Global Inequality
inequality.org
inequality.org
Incorrect. They are comparing wealth with GDP, which would equate to comparing wealth with income.
Also these individuals' wealth did not derive from income.
Much of this covers from options in the brands they built.
The stocks aren't being taken from anyone.
So... Why would there be a limit? How would you enforce it?
The remedy is right there in front of us, but blocked for political reasons and greed.
Islam already solved this over 1400 year ago. Zakat laws are fair, and not egregious like some of the crazy taxation proposals we've been seeing thrown around, with no understanding how they will actually destroy the economy. Zakat has 0% income tax, 0% gains tax, 0% inheritance tax, and only taxes certain things at a very reasonable fixed rate (e.g. money that is 1 year old is "taxed" at 2.5% which is payable to charity among other things). This encourages people to work for wealth, and sustains the economy and society as has been proven historically.
A huge underlying issue that no one is willing to talk about is how the modern economic system is built on lending (with interest), a predatory and dangerous practice that has been prohibited thousands of year ago by Islam, Christianity, and Judaism. Fix the underlying problem (and anything that offshoots from it, such as stock shorting), and things will start to fall in place.
"The world’s 10 richest billionaires, according to Forbes, own $801 billion in combined wealth, a sum greater than the total goods and services most nations produce on an annual basis, according to the International Monetary Fund"
1. It's perhaps easier to determine than income (especially for the ultra-wealthy, who often have negative-income in certain years).
2. The wealth-gap is much greater than the income gap, so leads to more dramatic-sounding statements.
But really what we care about is income--especially when one considers that wealth is just unspent income. And income is actually what determines lifestyle.
Some of those are easy to measure and others aren’t.
So going by your statement “wealth is just unspent income”, depending on what they consider as “wealth”, you could have person A invest all their disposable income and person B spend all their disposable income. Then in the end analysis person A is wealthy and person B is not despite having the same income.
Wealth can borrowed against, in many cases to pursue opportunities to build more wealth such as investing or purchasing rental properties. Wealth enables people to make choices that would be too risky to make for people who depend on an income, such as starting a business. Wealth ensures financial security even if one does not have an income. Wealth buys access and influence. Wealth can be inherited.
In other words, wealth is not just money, like income is. Wealth is a form of power.
See the book "The Millionaire Next Door".
The book basically lays out common strategies ordinary people employ to become millionaires. It's well worth your time.
The distinction between wealth and income in the book is not so helpful for comparing inequality I think. You can be well-off by having access to enough money: whether this is by having a lot in the bank and a small income, or a little in the bank and a large income, you are still far better of than having neither.
I contest the term “self-made” since in particular, socioeconomic status is transmitted from parents to children (there are many studies of this). Sure, there are exceptional self-made individuals. But in a world where the income bracket of a child can be fairly reliably predicted from their parents, is calling a large group of people “self-made” meaningful?
Pretty much nobody I've recommended the book to, and I recommend it a lot, ever reads it. The only one who has is following its recommendations and is well on his way to being a millionaire as a young man.
> I contest the term
That's pretty much denying that people have free will. For example, the public schools teach people to read. I recommend the book. The book is available for free. They don't read it. That's their choice, not fate.
BTW, I'm old. I've noticed a common correlation between peoples' attitudes and their wealth over the years. The ones who believe they are hapless victims of fate, never manage to get anywhere. The ones who see themselves as having choices are very likely to accumulate wealth.
You are who you choose to be.
Motivation is a pre-requisite, but far from the only one. I don't know anyone who accumulated significant wealth who was: 1) dumb 2) had significant health issues.
Being a sports champion means you must be better than anyone else. The rules are deliberately set up so only one can succeed. This is quite unlike free markets. You don't even have to be better than average to do quite well in the free market.
> dumb
Donald Trump? :-)
> significant health issues
People who's health is so bad they can't work have my sincere sympathies. But this is a pretty small percentage of the population. The overwhelming majority are of sound mind and body.
Statistics also show that Americans are increasingly unfit and overweight. These are choices, not predestinations.
- slightly above average intelligence
- stable home
- fancy degree
- modicum of work ethic
- first world passport
But these things put you into the wealthiest 10% of the world as a starting point.
This wider world, into which every person and thus potential millionaire is born, is, alas, not a level playing field.
This is why global inequality must be addressed. It will result in more innovation, less violence, more choice, less corruption.
But even more generally - the situation is a lot more complicated.
The book I mentioned will put you in the know.
> and at the expense of others
Only if you believe the economy is zero-sum. But that wouldn't explain the overall rising wealth that's been going on in the US for over two centuries.
