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Oxfam: 85 richest people as wealthy as poorest half of the world

187 points by T-zex 13y ago

deleted 13y ago
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- ThomPete 13y ago
  The problem is different. The problem is that even if you gave everyone $15,000, a year from that you would see some with a lot more than 15K and even more with almost no money.
  - EliRivers 13y ago
    Surely that's good? The problem with rich people is they don't spend their money. The money has to keep going round and keep being spent.
    - ThomPete 13y ago
      But what does that help if people then are back to having no money.
      - EliRivers 13y ago
        1) A year with money and the rest without is better than always being without. You might as well argue "we all die eventually so why do anything". 2) For a year they did have money. There is a lot you can do with a year of having money to radically improve your future chances. 3) The money will not have all been sucked back into the hands of a few people. There will still be billions of people with money, and that money will continue being spent and going round. If you have no money and everyone around you has no money, you've got a big problem. If you have no money and all around you are people with money to spend, you can now get money, because that's what creates jobs; demand for goods and services and the ability to pay for them. The redistribution wouldn't vanish back to the original situation for a long, long time, and quite possibly never given the precedent set.
        ThomPete 13y ago
        There is a reason why eg. Scandinavian countries re-distribute wealth continuously and not just once. I am not sure why you would think that wealth wouldn't skew back into in-equal distribution.
        EliRivers 13y ago
        I am not sure why you would think that wealth wouldn't skew back into in-equal distribution. Maybe you didn't read what I wrote very carefully. I said: "The redistribution wouldn't vanish back to the original situation for a long, long time, and quite possibly never given the precedent set." Let's break that down. "The redistribution wouldn't vanish back to the original situation for a long, long time" - hey, looks like I do think the wealth will skew back to in-equal distribution! I simply think it will take a while to return to a handful of people holding half the world's money, and given that the rest of my third point is about what would happen when some people with no money find themselves surrounded by people with money, it seemed pretty fucking clear to me that I was talking about an in-equal distribution. "and quite possibly never given the precedent set." - because once it's been made clear that at the point a handful of people hold half the world's money it all goes back again, nobody will be stupid enough to get that rich because they know they'll lose it all.
        ThomPete 13y ago
        I can read, so no need to be snarky. The question is whether we are discussing the same here.
    - arethuza 13y ago
      "The problem with rich people is they don't spend their money" They don't sit on piles of cash (i.e. literal bits of paper) - they own (purchase) assets of various kinds and even if they do have large quantities of cash sitting in a bank then this is put to work by the bank.
      - EliRivers 13y ago
        I should be clearer with what I mean; the problem with rich people is that, relatively speaking, they don't spend their money. Poor people spend all their money, fast. Rich people seem to have a lot of money tied up in swapping things with each other (for exmaple, stocks, which are not investments in the company except for the first time they're bought).
        arethuza 13y ago
        Why is that a problem though? If there wasn't a downstream speculative market in shares then the value they would get when sold initially would presumably be far less so the companies or individuals getting the money at that stage would be worse off.
        EliRivers 13y ago
        It's not inherently a problem; it's relatively a problem, given that swapping shares around each other creates no value (i.e. nothing of use to the world has been created), but the rich could instead blow it all on actually creating something or rather, paying for people to do work that leaves the world more actually wealthy (by which I mean, not "has more money" but "has more value"; Bill Gates stumping up cash to help wipe out Polio will leave the world phenomenally more wealthy, but with the same amount of once-owned-by-Bill-Gates cash in it - this is an extreme example of how to do it, but with the very rich it has to be extreme, because unlike poor people, the very rich simply can't spend a significant amount of their money feeding themselves and having a room redecorated and going to the movies). Also, would it really be so bad if the stockmarket was less speculative and the benefit from owning stock was expected to come in the form of dividends? Everyone would have an incentive to make companies reliably, long-term profitable instead of prone to boom and bust. Edit to answer the below: Yes, that cash does come from some very wealthy individuals, and what they're doing there is paying for people to do work that leaves the world more actually wealthy (hopefully - if the business crashes and burns when it turns out the world doesn't want shoes that are also electric bananas no new wealth was created). They're hoping to get a lot of that new wealth for themselves, true, but lots of it goes elsewhere too. They're not just swapping shares around; they're actually paying people to do things.
  - sentenza 13y ago
    You have put your finger right on it. Inequality is emergent in a functional economy. So if equal opportunity for everybody is desired, redistributive mechanisms are needed.
- jrnkntl 13y ago
  Interesting read on giving people free money and the results "We tend to think that simply giving people money makes them lazy. Yet a wealth of scientific research proves the contrary: free money helps." - https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/20798745-cb9fbb39 https://decorrespondent.nl/541/why-we-should-give-free-money...
  - sansan85 13y ago
    Look at Uruguay. Since some years ago, the government started giving free money to below-poverty-line people. It has been happening complete the opposite. As people receive money, they don't feel the need of working and progressing in life, including when the are offered to work in street cleaning duties or similar. The thing is that the tax payers are starting to feel that their money is not been well spent, until nobody knows.
- dangrossman 13y ago
  How much of that $110tn wealth is actually money? Most of it must be assets, and most of that intangible assets like stock holdings.
- kfk 13y ago
  Most of that money isn't stored as a pile of cash under the bed. It's capital invested in other activities: think machinery, think infrastructure, think capital (and we know in some industries like banking and insurances they need to have capital, don't we?). The fact that these people "have" it doesn't mean it doesn't produce value. You need to understand that liquidate all that worth WILL put people on the street and will disrupt the economy as we know it. Namely, maybe at that point you won't do much with those 15k.
- broolstoryco 13y ago
  interesting, the calculations in the reddit thread put the number at around 500 for each of the 3.5 billion
- yaakov34 13y ago
  Some math here is fucked up. These people don't have an average of over a trillion in assets each (assuming that tn stands for trillion...) My guess is that they have something like two orders of magnitude less, and the world's population would get $150 each. Then again, that sounds low, given some people with tens-of-billions fortunes. Anyway, $110 trillion and $15000 is way, way too high - between one and two orders of magnitude.
  - throwaway_yy2Di 13y ago
    Your parent commenter misread the article. Oxfam claims 85 persons have a wealth of $1.6 trillion, and another 70 million have $110 trillion.
  - maxerickson 13y ago
    The $110 trillion is the 1%. The 85 or whatever have ~1 trillion pounds. (These figures are from the articles, both the Guardian story and GP post link, but nice guess)
- 3rd3 13y ago
  Instead it should be entirely spent in AI development, infrastructure, sustainable energy and manufacturing, automatization and climate change prevention. All major problems humanity has will be solved by that.
  - deleted 13y ago
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- pbhjpbhj 13y ago
  Just watched In Time, http://www.imdb.com/title/tt1637688/ http://www.imdb.com/title/tt1637688/, the other day; it looks at financial inequality through a lens of equating money with time. Quite reminiscent of Logan's Run. Spoiler: they ultimately initiate a collapse of the system by a violent redistribution of wealth [ie time]. The movie ends at this point without considering the fallout.
awjr 13y ago
I have no issue with the rich, however I'm guessing 'most' of the super-rich have achieved this through acute business acumen. However 'acute business acumen' can translate into squeezing maximum profits out of a business. Justification for this practice can be found everywhere. Particular "legal requirement" to maximise profits for shareholders. No value is put on social responsibility.
