
Eight billionaires 'as rich as world's poorest half' - kungfudoi
http://www.bbc.com/news/business-38613488
======
apsec112
I'm richer than the poorest two billion people in the world combined, and I'm
an upper-middle-class programmer with some modest savings.

Please stop adding up the wealth of the poor: [http://blogs.reuters.com/felix-
salmon/2014/04/04/stop-adding...](http://blogs.reuters.com/felix-
salmon/2014/04/04/stop-adding-up-the-wealth-of-the-poor/)

~~~
rgbrenner
that's a really interesting article.. I think the more surprising fact is that
7.5% of the bottom 10% are in the US. That's 50 million US citizens. That's
pretty shocking.

Edit: although since we're talking about people who have negative net worth..
perhaps it's only because they're able to borrow so much. I doubt a poor
Indian or Nigerian would be able to borrow $100K for college.

~~~
geodel
It would look less shocking once one understand US poorest 5% are equal to
India's richest 5%

[http://mjperry.blogspot.com/2011/01/americas-poor-indias-
ric...](http://mjperry.blogspot.com/2011/01/americas-poor-indias-richest.html)

~~~
rgbrenner
Also interesting.. but it took me a minute to figure out how to sync this info
with the article... the article is for net worth, and this is for income. It
is surprising how little the top 5% Indians earn.. I actually had to verify it
to believe it.

------
tabeth
I believe there's a fundamental assumption among many that with time, life is
becoming better for all. Even if this is true right now, one day it will not
be true.

Once no longer true, humanity is going to have to ask itself if the massive
increases of inequality were worth it. Whether it's:

1\. Global warming

2\. Nuclear war

3\. Mass unemployment

4\. Resource depletion

Or something else, I suspect the effects of the "big event" in the future,
once amortized to now will be so large, that all of the supposed progress
we've made now is negligible, if not counterproductive.

The relevance to this particular article is that the eight billionaires "as
rich as the world's poorest half" will have contributed 99.99% to what I refer
to previously (compared to the poor half they're compared to), yet they and
their descendants will be completely shielded from the worst of the effects.

How dystopian.

~~~
mcroft
If you've never come across Hans Rosling before, I highly recommend watching
one or two of his videos on world statistics.

His overall point is that the world is doing much better than you may think.
He uses a lot of data that he makes publicly available and shows which metrics
are the best measure of progress and why.

Aside from that, he's also a very entertaining and engaging communicator.

Here's a relevant article:
[http://www.bbc.co.uk/news/magazine-24835822](http://www.bbc.co.uk/news/magazine-24835822)

~~~
majewsky
Also, going in the same direction:
[https://ourworldindata.org/](https://ourworldindata.org/)

------
marcoperaza
This kind of statistic is very deceptive and borderline dishonest. If you have
no debt and one dollar to your name, congratulations, your are richer than the
poorer half of the United States combined.

Also, by this logic, a homeless guy with no debt and a $10 bill in his pocket
is better off than the Harvard Law grad at a prestigious law firm still paying
off his student loans.

~~~
kolbe
really? i always assumed most were just very poor, not net in debt.

~~~
marcoperaza
I just looked it up and it's actually something like 20% of the US that has a
negative net worth. Not half, but my point stands.

~~~
chiefalchemist
I would imagine that if you factored in "home ownership" it's much higher.
That is, you don't actually own your home til the mortgage is paid. So that
equity is a ruse of sorts.

~~~
rgbrenner
net worth includes assets... so only if they were underwater on their
mortgage.. and with the house prices in the US, I don't imagine there are a
lot of people in that situation (at least since the subprime mortgages have
all/mostly been foreclosed on by this point).

~~~
chiefalchemist
Okay. Thanks. But I'm gonna have to call that a false god none the less.
Wealth on paper (i.e., stock) is bad enough, but to assume (<< keyword) that
some fraction of your house is worth $X and is "money in the bank" seems
foolish to me.

Let's not forget that when you get a mortgage for say $500k, that's not what
you end up paying (in total). The total and real cost of that loan is much
high.

I digress? :)

------
kolbe
I like how these articles like to focus on the yacht and houses that represent
at most 1% of their net worths, and don't focus on the 99% of it that is being
put to use as investment capital.

