Richest 1% took 82% of new global wealth last year, report says | Hacker News Reader

Richest 1% took 82% of new global wealth last year, report says

independent.co.uk

62 pointspmoriarty52 comments

For context, to be a member of the global top one percent, you must earn $32,000 per year[1].

1. https://www.investopedia.com/articles/personal-finance/05061...

Thank you for that information!

The $32,400 figure from that article, is from the same group in the original article, Oxfam. Since the original article didn't really point out the income floor for the global 1%, Twain's quote comes to mind: There are lies, damned lies, and statistics.

Would you suppose that someone making $32,000 per year in the US has a comparable standard of living to someone who makes $32,000 per year in a country where laborers are paid $2 a day? If the answer is no, do you then think a global 1st percentile of wage earnings is a useful metric, especially when the US 1st percentile (according to your link) is an order of magnitude higher?

I agree with you that the scales are way out of wonk for exactly those reasons. But is there a better metric for this?

It sounds like the calculation of the 1% isn't relative, though of course the gap between 32k and the top number is astonishing.

I think you raise a good point, but I'm not sure how we should normalize our ideas of wealth in an equitable way internationally.

No, but because they are far better off in the US.

I live in a country were just under a 1/4 of the population lives in poverty, on mass most people don't even come close to earning 32K USD a year. The average is around 1/7th of that at approximately 7K USD.

So, is it fair to compare someone in the US living of 32K a year and someone earning 32K a year where the laborers are being paid $2 a day, well the answer to that is yes. After all you would be talking about edge case, as there isn't a lot of people living in those circumstances in developing countries, while the mass in the US is living under those circumstances.

If you want to talk about the "standard" of living, then the cost of the same standard in developing countries is often the same as developed countries, Petrol, cars, healthcare (though this may differ in some areas), quality food, are comparative in cost, as many of these products are provided from the same or similar sources as where US consumers get their products.

There is something strange about this claim. By definition there are 70 million people in the global 1%. I find it hard to believe the median wage of the top 70 million highest incomes in the world is only $32,000.

It's the minimum, not the median.

Sorry I meant to say median of the top 140 million.

That's income. Top 1% of wealth is 720,000 Euros (880,000 dollars).

Since we're talking about global wealth this needs to be placed in to perspective. If you're in the USA you're probably in this 1% even if you don't feel like it. World is a big place.

https://www.investopedia.com/articles/personal-finance/05061...

It is hardly surprising that business owners are taking in the lions share of gains.

Also, this:

Oxfam said tax avoidance by businesses and wealthy individuals is costing developing countries and poorer regions around $170bn annually (£123bn), which could otherwise be allocated towards public services and "used to fight poverty".

Is nonsense. The tax avoided, not to be confused with tax evaded -which would be illegal- can't be used to pay for anything.

Capital appreciates faster than labor, and last year capital appreciated dramatically. The richest 1% have most of the investable capital. No surprise here?

The title unnecessarily uses inflammatory language. Stating that the richest 1 percent "took" some percent of new wealth implies thievery or malfeasance. Why not say that they earned that percent, or that most of the new wealth came in the form of returns to capital, or other language that is less judgmental and more descriptive?

The first paragraph is also very poorly written: "Growing inequality resulted in 82 per cent of new global wealth going to the richest 1 per cent last year..." Growing inequality is a consequence of this, not a cause!

While extreme inequality likely is not sustainable and throughout history has led to social upheaval (e.g., the French Revolution), the poor choice of language in the headline and at the beginning this article really turned me off. I stopped reading at that point.

I don't think the word "took" implies what you said, and I think your offence at the title is unwarranted

“Earned” conveys an even stronger opinion in the other direction. I can’t think of a less loaded word than “took” for this context, though it could have just been phrased differently.

English is not my native language but as far as I understand, the paragraph after which you stopped reading, clearly stated that inequality is the consequence by saying "Growing inequality resulted in 82 per cent of new global wealth going to the richest 1 per cent last year..." as opposed to using the word "caused".

Why not finish reading the article after this major gripe is cleared up then?

Thanks. Your understanding is incorrect. The words "resulted in" mean caused something to happen: https://www.merriam-webster.com/dictionary/result%20in

To specify causality in the other direction, the article should have used words like "resulted from," "was caused by," or "was a consequence of," for instance.

It’s tough. I’m probably not in that 1%, but this is how finance works. Money begets money. I don’t really understand how you counter the ability for people to invest without breaking the massive consumer protections that exist. Let alone the difficulties that would arise from requiring businessss to raise their capital (through equity or debt financing) from 1M people at $10 each, vs 1 group at $10M. This consumerization of finance looks good at a high level, but is impractical to execute.

So, if we want more new capital to go to the 99% - how would we do it?

You live in the US. You are most definitely in the global 1%.

