Richest 1% to own more than rest of world, Oxfam says
bbc.co.uk
bbc.co.uk
http://www.monbiot.com/2011/11/07/the-self-attribution-falla...
Yes, and this is a problem. We tax people who have $1M net worth far too much, and people who have $10M+ net worths (the true 1%) far too little.
Edit: Clarified that I meant to refer to net worth, which is far more useful to talk about.
1% makes a great campaign slogan, but is similarly picked from the air. If one wanted to find 'the number' related to the Bourgeoisie - it would be near 0.05%.
My point is, when people talk about taxing the rich, they are talking about most of the folks on HN (at least in SF). The top 1% households make ~$450k per year. That a couple who each take home $225k.
I remember an election in Canada a while back where the NDP (far left) said "We would increase the taxes on thr rich". Someone asked "who are the rich?" And they said "A family of four making more than $80K." I had to give them credit for being honest.
Even at $80k, you're doing nearly 3 times as well as the median American household.
0. http://economix.blogs.nytimes.com/2012/01/17/measuring-the-t...
Googling turns up lots of people quoting that statistic, but none of them provide more details on who was surveyed or what methodology was used, so it's kind of meaningless.
http://www.ustrust.com/publish/content/application/pdf/GWMOL...
Let's punch it up to people with 10 million or more (which is more in line with what "millionaire" meant in the days of our parents and grandparents) and see how many first-generation are left. Obviously, that data is hard to come by (and frankly, I'm skeptical of the Cato data, just as I'm not citing data here from Citizens for a Fair Economy).
Realistically this system is designed to make the rich richer and the middle class poorer however the rich are underestimating their effect and the effect of automation and cut through CEO's on the general population.
Automation is making a lot of jobs obsolete earning the people who own the systems more money for less cut through CEO's are pushing to reduce employment costs at any price and the rich are the only ones capable of investing the large sums required to get the huge returns the global market can give you.
Then of course people say "but greed". Yes, as if only rich people are greedy and you are not.
A janitor in Australia makes a whole lot more than a janitor in India, and is able to save a lot more after consuming the same amount of goods, for example. Both earned their wealth honestly but why is one wealthier than the other merely because of living in a different country? Statistics like these can provoke some good questions.
One of the symptoms is the spread of CxO pay to staff pay. Or companies with record profits paying near minimum wage --sure it makes sense in pure competitive capitalism, but is that what is best for society? Should we govern those disparities more, would it make society at large better (result in better educated and more productive people with reduction in crime, etc?)
Unrelated to this but nonetheless a question this brings up is how well could the world deal with 7billion people with incomes similar to middle income euro/nam/east Asians?
I really can't understand how you think this is about some person's individual success. People don't hate that, they want it for themselves too. The problem is that statistically it's becoming less likely for poorer economic groups, regardless of their honesty.
If you look at the wealthiest people in the world, those are the people who are either in power or close to power. Nobody will be able to make money by favoritism or coercion or corruption if there is no entity (e.g. government) that facilitates those things. Look at the world map. Which countries (again, with the exception of Scandinavian countries) are the richest and in which countries the lot of ordinary men is better? The ones where there's more free market, not less. The US, of course, is absolutely not in the top list of those countries, being highly regulated and taxed.
Which countries, specifically, do you have in mind?
Even if you omit the best examples of European social democracy, a lot of people would argue that quality of life for the average person in France, Germany or the UK is much better than in the US, due to such government meddling as social healthcare, labour laws and consumer protections.
Sure, government corruption is one way rich people make themselves richer, but money by itself is powerful too. Imagine we lived in anarchy, the strongest few would amass all the wealth, they would run their own private armies, and no one who wasn't rich and strong would have any leverage to get anything.
The point of a progressive taxation scheme is that wealth itself confers an advantage that needs to be offset by some collective power of the populace. Claiming that free markets will make the wealth gap shrink is just magical thinking. Money is power, regardless of the form of government.
Furthermore, please notice that when you say "The point of a progressive taxation scheme..." means that this is an intention of the policy. The actual effect might be quite different, as is very often the case with government policies. I would argue that rich people will always be more powerful, you simply cannot avoid that. And there will always be inequality. Question is, under which system will the rich be less powerful and my answer is that without government they won't be able to coerce others and force others to do things, they will only be able to spend THEIR own money and act on the market as market players, with no special privileges.
