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China has a similar problem. http://www.forbes.com/sites/kenrapoza/2013/01/20/the-china-miracle-a-rising-wealth-gap/ http://www.forbes.com/sites/kenrapoza/2013

China has a similar problem. http://www.forbes.com/sites/kenrapoza/2013/01/20/the-china-miracle-a-rising-wealth-gap/ http://www.forbes.com/sites/kenrapoza/2013/01/20/the-china-m... http://www.bloomberg.com/news/2013-02-05/china-approves-income-plan-as-wealth-divide-poses-risks.html http://www.bloomberg.com/news/2013-02-05/china-approves-inco... This is frightening to social scientists in China who analyze society from a Marxist framework, especially those who have noticed that regional wealth gaps in China are greater than those in Yugoslavia before Yugoslavia disintegrated.

selmnoo 13y ago
America has a somewhat similar problem. One family right now has more wealth than the bottom 40% of the American population combined. http://articles.latimes.com/2012/jul/18/business/la-fi-mo-walmart-heirs-20120718 http://articles.latimes.com/2012/jul/18/business/la-fi-mo-wa...
- Shivetya 13y ago
  it was a stupid study done to score points with specific groups, basically another bash Wal-Mart to appeal to those bobble heads who rally around that sort of stuff. It takes a lot to ignore all the other wealthy individuals and groups to zero in on that family. Throw out the negative equity people and the numbers were not as bad, use median income and the numbers are better. I doubt the comparisons made in China and Russia are the same as this study you cite was. Besides, most importantly, the Waltons earned it, most of the wealth locked in China and Russia are either ex political power players or their friends. Still, when it comes to China and even Russia, what has really changed? The same people ruling and having control of the wealth when they were not "open" markets are basically the same now.
  - yodsanklai 13y ago
    "Besides, most importantly, the Waltons earned it, most of the wealth locked in China and Russia are either ex political power players or their friends." The distinction here is arbitrary. When we talk about such amount of wealth, I think the verb "to earn" lose some his significance. As a society, I don't believe we should accept that a few persons own such a huge proportion of the wealth (regardless whether they "earned" it, stole it, found it...).
- rayiner 13y ago
  It's not quite that similar. The 400 richest Americans control $2 trillion, or about 3-4% of total U.S. wealth. That means wealth in the U.S. is a lot less concentrated at the top than in Russia. To match Russia (accounting for population), the 200 richest Americans would have to own $19 trillion in assets, the average wealth would have to be about $100 billion and you'd see some trillionaires. Looking at the net worth of the bottom 40% of the American population doesn't tell you much about the level of oligarchy in American society. You would expect a big chunk of the population to not have much in the way of assets, simply because the trajectory of peoples' lives is to build up assets as they age over time. See: http://en.wikipedia.org/wiki/Wealth_in_the_United_States#Statistics http://en.wikipedia.org/wiki/Wealth_in_the_United_States#Sta.... Indeed, things that are ostensibly good, say more people getting higher education or more job mobility, can push out the time when people settle down, buy a house, and start saving, thus increasing the number of people who don't have substantial assets. The median family net worth of a household headed by someone under 35 is $10k, while it's over $230k for a household headed by someone aged 55-65. The "bottom 40%" category is also heavily skewed by education, with households headed by non-high school graduates having a median net worth of $30k versus $250k for households headed by college graduates. The statistics indicate that the "bottom 40%" starts around $40k. How many people under 30 do you know that have a net $40k? With student loans and sky-high rents, I bet lots of silicon valley engineers are in that "bottom 40%" for reasons that have nothing to do with oligarchy.
  - jcampbell1 13y ago
    Wealth statistics are tricky. As a thought experiment, I have always wondered what the numbers would be if everyone in the country had identical incomes of $50k/year. I have a feeling that 25% would accumulate debts and have zero total wealth. Even with perfectly identical incomes, the "wealthiest" person would have more wealth than the bottom 25% combined.
