The richest 1% own 48% of the world’s wealth

Last year Oxfam made headlines with its ‘killer statistic’ that 85 people owned as much as wealth as half the world’s population. Their latest inequality report, which is out today, updates that figure and shows the trends in shares of the world’s wealth.

Today, the richest 1% own 48% of the world’s wealth. If their wealth continues to grow as fast as it has in the last half decade, they will own the whole half by 2016.

1-and-99-percent

Whether you think this is a problem in itself is a matter of debate, but it certainly has consequences. Oxfam argue that this wealth is mainly being created in specific sectors, particularly banking and insurance, and that these fortunes give those sectors undue political influence. That huge lobbying power can be used to fend off taxation and regulation, and ensure that the status quo continues.

You can read the full report here.

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28 Comments on “The richest 1% own 48% of the world’s wealth”

  1. campbeji January 19, 2015 at 2:37 pm #

    Hi, I always find this type of thing a little one sided and pretty misleading. I am reading that Oxfam report and it seems to be written in a way that says ‘Rich people are bad’ that they bend the rules and do their best to dominate and subjugate the rest of the world. So 1% of the population control 48% of the wealth, does that mean that they have taken that wealth from the bottom 99%, I don’t think so, I think this means that they are better at creating wealth than the rest.

    It follows on from this that they are also better at creating employment than 99% of the population, their taxes etc are also bye and large bigger than other peoples so they are supporting their governments more. When rich people spend their money (possibly with larger purchases) they are supporting other businesses and industries etc.

    Is there problems with the way this all works – Yes, do the richest people have more power and influence – Yes, should society be changed to reduce their power and influence – I don’t know

    It would have been interesting if Oxfam had also produced a series of graphs showing the top 1% v’s the bottom 99% in terms of other things like employment created, wealth created for other people, charitable giving, taxes paid etc

    If you check out the givingpledge website you will see that there is something like 128 people and families who have promised to give away over half of their wealth either during their lifetimes or in their will. These 128 people/families are all Billionaires.

    Since it’s inception some 14 or so years ago the TV appeal for Children in need has raised and amazing £600 million pounds, however if we compare this to the charitable donation of Warren Buffet (Owner of Berkshire Hathaway and joint founder of givingpledge) for last year of $2.8 Billion an increase from his previous years donation of $2.6 Billion, bringing his total to $23 Billion, and he isn’t even the biggest charitable supporter (I think that is Bill Gates).

    Anyway, as I said the reporting is often very one sided and I think unfair. I think the best way to improve the situation would be to help the bottom 99% learn how to be better at generating wealth.

    Jim

    • henry1941 January 19, 2015 at 3:23 pm #

      The one percent do not create employment nor do they generate most of the wealth. Employment does not need to be “created” – the tasks are there waiting to be done.

      Nor does the 1% generate a disproportionate amount of wealth. They are syphoning off wealth produced by the 99%.

      • campbeji January 19, 2015 at 3:38 pm #

        Hi Henry, I’m not really sure how you can support that claim, Bill Gates for example created the company Microsoft, it started with just a few people and now employs over 80,000 people directly and I’m sure the number of 2nd and 3rt tier employees/contractors who depend almost entirely on Microsoft product will be in the millions.

        I’m also wondering how the 1% syphon off the wealth from the other 99%? Unless of course you mean the money that people pay for the products their companies produce. I use and pay for certain Microsoft products, but I certainly haven’t noticed any other money being siphoned out of my bank account by Microsoft.

        The statement about ’employment not needing to be created’, i’m assuming you are not expressing yourself properly or that I am mis-understanding what you mean, or possibly that you don’t understand how jobs and employment work.

        Jim

        • henry1941 January 19, 2015 at 9:03 pm #

          There is just one Microsoft and most of its revenue flows have come about through the exploitation of government-granted intellectual property rights and its own exploitation of the phenomenon known as lock-in. This is I agree remarkable when better products are available at no charge to the user and have been for the past fifteen years.

          How is money siphoned off? I assume you are working. Is your wage the full value of whatever it is you produce?

          Employment does not need to be created. We have misled ourselves into thinking that there is something called a job which has to be provided by an employer. The reality underneath that is that we all produce things that we all need or want, and exchange them with each other, so as to make use of the benefits of division of labour. Since human wants are unlimited, the work that is to be done is also unlimited.

          • campbeji January 19, 2015 at 11:25 pm #

            Hi Henry,

            Are these ‘Government granted intellectual rights’ the same ones that were put in place to allow people and companies to benefit from their own creative efforts. They allow people to make money through their artistic and entrepreneurial effort. I think that what you mean is that these laws stop (or try to stop) people from stealing other peoples work.