The problem is that while your intentions are noble, intentions alone cannot solve the problem. You always have to look at results. Tell me, where in the world has progressive taxation produced innovation and wealth? Perhaps, Scandinavian countries are innovative and are responsible for a great deal of awesome new things in the world? No they're not. Or perhaps China or Russia before they started liberalizing their markets had produced a lot of innovation and increased the standards of living for their citizens? No. Only in countries with less government intervention have we seen the lot of ordinary men greatly improved.
The thing is, as soon as you talk about a system of property, you're talking about violent coercion. Even before you consider corruption, the government is disproportionately helping rich people by enforcing that they have exclusive access to a larger share of the world's resources. That's fundamentally what it means to be "rich".
Now don't get me wrong, I'm not going to suggest completely abolishing property rights. I just get sick of people using "it's coercion" as an argument against any government intervention, while quietly ignoring the absolutely huge amount of coercion involved in enforcing a "free market".
>Nobody will be able to make money by favoritism or coercion or corruption if there is no entity (e.g. government) that facilitates those things.
People are perfectly capable of favouring, coercing and corrupting others without any help. Centralised power can make it worse in some cases, but it's not like all that power disappears when you take away the government.
Other examples might be CEO pay vs average pay; the shrinking middle class; etc.. These create a feeling that while the rich grow richer, things get harder for the middle class... and add to this sense of unfairness. Since it's unfair if a company is improving it's earnings/productivity/etc, but most of those gains go to the CEO (since that increase is the result of everyones input).
From that angle, this really has nothing to do with greed.
If it were to come to light that some rich person also earned their money dishonestly.. that seems to create anger that's directed toward that person/group.. see the anger people had over the bank bailouts... that didn't grow into an anti-rich campaign.
Not to mention the fact that contractors pay almost double employment tax at a time when more and more employees are being pushed out into being contractors.
Nearly 50% of the Forbes 500 have inherited their wealth. The Walton children will soon be inheriting a sum equal to the combined wealth of the bottom 3/4 of all black American families.
The question is, if I made my money honestly, do I have the right to spend my money as I please? If yes, then I should be able to leave it to my children, and not to someone else's children. If you think I shouldn't do that or that inheritance should be heavily taxed, you're essentially saying "even though you actually earned that money, it doesn't belong to you", which is practically communism - I think it's immoral, evil and unfair.
If our current system of government weren't rotten to the core, I'd actually agree with you. But so much of the top 1% of net worth has been accumulated through government spending (particularly DoD spending) or corporate welfare (particularly in the finance sector), and that's equally immoral, evil, and unfair.
Then you understand why people are so pissed about the 1%? The middle class, particularly under 40, is fucking suffering, man. That's not a good thing.
If you're an honest man in the top 1%, you should be working like a demon to change the current system, because having so much resentment against the most wealthy doesn't bode well for your future (either due to extraordinarily high taxes or civil unrest, neither or which I am advocating for).
Unfortunately, it has attracted a huge swarm of scammers, pumpers, and other dishonest people as it's grown, so I've lost interest.
While all the hacks are unfortunately part of a growing process, security will continue to improve[1]. I'm much more concerned about this type of people Bitcoin has attracted, and that much of its community has promoted. I'm particularly concerned that the constant influx of scammers may be inevitable in an anonymous or pseudonymous, irreversible currency, which a decentralized currency almost necessarily must be.
1. By necessity cryptocurrency may well bring about a rebirth in information security
But that's valid for a lot of things. Say, although you own a land, you still have to pay taxes on it, and if you won't, in the long run it will be forcefully seized from you. It's just how the society was designed (or "evolved into", if you please), with its laws that we, for the most part, just come to accept. Similar acceptance exists and/or can be (not that it should be) further extended for many other instances. The only necessary thing for imposing such an order is power. An authority has the power over land owners, thanks to the nature of that owned good - being immobile and having an intrinsic value. Now, given the right kind of power, a similar order of things can be forced on pretty much everything!
1.) Are there numbers that back up this claim?
2.) I've already heard our society is in a death spiral of short-term entertainment and consumerism (and for reasons deeper than an estate tax). How do you suppose that an estate tax is somehow more fundamental?
> That is, people, knowing they can't leave anything to their children, will spend as much as they can on things they don't really need, thus provoking the wrong kind of spending.
