equality wealth

The global wealth pyramid

Credit Suisse have released their latest edition of the Global Wealth Report, which they describe as “a comprehensive portrait of global wealth”. It’s a fascinating document, and there are a number of facts or graphs worth highlighting. For now, I’ll stick with this one, the global wealth pyramid.

At the top, 0.7% of the population share 112 trillion dollars, 45.2% of global wealth. That means that “the top 1% of wealth holders now own half of all household wealth”, just as Oxfam warned us a few months ago.

At the bottom, 3.4 billion people share 7.4 trillion, or 3% of the world’s wealth. Then there’s a big chunk in the middle, which is where most of us in developed countries fall.

global-wealth-pyramid

It would be a mistake to think that the big blue block at the bottom represents ‘poor people’. This graph shows wealth, not income. If you have a mortgage, your net wealth may put you in the bottom of the pyramid even if your earnings are healthy. Conversely, the graph might make you look much richer than you feel – I earn less than the UK average, but I suspect that Luton’s rising house prices will have pushed me into the top 5%.

So these numbers don’t tell us that much about wealth and poverty. What really matters is the trends. In particular, are people moving up the pyramid? Ideally what we want to see is that big blue slice shrinking and the middle growing, as people are able to earn and save and invest.

Unfortunately, the trend since 2012 has been in the wrong direction. The turquoise 10,000-100,000 section has shrunk by 2.1% a year, while the base has grown by 2.9%. “Wealth inequality fell up to 2007 but has increased since that time.”

Credit Suisse expect that to reverse in the next couple of years and that between now and 2020, those with wealth between 10k and 100k will rise from 21% to 25% of the world’s population. In the same half decade, the number of millionaires is expected to grow by 46%. As always, it’s easier to make the rich richer than make the poor less poor.

15 comments

  1. “It’s easier to make the rich richer than make the poor less poor” – Jeremy, we can’t even agree on how to make the poor less poor, (globally i mean, not merely a personal donation). Let alone, who/how many are truly determined to.

  2. The key thing to emphasize is that these are relative figures. The poor are getting less poor absolutely, but are relative to the super rich have a smaller fraction of a bigger pie.

    We know how to reduce absolute poverty. Keep doing what we are doing: Free trade, markets, capitalism and globalization.

    In the week that Angus Deaton won the Nobel Memorial prize for Economics in part for his work that allows us to cronical the enrichment of the poorest I think that is a point that needs to be made. (Though Deaton was concerned about the rich kicking the ladder away in poorer countries).

    Gapminder showed us the general ignorance on this point. Only 12% of UK graduates think that extreme poverty has decreased in the last 30 years. http://m.gapminder.org/news/highlights-from-ignorance-survey-in-the-uk/
    I think part of the blame is the loose talk about the poor increasing when talking about relative levels of wealth. If campaigners were clearer then misapprehensions would be avoided, though I think some campaigners want that misapprehension.

      1. You may well be right in that this is the only response to such needs, but, I’m sure there could be quicker, richer (humanitarian) ways if the will could be developed. I expect you’d call this idealism. “I Have A Dream”. If your only reply is demeaning, please don’t demean yourself. A decent reply is always welcome.

  3. As I have got older my idealism has moved from pursuit of a perfection that suits my personal ideals to a desire for the best possible world that takes the world and peoples as they are. Evolution rather than revolution. It is easy to assert that you are sure there could be a quicker and more humanitarian way to end world poverty but the question then is what is it?. Many different methods have been tried in the past and are not as good as the present globalized capitalism approach. Calls for a different system need to include suggestions for what that system might be.

    I think the onus of proof is on any alternative system when the current system is working so well (historically speaking). If a new method turns out to be less effective than our present system then it will be the poor who suffer. Just saying we should think differently or will a better world really isn’t a plan that can be put in place.

    The ultimate problem is the ideal that the poorest can be made as rich as us without the grind and hardship of development as it is. No real world solution can ever match that ideal. Moral indignation such as that at the conditions in sweatshops doesn’t stop them being the quickest route out of poverty for most countries, or better than the alternatives for the people who work in them.

    My great fear is that the ‘there must be a better way’ mentality goes against improvements we know will have a beneficial effect under the current system. For example campaigns against trade deals such a TTIP are harmful when a bigger Trans-Atlantic market means more opportunities for poor countries to sell their wares. Yet some of these are carried out by groups who claim to support ending world poverty.

    Is our current system perfect? No. Could it be improved? Sure. Is there a better system out there? Not that I have seen. No harm in asking the question but an appreciation for the immense success of the current one doesn’t go amiss.

    1. You do not say anything not known. And you end with ‘an appreciation of the immense success of the current one doesn’t go amiss’. The paramount issue for both matters is, as I’ve said before – Where possible, one tries to see as much of a situation as one can (from many, often seemingly unrelated areas), and then weigh up the trade-offs. The result depends on how much information one has and/or personal bias. As with ‘immense success’ – it’s all depends on what is going into the pot. (A gateaux is a gateaux but how about some cream)!
      So, what you say has been seen and acknowledged, but, the response is different for some of us. And, of course, not all tbelieve the poor ought to be as rich as others as the basis for their thinking.

      If I attempt to cover the issue between your line and others, in a very abbreviated manner, it is that you want business as usual (generally), but, there’s another vision of business with more conscience needing to the driving force- hence the cry against the current sweatshops etc. I don’t want to go on here to discuss the arguments about this and all the rest- I’m merely trying to sum up the fundamental place where many split. We do need protestors.