- ThomPete 13y ago
  No one becomes super wealthy because of acute business acumen. They become super wealthy because they are lucky that their products/services/investments pan out properly. Bill Gates, who I have a lot of respect for, didn't become super wealthy because of his business skills (although they obviously had a lot to do with it) but because the industry he happened to be in exploded. Thats all fine and good. I have no issue with that. But it does point to what I would consider a flaw in the way wealth is distributed. But what that flaw is I am still not sure of.
  - arethuza 13y ago
    What about Warren Buffet - I'd have thought pretty much the definition of someone with "business acumen": http://en.wikipedia.org/wiki/Warren_Buffett http://en.wikipedia.org/wiki/Warren_Buffett
    - falcolas 13y ago
      Warren Buffet strikes me as the exception that proves the rule that most wealth is inherited or gained through illicit means. He's brought up so often as a model for the American dream, but he's typically the only one.
      - arethuza 13y ago
        What about Amancio Ortega Gaona - starts a business selling quilted bathrobes in Spain and ends up 3rd richest person in the world? http://en.wikipedia.org/wiki/Amancio_Ortega_Gaona http://en.wikipedia.org/wiki/Amancio_Ortega_Gaona What did he do that was "illicit" (he certainly didn't inherit wealth as he started working in his early teens)?
spiritplumber 13y ago
Are they rich in protein? I'm hungry.
huseyinkeles 13y ago
which half?
- broolstoryco 13y ago
  the left one
read 13y ago
Wealth is not bad, turning it into power is. It's easy to see how 67% of people would agree with the sentence: "the rich have too much influence over where this country is headed". What's might not be as easy to see is why 2% disagreed with that sentence strongly. It might be related to http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html with its conclusion copied below. If you try to attack wealth, you end up nailing risk as well, and with it growth. If we want a fairer world, I think we're better off attacking one step downstream, where wealth turns into power.
- bitwize 13y ago
  There was a rich man who went up to a woman at a party and asked her, "If I gave you a million dollars, would you have sex with me?" The woman laughed and said "Sure!" The rich man asked her "Would you have sex with me for a hundred dollars?" The woman gasped, offended, and exclaimed, "I'm no prostitute!" The rich man said "Ma'am, we've already established that you're a prostitute; the only question is as to price." Power is the ability to induce others to do what you want. Wealth can induce others to do what you want. Therefore, wealth is power.
  - precisioncoder 13y ago
    Winston Churchill =) http://www.goodreads.com/quotes/300099-churchill-madam-would-you-sleep-with-me-for-five-million http://www.goodreads.com/quotes/300099-churchill-madam-would...
  - nsxwolf 13y ago
    I think the kind of power being talked about would be more like raping a woman then using your money to make the allegations go away. Your example is a free exchange.
- asgard1024 13y ago
  I am really not sure how to make that distinction. It seems to me that to prevent "wealth turning into power" we would need essentially complete transparency on spending of the wealthy. Also, I would probably much rather nail some risk (by limiting personal wealth to some reasonable amount) than risk "a leak" between wealth and power. Most founders, it seems to me, don't start overly wealthy; they would probably still risk starting their own business even if the "supergains" had zero probability (as opposed to really small probability). Coupled with a good social and liability system (that will allow you reasonable life in case of business failure), financed from taxing of too much wealth, this can even increase the risk people are willing to take.
jheriko 13y ago
just makes me wonder why our leaders aren't robbing these people down into 'moderately disgusting' levels of wealth inorder to equalise our varying national debts and deficits... and why tax havens aren't being threatened with severe action if they don't cease their tax havenry. i don't agree with theft, but i have a hard time feeling sorry for someone who can lose 95% of their wealth for the greater good and still live a fantastically luxurious lifestyle and ensure one for two or three generations of offspring as well.
ig1 13y ago
There's a building body of evidence which indicates that returns are increasingly going to capital and not labour, however not as a result of "power-grabs" but rather technology (the same thing happened during the early part of the industrial revolution). It's actually the cover story of this weeks Economist: http://www.economist.com/news/leaders/21594298-effect-todays-technology-tomorrows-jobs-will-be-immenseand-no-country-ready http://www.economist.com/news/leaders/21594298-effect-todays... If you're a fan of harder data, you can read the UK Government report about how technology is responsible for driving the destruction of middle-income jobs and pushing up inequality: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/250206/bis-13-1213-hollowing-out-and-future-of-the-labour-market.pdf https://www.gov.uk/government/uploads/system/uploads/attachm... [Edit: Given the number of up-votes this is getting I've submitted the Economist link as it's own story: https://news.ycombinator.com/item?id=7089531 https://news.ycombinator.com/item?id=7089531]
- rfnslyr 13y ago
  Jesus, now I have to feel guilty about being white, bering a male, and being a developer? Someone stop me!
  - pietro 13y ago
    Stop feeling guilty! It's stupid and wrong.
  - ronaldx 13y ago
    You have personal responsibility for your actions as a developer. If you are using your skills in a way which primarily benefits the super-rich and is a net negative to society, you should take this opportunity to reflect on that: yes.
    - rfnslyr 13y ago
      I work on mobile applications at an investment bank so the rich can fiddle with their money from their diamond plated iPhones. Does that buy me a ticket to hell?
veganarchocap 13y ago
It's interesting that an expanding government in America has seen a rise in the income-gap.
LekkoscPiwa 13y ago
The problem that Leftists don't see is obvious: In Communism or Socialism the Party Leader (i.e. Stalin) is one of these 85! Forget rhetoric there have always been powerful, rich people and there always will be! Socialism/Communism is just exploitation by the party vs. exploitation by the private person.
jasonkester 13y ago
This is a good innumaracy test. The level to which it pisses you off is a good indicator of how well (or rather, poorly) you understand how money works. It's along the same lines as telling somebody that it costs more than $0.01 to make a penny.
kokey 13y ago
It's easy to create alarm over inequality. Compare the people who has built up wealth to the people who has no wealth because what they earn gets spent every month. This way even most of the middle class looks dirt poor.
11thEarlOfMar 13y ago
Missing the forest for the trees. Taking the two most populace countries: - China per-capita income, in 2011 dollars: 1984, US$432
joshuahedlund 13y ago
Inequality is an important topic to discuss, but unless I skimmed too quickly I haven't seen this factor addressed in the article or the comments here: I'm pretty sure that a significant number of poor people essentially have 0 assets or even debt, so if you own virtually anything you already "own" or "control" more "wealth" than millions or maybe even a billion-plus people. It's the same thing when you see statistics about the Waltons having more wealth than the bottom third of America or whatever.. technically true, but also so do you and so do I.
RivieraKid 13y ago
If the level of wealth redistribution via taxes was higher, than the average member of the society would be better off, that's almost for certain. Reasons for that: - Let's say A earns $1000 day and B earns $20/day. If A was force to give $20 of his earnings to B, this 2-person society would be better of. Because the standard of living of A would decrease slightly but the standard of living of B would increase significantly. - There's a rich get richer and poor get poorer effect. - Lot of wealth gain is a result of pure luck. Wealth redistribution serves like an insurance policy. Examples: bitcoin mining, finding a gold mine. (Of course, there are lots of negative effect of wealth redistributin. What I'm saying is that the optimal level of w. r. is higher than the current level.) But - while I know that the society would be better off, as a developer I would be worse off, so to be honest, I'm not really in favor of higher taxes.
- PythonicAlpha 13y ago
  +1 for being honest. Nobody likes taxes, I don't either. But you are right: Taxes that increase with income have positive effects on society itself. We had one of the most well balanced societies in the world, as I think, because we have (or better: had) a taxation system that favored little incomes. Since our system changed in favor to the rich, our society begins to erode. The countries with the luckiest people in Europe are those with the highest taxation. The reason is, that a brought middle-class of people exist. You could really say, that taxation (that increases with income) is good for society, since differences are leveled out and middle-class is more likely to establish.