            Yes i know about lock in, not sure that it applies to Microsoft products, I have stopped using many of the Microsoft products that I used to and moved to some of the open source products available, however not everyone wants to do this for whatever reason. I do think that Microsoft have every right to charge whatever they want for their products, thats the basis of a free economy after all.

            Yes i do work, and no I don’t pay myself the full value of the products I make (I run my own business), I have bills to pay, taxes, professional fees, memberships, transport costs, wages etc. Do I pay employees the full value of the products they make, of course not, for all of the same reasons as before but also so that the company can make a profit. Profit allows me to invest in my business so that I can make more money, hopefully this allows me to ‘create’ more jobs and have more money to spend on holidays etc.

            Your ‘Employment’ paradigm appears to be very messed up, i don’t even know how to comment on it without the whole thing sounding silly
            Jim

          • henry1941 January 20, 2015 at 5:11 pm #

            Do you pay yourself the full value of your products? Probably not – you will be paying out things like rent and tax, which means that you do not even yourself receive that full value.

          • campbeji January 20, 2015 at 9:06 pm #

            Hi Henry,

            “Do you pay yourself the full value of your products? Probably not – you will be paying out things like rent and tax, which means that you do not even yourself receive that full value.”

            If you had read my post you would have seen that I said that, but thank you for supporting my point.

            “Yes it appears to be backwards, I can appreciate that. But the natural condition is for people to work and produce things which they then exchange. If people have to wait for an employer to come along and offer them work, there must be a blockage in the system. There are several.”

            People only work when it is beneficial to them, whether it is through employment or a barter system, there are very few people, if any, who will work for no return, but on the chance that someone out there wants to do some work for no return, I’m struggling to get my tax return done, your welcome to do it for me 🙂

      • DevonChap January 19, 2015 at 8:34 pm #

        Employment doesn’t need to be created, it is waiting to be done! Stuff and nonsense. Imagine someone in 19th century London who was an App designer. Without the innovators most modern jobs wouldn’t exist. You might look now at what appears obvious but those didn’t appear so at the time and big risks were taken. And those innovators like Bill Gates, Steve Jobs and Sam Walton only get a small fraction of the value of the innovations, the public gets 97%.

        • henry1941 January 19, 2015 at 9:08 pm #

          Apps designers in nineteenth century London? Why chose that example? Most people today are not apps designers. They do ordinary low level tasks essentially the same as they were in Roman times. Chariot driving has been replaced by its modern equivalent, but underlying work is the same.

          The innovators only get as much as they do because patents and copyrights allow them to. But the bulk of the creaming-off is not done by innovators.

          • campbeji January 19, 2015 at 11:39 pm #

            Most people do ordinary low level tasks??? I know a lot of people in a range of employment types, farmers, taxi drivers, teachers, software developers, telecom engineers, production engineers, factory workers, journalists, scientists, doctors, nurses, firemen, paramedics, brickies, shop workers, artists, wedding planners, balloon printers, pilots, psychologists etc etc I don’t think that I would want to describe any of them as ‘low level’, and very few would have an equivalent in Roman Times. Even if they did that doesn’t mean anything, back then there was still businesses with employees, or slaves, commerce still followed a very similar pattern to the one we use today.

            Since we are talking about the inequality between the rich and the poor, and you brought up the Roman times, do you think the difference between the rich and the poor has increased or decreased since back then?? Decreased I think.

          • henry1941 January 20, 2015 at 9:26 am #

            “Most people do ordinary low level tasks??? I know a lot of people in a range of employment types, farmers, taxi drivers, teachers, software developers, telecom engineers, production engineers, factory workers, journalists, scientists, doctors, nurses, firemen, paramedics, brickies, shop workers, artists, wedding planners, balloon printers, pilots, psychologists etc etc I don’t think that I would want to describe any of them as ‘low level’,”

            Neither would I.They are all Level 2 (artisan/professional) tasks and are rewarded accordingly.

            “very few would have an equivalent in Roman Times.”
            Of course there were equivalents. The Romans were a sophisticated technological society with high levels of technical skill in many different areas. The Roman artefacts on view at any local museum testify to high levels of skill which would have needed many years of training.

            But there is always a mass of work which needs only a bare minimum of training and experience to perform.

            “Even if they did that doesn’t mean anything, back then there was still businesses with employees, or slaves, commerce still followed a very similar pattern to the one we use today.”

            What is your point then? The sucking up of wealth in Roman times occurred through the use of slavery. Wealth is still sucked up by non-producers though the mechanisms have changed. The wealthy are, by and large, not those who are producing the wealth.

          • campbeji January 20, 2015 at 2:03 pm #

            Hi Henry,

            My point is that you seem to have the concept of employment/jobs backwards. You claim that the work is there waiting to be done and doesn’t need a job to be created to allow it to be done. My point is that the only way someone is going to do the vast majority of jobs is if there is some sort of benefit to them, usually financial, This only happens if there is some form of employment and this only happens when someone decides that they want another person to perform the task for them and ‘Creates’ the job. The person who creates the job will normally only do it if there is the ability to save time or make money by having someone do the task. This is the basis of how most people will generate wealth.