    - anovikov 13y ago
      That's why i think if we want to debate if the society is 'fair' or not, we should think about income distribution, not wealth distibution. Even for the majority of the people considered 'rich' (top 1% by income), most of the income is not derived from assets/wealth, but from work. So wealth does not play a big role in living standards of vast majority of Americans, even most rich ones.
- nimble 13y ago
  > more wealth than the bottom 40% of the American population combined. Sounds like a statistic designed to rile people who don't understand the difference between wealth and income. You can be living quite comfortably but with no wealth accumulation (no savings or property). If you're also in debt, your wealth is negative. That bottom 40% probably includes a good number of people making over $100K per year.
- yummyfajitas 13y ago
  30%, not 40%, according to your article. In the same year (2007), I had just finished my Ph.D. and finished grad school. My income went from about $18k to $50k. In that year, I had more wealth than the bottom 25% of the American population combined. You probably did too. http://blogs.reuters.com/felix-salmon/2011/12/13/how-alice-walton-has-improved-america/ http://blogs.reuters.com/felix-salmon/2011/12/13/how-alice-w...
  - dreamfactory 13y ago
    combined?
    - pathy 13y ago
      From the article: "According to the latest data we have, 24.8% of American households had zero or negative net worth" So basically if you have a net worth of more than $1 you are wealthier than ~25% of America.
      - ctdonath 13y ago
        When the music stops, yes. The confusion over this stems from people living comfortable lives, despite negative net worth, because their cash flow satisfies creditors and their expected lifetime net worth (after the debts are finally paid off) is positive. The statistics are misleading because they view the data as "game over right now", when the matter is ongoing. Someone might have negative worth right now, but that's not taking into account the fact they'll earn a million dollars over the next decade.
    - mseebach 13y ago
      Yes, combined. 25% of the US population has 0 or negative net worth. Combine those and the sum is well south of 0, so if you have a positive net worth, you're worth more than the bottom 25% combined (and then some, because the people with negative net worth would average out some of those positive net worth).
- zackmorris 13y ago
  It actually went up to 60% because most of the gains since the great recession began in 2008 have gone to the top 1%: http://www.youtube.com/watch?v=D6b27nnmdGg http://www.youtube.com/watch?v=D6b27nnmdGg
- malandrew 13y ago
  If I controlled that much money and was determined to be charitable after accounting for my own personal comfort, I'd love to perform the following experiment, give away $833 to every person in that 41.5% each month for the next 12.5 or so years. IANATL, but at $833 per month you stay just under the $10000 per person you can give each year. The economic impact of such an act would be a huge direct stimulus to the economy and would change the lives of everyone for the better.
ZeroGravitas 13y ago
It reminded me of this history of the Congo, particularly the more recent stuff like the 100 Million dollar palace in the remote Jungle with a runway built specifically for Concorde, which was used for shopping trips to Paris: http://www.bbc.co.uk/news/magazine-24396390 http://www.bbc.co.uk/news/magazine-24396390
tanzam75 13y ago
> This is frightening to social scientists in China who analyze society from a Marxist framework, especially those who have noticed that regional wealth gaps in China are greater than those in Yugoslavia before Yugoslavia disintegrated. I don't see what Yugoslavia has to do with it. Yugoslavia was a very different situation, in that each republic was populated by a different ethnic group, with a history of squabbling. Slovenia and Croatia were wealthier than the other republics, and they resented the fact that Serbia held the reigns of political and military power in the federation. It is not accidental that these were the first two republics to break away -- and also that they managed to break away successfully. In contrast, Bosnia had a large Serb population, and they weren't about to let go without a fight. China is different, in that most of the rich provinces have a majority-Chinese population, and most of the poor provinces are also majority-Chinese. The only provinces they're worried about are Xinjiang and Tibet -- and that's an ethnic problem, not an economic problem. The reason that the Chinese Communist Party is worried about the distribution of wealth is that they don't want a grassroots communist revolution. They know all too well how those things get started ...