- jedmeyers 13y ago
  Does your "average member of society" creates any wealth, or just sits there waiting for the redistribution he is entitled to to arrive?
  - RivieraKid 13y ago
    Take the wealth created by the society, divide by number of members. If it's more than zero, then yes, the average member of society creates wealth.
11thEarlOfMar 13y ago
If we are looking for inequality and focus on outliers, we will always be able to find unfairness. Over the last 30 years, large portions of the world population have seen dramatic increases in per-capita income. If the masses are benefited, it seems natural that the outliers will lie out even further. Data from: http://stats.oecd.org/# http://stats.oecd.org/# Taking the two most populace countries over the last 30 years: - China per-capita income, in 2011 dollars: 1981, US $282 2011, US$8,319 30x increase in per-capita income - India per-capita income, in 2009 dollars: 1981, US $472 2009, US$3,203 7x increase in per-capita income A large portion of the world population is benefiting from economies that grow with technology as the catalyst.
jgalt212 13y ago
The rise in income inequality is driven by technology and those who know or can embrace it. The rise of the super rich is driven by people stealing money out of the ground (commodities oligarchs) and tax loop holes (carried interest being the most notorious) creating a regressive tax policy at the very upper end of the income spectrum. Zero % interest rates help both parties b/c they are big users of capital. Plant/equipment/storage costs for commodities and HF/PE crew borrows a lot of money. The super rich like everyone (The Economist, in this example) to focus our energies on point 1, so we don't mess with their loopholes and 0% interest rates.
RivieraKid 13y ago
If wealth was a linear fuction of skills or hard work, the wealth inequality would be way lower. Most of the current unequality is actually caused by the rich-get-richer effect and luck. (And skills or hard work are just luck too if you think about it.)
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travisp 13y ago
It's also important to realize that global poverty is at a historically low level at the same time. If you believe the Gates letter in the WSJ, then there will be practically no impoverished countries (with a few exceptions) left in just a few decades. That is unprecedented. I would agree that many of the extremely wealthy have achieved their wealth through political power grabs (particularly, but not limited to Russia and China), but you should also expect great wealth to be created and earned honestly through a process that is lifting the entire globe out of poverty. Distinguishing between these two sources of wealth is important if you truly want to lift the quality of life around the world. Broadly fighting "inequality" of wealth wherever you see it is likely to slow or destroy this growth.
- bencollier49 13y ago
  You're arguing that income inequality helps to eradicate poverty?
  - davidw 13y ago
    Here's a hypothetical scenario: Society A: everyone has at least 1000 wealth somethings, which is plenty to live comfortably. Some people have 1,000,000 wealth somethings. It's very unequal. Society B: everyone has 10 wealth somethings, which is not enough to live very well. There is no inequality. How this all works out in the real world is the domain of economics research and is probably something of an open question.
    - marvin 13y ago
      A closely related and very relevant question is whether society C, where economic incentives and politics ensure that everyone has at least 2000 wealth somethings and some people only have 500,000 wealth somethings, is better than Society A. I think you and others in this thread are arguing a moot point. Certainly it's relevant that the median human lives a better life today than 50 years ago, but it doesn't necessarily have anything to do with whether today's income inequality is a bad thing or whether extreme income inequality makes many people's lives worse than they would be otherwise.
confluence 13y ago
I call this current phenomena inequality blow out. The world is now wealthy enough such that the rich truly can be so much wealthier than the poor (deserved or not - mostly NOT), because there is so much excess wealth already in circulation. The "have nots" in most developed nations usually have enough to not need to riot in the streets so long as their governments are doing a decent enough job. Before modern times, we generally kept inequality in check through periodic bloody revolutions, and only more recently via government enforced transfer payments. Nowadays there is no longer an upper limit to wealth accumulation since bloody revolutions have been more or less capped by social programs funded by transfer payments. The poorest in developed nations today often have access to enough food, water and shelter to live a fairly decent life (not all nations obviously, just those with high HDI coeffecients). Now, so long as this global poverty floor continues to rise through time at a decent enough pace, then societies will remain stable. However, if the rich make that rise falter with ever more aggressive tax policies (0% rates which negatively affect social programs), rent seeking behaviour (squeezing the middle class out of existence, and destroying the mass consumption/tax base), or political power grabs (Koch bros' who don't like to pay for negative externalities), they'll lose their heads. Pure and simple. As I sit here today, and watch our "ever so progressive" Syria (by Middle Eastern standards) falling apart as it goes through a horrific and bloody civil war, I really do wonder how much of a value the rich put on their heads. How far are the rich willing to go in their game of class chicken with the poor? Because as far as I can see, the poor will always win. The poor will eventually redistribute the wealth to equalize opportunity, and mitigate the catastrophic failures inherent in capital markets that allocate wealth to owners as a proxy to the actual wealth generators (engineers/scientists/workers). The question the rich should consistently be asking themselves is whether or not they'd rather bleed to death slowly by paying for orphanages and food for the poor, or quickly at the end of an orphan's machete. The past wasn't all that long ago. I can still see its shadows on the wall. Don't push your luck. /rant
- deleted 13y ago
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- PythonicAlpha 13y ago
  Thats the reason, the rich countries need drones, robots and also computers to control the first two. Since the top 1% must defend against the others.
brosco45 13y ago
Well, they can print money, we can't.
ctdonath 13y ago
How long do those ~85 stay at the top? I'm getting old enough (which is surprisingly young) to watch top-tier super-solid blue-chip businesses crash and burn. Smith Corona, once the most recognized brand in the world? most of you respond "who?". Kodak, with world domination of imaging? dead, just hasn't stopped moving yet. Pan-Am gone, IBM a shell of what it was, a host of other leading super-profitable businesses either crawling on broken glass or gone entirely. Likewise I've seen a lot of big-name big-wallet people likewise go to nothing. I haven't studied the financial dynamics of wealthiest individuals (in terms of this topic's top 85), but as their hoard is based on business I can presume similar turnover for many. They may be at the top _now_, but for how long? This growing consternation over income/wealth "inequality" consistently fails to look at the dynamics of those involved, focusing instead on a mere snapshot selected for maximizing political outrage. Fact is, some 85% of those in the bottom quartile move out of that bracket within a few years, with 15% jumping to the top 25%. The only financial help most of them need is for the government to get out of their way. Some do need active assistance, yes, but even most of that is better served by voluntary private charity - and certainly not massive economic changes inflicted by self-righteous & ignorant politicians. Never mind the oft-overlooked fact that the top 85 spend and invest and donate a tremendous amount, way beyond what is publicly known. They may have half the money in the world; don't ignore how much money they move and thru whom. Confiscate their wealth by taxation in the name of "income equality", and you'll deny those who live on the movement of that wealth.
- lmm 13y ago
  Social mobility is the lowest it's been in American history and still falling, no?
  - ctdonath 13y ago
    No. I'm open to data-based correction, though. Insofar as social mobility may be stifled now, many contend it's in large part to government administration causing a sharp increase in taxpayer liability (you may not be billed for it yet, but your share of the debt is enormous and growing fast) and economic uncertainty (sporadic currency pumping, encouragement of class envy, and rule thrashing on healthcare etc). Hard for employers to hire & give raises (the core of social mobility) when economic future is so unpredictable and depressing.