Also, there's no doubt in my mind that the King of Saudi Arabia and Vladimir
Putin have these 8 beat soundly in net worth, too.

~~~
jondubois
Inequality causes society as a whole to increasingly serve the rich at the
expense of the poor.

In fact, 'investment capital', unless properly allocated, is indistinguishable
from frivolous spending.

If you buy a super-yacht; those hundreds of engineers and technicians who
built it for you could instead have spent their time building airplanes for
'regular' people (and made international travel cheaper for everyone).

In the same way, if you invest in a crappy startup (which makes a product that
nobody needs), you are taking hundreds of engineers away from building
something useful and making them work on something useless.

At first glance, this doesn't seem too bad - After all, if you make a bad
investment, the system will punish you by not giving you any ROI, right? So
you'd lose your money and will cease to be a nuisance to society.

In reality, however; because of social factors and economies of scale (lots of
money in relatively few hands), it's actually possible (and extremely common)
for people to make terrible investments and still get a return on it. If you
have enough people in the system who know how to talk the talk and are good at
manipulating others, then eventually, the waste builds up and becomes a
significant burden on all of society (especially the poor).

Soon enough, everyone in the world will be working on some useless trendy
start-up to cater to the whims of a few wealthy investors - Nobody will be
able to afford to work on a revolutionary HIV vaccine, world-changing
education software or automated farming machines.

------
cromwellian
These measures I don't think are a good way to measure, because I think
there's a difference between someone who's very wealthy on paper because of
high stock prices, and someone whose's wealth because they got a
disproportionate share of income. The latter represents money diverted in the
here and now to someone else, and the former represents money that can be
diverted in the future. Of course, you can ask Elizabeth Holmes how much of a
billionaire she is now with Theranos, as an example of how paper wealth
doesn't always translate. It's possible for someone to be very IPO stock rich,
but not actually have received much income. This is especially true for
founders who started with their stock, instead of being given it as a bonus.

------
aburan28
What is the justification for this article being flagged?

~~~
caminante
Despite not being an egregious case, I think the flagging's fair.

As others pointed out [0], the article's premise is silly and just an annual
refresh of Oxfam's dubious statistic. Thus, WRT HN's submission guidelines,
the article's off-topic and not "evidence of some interesting new phenomenon."

[0]
[https://news.ycombinator.com/item?id=13407849](https://news.ycombinator.com/item?id=13407849)

------
treuherz
Oxfam released a similar stat last year, and the BBC's More or Less team
didn't think much of it. The wealth numbers they're using aren't necessarily
well-behaved when they're totted up the way Oxfam has done, as there are a lot
of cases where wealth as-measured isn't an intuitive measure of "richness".
For example, a new graduate with tens of thousands in loan debt will still
have a chance at better long-term income than someone with neither the
qualification nor the loan who has higher numeric worth.

That said, it's harder to find examples where the a high wealth implies a low
buying power, so this doesn't necessarily contradict the crux of the piece.
Either way, it's worth being skeptical of misapplied statistics.

Sources:
[http://www.bbc.co.uk/news/magazine-26613682](http://www.bbc.co.uk/news/magazine-26613682)
[http://www.bbc.co.uk/programmes/p03fj84x](http://www.bbc.co.uk/programmes/p03fj84x)

------
refurb
If we're worried about improving inequality, it would be helpful to have some
historic data. I would assume if you went back 100 years it was far worse
since much of the developing world (e.g. China, India) had far more poverty.

~~~
andrewmutz
You can see data about long-term economic inequality here:

[https://ourworldindata.org/income-
inequality/](https://ourworldindata.org/income-inequality/)

~~~
refurb
Wow! Great link. Thanks for sharing that. I haven't seen that data before.

My only complaint is that it doesn't show the world overall.

------
AKifer
Even if we manage to reduce poverty by half, someone will always find a way to
write "Eight billionaires 'as rich as world's poorest quarter"

------
bikamonki
$425bn/3.6bn = $118 avg. Now, the $425bn are not liquid assets, so we can
argue that each of the 3.6bn individuals on the bottom half are worth a lot,
lot, more than $120 each (worth in the same sense as measuring the net worth
of billionaires). For starters, they own thousands of labor hours. Maybe the
problem is that we cannot create enough jobs and it is easier to blame Zuck
and friends?

It is a very dangerous idea to seek a fairier distribution of wealth by taking
it from the rich. If you doubt it go ask Venezuelans or Cubans if it worked
out for them.

~~~
confounded
> _It is a very dangerous idea to seek a fairier distribution of wealth by
> taking it from the rich._

Sounds like a pretty straight-forward idea to me. How else best to achieve a
fairer distribution? "Trickle down"?

~~~
cmdrfred
Historically this has been achieved with pitchforks and guillotines.

------
mindcruzer
Ok, but unlike the title implies, them being rich isn't what's making those
people poor.

~~~
jsmeaton
Isn't trickle down economics supposed to redistribute portions of that wealth?
If you agree that trickle down isn't working because the elite are capturing
it for themselves, then you could conclude that them being rich _is_ a
contributing factor to these people being poor. No?

~~~
randomdata
As I understand it, the 'trickle' comes in the form of, for example, cheaper
food. Which, as a percentage of income, is something that we can see has
actually happened. The remainder can be used to capture a portion of the
wealth.

The problem comes in actually using that money to capture wealth instead of
increasing your expenses elsewhere. The latter of which is very easy to do.

~~~
jsmeaton
I guess I'd prefer to see this in wages and similar. Rather than increasing
wages with respect to inflation, they've stagnated, and profits for companies,
shareholders, and owners are much higher.

> The problem comes in actually using that money to capture wealth instead of
> increasing your expenses elsewhere. The latter of which is very easy to do.

Absolutely. I think this is where the idea of trickle down economics fails. It
assumes that mo' money mo' expenses. I guess there's only so much you can buy
with 80 Billion before that assumption breaks down.

