
Top 1% now owns more of the wealth than the remaining 99% - niklasbuschmann
http://www.theguardian.com/money/2015/oct/13/half-world-wealth-in-hands-population-inequality-report
======
mikeash
> The report defines wealth as the value of assets including property and
> stock market investments, but excludes debt.

How does this make the slightest bit of sense? Counting property but ignoring
debt is going to exaggerate the wealth of many Americans by an order of
magnitude, for example. Beyond that, one person's debt is another person's
investment, so you're double counting all that money.

~~~
breischl
I think the Guardian article meant that they had subtracted debt from assets,
but they stated it in a confusing way. The original report states:

    
    
      Once debts have been subtracted, a person needs only USD 3,210 to be among the wealthiest 
      half of world citizens in mid-2015. However, USD 68,800 is required to be a member of the 
      top 10% of global wealth holders, and USD 759,900 to belong to the top 1%.
    

Which is more clearly stated and uses the same numbers as the Guardian
article.

See page 11 from: [https://publications.credit-
suisse.com/tasks/render/file/?fi...](https://publications.credit-
suisse.com/tasks/render/file/?fileID=F2425415-DCA7-80B8-EAD989AF9341D47E)

~~~
mikeash
Yes, I believe you're correct. Holy crap is that a terrible way to put it. I
wouldn't call "excluding debt" confusing, but just outright wrong. Unless this
is one of those dialect things that means something different to the Brits?

~~~
gozo
More of an accounting/finance thing, similar to how net price is price
excluding tax, net wealth is wealth (assets) excluding debt
(loans/liabilities).

~~~
mikeash
I'm not sure if that helps, because here in the US "price" is by default
listed before taxes! I would read "net price is price excluding tax" as "net
price is price, ignoring taxes," and thus "net wealth is wealth, ignoring
debt."

------
pvnick
Wealth disparity may be growing, but I think folks disagree about the source.
Some point to tax havens which allow the rich to accumulate wealth without a
bit being shaved off and redistributed. They say we need to increase taxes and
disallow tax havens to limit wealth accumulation.

I don't think taxes paint the full picture. For the past 7 years or so central
banks in the US, Japan, and UK (and recently the European Central Bank) have
embarked on aggressive quantitative easing programs, printing and injecting
into the economy massive amounts of new cash, propping up banks and stock
markets. The first layer that this cash passes through is filled with wealthy
folks (i.e. bankers and those with lots of investments). The people at the
lower end of the wealth spectrum benefit indirectly through living in an
economy which survived and having their investment-backed retirement/pension
packages in-tact (for the most part). Thus quantitative easing is
fundamentally a regressive stimulus package, with most of the new cash going
into the pockets of the most wealthy, and the least wealthy getting table
scraps by comparison.

Quantitative easing may have spared us a collapsed global economy, but the
effects are increasing wealth inequality. I don't know what the best solution
is, and in fact I don't think anybody does. Everyone is kinda shooting in the
dark here.

~~~
godzillabrennus
We are living in a consumer economy where an increasing number of jobs are
becoming automated. QE is effective in relaxing capital constraints for
private industry to thrive but trickle down economics not only doesn't work it
certainly doesn't work when you take into account the increasing automation.
More than half of Americans live on less than $30k a year. If we want to jump
start America we need a minimal viable income. Guaranteed checks to every
citizen for them to do what they want. You can argue inflation all you want
but without free market economics working for labor we need to tax the rich
and siphon that cash back into the hands of the consumer.

------
leoplct
"The report shows that a person needs only $3,210 (£2,100) to be in the
wealthiest 50% of world citizens. "

Prices between country are adjusted to Power parity purchases (PPP)

~~~
hwstar
This reasoning is flawed. It depends what your cost of living is in the region
of the planet you call home. Yes, I suppose you could move to a lower cost of
living region, but there are issues with that as well (Oppressive government,
Lack of hospitals, Sanitation, no English speakers, etc.)

------
prostoalex
According to census.gov [http://blogs.census.gov/2013/03/21/household-wealth-
and-debt...](http://blogs.census.gov/2013/03/21/household-wealth-and-debt-in-
the-u-s-2000-to-2011/) at least in the US "changes in overall median net worth
observed over the past decade have been driven primarily by changes in one of
its major components – equity that American households hold in their homes".

The recipe for greater wealth equality is to subsidize mortgages and restrict
new construction, so that everybody's house values move up a notch, which
makes everyone feel a little bit better about themselves.

~~~
13thLetter
> The recipe for greater wealth equality is to subsidize mortgages and
> restrict new construction, so that everybody's house values move up a notch,
> which makes everyone feel a little bit better about themselves.

I assume this suggestion was made "A Modest Proposal"-style, right?

Those are the policies we've been following, and they cause great harm. It's
already nearly impossible to buy a home in many American cities if you're not
upper middle class at a minimum, and even then you're paying an unsustainable
portion of your income. Restricting construction further and subsidizing
mortgages (so that home prices simply float up to their current value +
subsidy) will put homes even farther out of reach.

~~~
prostoalex
Right, this is not the recipe for fair market prices or housing affordability.

This is a recipe for increasing wealth equality, an abstract statistical value
the press tells us we should be outraged about.