- tokenadult 13y ago
  China proper has a 2000+ year tradition of unification. No. China is a divided country today, if you believe the official view of both the P.R.C. and R.O.C. regimes about Taiwan as a territory of China, and China was divided into territories ruled by warlords as recently as my own parents' childhood. There have been many periods of Chinese history when the territory that is now known as the country of China was ruled by multiple, warring regimes, and interregional ethnic tension among nominally "Han" people in China is well known to anyone who speaks Chinese (as I do) or has studied Chinese history (as I have). I referred to Yugoslavia in my comment to which you kindly reply because this is an example that has been pointed out to me by Chinese social scientists. If one accepts a Marxist framework of economic determinism, as many social scientists in China continue to do, the break-up of Yugoslavia was all but inevitable once regional economic disparities became as great as they were in Yugoslavia in the 1990s. But regional economic disparities in China are now greater, and not least in the large swaths of territory that historically have been part of Tibet and eastern Turkestan. The reason that the Chinese Communist Party is worried about the distribution of wealth is that they don't want a communist revolution, such as the one that originally brought them into power. Yes, the current leaders of China have violent regime change as well as territorial dissolution to worry about. I'm agreed with you there.
felipe 13y ago
I understand the problem of rising wealth gap in China, but I missed the part in the articles you linked where it says that a very small and tight group of connected people owns a substantial part of the country. Obviously guanxi and party membership are unfair and create such inequalities in China, but it seems to me that in Russia the issue is a mafia-like situation, while in China it's more of a system-related issue. (I am not trying to minimize the problem in China, I am just not sure whether they can be compared)
- tokenadult 13y ago
  My quick Google search at that moment didn't turn the last news story I read directly on the issue you mention. The story I found just now http://www.scmp.com/comment/insight-opinion/article/1217811/fight-corruption-china-must-push-disclose-leaders-wealth http://www.scmp.com/comment/insight-opinion/article/1217811/... isn't the same story either, but it is familiar to persons who follow news from China that the concentration of wealth at the top of the ruling party clique is very extreme--and unknown in its full extent, for lack of a free press.
  - felipe 13y ago
    I do not read Chinese fluently, but I do follow news from China pretty closely (I lived in China for a couple of years) and I am not denying that top-members of the party are taking advantage of their position (Wen Jiabao as an example). Although I agree with you that we do not know it for sure due to the lack of transparency, the corruption problem in China is similar to the problem we have in other countries like in Brazil, where I live. And in both countries there always the forces "for" and "against" working to put things under the rug or investigate and prosecute, most of the time for political gain (Bo Xilai as one example, and here in Brazil we have other similar cases too). In Russia it seems that it's a different problem altogether, that is, a mob were able to literally seize part of the country, including the president's cabinet. In Brazil and in China we can say (sometimes cynically) that all politicians are corrupt, but there are opposite forces at play, but to me it seems like in Russia the damage is really catastrophic. (granted that I do not follow Russian politics, so I am not completely sure) (EDIT: Thanks for sharing the link btw, spot-on criticism from SCMP)