If we're wondering how to better distribute capital/money, I was reminded of this article describing a new monetary system:

"""But there’s an even more exciting solution we might consider. We could abolish debt-based currency altogether and invent a new money system completely free of intrinsic debt. Instead of letting commercial banks create money by lending it into existence, we could have the state create the money and then spend it into existence. New money would get pumped into the real economy instead of just going straight into financial speculation where it inflates huge asset bubbles that only benefit the mega-rich. """

https://www.theguardian.com/global-development-professionals...

This is actually a principal of Islam, to what I understand. Interest is against the doctrine [0]. I’m not Muslim, so I can’t speak to how well it’s followed.

[0] https://en.wikipedia.org/wiki/Riba

My sense, from my own area of work, as well as in reading the news and reading economics research, is that there isn't enough competition in the market, and there's too many monopolies.

The problem as I see it, in the US at least, is that the solutions to these monopolies don't fall along the lines of the "government good versus government bad" rhetoric that tends to dominate partisan discussions. In some areas and in some ways we need less government, maybe a lot less, and in some areas and in someways we need more, maybe a lot more.

In some areas, to my view, there needs to be a lot less regulation, such as in some aspects of healthcare research and service provision (e.g, licensing laws, lots of drug regulation). Sharply reducing intellectual property laws are another example (sharply reducing copyright duration, making patents much more difficult to obtain, reducing terms). In other areas there might be a need for more regulation, such as in pricing transparencies, maybe even in applying anti-monopoly laws to some hospital and insurance groups in some areas.

Why aren't we in the US rolling out massive municipal ISP infrastructure, for example? This would solve multiple things at once.

I could go on and on. Basically, I see monopolies everywhere. I feel like the government needs to take action to introduce massive amounts of competition into the economy, whether that be through public projects or deregulation, or both.

https://www.theatlantic.com/business/archive/2018/01/craft-b... https://slate.com/business/2018/01/a-new-theory-for-why-amer...

The big challenge with infrastructure is the maintenance costs. Upon debut, new roads are great. Likely, better than what a private company tasked with the problem could produce (not talking about the actual construction which is, in America, performed by private companies bidding on contracts).

However, over time, it appears that we rob the maintenance funds to service other governmental desires - sometimes it’s just what will get the dogcatcher re-elected. So, this virtual monopoly leads to undesirable outcomes.

I believe governmental mismanagement of resources is a valid argument against allowing new governmental virtual monopolies. (Examples include American outdated transportation infrastructure, the Flint Michigan water fiasco, governmental shutdowns in federal parks upon new budget constraints, and more).

A peculiarity that folks on the left and right fall into is that all is fine when “my guy” is in office, but fail to see the consequences of governmental ownership in worse times.

For private companies, at least, there is an advantage that investment (outside of monopolies, which I’m inclined to your perspective) should match demand.

Also just noticed the top item on HN right now is about how SpaceX can’t test their rocket because the government Is in fiscal limbo. I’d expect that should creates a new wave of people who are concerned about governmental mis-management. https://www.floridatoday.com/story/tech/science/space/2018/0...

Start a total war. This seems to be the only thing that causes the 1% to share their wealth with the 99% - nothing like the fear of expropriation to motivate a change in heart from our rulers.

Look into the Rothschild family. They’ve profited greatly from wars over the centuries. This actually seems counterproductive to the point.

https://en.wikipedia.org/wiki/Rothschild_family#The_Napoleon...

This is how compound interest works. Why does this surprise anyone?

Surely the trend left unchecked is disturbing. On this course, what do we expect the headlines to look like in the following decades?

Even after info provided by @jetrink about one top percent earns more than $32k annually. I personally would like to be top 0.01%

Everyone who earns money and especially big amount of money didn’t get for nothing. It’s hard working everyday without weekend or holidays. This is how it works.

I’m know it’s not very popular to be a republican in donkeys state. But I’m republican! #commingout

The slackers. I expect them to collect 99%.

If I were to guess - the manifestation of statistics like this are how revolutions are ignited.

What will happen when this revolution comes to exist?

Something like Russian Revolution

да

well, I think things like brexit and Trump are desires for some kind of significant change. I think there's likely going to be a big disconnect between what people think will be better and and what actually is better, but I think we will see more push towards things promising bigger changes.

There won’t a revolution as the 1% are smart enough to decapitate the 99% by “inviting” the smartest 0.1% into the club (they make great son- and daughter-in-laws).

Meritocracy is hard to fight.

It's silly to say that the 1% are there from hard work, family fortunes apparently don't exist in that fantasy. Also you're forgetting that the armies of the 1% are made up of the 99%, all the money in the world has done nothing to stop the most powerful people in the world in history once the 99% have revolted, by definition there's no power stronger than that. See every revolution in history.

Too bad the 1% is protected by police forces, and courts, in pretty much every major Western jurisdiction? This isn't changing any time soon.