Again numbers. Or any kind of precedent? Might one suggest that the children who inherit the wealth but don't have the work ethic are provoked into the wrong kind of spending? This claim seems all the work of narrative and no work of empirical grounding.
> The question is, if I made my money honestly, do I have the right to spend my money as I please?
That is not the question. It is one question in a long list of questions. Another question is how much of a right does someone have to do "A" before it interferes with the rights of others (the foundation of our values) - in cases where "A" is wealth accumulation there does exist points at which the rest of society is hurt.
And in fact, nobody is suggesting that you may not pass inheritance, just that it be taxed like everything else. In fact taxed heavily.
> If you think I shouldn't do that or that inheritance should be heavily taxed, you're essentially saying "even though you actually earned that money, it doesn't belong to you", which is practically communism - I think it's immoral, evil and unfair.
It is a far, far cry from communism. Remember Locke's own concept of property - no land or wealth is owned by anyone, a person merely the products of their own labor (an apple for picking it, a crop for sewing it). The wealthy in this country and in modern capitalism have not earned the wealth by working the fields. They own the machines that work the field and pay the labor force that works the field. That is to say, they own the vaunted 'means of production'. Essentially, wealth creates and captures wealth.
Piketty's analysis of this is damning. Piketty's framework is simple:
An individual with accumulated capital's purpose is to live from their accumulated capital and grow the rest faster than inflation, so that their accumulation grows. When the savings rate (today for the top elite ~10%) outstrips the inflation rate (~1.2%), accumulated wealth grows. But workers wealth, which doesn't grow at 110% per year, actually decreases to 98% a year - they must be 2% more productive every year to get a 2% raise since they do not have access to the same savings rate as the financial elite.
> think is immoral, evil and unfair
I (and others) think that children inheriting billions of dollars, giant estates, seats of corporations, and ivy league entry by birth alone is immoral, evil and unfair.
That is, a system which created classes of people based on dynasty rather than merit is not fabled capitalism - presumed to be based on merit.
What we call for is not communism, but capitalism. A capitalism where there is equal opportunity for hard workers to get ahead. Huge inheritances is one of the largest hurdles to a functioning capitalism.
If it's any sign, look at the homeless camps in Silicon Valley. People (outside tech) were never so broke as now, it's almost a 1920's pattern, to a limited degree. Janitors live in their cars in our parking lot because they can't afford housing. I wish they were paid more. :((
Eventually, we may need redistribution of wealth, voluntary or not, because people need at least enough food and shelter, and some path to self-sufficiency, if possible. I don't advocate rash direct wealth transfer but at first voluntary subsidization/underwriting of bare, minimal essentials (food (organic, fair trade fruits/vegetables/etc.[0]), housing, transport, education) adjusted to income.
(Santa Clara county General Assistance (GA) for singles is ~$150 USD/month and food stamps (CalFresh) is about the same... Seriously not enough to survive on but also not enough for people to hurt themselves with either.)
0: to avoid workers being sprayed with horrible chemicals and such. (Btw, in California, CRLA are cool folks.)
And this is why at some level, a person is no longer entitled to additional wealth (even if it's earned honestly and fairly).
We know from history that when a small group of people control the vast majority of wealth, it creates an unstable system. So in order to maintain a stable government and economy, there must be some limits on wealth.
(and progressive taxes are one of the ways we control wealth, and prevent this instability.)
What a completely empty concept of morality. Human societies and philosophers have wrestled for generations with ideas about justice, fairness, compassion, ethics… You will do well to take some time with an open mind to explore the range of ideas people have worked out. Moral judgments about what people deserve in life are far more complex than whether a single person didn't themselves cheat, steal, or coerce.
Wealthy people have disproportionate power in society and use that power to distort society to serve their needs. One simple example is how large US companies use government lobbying to transfer money from the public to themselves. Here is a list of the top spenders on lobbying:
https://www.opensecrets.org/lobby/top.php?indexType=s
What happens to the money that these companies acquire? Just as inequality is increasing in society, so is inequality in pay within companies (e.g. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/09/25/t...). Choosing Boeing at random, it's CEO has received over $20M for several years running (http://www.usatoday.com/story/money/business/2014/03/14/comp...)
All up, this is a complex system to transfer money from the public into the pockets of the high level executives at a few firms.