      This is why your ‘evidence’ will ‘prove’ the matter you look at but not ours. I’ve heard your many ‘voices’ throughout my lifetime and you’ve heard mine. I suspect the world is unfolding as it should. There is a will that is its driving force. But this will be too philosophical for your liking, my dear Devonchap 🙂

      1. I’m not sure if you are in extreme poverty what definition of success there is rather than no longer being in said extreme poverty. This is why our discussions degenerate. We are discussing the eradication of real poverty. You say you are sure there is a better way than the current real world system. I ask you to give an alternative and you give me philosophy.

        Raising people from extreme poverty is a moral mission for me. Perhaps there is a trade off that clean water and a toilet means you lose some indefinable sturdy peasantness but the people to decide on that trade off are the poor themselves, not us.

        1. I don’t think of our discussions as degenerating, they just don’t go anywhere for you or me. And you double back on ground already covered a myriad of times by me. Nowhere have I professed to have an answer – it’s not a mathematical problem. I keep making this clear and you keep demanding an answer! (And by the way, although you’ve kept blatant abuse out of our recent attempts to talk to each other, your few comments about yourself growing up etc can easily be read as mere attacks from the back door. This would be real degeneration, that’s why I do not respond to it).

          One point may be of joint interest, which I meant to add last time, is that the protests I’ve heard of regarding TTIP are not against TTIP per se, just particular aspects, such as more NHS privatisation and our governments being sued for company losses when we use less of their products after being advises to by our own governments. If you want to give me different information on this point, I’d be happy to hear.

          And on ‘moral missions’, I’m sure we are on the same ground, we simply cannot agree on the way to do it. Your way is already in operation and you keep saying it is the best. I would like to see its standards improved for a start, and I see this as paramount. And, the poor can’t decide on ‘that trade’ as it is Hobson’s choice. We want more than ‘It’s fine as it is, carry on and we’ll sort the moral issue out some time later’. I think we are discussing different matters, this is why we don’t connect. I’m sure I’ve said as much before, and, I’m sure there’s no more to be added as it can’t go further.

          1. Really, you need to play the victim again? You made several passive aggressive sly digs at me but I took that as just your writing style.

            I wasn’t referring to you. I was going to have a paragraph on how the Monbiot & Corbyn supporters seem more interested in posturing to signal their personal virtue than in solving problems but I thought you might take that as a covert dig at yourself so I left it out.

            Moats and beams sweetie, moats and beams.

          2. This is beginning to degenerate but must merely say you’re wrong – check it yourself. I said ‘can’ and ‘would be’. In other words, not necessarily. (I’d take this further but not needed here and too long). You can also see that I used parenthesis simply to show there may be yet another (already gave two), reason to my actual point that we get nowhere. So, nothing to do with being a victim. Your misinterpetation.

            I also doubt I’ve had any dig at you or anyone else in mind at any time as I see human nature in all being the source of many problems – just a matter of power magnifying it.

            But the fact is, it wouldn’t be different whoeve, (Monbiot & Corbyn supporters etc), you were pointing at with your personal digs about their posturing their virtue with no ability to solve problems, whilst puffing yourself up as having grown up from selfish thoughts and having become more wise.

            You could have picked up on the TTIP matter for more useful discussion. I really am beginning to think, (as once said by another), you are here merely for argument, not any related discussion. That’s not a dig, it’s evidence and it’s your right. I do think it is a pity, but, I have suggested before that perhaps I ought to avoid your comments (& perhaps, you mine), however, on this occassion, you picked up my comment to Jeremy.

          3. You replied to my first comment which was to Jeremy. Check the thread tree.

            If you aren’t looking for victim status why pick up on my phrase?

            And I have lost track of how many times in the past you have gone on about your wider learning and wisdom. So to say I am puffing myself up is motes and beams again.

            Oh, wad some power the Giftie gie us,
            To see ourselves as others see us.

            Debating TTIP wth you is literally pointless since it involves actual facts and figures. There can be no progress as our evidence bases are different

          4. Could redirect you and respond to all, but, I now, definitely know not to entertian this any longer.

  4. On the left hand side of the graph you have the actual numbers of people with varying degrees of actual wealth, so this isn’t relative. And as I said, the numbers of people in the lower half has been growing. That is, incidentally, a change since the financial crisis. Until then global inequality was falling – something that you have rightly pointed out as overlooked by many social justice commentators.

    I agree that developing countries need markets and free trade, but your mistake is to equate that to ‘keep doing what we’re doing’. Many of our current systems are manifestly unfree trade, from the vast agricultural subsidies that developed countries use to the self-interested behaviour of the IMF and its associated institutions. The rent-seeking of the financial industry and corporate tax avoidance are also major problems.

    There’s no big alternative out there to what we have, but it can run a whole lot better than it does. We also need strategy – you can’t just throw markets open to competition, as Russia proved. Prosperity will not necessarily result. So yes, markets and free trade, but also reform of international institutions, and market development rather than just opening them.

    1. You may have noticed that I support freer trade, and that also goes against agricultural protection. Free trade has been increasing and protection decreasing. That is what we are doing and hence what I say we should keep doing. Notice that including the great recession the long term trend in this wealth report is still positive. Focusing on short periods is not the way to assess things.

      Russia post communism was utterly bankrupt with a failed economy and intentionally weak civil society. There really wasn’t solution that didn’t involve collapse. Bad example.

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