Eight billionaires 'as rich as world's poorest half' | Hacker News Reader

Eight billionaires 'as rich as world's poorest half'

bbc.com

51 pointskungfudoi55 comments

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...

Excellent post. It's never ceases to amaze how hard this stuff is to quantify.

That was great, thanks for posting it.

However, I think these kinds of shock headlines are still somewhat useful. They help remind me that money doesn't really work the way I imagine it does in everyday life. It also reflects the control that a few individuals have over money, if not wealth/resources.

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.

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...

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.

In terms of money perhaps, but in terms of life security, leisure time, etc I am in doubt the comparison really holds.

I would be interested to see the relative poverty of the US poor vs the relative poverty of Indian poor. Things like affording food, shelter, and transportation based off their income.

It would be interesting to add up the annual income of the world's poorest and richest people instead of net worth. This isn't entirely fair either, given than some unemployment is voluntary, but there would still be a massive inequality between the richest and poorest working people.

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.

You have to factor consumption into the 99.99% there. Bill Gates captured ~$100 billion in wealth. A phenomenal amount.

The US spent 30 times that amount on healthcare last year.

From The Hitchhiker's Guide to the Galaxy:

“Far out in the uncharted backwaters of the unfashionable end of the Western spiral arm of the galaxy lies a small unregarded yellow sun. Orbiting this, at a distance of roughly ninety million miles is an utterly insignificant little blue-green planet, whose ape descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn't the small, green pieces of paper which were unhappy. And so the problem remained, and lots of the people were mean, and most of them were miserable, even the ones with digital watches. Many were increasingly of the opinion that they'd all made a big mistake coming down from the trees in the first place, and some said that even the trees had been a bad move, and that no-one should ever have left the oceans. And then one day, nearly two thousand years after one man had been nailed to a tree for saying how great it would be to be nice to people for a change, a girl, sitting on her own in a small cafe in Rickmansworth suddenly realised what it was that had been going wrong all this time and she finally knew how the world could be made a good and happy place. This time it was right, it would work, and no-one would have to get nalied to anything. Sadly, however, before she could get to a phone to tell anyone, the Earth was unexpectedly demolished to make way for a new hyperspace bypass and so the idea was lost forever.”

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

Also, going in the same direction: https://ourworldindata.org/

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.

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

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.

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.

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).

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? :)

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.

Vladimir Putin and King of Suadi Arabia will actually run for their lives if they are not in Power. They cling to power because that is the only way to enjoy their billions. All the money Putin or Sauds have put aside literally becomes void the day, they cede power to others.

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.

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.

What is the justification for this article being flagged?

You've been on the site for years, and quite a few of your recent comments have been about stories getting flagged. In your experience, why do you think other users might have flagged this one?

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

'click'.

There's apparently some level of egregious behavior that will result in not being able to flag things anymore but beyond that people will have lots of motivations for flagging things.

In this case a likely explanation is the terrible click bait headline.

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/programmes/p03fj84x

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.

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

https://ourworldindata.org/income-inequality/

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.

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"

$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.

Putting a king on a guillotine was also very dangerous idea.

Zuck can pay no taxes by donating his money to his wife foundation - something not really possible for regular taxpayer. WTF wealth distribution is this?

Rich paying their fair share is a good start.

> 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"?

Historically this has been achieved with pitchforks and guillotines.

>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.

FYI most countries already do this in the form of somewhat progressive taxation. Some however do this more than the US (say, the great majority of Europe), and they do pretty much fine.

I also don't see how this is "dangerous". For who, the general population? The socio-economical system? The environment?

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

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?

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.

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.

> 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

> 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

> 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?

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.

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.

How did the Zara guy get so rich?

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

These people deserve a very, very special income tax.

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!

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?

> Power to the billionaires!

At what point should it stop? Are we lucky that your friends are by your definition 'great guys', or are all billionaires by definition 'great guys'? Do I have to agree?

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