There are other examples of systematic changes to benefit the wealthy, such as declining tax rate for top earners in the US and other countries. See http://milescorak.com/2013/05/29/do-falling-tax-rates-explai...
I don't want to give the impression that all these shenanigans involve government corruption. The wage fixing case against Apple, Google, etc. (http://www.cnet.com/uk/news/apple-google-appeal-settlement-r...) is a good example of private companies acting to screw over workers without involving government.
It looks like there could be really good information in there - I'd love to give it an upvote if it were unpacked a bit, and cited and argued more clearly.
Let's not forget that government:
* Are the other end of "spending on lobbying"
* Are the buyers of "expensive military goods"
* Create the concept of corporations, and gives tax breaks to them ("corporate welfare")
* Give sweetheart deals to political favorites
* Lock up citizens for non-violent offenses, denying them the chance to earn a living
* Allow and promote regulatory capture, which forbids many smart, driven individuals from challenging current business leaders.
The sooner we can get government out of business, the fairer and more equal things will be for everyone.
Do you know of a more nuanced (empirical) approach to predicting or recognizing which instances are driven by the masses, rather than political narrative?
From a state where everybody is born naked and without any god given possesions, it's only through injustice, and accumulated violence, exclusion, etc that you get to a state were somebody has billions and others nothing.
Even the mere act of inheritance (in which you did nothing at all, neither bad nor good to get those money from) makes an old injustice persistent.
Gifts of property and money to people while you are alive, when they exceed certain totals per year and when they exceed certain totals on individual terms, these exchanges are taxed.
There is no reason why it should not also be so when you pass on.
Believe it or not "It's my money, I do whatever I want with them" is not seen by everybody as some divine-being-given right.
Nor it was always available in all societies.
And it's quite hypocritical to be called from a society that supposedly believes in the advantages of capitalism and the free market as motivating forces for progress and hard work, etc. Inherited money are against all that. In fact they take us to feudal times, taken in extreme.
Working to make money for yourself is what is used to explain the difference between capitalism and really existing socialism (USSR et al), that is to explain why in the former people worked more and were more motivated, as well as the latter's decline in progress, industry, etc. "Why work hard and be creative since you have a guaranteed salary from the state", the reasoning went.
Adopting this argument, we can say: "why work hard and be creative, since you have a guaranteed fortune that you inherited".
Think Paris Hilton. Or really any lazy, fast-spender inherited-money-from-his-self-made-parents person you know...
Isn't it obvious in retrospect? Of course someone can have $10 billion in his name and still be creative, but I'm talking about the average person here, not outliers.
As for the thing about this "taking us back to feudal times", as has been pointed out by other people in this thread, inherited wealth is not really that different from the inherited castles, and plots of land and fortunes of the feudal overlords.
With inheritance, just because you were born in a certain family (like in feudal times) you automatically get wealth and power. And you can use that power to ensure you keep the wealth and pass it on to your "noble" descendants. It's not by accident that we talk about "silver spoons" and such.
(Power, in our society is directly associated with wealth. From a point and above you can have a few congressment in your pocket, for example).
Is there a distinction between a billionaire and a dynastic prince of a small nation who can command up to 20,000 people for up to a year before they get angry enough at him that they stop listening?
Large amounts of wealth inequality implicitly distort liberal democracy - the thing that recognizes "rights" as a philosophical system of morality & ethics - and destabilize it. There is no "correct" level of wealth inequality, but a system in which wealth inequality is growing in an out of control fashion, is an unstable system whose existence is threatened. That this system is liberal democratic market capitalism matters little - this is not some kind of natural arrangement, it's something we built, and it's something which can fail. Because people, as a whole, only respect what's written on little bits of paper - only respect the customs and law of property rights and the existing power structure - so long as the system provides them with the things they think are necessary for their livelihood.
Well, that's our system. Nearly all growth of the economy is ending up technically "owned" by a narrower and narrower minority. For one reason or other, the economic equation has developed an unbalanced variable, and wealth is completely failing to trickle down... and our system can't sustain this perpetual exponential growth in power imbalance forever.
Some of the greatest attacks on inequality were performed in part due to a very real fear that the whole system would collapse in a socialist revolution; The fact that the Communists are fallen has made this less credible, and perhaps, for all their evils, that's not a great thing for us.