------
OJFord
I don't think this is particularly surprising or interesting on a global
scale. Not least because of the difficulty in data collection that could lead
to different conclusions the next time someone tries.

Wealth distribution within a country is an interesting thing to look at, but I
think at the global level it's not nearly as compelling as, say, wealth
distribution among countries.

------
NiftyFifty
In other news, bread comes in white. Glad someone has already posted scale of
economy against other sources. Cool beans.

------
tyadon
I really hate to break it to you guys: It's always been like this. Maybe not
quite THIS extreme, but a very small group of wealthy white men have run the
United States since the beginning.

~~~
rgbrgb
I don't think you'll find much sympathy for the status quo in this crowd. We
like fixing things.

~~~
zardo
We can learn from it though, the history of inequality does suggest that
inequality is an attractor, and equality is an unstable state that would
require active management to maintain.

------
santosha
I'm not sure if this was addressed in the Credit Suisse report, but these kind
of comparisons can be very misleading. The problem is that a lot of people in
the bottom 10% have net negative assets (every fresh grad with college loan
debt for eg). This skews the distributions, making the wealthy seem richer
than they really are.

Suppose A has 50$, B has 30$ and C has -20$ (owes a creditor). A seems to
control ~82% of all the wealth, but B is actually in much better shape than
that number suggests.

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msoad
Not very related but if you're using Chrome install this plug-in to get a
clean "AMP" version of Guardian and many more websites:

[https://chrome.google.com/webstore/detail/%E2%9A%A1%EF%B8%8F...](https://chrome.google.com/webstore/detail/%E2%9A%A1%EF%B8%8F/igokgmnkplcfgnegidccbgmlnecaffhh)

~~~
e12e
If anyone else was wondering, that's "Accelarted Mobile Pages":
[https://github.com/ampproject/amphtml](https://github.com/ampproject/amphtml)

Does seem odd me to point that out on a Guardian link - it's never struck me
as particularly slow (on mobile or otherwise).

~~~
ptaipale
Their comment system is really bad (slow and browsing through pages does not
work well).

------
pluckytree
It’s clear we need government intervention that punishes those that profited
richly from the collusion between government and big business. I would
recommend letting industry draft any legislation intended to fix this problem.

------
themetrician
In other news:

Top 1% singers better than the remaining 99%.

Top 1% sprinters better than the remaining 99%.

Top 1% producers better than the remaining 99%.

Where's the surprise here? It's a variation of Sturgeon's Law.

EDIT: the top 1% of wealthy americans are better _producers_ than everyone
else, yes. They are not better _people_ than everyone else, no. How is this so
hard to understand to HN-level people?

~~~
sp332
I don't think you read the stats right to be honest. The top 1% of producers
aren't better than the other 99% _combined_.

And another point: I don't think all of Sam Walton's kids are even in the top
1% of producers even though they are at the very tip-top of wealth owners.

And the top 1% of owners don't have the same wealth as the other 99% in other
countries, or even in this country in the past. It's not a normal thing at
all.

------
dollar
Who cares about socialist propaganda like this? There is no evidence that
"equality" in the distribution of wealth is good for middle class and low
income persons. For example, if the distribution were more equal on a relative
basis, but all brackets had less money than before, is that supposed to be an
improvement?

~~~
mikeash
Wealth means power.

Let's take an extreme case: every person in the world has their wealth
increased by 10% over what they have today, except for one person who has his
wealth increased by $1 quadrillion.

Everybody is better off, right? Except that wealthy person is going to rule
the world, and stack the deck to help himself, and there's nothing that says
he's only going to do it in such a way that everybody else keeps increasing
their wealth too, or even keeps their wealth at all.

We can see this at work in the US where the political process has become
pretty corrupted, to the point that half the politicians act like wealthy
people in the US suffer under a tremendously high tax burden when they
actually pay less as a percentage than the average person, and the other half
pays lip service to getting the wealthy to pay more but only proposes weak
measures that never go anywhere, and where systematic lawbreaking in the
financial sector that led to a gigantic financial crises went completely
unpunished, except for the one guy who made the mistake of ripping off wealthy
people.

~~~
dollar
I agree, wealth and power are closely related right now. But why? We could
focus our energies on the distribution of power instead of the distribution of
wealth. We could create a world where power and wealth were not so closely
correlated. Arguably, our original constitutional government was a lot closer
to that than we are today. That was when we had apportionment of 1:100000 in
the U.S. House. That was when State governments elected their senators. That
was when it was assumed that any State could withdraw from the Union, that any
county could withdraw from a State. It was before a massive, centralized
federal government.

~~~
mikeash
Wealth is ultimately the codification of power. A dollar is the representation
of the power to get somebody else to give you a dollar's worth of value, or do
a dollar's worth of stuff for you.

They are not perfectly linked, but I think they tend to come together. If
someone has a lot of economic power, which they can use to get a bunch of
people to give them things or do things for them, that's an avenue to
political power. If someone has a lot of political power, they can leverage
that to get economic power.

Your statement about how the original US government was closer to this than
today doesn't sound right to me. Weren't only people^H^H^H^H^H^men^H^H^Hwhite
men who owned land allowed to vote?