            The whole issue of your low level tasks or Level 1, 2, or 3 tasks is irrelevant to the actual subject of wealth and inequality that is being discussed, except in so far as it effects a persons ability to control their own financial situation.

          • henry1941 January 20, 2015 at 5:09 pm #

            Yes it appears to be backwards, I can appreciate that. But the natural condition is for people to work and produce things which they then exchange. If people have to wait for an employer to come along and offer them work, there must be a blockage in the system. There are several.

        • DevonChap January 19, 2015 at 10:23 pm #

          What percentage of the work force worked in agriculture in Roman times? 80-90% What percentage now? 1%. In 1841 in the UK it was 22%.

          In 1841 33% of people worked in services, in 2011 it was 81%. These services are in many cases utterly different to anything even 100 years ago. So even ignoring population growth people are doing different types of work. Assertion is easy, but the facts are different. A good starting point.
          http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/170-years-of-industry/170-years-of-industrial-changeponent.html

          • henry1941 January 19, 2015 at 11:36 pm #

            I don’t disagree but most work has always consisted of simple tasks requiring minimal levels of skill – one can think of it as Level 1 labour. Level 2 is artisan work requiring skill and training, Level 3 is professional work eg managing, banking, and specialisms such as doctor, teacher, architect, etc. The basic outlines do not change, the vast mass of work is always at Level 1, and the work always needs to be done.

          • campbeji January 20, 2015 at 12:10 am #

            When I was a young child, some 40 odd years ago my family used to take our holidays in a house on a farm. Whenever the hay was being cut my father used to help the farmer out, altogether a team of about 6 or 7 men would have taken all day to cut and bale the hay in the big field. Now the farmer uses a machine to do the work, a few hours and its done with no more than two people. The work is still there but the jobs are not. Modern technology has destroyed some jobs but has created new ones.

  2. henry1941 January 19, 2015 at 3:20 pm #

    The report was disappointingly superficial, making no mention of the mechanisms by which financial institutions are sucking up wealth produced by others. Thus it has no useful contribution to make when it comes to suggesting ways of making things better.

    • Jeremy Williams January 21, 2015 at 9:31 am #

      ‘Disappointingly superficial’ was my impression too, but only of this particular report. It’s best understood in the wider context of the ‘Even it Up’ campaign, which has a fair amount of work behind it.

  3. mattcurrey January 19, 2015 at 3:39 pm #

    Reblogged this on matt's musings .

  4. DevonChap January 19, 2015 at 8:29 pm #

    Another dodgy dossier from Oxfam. Since Jeremy posted this without criticism I assume he thinks it is correct.This report is disingenuous since at no point in its 12 pages does it say that it is looking at NET wealth. Net wealth may have some use in comparing rich people to other rich people but it pointless talking about poorer people.

    If I earn £50,000 pa, have a £300,000 mortgage and have no problem paying it but due to a fall in house prices am in negative equity with a house only worth £270,000 I have net assets of -£30,000. By Oxfam’s reckoning I am therefore poorer than a Mumbai street child who has nothing but also has no debts.

    It also amuses me that the graph Jeremy copies shows that the top 1%’s share of net wealth was higher in 2000 that it is today.

    • henry1941 January 19, 2015 at 11:37 pm #

      It is worth than that – it doesn’t even define wealth. OOPS.

      • Jeremy Williams January 20, 2015 at 10:04 am #

        This post is little more than a link to the report, and not an endorsement or a criticism. I’ll be coming back to it.

        • DevonChap January 20, 2015 at 8:38 pm #

          The thing to remember that this is not a serious report. Not even Oxfam really believe it is correct, it is advertising. Oxfam needs funds to pay its staff’s salaries. Given the famine business has been a bit poor lately given to all this pesky economic growth in developing countries, they are trying to build brand awareness in other areas, and railing against inequality is one.

          The trouble is that this nonsense gets into the public discourse, often mangled (such as Polly Toynbee saying this report said the top 1% owned 99% of the wealth), It also goes into the mix for other advertorial reports from Oxfam and other charities where the half truths here get mixed with other half truths to quarter truths and worse which but dint of repetition are hoped to become the established ‘fact’.

          • Jeremy Williams January 21, 2015 at 11:58 am #

            You’re right that it’s easily mangled, as was their last stat.

            You’re partly right that it’s advertising. I’d have said lobbying.

            You’re wrong about famine. 1 in 4 people in Africa are still undernourished, so there’s still plenty for Oxfam to do. And you’re wrong about Oxfam’s agenda, which they’re very transparent about.

Trackbacks/Pingbacks

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