bedhead 13y ago
The ever-expanding wealth gap is primarily a function of what Warren Buffett has called the most powerful force in the universe: compounding. The "problem" is that some people are simply better at growing their wealth. This minority of people, either through intelligence or luck or some combination of the two, are able to earn very high returns on their wealth, typically via creating businesses. Then once they have some wealth they become creditors, and can earn additional returns. I encourage anyone to throw together a spreadsheet to see how this happens in the real world. Start with 100 people whose wealth is identical, set to $1. Then make a corresponding column that's a normal distribution to represent growth rate (I start at 25%). Then fast forward 50 years, compounding everyone's wealth at their respective growth rate. Voila, through the magic of compounding, despite the growth rates being normally distributed, the wealth distribution is now basically logarithmic, and the wealth gap has effectively exploded. Despite everyone beginning with the exact same wealth, the top 15 people now have almost 80% of the wealth. The longer the time horizon, the greater the imbalance becomes. Welcome to compounding...Buffett gets it. Today's wealth gap is not a capitalistic conspiracy nor is it racism or anything else. It's just algebra. Even if you use a normal distribution with a very small variance, over time the wealth imbalance will grow significantly. It is inescapable.
PythonicAlpha 13y ago
The problem is not technology, but the problem is our economic (particularly "money-") -system. The system with interest rates and profits from money (stock) is leading us into rapidly increasing imbalance of property and incomes. Today you can make thousands times more money just by making money from other money -- without any benefits for society involved (in many cases, the results are even devastating for society, e.g. food speculations) -- than any well paid office worker who uses much creativity and produces real values (like an architect or designer) even, if it is not your own money you speculate with. That should make us think for a moment. This spiral even has gotten worse in the last decades, because profit margins have been increased and increased. Everybody is crying for "investment opportunities" and pressure is on the stocks to generate more profits. That was also powered up by the globalization. Normal human labor has been devaluated this way and just making profits from your possessions is increasingly making more and more money. The people with money also have managed to make the rules in nearly all the world so, that earnings increase. At the same time, more and more companies and rich people have brought their money or profits into tax havens, so the countries are starving on taxes ... the lower paid people have to pay them alone. It's an downward spiral, taking the whole human kind down!
Shivetya 13y ago
The key take away for me is, far too much of the world's population is beyond the reach of those who may/would help them. So many people are in the state they are in because of defective governments that run the countries they live in. This wealth disparity is more of a geographical disparity, where you live matters a whole lot towards whether you will ever have wealth. I just cannot feel upset about the fact that 85 people equal half the world when its far more than half the world that these 85 can probably never help because of rulers or lack thereof where these people live
linux_devil 13y ago
Sometime I think , these guys travel from future and manipulate markets in their favor to be filthy rich
anovikov 13y ago
Think about it that way: 85 richest people own only about 1.6% of the total wealth of top richest 1%. Which is probably about 0.3..0.5% of total worldwide wealth. And 85 people are not some monolithic force, even as they have some similarities, they can't agree on anything (see U.S. Senate which has about as many people - can it agree on much?). So the threat of these rich guys to the world is purely imaginary. It is unfair to compare capitalists to proletariat in their wealth. Capitalists make money from capital, so a capitalist without capital is no more. Proletarian does not need any money to get his income. If you compare incomes of those 85 guys to poorest people they will make up a combined income of some poor 3rd world country like Cuba or Belarus, or at biggest like Romania (implying average returns on capital, inflation adjusted, of about 6-8%). Not half the world, not even close. Top 1% will be yes, more like like Japan, but hey, Japan has under 2% of the world's population. So again there is little 'threat' or rich.
alexeisadeski3 13y ago
As wealthy as the poorest half of the world. People, people, get ahold of yourselves. The poorest half of the world. Wealthy. Wealth. Not income. This statistic is ridiculous.
ctdonath 13y ago
In the late 1800s, a half-dozen or so super-wealthy would regularly vacation together on Jekyll Island (Georgia USA), representing some 1/6th of the world's wealth. Expanding the total to include the top 85 would probably produce about the same results as Oxfam's report over a century later. That a few of the richest (with vast holdings) out-value half the world's population (with zero, or negative, holdings) at any given point in history is not surprising.
tzs 13y ago
Unless a distribution is completely flat (every person has the same wealth), then it is mathematically necessary that the top N% will have >N%. If the distribution is also not flat within subranges of the possible wealth, then as N gets smaller, the fraction of wealth owned by the top N% divided by N necessarily gets larger.
michalu 13y ago
i would love to see the statistic on how many direct and indirect jobs are the top 85 responsible for. Their wealth is after all mostly a stake in their company, valued that high by the public (if publicly traded) or an analyst.
justinzollars 13y ago
The money will trickle down. ;)
prirun 13y ago
To me, the main reason for this wealth inequality is currency devaluation and economic inflation. The middle class and the poor use much more of their money for everyday things, and the price of these everyday things has increased tremendously over the last 75 years. Take a look at this US inflation chart (and that is if you believe the US Gov inflation data, which I don't): http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg http://en.wikipedia.org/wiki/File:US_Historical_Inflation_An... Notice that prior to the 50's, there were balanced periods of inflation and deflation. Since the 50's, there has only been inflation. When the price of housing and food goes up, the middle class and poor people take it up the ass, while rich people who are making money via loans to the MC and poor and raking in much more in interest (for example). When the top 15 US banks are about to go under, the government and Fed buy all their bad assets (loans) with currency the create by pushing a button. Nothing useful or productive is done to create this "value". That new currency is used by the banks to further increase their wealth by manipulating the stock and commodities markets. And yeah, sure - the upper middle class people who have money left over from their paycheck can invest in these markets and increase their wealth. Well, they can until the rug gets yanked out. And when that happens, you can bet the large pension funds, banks, government officials, and those 85 rich bastards will be given plenty of notification before the big crash. But the average Joe invested in the market won't: he will take it up the ass. It's just another way the rich and influential profit from the masses. Think about the cost increases in food, higher education and the medical system for example. Way, way higher than general inflation. These higher costs force middle class people into lower class, and force lower class people onto government assistance. ANd please don't say Bitcoin is going to fix this. Digital currency is the ultimate wet dream for the rich, because they will be able to track AND TAX every single transaction, including those to your babysitter or yard guy. Eliminating all untaxed financial transactions and monitoring every transaction is the overloards' ultimate goal. I'm not saying technology is not a factor - clearly it is. One accountant can do much more with a computer than several accountants could do before computers, robots in factories obviously displace workers, and outsourcing jobs to countries with extremely low wages is a problem. But I think these pale in comparison to currency devaluation over the long term.
Executor 13y ago
I'm not going to argue against restraining these rich people. But what I will argue against is the type of answer given and the level of awareness that brought the answer. If people realized that there can be economy without money (i.e. resource-based economy) then all these rich people lose their power. Assuming that an RBE society would be more fairer for the populous.

