
Oxfam: 85 richest people as wealthy as poorest half of the world - T-zex
http://www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world
======
ig1
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...](http://www.economist.com/news/leaders/21594298-effect-todays-
technology-tomorrows-jobs-will-be-immenseand-no-country-ready)

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/attachm...](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/250206/bis-13-1213-hollowing-
out-and-future-of-the-labour-market.pdf)

[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
Jesus, now I have to feel guilty about being white, bering a male, _and_ being
a developer? Someone stop me!

~~~
ronaldx
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.

~~~
wavefunction
The important thing to note is that we are all apparently working to benefit
the super-rich. In fact, your options to the contrary are pretty limited.

~~~
dantheman
We are benefiting everyone. Technology improves the quality of life for
everyone, the benefits may be concentrated right now but over time they'll be
dispersed. We are freeing labor from tasks, the problem is that we are in a
transition period where their new tasks are not well understood. Overall
software eating the world will make everyone significantly richer.

Also, as always wealth is not a zero sum game. Just because someone has 100X
the wealth you do, does not mean that they stole from you, or that you are
poorer. In fact your standard of living has probably increased.

~~~
hcarvalhoalves
> Also, as always wealth is not a zero sum game. Just because someone has 100X
> the wealth you do, does not mean that they stole from you, or that you are
> poorer.

While this makes us _sleep well at night_ , please consider that the top
richest are often connected to:

\- Externalizing costs to countries with corrupt/authoritarian governments

\- Tax evasion

\- Companies backed by strong governments' tax money (theft by the state),
later privatized for pennies because the government is broke and/or corrupt

\- Banking, which never follow free-market rules

\- Oil and mining companies, which aren't taxed proportional to the intrinsic
environmental and social impacts

While wealth doesn't comes from theft, _wealth concentration_ requires a dose
of unethical behavior and not observing some people's fundamental rights. When
you're at _that_ level of capital it's an entire different game.

~~~
dantheman
Then the problem is not wealth inequality it's government intervention and
government corruption. So we should stop talking about wealth and start
talking about corruption.

~~~
hijinx
I think they both merit discussion, as one enables the other. Ignoring
corruption, the super wealthy can set the topic if not the tone of discourse
for entire nations (and increasingly do).

------
travisp
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
You're arguing that income inequality helps to eradicate poverty?

~~~
davidw
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
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.

~~~
ctdonath
By capping incomes/ownership to 500,000 wealth somethings, you discourage the
creation of productivity required to supply the extra 1000 wealth somethings
to everyone, as required to transition from scenario A to C. By penalizing
anyone making/having more than that cap, nobody has incentive to create
another 500,000 (or even just 1) more wealth somethings which would, at some
point, would be transferred to others anyway. In practice, such capping tends
to turn scenario A into B because not only is anyone discouraged from
producing more than a certain amount of value, what manifestations of wealth
which exist decay and are eventually destroyed without sufficient resupply for
the whole society; as wealth is consumed/decayed/destroyed, and productivity
is effectively punished, the majority increasingly vote for forced
redistribution of what remains, leading to stabilizing at 50 per person.

Wealth somethings don't just grow on trees, ya know. They don't last
indefinitely either, much less increase commensurate with population growth &
needs despite lack of sufficient incentive to create them.

------
awjr
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.

~~~
joosters
Yes, most Russian oligarch billionaires got their wealth purely through _acute
business acumen_...

~~~
mtrimpe
Well; they _are_ known for their impeccable execution(s)
([https://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvine...](https://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinenko))

~~~
mtrimpe
By the way; this isn't snark towards Russia but snark against the notion that
the threat of violence doesn't play a significant part in the distribution of
wealth anymore.

------
bedhead
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.

------
read
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
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
Winston Churchill =) [http://www.goodreads.com/quotes/300099-churchill-madam-
would...](http://www.goodreads.com/quotes/300099-churchill-madam-would-you-
sleep-with-me-for-five-million)

------
ctdonath
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
Social mobility is the lowest it's been in American history and still falling,
no?

~~~
ctdonath
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.

------
confluence
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

~~~
PythonicAlpha
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.

------
RivieraKid
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.

~~~
jedmeyers
Does your "average member of society" creates any wealth, or just sits there
waiting for the redistribution he is entitled to to arrive?

~~~
RivieraKid
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.

~~~
jedmeyers
There is no "wealth created by the society". Society as a whole does not
create wealth, it's individual members do.

~~~
RivieraKid
Ok, so sum the individual contributions and divide by number of individuals.

> Society as a whole does not create wealth, it's individual members do.

I disagree, but perhaps you have a different definition of wealth.

~~~
jedmeyers
"Ok, so sum the individual contributions and divide by number of individuals."
\- why would you ever do that?

------
RivieraKid
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.)

------
11thEarlOfMar
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.

------
kokey
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.

------
PythonicAlpha
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!

------
anovikov
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.

------
tzs
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.

------
jgalt212
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.

------
jasonkester
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.

------
joshuahedlund
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.

------
Shivetya
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

------
jheriko
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.

------
ctdonath
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.

------
Executor
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.

------
alexeisadeski3
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.

------
11thEarlOfMar
Missing the forest for the trees.

Taking the two most populace countries: \- China per-capita income, in 2011
dollars: 1984, US$432

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

------
prirun
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_An...](http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg)

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.

------
michalu
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.

------
brosco45
Well, they can print money, we can't.

------
justinzollars
The money will trickle down. ;)

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

------
huseyinkeles
which half?

~~~
broolstoryco
the left one

------
spiritplumber
Are they rich in protein? I'm hungry.