selmnoo 13y ago

America has a somewhat similar problem. One family right now has more wealth than the bottom 40% of the American population combined. http://articles.latimes.com/2012/jul/18/business/la-fi-mo-walmart-heirs-20120718 http://articles.latimes.com/2012/jul/18/business/la-fi-mo-wa...

Shivetya 13y ago
it was a stupid study done to score points with specific groups, basically another bash Wal-Mart to appeal to those bobble heads who rally around that sort of stuff. It takes a lot to ignore all the other wealthy individuals and groups to zero in on that family. Throw out the negative equity people and the numbers were not as bad, use median income and the numbers are better. I doubt the comparisons made in China and Russia are the same as this study you cite was. Besides, most importantly, the Waltons earned it, most of the wealth locked in China and Russia are either ex political power players or their friends. Still, when it comes to China and even Russia, what has really changed? The same people ruling and having control of the wealth when they were not "open" markets are basically the same now.
- yodsanklai 13y ago
  "Besides, most importantly, the Waltons earned it, most of the wealth locked in China and Russia are either ex political power players or their friends." The distinction here is arbitrary. When we talk about such amount of wealth, I think the verb "to earn" lose some his significance. As a society, I don't believe we should accept that a few persons own such a huge proportion of the wealth (regardless whether they "earned" it, stole it, found it...).
rayiner 13y ago
It's not quite that similar. The 400 richest Americans control $2 trillion, or about 3-4% of total U.S. wealth. That means wealth in the U.S. is a lot less concentrated at the top than in Russia. To match Russia (accounting for population), the 200 richest Americans would have to own $19 trillion in assets, the average wealth would have to be about $100 billion and you'd see some trillionaires. Looking at the net worth of the bottom 40% of the American population doesn't tell you much about the level of oligarchy in American society. You would expect a big chunk of the population to not have much in the way of assets, simply because the trajectory of peoples' lives is to build up assets as they age over time. See: http://en.wikipedia.org/wiki/Wealth_in_the_United_States#Statistics http://en.wikipedia.org/wiki/Wealth_in_the_United_States#Sta.... Indeed, things that are ostensibly good, say more people getting higher education or more job mobility, can push out the time when people settle down, buy a house, and start saving, thus increasing the number of people who don't have substantial assets. The median family net worth of a household headed by someone under 35 is $10k, while it's over $230k for a household headed by someone aged 55-65. The "bottom 40%" category is also heavily skewed by education, with households headed by non-high school graduates having a median net worth of $30k versus $250k for households headed by college graduates. The statistics indicate that the "bottom 40%" starts around $40k. How many people under 30 do you know that have a net $40k? With student loans and sky-high rents, I bet lots of silicon valley engineers are in that "bottom 40%" for reasons that have nothing to do with oligarchy.
- jcampbell1 13y ago
  Wealth statistics are tricky. As a thought experiment, I have always wondered what the numbers would be if everyone in the country had identical incomes of $50k/year. I have a feeling that 25% would accumulate debts and have zero total wealth. Even with perfectly identical incomes, the "wealthiest" person would have more wealth than the bottom 25% combined.
  - anovikov 13y ago
    That's why i think if we want to debate if the society is 'fair' or not, we should think about income distribution, not wealth distibution. Even for the majority of the people considered 'rich' (top 1% by income), most of the income is not derived from assets/wealth, but from work. So wealth does not play a big role in living standards of vast majority of Americans, even most rich ones.
nimble 13y ago
> more wealth than the bottom 40% of the American population combined. Sounds like a statistic designed to rile people who don't understand the difference between wealth and income. You can be living quite comfortably but with no wealth accumulation (no savings or property). If you're also in debt, your wealth is negative. That bottom 40% probably includes a good number of people making over $100K per year.
yummyfajitas 13y ago
30%, not 40%, according to your article. In the same year (2007), I had just finished my Ph.D. and finished grad school. My income went from about $18k to $50k. In that year, I had more wealth than the bottom 25% of the American population combined. You probably did too. http://blogs.reuters.com/felix-salmon/2011/12/13/how-alice-walton-has-improved-america/ http://blogs.reuters.com/felix-salmon/2011/12/13/how-alice-w...
- dreamfactory 13y ago
  combined?
  - pathy 13y ago
    From the article: "According to the latest data we have, 24.8% of American households had zero or negative net worth" So basically if you have a net worth of more than $1 you are wealthier than ~25% of America.
    - ctdonath 13y ago
      When the music stops, yes. The confusion over this stems from people living comfortable lives, despite negative net worth, because their cash flow satisfies creditors and their expected lifetime net worth (after the debts are finally paid off) is positive. The statistics are misleading because they view the data as "game over right now", when the matter is ongoing. Someone might have negative worth right now, but that's not taking into account the fact they'll earn a million dollars over the next decade.
  - mseebach 13y ago
    Yes, combined. 25% of the US population has 0 or negative net worth. Combine those and the sum is well south of 0, so if you have a positive net worth, you're worth more than the bottom 25% combined (and then some, because the people with negative net worth would average out some of those positive net worth).
zackmorris 13y ago
It actually went up to 60% because most of the gains since the great recession began in 2008 have gone to the top 1%: http://www.youtube.com/watch?v=D6b27nnmdGg http://www.youtube.com/watch?v=D6b27nnmdGg
malandrew 13y ago
If I controlled that much money and was determined to be charitable after accounting for my own personal comfort, I'd love to perform the following experiment, give away $833 to every person in that 41.5% each month for the next 12.5 or so years. IANATL, but at $833 per month you stay just under the $10000 per person you can give each year. The economic impact of such an act would be a huge direct stimulus to the economy and would change the lives of everyone for the better.