187 points by T-zex 13y ago

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ThomPete 13y ago
The problem is different. The problem is that even if you gave everyone $15,000, a year from that you would see some with a lot more than 15K and even more with almost no money.
- EliRivers 13y ago
  Surely that's good? The problem with rich people is they don't spend their money. The money has to keep going round and keep being spent.
  - ThomPete 13y ago
    But what does that help if people then are back to having no money.
    - EliRivers 13y ago
      1) A year with money and the rest without is better than always being without. You might as well argue "we all die eventually so why do anything". 2) For a year they did have money. There is a lot you can do with a year of having money to radically improve your future chances. 3) The money will not have all been sucked back into the hands of a few people. There will still be billions of people with money, and that money will continue being spent and going round. If you have no money and everyone around you has no money, you've got a big problem. If you have no money and all around you are people with money to spend, you can now get money, because that's what creates jobs; demand for goods and services and the ability to pay for them. The redistribution wouldn't vanish back to the original situation for a long, long time, and quite possibly never given the precedent set.
      - ThomPete 13y ago
        There is a reason why eg. Scandinavian countries re-distribute wealth continuously and not just once. I am not sure why you would think that wealth wouldn't skew back into in-equal distribution.
        EliRivers 13y ago
        I am not sure why you would think that wealth wouldn't skew back into in-equal distribution. Maybe you didn't read what I wrote very carefully. I said: "The redistribution wouldn't vanish back to the original situation for a long, long time, and quite possibly never given the precedent set." Let's break that down. "The redistribution wouldn't vanish back to the original situation for a long, long time" - hey, looks like I do think the wealth will skew back to in-equal distribution! I simply think it will take a while to return to a handful of people holding half the world's money, and given that the rest of my third point is about what would happen when some people with no money find themselves surrounded by people with money, it seemed pretty fucking clear to me that I was talking about an in-equal distribution. "and quite possibly never given the precedent set." - because once it's been made clear that at the point a handful of people hold half the world's money it all goes back again, nobody will be stupid enough to get that rich because they know they'll lose it all.
        ThomPete 13y ago
        I can read, so no need to be snarky. The question is whether we are discussing the same here.
  - arethuza 13y ago
    "The problem with rich people is they don't spend their money" They don't sit on piles of cash (i.e. literal bits of paper) - they own (purchase) assets of various kinds and even if they do have large quantities of cash sitting in a bank then this is put to work by the bank.
    - EliRivers 13y ago
      I should be clearer with what I mean; the problem with rich people is that, relatively speaking, they don't spend their money. Poor people spend all their money, fast. Rich people seem to have a lot of money tied up in swapping things with each other (for exmaple, stocks, which are not investments in the company except for the first time they're bought).
      - arethuza 13y ago
        Why is that a problem though? If there wasn't a downstream speculative market in shares then the value they would get when sold initially would presumably be far less so the companies or individuals getting the money at that stage would be worse off.
        EliRivers 13y ago
        It's not inherently a problem; it's relatively a problem, given that swapping shares around each other creates no value (i.e. nothing of use to the world has been created), but the rich could instead blow it all on actually creating something or rather, paying for people to do work that leaves the world more actually wealthy (by which I mean, not "has more money" but "has more value"; Bill Gates stumping up cash to help wipe out Polio will leave the world phenomenally more wealthy, but with the same amount of once-owned-by-Bill-Gates cash in it - this is an extreme example of how to do it, but with the very rich it has to be extreme, because unlike poor people, the very rich simply can't spend a significant amount of their money feeding themselves and having a room redecorated and going to the movies). Also, would it really be so bad if the stockmarket was less speculative and the benefit from owning stock was expected to come in the form of dividends? Everyone would have an incentive to make companies reliably, long-term profitable instead of prone to boom and bust. Edit to answer the below: Yes, that cash does come from some very wealthy individuals, and what they're doing there is paying for people to do work that leaves the world more actually wealthy (hopefully - if the business crashes and burns when it turns out the world doesn't want shoes that are also electric bananas no new wealth was created). They're hoping to get a lot of that new wealth for themselves, true, but lots of it goes elsewhere too. They're not just swapping shares around; they're actually paying people to do things.
- sentenza 13y ago
  You have put your finger right on it. Inequality is emergent in a functional economy. So if equal opportunity for everybody is desired, redistributive mechanisms are needed.
jrnkntl 13y ago
Interesting read on giving people free money and the results "We tend to think that simply giving people money makes them lazy. Yet a wealth of scientific research proves the contrary: free money helps." - https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/20798745-cb9fbb39 https://decorrespondent.nl/541/why-we-should-give-free-money...
- sansan85 13y ago
  Look at Uruguay. Since some years ago, the government started giving free money to below-poverty-line people. It has been happening complete the opposite. As people receive money, they don't feel the need of working and progressing in life, including when the are offered to work in street cleaning duties or similar. The thing is that the tax payers are starting to feel that their money is not been well spent, until nobody knows.
dangrossman 13y ago
How much of that $110tn wealth is actually money? Most of it must be assets, and most of that intangible assets like stock holdings.
kfk 13y ago
Most of that money isn't stored as a pile of cash under the bed. It's capital invested in other activities: think machinery, think infrastructure, think capital (and we know in some industries like banking and insurances they need to have capital, don't we?). The fact that these people "have" it doesn't mean it doesn't produce value. You need to understand that liquidate all that worth WILL put people on the street and will disrupt the economy as we know it. Namely, maybe at that point you won't do much with those 15k.
broolstoryco 13y ago
interesting, the calculations in the reddit thread put the number at around 500 for each of the 3.5 billion
yaakov34 13y ago
Some math here is fucked up. These people don't have an average of over a trillion in assets each (assuming that tn stands for trillion...) My guess is that they have something like two orders of magnitude less, and the world's population would get $150 each. Then again, that sounds low, given some people with tens-of-billions fortunes. Anyway, $110 trillion and $15000 is way, way too high - between one and two orders of magnitude.
- throwaway_yy2Di 13y ago
  Your parent commenter misread the article. Oxfam claims 85 persons have a wealth of $1.6 trillion, and another 70 million have $110 trillion.
- maxerickson 13y ago
  The $110 trillion is the 1%. The 85 or whatever have ~1 trillion pounds. (These figures are from the articles, both the Guardian story and GP post link, but nice guess)
3rd3 13y ago
Instead it should be entirely spent in AI development, infrastructure, sustainable energy and manufacturing, automatization and climate change prevention. All major problems humanity has will be solved by that.
- deleted 13y ago
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pbhjpbhj 13y ago
Just watched In Time, http://www.imdb.com/title/tt1637688/ http://www.imdb.com/title/tt1637688/, the other day; it looks at financial inequality through a lens of equating money with time. Quite reminiscent of Logan's Run. Spoiler: they ultimately initiate a collapse of the system by a violent redistribution of wealth [ie time]. The movie ends at this point without considering the fallout.

awjr 13y ago

I have no issue with the rich, however I'm guessing 'most' of the super-rich have achieved this through acute business acumen. However 'acute business acumen' can translate into squeezing maximum profits out of a business. Justification for this practice can be found everywhere. Particular "legal requirement" to maximise profits for shareholders. No value is put on social responsibility.