Apparently, in the early history of currency, after we had gotten property rights laid down tightly and developed a fungible system of value, various civilizations developed a problem. Unlike the vague bonds of social obligation that they had previously represented, debts that are denominated in coinage attract contract arrangements with penalties such as slavery. This was accepted until surprisingly recently as an unfortunate necessity of life. The elite discovered that the accumulation of slaves was a practical problem, because their customary service as cook or manservant or sexual partner took them out of the fields, and first currency crises were born: It was recognized that if the fields were left fallow, this was a worse outcome for all than the property of the elites not being sacrosanct. The arrangement that was periodically arrived at was that the king would issue a jubilee, freeing all the slaves to go back to their fields and their families, with no compensation to the elites. When this was missing for a protracted period, slave revolts tended to pop up, with summary execution of the masters as a prize.
The system of norms ("rights") is subordinate, at some level, to the proper functioning of a society. It doesn't particularly matter whether we call people with an indispensable debt that they need to perform service to partially mitigate, "slaves" or "working class" or "debt peons". You can only push them so far and still earn positive economic returns, and beyond that, in the full view of history, you can only push them so far and still keep your head.
Whether one is "entitled" to property is a view from so close to the ground one can't see past the blades of grass.
Depending on the interpretation of "cheat","steal", "coerced" and "anyone" means. Take the banks that made money from the real estate bubble. Did they cheat, steal or coerced anyone? Maybe if you comb through the legal details they haven't. Yet many will say they did.
> Then of course people say "but greed". Yes, as if only rich people are greedy and you are not.
The problem is if the rich are greedy they have the potential to inflict a lot more damage than say if someone poor is greedy.
Excessive wealth inequality creates a massive imbalance in society. The concentration of wealth in the hands of so few leads to corruption, oppression, and wars. We already see all of this and it will only get worse unless we address the issue.
Right now inheriting valuable property and other assets is an "honest" mechanism, but is not at all clearly fair.
For example should you be evicted from your family farm that you've worked on your whole life when your 80 year old mother dies just because you haven't saved up enough money to buy it on the event of her death.
What if you are a subsistence farmer in Cambodia in the same situation - should you lose your family land to the state on the event of the death of your parents?
"Of the remaining 52% of global wealth, almost 46% is owned by the rest of the richest fifth of the world's population, Oxfam said." So that's 94% of human wealth concentrated in the top 20% of humans.
Keep in mind the 80th percentile global wealth is, according to TFA, $3,851. To me, I see this as an incredible opportunity, because I imagine with a few dollars of computing power and a network connection, a human would have everything they need (except for the requisite food, water, shelter, freedom, safety, and education) to readily earn that.
To me that means there's no need to drastically redistribute wealth. What we need to redistribute is basic human necessities. Anyone can be brought up to current 80th percentile if we can just provide the basics. The solution to that problem has confounded humankind since inception, but as hackers we believe technology holds the key to an answer.
* Updated after jzwinck's reply.
"That compares to an average wealth of $2.7m per adult for the elite 1%."
The site you linked has no info (that I could find) regarding where they source their stats, as well as no info regarding how they process the numbers so I'd be a bit wary about trusting their figures.
EDIT: That's not saying the numbers are wrong, if $2.7m is the average, then $770k could be the low end of the distribution.
EDIT 2: After entering some numbers into their form, they finally show you who they are, and where they get their numbers. I really wish they had a link on their homepage with that info...
It also says that $1B puts you at #998 in the world. Oxfam claims that number recently grew to 1645 [1]. I can accept 998 as a calculated estimate based on somewhat outdated data. But, it's obviously not nearly perfect.
[1] http://www.theguardian.com/news/datablog/2014/oct/29/oxfam-r...
http://www.bbc.co.uk/programmes/b04xf1d5
To be in the top 1% you need net assets of over about £500,000 - and this includes your house if you' e paid off the mortgage.
http://qz.com/329099/80-rich-people-now-have-as-much-as-50-o...
People that don't allow other people to die when there's wealth available.
But I wouldn't do the courtesy of calling it a "civilisation".
healthier - I definitely disagree. I can provide a lot of statistics about why I think it is so, but unfortunately I can't provide statistics about what I see happening around me. And sometimes it's scary.
better educated - Disagree. I think there are huge problems with the education system and it's only baby steps that are taken to improve something.
better fed - With what?
So... I agree with "kolev" that these 1% could eventually put their money to better use. Maybe some of them are doing it.