneously created the company? Most probably not. The market sees fairness and reward as proportional to actual creation. This seems just as valid as your abstract reasoning.
  - patstew 8y ago
    It's not really a metric, just an absurd example to illustrate a point. In answer to your example, I would say probably yes, but not exactly the same and it wouldn't be called Amazon. Amazon bought up and merged competitive companies on its way to success. If Amazon didn't exist, it's likely one of those, or another competitor that fell by the wayside would've taken its place. I think it's extremely unlikely that most of the hard work, good decisions, clever innovations etc that led Amazon to win can be attributed to Bezos personally, as most of the spoils have.

15characterslon 8y ago

Also the world's richest 50% own more than the poorest 50%.

justanegg 8y ago

Rich Shaming

porjo 8y ago

It's a great temptation to point the finger at 'those filthy rich people over there' but to someone else you and I are those filthy rich people. Let's all have an attitude of gratitude, and not forget that wealth isn't a zero sum game. Make the most of what you've been given, and leave the world a better place.

onion2k 8y ago
To paraphrase your argument; "You have 1,000 times more wealth than a poor person so you can't say it's bad that someone else has 1,000,000,000 times more." You know what, I absolutely can.
- porjo 8y ago
  Sure, go right ahead - just don't be self righteous about it. Don't become what you hate in that other person.
xg15 8y ago
Explain to me how certain relevant aspects of wealth such as food, housing, energy or not wrecking the planet are not a zero sum game.
- oblio 8y ago
  Well, this game can be played cooperatively or adversarially. For the latter approach, everything is a zero sum game. Getting back to your points: > food We already (can) produce way more food than we consume. The main problem is distributing it and the lack of economic incentives to make this distribution global and fair. > housing We have the tech and resources to provide everyone adequate non-slum housing. It's again a problem of global and fair distribution. More than that, more people need to accept that we need more high density urban environments. This point will come back later :) > energy From an energy point of view, we're kind of at the "food" point. The real challenge is converting energy production to renewables. Which brings us to... > not wrecking the planet We absolutely have all the tech and know-how to not wreck the planet. But it's a tragedy of the commons. Not wrecking the planet is the final end game, the ultimate cooperative move. Heck, it's the final anti-zero sum game move.

nootropicat 8y ago

This is a bad comparison not only because of debt, but because that is a valuation of productive capital they own. Nobody can eat shares. The only thing that would happen after a 'fair redistribution' is that party's bureucrats would replace current managers in their former companies. The fate of PDVSA shows the ultimate result. What the ultra-rich actually consume is a tiny fraction of their net worth.

lostmsu 8y ago
The same goes the other way too though. Nobody can consume 1,000,000,000 loafs of bread.

randyrand 8y ago

Imagine there was another planet in another galaxy that had 100x the wealth as earth. Would it even matter? Sometimes I think these global comparisons are like comparing different planets. Who really cares? It's our immediate surroundings that matter.

deleted 8y ago
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dannyw 8y ago
Less wealth at the top, means more wealth all around. Your analogy is flawed, unless you think things like progressive taxation, social support / transfer payments, and closing rich’s tax havens and loopholed are equivalent to a galaxy far far away.
- manigandham 8y ago
  Wealth is not zero sum.
  - dannyw 8y ago
    The distribution of finite resources on this planet is a near zero sum question.
crc32 8y ago
Research suggests that we value relative wealth more than absolute wealth. [1] This means that inequality is important for social stability - does social stability matter? There are possibly other reasons as well - you could argue rich people invest differently, which has implications for the global allocation of resources. [2] [1] http://science.sciencemag.org/content/318/5854/1305.full?ijkey=wQeHRuQG0gS/w&keytype=ref&siteid=sci http://science.sciencemag.org/content/318/5854/1305.full?ijk... [2] https://www.theglobeandmail.com/investing/globe-wealth/article-how-do-the-wealthy-stay-that-way-they-dont-invest-like-the-rest/ https://www.theglobeandmail.com/investing/globe-wealth/artic...
vidarh 8y ago

mruts 8y ago

Wealth inquality (up to a point, of course) is, in general, actually a good thing. The more concentrated wealth is, the more easily and more cheaply it can leveraged to affect change. A good example might be the Gates Foundation. Through Bill Gates’ concentration of wealth, he can allocate money to help the world with very little friction and overhead Other examples include VC or hedge funds. While they don’t own the money themselves (they merely aggregate and invest it on the behalf of others), the reason this happens is because it’s much more profitable and efficient to invest one large pot of cash vs many small pots of cash. PS: If someone wants to bring up that index funds are better, it’s still the same principle at work. The expense ratio of a S&P 500 index fund are much smaller than what most individuals could manage themselves.

piahoo 8y ago
tldr; wealth inquality is good, because it is easier to distribute wealth (fight with wealth inquality) disease is good, because it easier to fight with disease when you are ill
- username90 8y ago
  I think it is better that Gates has billions to distribute to poor people rather than each American millionaire having a couple of thousand dollars extra to spend on their vacations.
UweSchmidt 8y ago
It's the wealth inequality that creates the problems for so many people in the first place. Superrich people are basically royalty at this point. Affecting change as they see fit, mostly busy with themselves.
casual_slacker 8y ago
It's an interesting point seldom discussed: governments use money in boring safe ways, eccentric rich people "waste" money in unique and unpredictable ways. Both seem essential to the equation of production, just maybe not in the current proportions.

guykdm 8y ago

When you're very poor almost all of your assets are your earning capacity which isn't counted. So a top notch MIT graduate who participated with say 5$ in the cost of his education and can now earn a lot (which can be seen as a yielding asset) is now counted as 5$ poorer. Human capital isn't counted.

poilcn 8y ago

~34% of world population are children and teenagers. Of course they own nothing. Then there are young adults who just entered labor market and they don't have anything as well. So, it's roughly 40% of the world population. Plus debts mentioned by others.

methodiosmel 8y ago

So what?