ThomPete 13y ago
No one becomes super wealthy because of acute business acumen. They become super wealthy because they are lucky that their products/services/investments pan out properly. Bill Gates, who I have a lot of respect for, didn't become super wealthy because of his business skills (although they obviously had a lot to do with it) but because the industry he happened to be in exploded. Thats all fine and good. I have no issue with that. But it does point to what I would consider a flaw in the way wealth is distributed. But what that flaw is I am still not sure of.
- arethuza 13y ago
  What about Warren Buffet - I'd have thought pretty much the definition of someone with "business acumen": http://en.wikipedia.org/wiki/Warren_Buffett http://en.wikipedia.org/wiki/Warren_Buffett
  - falcolas 13y ago
    Warren Buffet strikes me as the exception that proves the rule that most wealth is inherited or gained through illicit means. He's brought up so often as a model for the American dream, but he's typically the only one.
    - arethuza 13y ago
      What about Amancio Ortega Gaona - starts a business selling quilted bathrobes in Spain and ends up 3rd richest person in the world? http://en.wikipedia.org/wiki/Amancio_Ortega_Gaona http://en.wikipedia.org/wiki/Amancio_Ortega_Gaona What did he do that was "illicit" (he certainly didn't inherit wealth as he started working in his early teens)?

spiritplumber 13y ago

Are they rich in protein? I'm hungry.

huseyinkeles 13y ago

which half?

broolstoryco 13y ago
the left one

read 13y ago

Wealth is not bad, turning it into power is. It's easy to see how 67% of people would agree with the sentence: "the rich have too much influence over where this country is headed". What's might not be as easy to see is why 2% disagreed with that sentence strongly. It might be related to http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html with its conclusion copied below. If you try to attack wealth, you end up nailing risk as well, and with it growth. If we want a fairer world, I think we're better off attacking one step downstream, where wealth turns into power.

bitwize 13y ago
There was a rich man who went up to a woman at a party and asked her, "If I gave you a million dollars, would you have sex with me?" The woman laughed and said "Sure!" The rich man asked her "Would you have sex with me for a hundred dollars?" The woman gasped, offended, and exclaimed, "I'm no prostitute!" The rich man said "Ma'am, we've already established that you're a prostitute; the only question is as to price." Power is the ability to induce others to do what you want. Wealth can induce others to do what you want. Therefore, wealth is power.
- precisioncoder 13y ago
  Winston Churchill =) http://www.goodreads.com/quotes/300099-churchill-madam-would-you-sleep-with-me-for-five-million http://www.goodreads.com/quotes/300099-churchill-madam-would...
- nsxwolf 13y ago
  I think the kind of power being talked about would be more like raping a woman then using your money to make the allegations go away. Your example is a free exchange.
asgard1024 13y ago
I am really not sure how to make that distinction. It seems to me that to prevent "wealth turning into power" we would need essentially complete transparency on spending of the wealthy. Also, I would probably much rather nail some risk (by limiting personal wealth to some reasonable amount) than risk "a leak" between wealth and power. Most founders, it seems to me, don't start overly wealthy; they would probably still risk starting their own business even if the "supergains" had zero probability (as opposed to really small probability). Coupled with a good social and liability system (that will allow you reasonable life in case of business failure), financed from taxing of too much wealth, this can even increase the risk people are willing to take.

jheriko 13y ago

just makes me wonder why our leaders aren't robbing these people down into 'moderately disgusting' levels of wealth inorder to equalise our varying national debts and deficits... and why tax havens aren't being threatened with severe action if they don't cease their tax havenry. i don't agree with theft, but i have a hard time feeling sorry for someone who can lose 95% of their wealth for the greater good and still live a fantastically luxurious lifestyle and ensure one for two or three generations of offspring as well.

ig1 13y ago

There's a building body of evidence which indicates that returns are increasingly going to capital and not labour, however not as a result of "power-grabs" but rather technology (the same thing happened during the early part of the industrial revolution). It's actually the cover story of this weeks Economist: http://www.economist.com/news/leaders/21594298-effect-todays-technology-tomorrows-jobs-will-be-immenseand-no-country-ready http://www.economist.com/news/leaders/21594298-effect-todays... If you're a fan of harder data, you can read the UK Government report about how technology is responsible for driving the destruction of middle-income jobs and pushing up inequality: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/250206/bis-13-1213-hollowing-out-and-future-of-the-labour-market.pdf https://www.gov.uk/government/uploads/system/uploads/attachm... [Edit: Given the number of up-votes this is getting I've submitted the Economist link as it's own story: https://news.ycombinator.com/item?id=7089531 https://news.ycombinator.com/item?id=7089531]

rfnslyr 13y ago
Jesus, now I have to feel guilty about being white, bering a male, and being a developer? Someone stop me!
- pietro 13y ago
  Stop feeling guilty! It's stupid and wrong.
- ronaldx 13y ago
  You have personal responsibility for your actions as a developer. If you are using your skills in a way which primarily benefits the super-rich and is a net negative to society, you should take this opportunity to reflect on that: yes.
  - rfnslyr 13y ago
    I work on mobile applications at an investment bank so the rich can fiddle with their money from their diamond plated iPhones. Does that buy me a ticket to hell?

veganarchocap 13y ago

It's interesting that an expanding government in America has seen a rise in the income-gap.

LekkoscPiwa 13y ago

The problem that Leftists don't see is obvious: In Communism or Socialism the Party Leader (i.e. Stalin) is one of these 85! Forget rhetoric there have always been powerful, rich people and there always will be! Socialism/Communism is just exploitation by the party vs. exploitation by the private person.

jasonkester 13y ago

This is a good innumaracy test. The level to which it pisses you off is a good indicator of how well (or rather, poorly) you understand how money works. It's along the same lines as telling somebody that it costs more than $0.01 to make a penny.

kokey 13y ago

It's easy to create alarm over inequality. Compare the people who has built up wealth to the people who has no wealth because what they earn gets spent every month. This way even most of the middle class looks dirt poor.

11thEarlOfMar 13y ago

Missing the forest for the trees. Taking the two most populace countries: - China per-capita income, in 2011 dollars: 1984, US$432

joshuahedlund 13y ago

Inequality is an important topic to discuss, but unless I skimmed too quickly I haven't seen this factor addressed in the article or the comments here: I'm pretty sure that a significant number of poor people essentially have 0 assets or even debt, so if you own virtually anything you already "own" or "control" more "wealth" than millions or maybe even a billion-plus people. It's the same thing when you see statistics about the Waltons having more wealth than the bottom third of America or whatever.. technically true, but also so do you and so do I.

RivieraKid 13y ago

If the level of wealth redistribution via taxes was higher, than the average member of the society would be better off, that's almost for certain. Reasons for that: - Let's say A earns $1000 day and B earns $20/day. If A was force to give $20 of his earnings to B, this 2-person society would be better of. Because the standard of living of A would decrease slightly but the standard of living of B would increase significantly. - There's a rich get richer and poor get poorer effect. - Lot of wealth gain is a result of pure luck. Wealth redistribution serves like an insurance policy. Examples: bitcoin mining, finding a gold mine. (Of course, there are lots of negative effect of wealth redistributin. What I'm saying is that the optimal level of w. r. is higher than the current level.) But - while I know that the society would be better off, as a developer I would be worse off, so to be honest, I'm not really in favor of higher taxes.

