Richest 1% Will Own More Than All the Rest by 2016 | Hacker News Reader

Richest 1% Will Own More Than All the Rest by 2016

oxfamamerica.org

38 pointsabhinovb40 comments

Economic growth and the resulting distribution of wealth / capital is not a zero sum game. So the fact that the top 1% owns more than the rest, is not a problem per sé. Who cares what 'they' own, if I / we can live happily, in wealth and in health. An opinion on the distribution of wealth (Piketty) is more political than economical.

But even on the more libertarian axis of the spectrum (for the US: conservative, for the rest of the world: liberal), it might be troubling.

'We' are working hard to eradicate poverty in all those countries attached to the 'global economy'. That is such a big plus in the lives of billions.

But for the already developed world it might be different. One of (my) principles to hold dear is the chance of improving oneself by studying, working hard, etc. The demise of the middle class in many developed countries, is an example. It seems to be getting harder for the many to work hard, own a house and save enough for retirement.

The rents paid to the winners in, say, the financial sector or modern internet are so disproportionate that they feel more like luck than skill. I don't have an answer of policy, because if you target that glut of wealth but end op hurting innovation, you hurt the billions as well.

But if (very big if) things like quantitative easing are stimulating the glut of cash flowing towards finance and venture capital, we might not be creating a very stable future where hard work and effort get rewarded with any notion of certainty. And that ís a problem for the world.

The problem as I see it is not wealth per se, but the fact that wealth confers power. Concentrated wealth means concentrated power, and that means the concentration of both will accelerate.

A rising tide lifts all boats, but who says the elite will remain content with a rising tide? Once they accumulate enough wealth and power, they may start to find it advantageous to add to their own wealth by impoverishing the rest.

It's often said that economics is not a zero sum game, and that for one person to win, another does not have to lose. That is, of course, completely true! But it doesn't mean that it's impossible for one person to win by causing another to lose.

This, of course, is nothing new. One of the best ways to accumulate power and wealth throughout history has been to conquer and enslave. One of the best things about the modern world is that we've managed to structure it such that conquest and enslavement are no longer good ways to obtain power and wealth, and you do much better by figuring out a better way to give people what they want. But there's nothing that says it couldn't go back to the way it was, perhaps with more clever and subtle techniques than simply leading a bunch of rough men on horses into the villages of your enemies.

http://blogs.spectator.co.uk/coffeehouse/2015/01/what-oxfam-...

(What Oxfam doesn’t want you to know: global capitalism means less poverty than ever)

Not the same issue. Inequality can continue to grow even while the poor become wealthier.

Right, but the trick is the inequality doesn't imply poverty. Wealth isn't a zero-sum game; FatCat having more doesn't necessarily require that SkinnyCat have less, even though the size of the pie slices grows or shrinks; the pie grows as well.

"Your new TV is bigger and slimmer, so why should you care the planetary economic system rewards a tiny minority with wealth that is almost incomprehensible?"

Okay, but the trouble is, it's a feeble argument for persuading people not to pay attention to the fact that 1% of the planet has half the wealth. People actually care about the fairness of how wealth is distributed. Did these fabulously wealthy people start working even harder, to justify the even more unequal wealth breakdown?

The 1% used to own <50% of all wealth. Soon they'll own 51%. What changed? I'd argue they've done nothing to deserve this increased wealth, and it's entirely justifiable that humanity is allowed to look at how to redistribute that wealth. Of course we have to be careful not to kill the golden goose - maybe they'll all emigrate to Mars where taxes are lower...

Not to mention the democratic problem of having 10 people weighting so much into the balance.

In the south of the UK (the part where most of the jobs are) housing is a dominant cost in most people's lives. Since there's a shortage of housing and buildable land, the cost of housing goes up with people's ability to pay. This absolutely trends towards a zero sum game, so income distribution is a clear concern. Political power is also purchasable to some extent in virtually every country, so income inequality matters there too.

But sometimes it's not the size of your piece that matters, but it's the size of your piece relative to others.

Examples:

- buying a law.

- legal bribes, like endowing a chair at Harvard to ensure your kid gets in

- hiring personal servants

- real estate: the average price of a house anywhere with a functioning banking system is approx 2-3x the average salary

For example, a bright Indian software developer faces the choice: do I make $40K in India or $200K in Silicon Valley?

The latter can afford a fancier car, the former can afford more servants.

Absolute wealth matters when purchasing items that can be created by spending dollars: cars, computers, food, energy, et cetera.