ZeroGravitas 13y ago

It reminded me of this history of the Congo, particularly the more recent stuff like the 100 Million dollar palace in the remote Jungle with a runway built specifically for Concorde, which was used for shopping trips to Paris: http://www.bbc.co.uk/news/magazine-24396390 http://www.bbc.co.uk/news/magazine-24396390

tanzam75 13y ago

> This is frightening to social scientists in China who analyze society from a Marxist framework, especially those who have noticed that regional wealth gaps in China are greater than those in Yugoslavia before Yugoslavia disintegrated. I don't see what Yugoslavia has to do with it. Yugoslavia was a very different situation, in that each republic was populated by a different ethnic group, with a history of squabbling. Slovenia and Croatia were wealthier than the other republics, and they resented the fact that Serbia held the reigns of political and military power in the federation. It is not accidental that these were the first two republics to break away -- and also that they managed to break away successfully. In contrast, Bosnia had a large Serb population, and they weren't about to let go without a fight. China is different, in that most of the rich provinces have a majority-Chinese population, and most of the poor provinces are also majority-Chinese. The only provinces they're worried about are Xinjiang and Tibet -- and that's an ethnic problem, not an economic problem. The reason that the Chinese Communist Party is worried about the distribution of wealth is that they don't want a grassroots communist revolution. They know all too well how those things get started ...

tokenadult 13y ago
China proper has a 2000+ year tradition of unification. No. China is a divided country today, if you believe the official view of both the P.R.C. and R.O.C. regimes about Taiwan as a territory of China, and China was divided into territories ruled by warlords as recently as my own parents' childhood. There have been many periods of Chinese history when the territory that is now known as the country of China was ruled by multiple, warring regimes, and interregional ethnic tension among nominally "Han" people in China is well known to anyone who speaks Chinese (as I do) or has studied Chinese history (as I have). I referred to Yugoslavia in my comment to which you kindly reply because this is an example that has been pointed out to me by Chinese social scientists. If one accepts a Marxist framework of economic determinism, as many social scientists in China continue to do, the break-up of Yugoslavia was all but inevitable once regional economic disparities became as great as they were in Yugoslavia in the 1990s. But regional economic disparities in China are now greater, and not least in the large swaths of territory that historically have been part of Tibet and eastern Turkestan. The reason that the Chinese Communist Party is worried about the distribution of wealth is that they don't want a communist revolution, such as the one that originally brought them into power. Yes, the current leaders of China have violent regime change as well as territorial dissolution to worry about. I'm agreed with you there.

felipe 13y ago

I understand the problem of rising wealth gap in China, but I missed the part in the articles you linked where it says that a very small and tight group of connected people owns a substantial part of the country. Obviously guanxi and party membership are unfair and create such inequalities in China, but it seems to me that in Russia the issue is a mafia-like situation, while in China it's more of a system-related issue. (I am not trying to minimize the problem in China, I am just not sure whether they can be compared)

tokenadult 13y ago
My quick Google search at that moment didn't turn the last news story I read directly on the issue you mention. The story I found just now http://www.scmp.com/comment/insight-opinion/article/1217811/fight-corruption-china-must-push-disclose-leaders-wealth http://www.scmp.com/comment/insight-opinion/article/1217811/... isn't the same story either, but it is familiar to persons who follow news from China that the concentration of wealth at the top of the ruling party clique is very extreme--and unknown in its full extent, for lack of a free press.
- felipe 13y ago
  I do not read Chinese fluently, but I do follow news from China pretty closely (I lived in China for a couple of years) and I am not denying that top-members of the party are taking advantage of their position (Wen Jiabao as an example). Although I agree with you that we do not know it for sure due to the lack of transparency, the corruption problem in China is similar to the problem we have in other countries like in Brazil, where I live. And in both countries there always the forces "for" and "against" working to put things under the rug or investigate and prosecute, most of the time for political gain (Bo Xilai as one example, and here in Brazil we have other similar cases too). In Russia it seems that it's a different problem altogether, that is, a mob were able to literally seize part of the country, including the president's cabinet. In Brazil and in China we can say (sometimes cynically) that all politicians are corrupt, but there are opposite forces at play, but to me it seems like in Russia the damage is really catastrophic. (granted that I do not follow Russian politics, so I am not completely sure) (EDIT: Thanks for sharing the link btw, spot-on criticism from SCMP)