PythonicAlpha 13y ago
+1 for being honest. Nobody likes taxes, I don't either. But you are right: Taxes that increase with income have positive effects on society itself. We had one of the most well balanced societies in the world, as I think, because we have (or better: had) a taxation system that favored little incomes. Since our system changed in favor to the rich, our society begins to erode. The countries with the luckiest people in Europe are those with the highest taxation. The reason is, that a brought middle-class of people exist. You could really say, that taxation (that increases with income) is good for society, since differences are leveled out and middle-class is more likely to establish.
jedmeyers 13y ago
Does your "average member of society" creates any wealth, or just sits there waiting for the redistribution he is entitled to to arrive?
- RivieraKid 13y ago
  Take the wealth created by the society, divide by number of members. If it's more than zero, then yes, the average member of society creates wealth.

11thEarlOfMar 13y ago

If we are looking for inequality and focus on outliers, we will always be able to find unfairness. Over the last 30 years, large portions of the world population have seen dramatic increases in per-capita income. If the masses are benefited, it seems natural that the outliers will lie out even further. Data from: http://stats.oecd.org/# http://stats.oecd.org/# Taking the two most populace countries over the last 30 years: - China per-capita income, in 2011 dollars: 1981, US $282 2011, US$8,319 30x increase in per-capita income - India per-capita income, in 2009 dollars: 1981, US $472 2009, US$3,203 7x increase in per-capita income A large portion of the world population is benefiting from economies that grow with technology as the catalyst.

jgalt212 13y ago

The rise in income inequality is driven by technology and those who know or can embrace it. The rise of the super rich is driven by people stealing money out of the ground (commodities oligarchs) and tax loop holes (carried interest being the most notorious) creating a regressive tax policy at the very upper end of the income spectrum. Zero % interest rates help both parties b/c they are big users of capital. Plant/equipment/storage costs for commodities and HF/PE crew borrows a lot of money. The super rich like everyone (The Economist, in this example) to focus our energies on point 1, so we don't mess with their loopholes and 0% interest rates.

RivieraKid 13y ago

If wealth was a linear fuction of skills or hard work, the wealth inequality would be way lower. Most of the current unequality is actually caused by the rich-get-richer effect and luck. (And skills or hard work are just luck too if you think about it.)

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travisp 13y ago

It's also important to realize that global poverty is at a historically low level at the same time. If you believe the Gates letter in the WSJ, then there will be practically no impoverished countries (with a few exceptions) left in just a few decades. That is unprecedented. I would agree that many of the extremely wealthy have achieved their wealth through political power grabs (particularly, but not limited to Russia and China), but you should also expect great wealth to be created and earned honestly through a process that is lifting the entire globe out of poverty. Distinguishing between these two sources of wealth is important if you truly want to lift the quality of life around the world. Broadly fighting "inequality" of wealth wherever you see it is likely to slow or destroy this growth.

bencollier49 13y ago
You're arguing that income inequality helps to eradicate poverty?
- davidw 13y ago
  Here's a hypothetical scenario: Society A: everyone has at least 1000 wealth somethings, which is plenty to live comfortably. Some people have 1,000,000 wealth somethings. It's very unequal. Society B: everyone has 10 wealth somethings, which is not enough to live very well. There is no inequality. How this all works out in the real world is the domain of economics research and is probably something of an open question.
  - marvin 13y ago
    A closely related and very relevant question is whether society C, where economic incentives and politics ensure that everyone has at least 2000 wealth somethings and some people only have 500,000 wealth somethings, is better than Society A. I think you and others in this thread are arguing a moot point. Certainly it's relevant that the median human lives a better life today than 50 years ago, but it doesn't necessarily have anything to do with whether today's income inequality is a bad thing or whether extreme income inequality makes many people's lives worse than they would be otherwise.

confluence 13y ago

I call this current phenomena inequality blow out. The world is now wealthy enough such that the rich truly can be so much wealthier than the poor (deserved or not - mostly NOT), because there is so much excess wealth already in circulation. The "have nots" in most developed nations usually have enough to not need to riot in the streets so long as their governments are doing a decent enough job. Before modern times, we generally kept inequality in check through periodic bloody revolutions, and only more recently via government enforced transfer payments. Nowadays there is no longer an upper limit to wealth accumulation since bloody revolutions have been more or less capped by social programs funded by transfer payments. The poorest in developed nations today often have access to enough food, water and shelter to live a fairly decent life (not all nations obviously, just those with high HDI coeffecients). Now, so long as this global poverty floor continues to rise through time at a decent enough pace, then societies will remain stable. However, if the rich make that rise falter with ever more aggressive tax policies (0% rates which negatively affect social programs), rent seeking behaviour (squeezing the middle class out of existence, and destroying the mass consumption/tax base), or political power grabs (Koch bros' who don't like to pay for negative externalities), they'll lose their heads. Pure and simple. As I sit here today, and watch our "ever so progressive" Syria (by Middle Eastern standards) falling apart as it goes through a horrific and bloody civil war, I really do wonder how much of a value the rich put on their heads. How far are the rich willing to go in their game of class chicken with the poor? Because as far as I can see, the poor will always win. The poor will eventually redistribute the wealth to equalize opportunity, and mitigate the catastrophic failures inherent in capital markets that allocate wealth to owners as a proxy to the actual wealth generators (engineers/scientists/workers). The question the rich should consistently be asking themselves is whether or not they'd rather bleed to death slowly by paying for orphanages and food for the poor, or quickly at the end of an orphan's machete. The past wasn't all that long ago. I can still see its shadows on the wall. Don't push your luck. /rant

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PythonicAlpha 13y ago
Thats the reason, the rich countries need drones, robots and also computers to control the first two. Since the top 1% must defend against the others.

brosco45 13y ago

Well, they can print money, we can't.

ctdonath 13y ago

How long do those ~85 stay at the top? I'm getting old enough (which is surprisingly young) to watch top-tier super-solid blue-chip businesses crash and burn. Smith Corona, once the most recognized brand in the world? most of you respond "who?". Kodak, with world domination of imaging? dead, just hasn't stopped moving yet. Pan-Am gone, IBM a shell of what it was, a host of other leading super-profitable businesses either crawling on broken glass or gone entirely. Likewise I've seen a lot of big-name big-wallet people likewise go to nothing. I haven't studied the financial dynamics of wealthiest individuals (in terms of this topic's top 85), but as their hoard is based on business I can presume similar turnover for many. They may be at the top _now_, but for how long? This growing consternation over income/wealth "inequality" consistently fails to look at the dynamics of those involved, focusing instead on a mere snapshot selected for maximizing political outrage. Fact is, some 85% of those in the bottom quartile move out of that bracket within a few years, with 15% jumping to the top 25%. The only financial help most of them need is for the government to get out of their way. Some do need active assistance, yes, but even most of that is better served by voluntary private charity - and certainly not massive economic changes inflicted by self-righteous & ignorant politicians. Never mind the oft-overlooked fact that the top 85 spend and invest and donate a tremendous amount, way beyond what is publicly known. They may have half the money in the world; don't ignore how much money they move and thru whom. Confiscate their wealth by taxation in the name of "income equality", and you'll deny those who live on the movement of that wealth.