Relative wealth matters when purchasing items which cannot generally be created by spending dollars: land, people.

I was careful to not say "the poor have it just as good as the rich", because I specifically did not mean to say that. The rich certainly have far more power, opportunity, and resources available to them because economics, but I've noticed a trend to conflate inequality with poverty, or to assume that those with more only have it because they took it from those with less, and both are rooted in the fallacious assumption that wealth is zero-sum.

Greater relative wealth means greater purchasing power of scarce resources. But the production of wealth is a consequence of the production of additional resources, which results in greater accessibility of things that were once solely the domain of the rich. I'm not making a value judgement about wealth inequality here - I'm simply pointing out that the rich becoming richer does not mean the the poor are able to afford less - and in fact often indirectly means that the poor can afford more.

The wealth of the poor is growing slower than the wealth of the "1%". It's not a hard concept to grasp.

How are you measuring wealth? My current car is a lot more efficient, safe, reliable, and comfortable than my last car, and I'm paying the same price. That's an increase in wealth for me. My next TV will be a lot bigger and perform a lot better than my current one, and will cost less. That's a big jump in wealth. My new smartphone consistently captures better pictures of my growing son than the last one I had; which makes me much more wealthy. I can video chat with relatives all over the world for almost $0, while my parents had to pay $X.XX/MINUTE to barely talk (over poor connections) to their families decades ago.

Wealth is the things we want, not the money we have.

I think the whole narrative of the top 1% owning more wealth than the bottom 99% is deeply flawed as it's way too narrowly quantified.

from my point of view.

your current car is better than your last. and the next one will be again better. and then at some point you might not even need a "car" (as we understand it now) anymore.

but that is closer linked to technological progress than to increasing wealth.

if i understand above's argument right than the wealth gap has less to do w/ how much people have but (on the longer run) how much chance they have to change it (relatively).

Well, part of that narrative also pertains to things like (e.g.) upper-class salary growth vs. middle-class salary growth.

When technology improves, your standard of living grows, but your share of the global pie shrinks. It means that when you get a Tesla and realistic VR porn, your net worth will be roughly the same as it would have been if technology didn't improve productivity, but someone will be a trilionare.

Are you're saying it's an issue of "fairness"? By who's measure? If one values VR Porn, going from not having it to having it increases one's wealth immensely. The outliers are just that, outliers.

The fact that you have a car and a smartphone puts you somewhere around the richest 5% of people in the world. I don't think most 1st worlders like yourself -- especially those with the time and means to visit Hacker News -- have much of a clue about the poverty that exists in the world.

I don't think zillionaires are made by keeping everyone else poor. I think it's much more likely the opposite, zillionaires arise from creating the most wealth for the most people. My issue is that "wealth" tends to be conflated with "money".

Wealth is synonymous with net-worth: total assets minus total liabilities. Yes, the quality of the goods available today is unquestionably better than the quality available 30 years ago, but many of those goods are being purchased on credit subsidized by the super-wealthy and have a shorter useful life (replace rather than repair).

Read the following post from the Century Foundation titled "Graph: Household Debt and Middle Class Stagnation": http://tcf.org/blog/detail/graph-household-debt-and-middle-c...

Over 500 million new people have joined the middle class in the last 13 years - https://www.allianz.com/en/press/news/company/point_of_view/...

I do agree we need to look for more effective policy to better manage natural power-law effects (inequality), but globally in many ways things have never been as good as today.

If everyone in the 99% was earning barely $2/day then you could also argue we've "eradicated poverty" by that metric.

There's two problems here, one of which is the non-1% is being squeezed hard even if the lowest 20% is seeing modest gains.

You (as well as this article, though less so) are conflating wealth and income. Wealth is a stock; income is a flow.

In any economy what is produced is split between wages and profits. Wages are the returns to labor, while profits are the return to capital. Income to households can be both returns on wealth or returns on labor, so clearly higher income will be correlated with higher wealth, and wealth inequality can be both cause and effect of income in equality.

What the Oxfam article fails to mention, is that quality of life and income have improved DRAMATICALLY for billions of people over the past 50 years, and ironically what is standing in way of the bottom 50% are often legal and cultural obstacles to accumulating capital -- wealth -- at both the individual and national level.

I have no idea why you insist on splitting hairs here. Most people have marginal income and zero or negative wealth.

Those with higher incomes have higher wealth. The correlation here couldn't be stronger even if it's not strictly linear.