That's kind of the point though, even if the army and police didn't revolt, they're crippled by the lack of services produced by the civilians. Major upheaval like this hypothetical have multiple times in history crippled even the most well equipped amred forces because of the nature of the revolt. Guns are only 1 part of defence, and every time there has been a populace under the rule of a government/system that they refuse to exist under it has either been overthrown or in the process of being so. This is an easily verified fact by looking through history, governance requires at least a majority of the populace to consent to it.

I do think capitalism has issues (mostly excessive compound interest'ing on massive wealth) but I don’t think there ever will be another round of redistribution of wealth. A global wealth tax I could see happening in the next 50 years, but then again, seems like it would be a hugely unpopular thing to do.

I think that automation is going to contribute massively to wealth inequality in the next few decades, and I think that not considering the destabilising risks of such centralisation of wealth is short sighted. People will only for so long tolerate getting the short end of the stick whilst the massive amounts of wealth for the wealthy balloons.

I don't know if a "redistribution of wealth" will ever be seen, but I do think the fundamental system we operate on in this day and age will need to be radically altered to prevent discontent

Where did I say the 1% got there by hard work?

Previous revolutions have been led by very smart people who were excluded from the 1% club. There has not been a revolution in a society where the poor or middle class very smart are admitted into the ruling class.

"Meritocracy is hard to fight."

If think we live in a meritocracy you are delusional.

We do for the 0.1%. The current system is very good at identify the smartest people whatever their background and bring them into the 1% club.

As for everyone else, well...

Except poverty rates are dropping astronomically and are the best ever. More people than ever have access to food, water (this will unfortunately likely significantly change negatively in the next decade), electricity due to investments in infrastructure and technology. People in poor countries have access to extremely cheap smart phones and unlimited information at the tips of their fingertips so the chances of upwards mobility are higher than ever in the 3rd world.

Previous barriers to upwards mobility such as race, ethnicity, caste are constantly being improved. Health, especially in Africa, has significantly improved.

We are at the height of society. In the developed world everyone no matter who you are has access to free food (SNAP), water, shelter(HUD, public housing, section 8), the entire world's information (library), healthcare (Medicaid- regardless of what politics keeps saying anyone making under 17k a year has FREE comprehensive Healthcare), education (free public schools for 14 years, heavily subsidized community colleges). Goods cost less than ever due to globalization, global economy is at its peak surpassing 2007. Unemployment is near an all time low.

Only manufactured revolutions can occur and only in the non developed world

You've just stated nearly every popular soundbyte that are typically used to justify whatever is currently happening in the global economy. I think most of them are pretty biased and misleading and I believe it's basically propaganda.

> poverty rates are dropping astronomically and are the best ever

I know there are papers which "prove" this but it's actually very hard to measure reliably. And the "best ever" part is almost definitely not true. We only have good data since after industrialisation and I think there are very good reasons to believe that colonialism and industrialisation made people a lot poorer in the first place, which they might lately be finally slightly recovering from. Either way, more people being one notch above starvation and abject poverty is not really a great success. I don't know how fast the definition of poverty changes. Is it fast enough to keep up with rising costs of living?

> People in poor countries have access to extremely cheap smart phones and unlimited information at the tips of their fingertips so the chances of upwards mobility are higher than ever in the 3rd world.

If you think that being able to read some tweets can get you out of poverty, you really don't get how poverty works. The people in these places need ownership over the value of their work. Most investment and therefore ownership in the developing world is not in the hands of the global poor, that's why they're poor. And we want them to stay poor because it allows us to extract the 80% of the wealth, as Oxfam has estimated. Just look at how much money goes out of Africa versus how much is going in:

http://blogs.ubc.ca/grsj102wm/files/2016/11/maxresdefault.jp...

Clearly, people from the first world are stealing massive amounts of the profit from local labour and resources. They do this via privatised ownership, which is the descendant of colonialism and was built into the predatory aid and lending policies of institutions like the world bank and IMF.

> Previous barriers to upwards mobility such as race, ethnicity, caste are constantly being improved.

There are plenty of regions where this is just not true, e.g. in parts of the Middle East. The economic crises people are facing have resulted in some groups doubling down on divisive beliefs.

> In the developed world everyone no matter who you are has access to free food (SNAP), water, shelter...

You must never have been in the kinds of circumstances where you actually had to rely on these programmes to live or you would never be so impressed with them.

> Only manufactured revolutions can occur

This is the one thing you are probably right about but I believe it's because so many people buy into this fabricated narrative of progress. We have also been stripped of more power relative to our rulers than ever and are completely alienated from each other with no way to successfully organise a mass movement with which to revolt.

Ok so just want to be the outlier here and say “boooooo”

... meanwhile, the number of people worldwide living in absolute poverty continues to plummet:

https://ourworldindata.org/wp-content/uploads/2013/05/End-of...

To be fair, that is not caused by the fact the 1% is getting richer. In most developing nations that is caused by the fact local leaders want to line their pockets and are willing to sell out their location population for a quick buck.

that's from 2013... but relative poverty is the bigger problem especially in OECD countries.

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