lmm 13y ago
Social mobility is the lowest it's been in American history and still falling, no?
- ctdonath 13y ago
  No. I'm open to data-based correction, though. Insofar as social mobility may be stifled now, many contend it's in large part to government administration causing a sharp increase in taxpayer liability (you may not be billed for it yet, but your share of the debt is enormous and growing fast) and economic uncertainty (sporadic currency pumping, encouragement of class envy, and rule thrashing on healthcare etc). Hard for employers to hire & give raises (the core of social mobility) when economic future is so unpredictable and depressing.

bedhead 13y ago

The ever-expanding wealth gap is primarily a function of what Warren Buffett has called the most powerful force in the universe: compounding. The "problem" is that some people are simply better at growing their wealth. This minority of people, either through intelligence or luck or some combination of the two, are able to earn very high returns on their wealth, typically via creating businesses. Then once they have some wealth they become creditors, and can earn additional returns. I encourage anyone to throw together a spreadsheet to see how this happens in the real world. Start with 100 people whose wealth is identical, set to $1. Then make a corresponding column that's a normal distribution to represent growth rate (I start at 25%). Then fast forward 50 years, compounding everyone's wealth at their respective growth rate. Voila, through the magic of compounding, despite the growth rates being normally distributed, the wealth distribution is now basically logarithmic, and the wealth gap has effectively exploded. Despite everyone beginning with the exact same wealth, the top 15 people now have almost 80% of the wealth. The longer the time horizon, the greater the imbalance becomes. Welcome to compounding...Buffett gets it. Today's wealth gap is not a capitalistic conspiracy nor is it racism or anything else. It's just algebra. Even if you use a normal distribution with a very small variance, over time the wealth imbalance will grow significantly. It is inescapable.

PythonicAlpha 13y ago

The problem is not technology, but the problem is our economic (particularly "money-") -system. The system with interest rates and profits from money (stock) is leading us into rapidly increasing imbalance of property and incomes. Today you can make thousands times more money just by making money from other money -- without any benefits for society involved (in many cases, the results are even devastating for society, e.g. food speculations) -- than any well paid office worker who uses much creativity and produces real values (like an architect or designer) even, if it is not your own money you speculate with. That should make us think for a moment. This spiral even has gotten worse in the last decades, because profit margins have been increased and increased. Everybody is crying for "investment opportunities" and pressure is on the stocks to generate more profits. That was also powered up by the globalization. Normal human labor has been devaluated this way and just making profits from your possessions is increasingly making more and more money. The people with money also have managed to make the rules in nearly all the world so, that earnings increase. At the same time, more and more companies and rich people have brought their money or profits into tax havens, so the countries are starving on taxes ... the lower paid people have to pay them alone. It's an downward spiral, taking the whole human kind down!

Shivetya 13y ago

The key take away for me is, far too much of the world's population is beyond the reach of those who may/would help them. So many people are in the state they are in because of defective governments that run the countries they live in. This wealth disparity is more of a geographical disparity, where you live matters a whole lot towards whether you will ever have wealth. I just cannot feel upset about the fact that 85 people equal half the world when its far more than half the world that these 85 can probably never help because of rulers or lack thereof where these people live

linux_devil 13y ago

Sometime I think , these guys travel from future and manipulate markets in their favor to be filthy rich

anovikov 13y ago

Think about it that way: 85 richest people own only about 1.6% of the total wealth of top richest 1%. Which is probably about 0.3..0.5% of total worldwide wealth. And 85 people are not some monolithic force, even as they have some similarities, they can't agree on anything (see U.S. Senate which has about as many people - can it agree on much?). So the threat of these rich guys to the world is purely imaginary. It is unfair to compare capitalists to proletariat in their wealth. Capitalists make money from capital, so a capitalist without capital is no more. Proletarian does not need any money to get his income. If you compare incomes of those 85 guys to poorest people they will make up a combined income of some poor 3rd world country like Cuba or Belarus, or at biggest like Romania (implying average returns on capital, inflation adjusted, of about 6-8%). Not half the world, not even close. Top 1% will be yes, more like like Japan, but hey, Japan has under 2% of the world's population. So again there is little 'threat' or rich.

alexeisadeski3 13y ago

As wealthy as the poorest half of the world. People, people, get ahold of yourselves. The poorest half of the world. Wealthy. Wealth. Not income. This statistic is ridiculous.

ctdonath 13y ago

In the late 1800s, a half-dozen or so super-wealthy would regularly vacation together on Jekyll Island (Georgia USA), representing some 1/6th of the world's wealth. Expanding the total to include the top 85 would probably produce about the same results as Oxfam's report over a century later. That a few of the richest (with vast holdings) out-value half the world's population (with zero, or negative, holdings) at any given point in history is not surprising.

tzs 13y ago

Unless a distribution is completely flat (every person has the same wealth), then it is mathematically necessary that the top N% will have >N%. If the distribution is also not flat within subranges of the possible wealth, then as N gets smaller, the fraction of wealth owned by the top N% divided by N necessarily gets larger.

michalu 13y ago

i would love to see the statistic on how many direct and indirect jobs are the top 85 responsible for. Their wealth is after all mostly a stake in their company, valued that high by the public (if publicly traded) or an analyst.

justinzollars 13y ago

The money will trickle down. ;)

prirun 13y ago

To me, the main reason for this wealth inequality is currency devaluation and economic inflation. The middle class and the poor use much more of their money for everyday things, and the price of these everyday things has increased tremendously over the last 75 years. Take a look at this US inflation chart (and that is if you believe the US Gov inflation data, which I don't): http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg http://en.wikipedia.org/wiki/File:US_Historical_Inflation_An... Notice that prior to the 50's, there were balanced periods of inflation and deflation. Since the 50's, there has only been inflation. When the price of housing and food goes up, the middle class and poor people take it up the ass, while rich people who are making money via loans to the MC and poor and raking in much more in interest (for example). When the top 15 US banks are about to go under, the government and Fed buy all their bad assets (loans) with currency the create by pushing a button. Nothing useful or productive is done to create this "value". That new currency is used by the banks to further increase their wealth by manipulating the stock and commodities markets. And yeah, sure - the upper middle class people who have money left over from their paycheck can invest in these markets and increase their wealth. Well, they can until the rug gets yanked out. And when that happens, you can bet the large pension funds, banks, government officials, and those 85 rich bastards will be given plenty of notification before the big crash. But the average Joe invested in the market won't: he will take it up the ass. It's just another way the rich and influential profit from the masses. Think about the cost increases in food, higher education and the medical system for example. Way, way higher than general inflation. These higher costs force middle class people into lower class, and force lower class people onto government assistance. ANd please don't say Bitcoin is going to fix this. Digital currency is the ultimate wet dream for the rich, because they will be able to track AND TAX every single transaction, including those to your babysitter or yard guy. Eliminating all untaxed financial transactions and monitoring every transaction is the overloards' ultimate goal. I'm not saying technology is not a factor - clearly it is. One accountant can do much more with a computer than several accountants could do before computers, robots in factories obviously displace workers, and outsourcing jobs to countries with extremely low wages is a problem. But I think these pale in comparison to currency devaluation over the long term.

Executor 13y ago

I'm not going to argue against restraining these rich people. But what I will argue against is the type of answer given and the level of awareness that brought the answer. If people realized that there can be economy without money (i.e. resource-based economy) then all these rich people lose their power. Assuming that an RBE society would be more fairer for the populous.