Let's hear the whole story.
Most of the boom is coming from the tech sector, as tech is revolutionizing productivity in all sorts of endeavors. They didn't steal the money from you or I.
I can even buy shares in those tech companies for $0 commission and get a cut of the wealth they create.
We're living in a golden age in the US. Even poor people have a computer in their pocket with instant access to the world's information. How cool is that?
It (your clothes, car, food, phone) is at the expense of slave labor around the world.
I'm not pessimistic. Health, hunger, literacy, longevity, are on the up. But Wealth Inequality, the OP topic, is also on the up. To view things otherwise is turning your back on the plight of others. Such issues are not conquered, there is no final victory. Each generation must fight the same battles to maintain their voices and remain relevant.
If you're better off, who cares if someone else is even better off? There's always going to be someone stronger, taller, handsomer, younger, wealthier, smarter, healthier than you. You'll just make yourself miserable worrying about it.
I don't spend my time worrying about Michael Phelps being a faster swimmer than me. I couldn't care less that Usain Bolt runs faster than me. My genes are not favorable for excelling in sport, and I simply don't care that other people have an advantage there.
P.S. my phone makes my life better every day. I could list all the ways, but it's pretty obvious. Its benefit to me is far, far more than what I paid for it. I don't want to go back to the 1970's and have no phone. It's free markets and inequality that made that phone.
Correct, the topic. You seem to view 'inequality' as you and I looking enviously up at Michael Phelps. You may be, but I am looking down at who we are leaving behind.
>If you're better off, who cares if someone else is even better off?<
The clear point is I am concerned that people are worse off.
But carry on telling me how that 1996 book means we can all be millionaires (if we would just buy it).
Does not imply making them worse off. You making money simply does not take away from other people.
> if we would just buy it
If you choose not to read the book, and dismiss it out of hand as impossible, that's your choice.
To help others who aren't getting ahead, recommend the book to them. It's been a best seller for 25 years now.
Based on my speed read of the available chapter one I couldn't recommended it. It is not aimed at me, or anyone I know.
I agree that it is always best left for each person to ultimately decide whether to read it or not.
Does everyone you know lead a desperate hand to mouth existence?
You also decide your course in life. These are not imposed upon you in America. You can blame your parents up until adulthood, then it's on you.
This is true, and not the sales-speak adage 'it's all up to you'.
I'm sad for you.
Many smaller games, of the size you are actually going to be playing in your life, are exactly zero-sum.
Limited number of startups in every batch of YC. zero sum. Limited amount of seed funding available globally for startup. zero-sum. Even fewer funding available for Series-B. zero-sum.
The economy grows substantially every year. How is that possible if it is zero-sum?
> are exactly zero-sum
Sports games, like baseball, are exactly zero-sum, because they are deliberately set up and enforced as win-lose. Free markets, on the other hand, are based on win-win.
It is (approximately, in the developed world) zero-sum because outside of the most extreme poverty, experienced utility is a function much more of relative material position than of absolute position, so increases in inequality drives disutility while improvements in absolute position accompanying such increases do not significantly offset the disutility from inequality (and the reverse would be true with increasing equality even with declines in aggregate absolute position.)
What motivates you to defend and apologize for inequality anyway?
> inequality
Every society that attempted to make everyone equally wealthy succeeded only in making everyone miserable.
> Every society that attempted to make everyone equally wealthy succeeded only in making everyone miserable.
Wrong. For instance, people in Norway are doing fine.
I did, and you are welcome to cite the actual statistic you are relying on from it.
> people in Norway are doing fine
Pumping 20% of their GDP out of the ground. Besides, they didn't try to make everyone equally wealthy.
Norway is equal because of high redistribution, actually. It's sad that you're so politically motivated to do apologetics for the rich that you'll refuse to learn some basic facts about a country that does it better than yours.
You're moving the goalposts.
♦ Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.
♦ Fewer than 20 percent inherited 10 percent or more of their wealth.
♦ More than half never received as much as $1 in inheritance.
♦ Fewer than 25 percent ever received "an act of kindness" of $10,000 or more from their parents, grandparents, or other relatives.
♦ Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.
♦ Nearly half never received any college tuition from their parents or other relatives.
♦ Fewer than 10 percent believe they will ever receive an inheritance in the future.
The book is from 1996.
Speaking from experience.
The rhetoric I heard back then about it being impossible for ordinary people to accumulate wealth is exactly the same as I read in this thread. It was the same in the 80s and 70s, too.