~~~
randomdata
_> Rather than increasing wages with respect to inflation, they've stagnated_

The data doesn't support this[1]. Wages _are_ stagnant, but only with respect
to inflation. Wages are increasing at rate of inflation, more or less.

 _> Absolutely. I think this is where the idea of trickle down economics
fails._

For argument's sake, let's say that the 'trickle' has lead to food being
$100/month cheaper. Do you put $100/month you have gained into the stock
market, with average returns of 7%, or do you go and sign up for a smartphone
plan?

If, assuming you are young, you choose the former, you will have an average
wealth of ~$250,000 by the time you retire, which will then provide ~$18K per
year recurring income to retire on. If you choose the latter, you will have
~$0 of wealth when you retire and no income.

The choice seems fairly obvious, but something tells me that most (myself
included) would choose the smartphone phone plan instead. In reality, you are
taking the wealth you have gained (~$250K) and are spending it on a service
that you wanted to have instead (a smartphone).

So, I agree, that doesn't work. People have shown that they are willing to
spend the gains they have made. But if we found a different way to funnel
$250K onto the balance sheet, would that actually stop them from spending it?
Or would they still find some way to turn that $250K of wealth into a
smartphone (or whatever consumable someone wants to enjoy) and be no further
ahead?

[1] [http://www.tradingeconomics.com/united-
states/wages](http://www.tradingeconomics.com/united-states/wages)

~~~
majewsky
> Wages are stagnant, but only with respect to inflation.

True, but at the same time, productivity (value produced per working hour) in
the US has more than doubled in 30 years. [1] I consider this unfair: Workers
should benefit from increased productivity as much as shareholders do.

[1]
[https://twitter.com/MaxCRoser/status/819316887213449219](https://twitter.com/MaxCRoser/status/819316887213449219)

~~~
randomdata
_> Workers should benefit from increased productivity as much as shareholders
do._

I mean, they do. The price of goods comes down. This is quite visible. Food,
for example, went from 25% of income in the 1940s to less than 10% today as
wealth concentrated among fewer and fewer farmers. If that wealth remained
distributed, leaving every American still trying to run a small patch of land
like they did in the 1940s, it would be highly inefficient and the price of
food wouldn't have been able to decline.

But, okay, imagine (to stay with the previous comment's example) that the
price of food remained the same and your income went up by $100/month instead.
Your profit is still the same. Are you really any further ahead? Is having
$100 clearly in your hand more apt to have you put it into the stock market,
or similar, to captures wealth? Or are you still going to go out and spend
that on a smartphone plan, or similar consumable, leaving no wealth to show
for it?

~~~
cmdrfred
You keep bringing up food. What of housing or healthcare? The costs there have
risen dramatically at rates many times higher than inflation. Inflation
adjusted the poverty line keeps rising while wages stay flat. I don't see how
this is a sustainable system.

~~~
randomdata
To be honest, I'm not sure we have actually seen a concentration of wealth in
housing. The homeownership rate is almost at the highest point in history (it
definitely was in 2008), which means that said wealth is spread thinner than
ever. Further, construction of homes is still quite accessible to small
business, so we haven't even seen concentration of wealth into construction to
see lowering prices there.

We might even go as far as to say housing perfectly demonstrates what happens
when you _don 't_ get the trickle down effect. Granted, those rising housing
prices are not all bad as you can make money from the gains on the property
and the construction of. This is the system you want to have everywhere,
right?

But housing is also interesting because people have changed where they want to
live. In the 1940s, ~50% of the population lived in the middle of nowhere.
Today, ~20%. Now, people are willingly taking the $100/month they saved on
food (just to stick with the example) and are applying it to the rent in the
big city so that they can have the opportunity to live there. If they were
happy with 1940s-style living, and opted for a home in the middle of nowhere,
they would be able to retain that $100/month and capture wealth with it. Like
the smartphone, this is consumer choice to give up the wealth to get more (to
live in the city).

As far as healthcare goes, I'm inclined to agree that wealth has been more apt
to concentrated there. But like people choosing to pay more to be in the city,
people are choosing to pay more to have state of the art healthcare. Would you
really want to go back to 1940s style healthcare at a lower cost? I'm not
convinced I would, even if it helps my balance sheet. The gains are still
there, but utilized instead of being stashed away into wealth.

------
Tycho
How did the Zara guy get so rich?

~~~
aianus
He didn't get diluted much through outside investment like Gates and Buffet.
He still owns something like 70%+ of his company.

------
slantaclaus
These people deserve a very, very special income tax.

------
starchild_3002
Misleading & annoying title. Those billionaires' wealth are all invested in
wealth-producing assets. And the billionaries I know do plenty of philantropy.
Power to the billionaires!

~~~
chiefalchemist
Perhaps you're misreading it? Is the issue wealth, or the concentration? If
diversity in investment is a positive, wouldn't we all benefit from less
concentration/more diversity?