That's a very misleading statistic; it takes less than 25 years and the long term average return if the S&P 500 to get a 10× multiple; so with that much time, an inheritance that represents only 10% of final wealth is quite easily the source (with just basic passive investment) of 100% of it. At 40 years from inheritance, it's over a 42× multiple, so an inheritance or less than 2.5% is the source of a whole fortune.
And, surprisingly, your statistic doesn't cover how many had “business” (whether genuine or as a tax dodge method of giving large gifts as “businesses expenses”) funneled to them to build their fortune directly from their wealthy family members, businesses controlled by wealthy family members, or people seeking to curry favor with wealthy family members. Which is how the pros do it.
Most parents don't die when their kids graduate from college. Most people are well into their 60s before their parents die and bequeath to their kids.
> "business expenses"
The IRS takes a pretty dim view of gifts disguised as loans and other schemes to funnel money to their kids without paying taxes.
> Which is how the pros do it.
Read the book. The millionaires in there did not get their wealth funneled to them from others.
> And income is actually what determines lifestyle.
I don't see why for either of those.
If I had $10M, I could retire today, never work again in my life, and my income would be $0. However, I could easily spend $200k/year and have a great lifestyle, without reducing my wealth, inflation-wise. Some people say I could even spend as high as 4% of my wealth annually [0] - which I personally don't agree with.
Vice versa, if I had negative $200k wealth (student debt, etc), and an income of, say, $100k/year while living in the Bay area, I would probably remain "poor" and be constrained to a thrifty lifestyle for a long, long time.
[0]: https://www.schwab.com/resource-center/insights/content/beyo...
For example, most people in the US can at least afford a cheap used car, and can therefore go pretty much anywhere. Of course, it's nicer to have a Bentley, but a luxury car still sits in the same traffic and has to obey the same speed limits as everyone else. In the developing world however, the rich always have cars, but many normal people can not afford one at all.
Even well-off (but far from wealthy) people - think contractors on say USD$200-500k / year - can architect their financial arrangements via a Pty Ltd / LLC to minimise on-paper income as well as expenditure.
Enjoying full use of an asset to which you, personally, have no ownership and no cost of maintenance, confounds assessments of this demographic all the way through to the private-jet crowd.
Considering that most people don't save anything (even in wealthy countries) it's not difficult to have 10x the average wealth.
Is my $80k in consumption really a good measure of my wealth?
This definition excludes a whole category of people: Those whose wealth is 0 (or even negative) but they are rich or at least living like rich people. If you own $10m in assets and have $10m in debt, your wealth is 0 but I'm pretty sure you are not poor. What's the percentage of such people in society? This should make inequality even worse.
Then you have a category of people who are not rich on paper but they have access to privileges (ie: government bureaucrats). As bad as inequality on these stats is, I think it's severely under-reported.
Me? I'm voting for parties that want to tax the rich+wealthy (people and enterprises) for money coming in and out of the country (or the EU).
Further, I try my hardest not to buy from the biggest offenders nor to use their products: Apple, Google, Nestle, Facebook, Amazon, McDonalds, Samsung, LG, etc. I try to buy local products and order from local, national or intra-EU companies. Second-hand or refurbished too.
And of course consumption in general is low: goods, energy, water are restricted to the necessary. There aren't many things in my dwelling that I don't need or don't use.
It's not always possible, but an attempt is being made.
I also vote for the parties with the strongest climate and environmental policies, which is generally the most left-wing parties, so that also fits with my own views on most other things.
But like you, my consumption in general is very low, so even if "vote with your wallet" did work as advertised, it wouldn't be doing much at all, an absent vote is a much less powerful signal than an actively cast vote.
So I donate to worthy causes and try to argue my views online and encourage people to reduce the consumption, for what good that does.
We must turn this consumerism ship around, somehow.
I get what they're trying to say, but it is the weakest way to argue their point.
It's not the inequality that's problematic and it'll always be there, it's what people do with it.
I'd say we have global stupidity and short sightedness with exceptions here and there and I'm not sure there was ever a time when this wasn't the case.
The obliviousness of the stupid people inhabiting this planet, gravely concerned with getting their bling on asap, no matter the cost to everyone and everything else, is what I'd most like to see gently exposed, comprehended and compensated for. This'll solve most problems for most people, including the stupid ones.
The individuals this article focuses on have almost all their wealth from options in their own companies - stocks they get by virtue of creating and running the company, which in turn skyrocket in value because they did a good job.
The money isn't being taken from anyone, except whoever wants to buy the shares.
You lose nothing if Musk's holdings grow by another 10% after Tesla sells lots of cars in China. Stop caring about it.