Rather than assume that they're a bunch of evil people who are trying to hide the truth from us poor suckers, maybe you should think about why they might not think that "less poverty than ever" invalidates their point.

Pretty sick of the constant class warfare nonsense.

People are not poor because Bill Gates, Elon Musk, Donald Trump and Oprah have lots of money. They are poor for other reasons which could fill pages to list and discuss. The rich are not oppressing the poor or causing class disparity. Government definitely is by sticking it's grotesque paws where it should not.

Apparently Obama is going to propose a hike in capital gains tax to 28%. If that happens it would have gone up from 20% to 28% under his watch. That is a 40% increase overall! There are consequences to such changes. They are destructive to the country, businesses, the middle class and the poor. We need to go in the opposite direction.

Blaming the rich is just a nice populist way to focus people away from where the real problems might lie.

Some people assume the default scale of things is linear. This is false. The default is logarithmic. When feeling snarky I like to say that it's called the natural log for a reason.

I feel like I see the 1%/50% ratio in more than a few places. One percent of people own 50% of wealth. One percent of mobile apps make 50% of the revenue. And probably a few more with respect to digital store fronts. Maybe not exactly 1/50, but certainly closer to that than what people would like/hope for. Can anyone think of more 1/50 examples?

The Oxfam text is called: "Wealth: Having it all and wanting more". This bothers me.

"Wanting more" is pretty much the human condition, I'd hate to paraphrase Gordon Gekko but that's why we're were we are today, that's why absolute poverty is about to be eradicated.

Yes, inheritance can be disgusting but if that's part of what helps create more wealth, so be it.

And no, I don't think people would move to the rocky mountains if we would limit wealth creation for oneself, but I definitely think less (of anything) would be created.

I inherit my parents genes. I inherit my fathers disposition and many of his attitudes. I inherit from my parents to know what it means to be cared for. Loved. Believed in. Supported.

Of all the things I will inherit, money is the least of the advantages I'll get. Indeed it's the money spent before inheriting that has the biggest impact for most people. I think inheritance is the wrong battle to fight, it rarely impacts opportunity or environment which are so formative.

Basically a duplicate (different article discussing the same source): https://news.ycombinator.com/item?id=8910476

Yes. I posted the original source.

so what? I'm not worse off because Bill Gates or the Waltons have billions in wealth. In fact, I'm better off. Microsoft, Walmart and the myriad of other corporate empires lowers the costs of goods which improves my standard of living.

what has the one to do w/ the other?

The only problem I have with the wealthy is when they buy off the government to favour their own interests.

My point of view with this is that it is more of a problem with government rather than a problem with the wealthy. If a government is bought off by the rich, it isn't a government for the people in the beginning to start off with.

At a 'society' level it very much depends on the rich. So Walmart appears to be paying the minimum they possibly can. This massively affects the spending power of this low wealth group. I believe this was something Ford recognised when building the first mass market cars. Without developing a relatively well off lower/middle class, there would not be enough people to buy his product, so he raised the wages of his factory workers.

agree.

aren't the living costs of walmart employee's even subsidized by tax payers? i believe i saw articles about this.

(edit): http://www.huffingtonpost.com/2013/05/31/walmart-taxpayers-h...

Not every item scales. Land in contended areas edges in on a zero sum game. Political power correlates substantially with wealth, and so wealth distribution affects that too.

I don't think Wal-Mart improves my standard of living. I think they're predatory, pushing manufacturers into cutting corners beyond sustainability, pushing workers into cutting wages beyond sustainability, and papering over the cracks with government subsidies for food and health care for their workers.

They can get away with it because they're gigantic. And that's the problem with wealth inequality; extreme wealth isn't a problem per se, but it involves a concentration of power that allows the extremely wealthy to switch over from enriching themselves by making everybody better off to enriching themselves by hurting others.

If you are in a field that isn't negatively effected by the Walton's downward pressure on salaries, then yes, they've raised your personal standard of living.

When the Walton's employ people for less 40 hours a week just so they don't have to pay benefits, they are externalizing that cost to the other taxpayers (food stamps, housing assistance, health insurance).

I'm not without blame here. I'm pretty sure whenever I eat at a Chinese restaurant that they are exploiting workers. The fact that the workers are better off than they would be in China isn't really a defense.

have you ever been to a walmart? I would wager half of its employees are unemployable and would be on 100% assistance were it not for walmart.

It isn't just my standard of living either. go to walmart at 11pm, or 2am and see the shoppers there. their money goes a lot farther at walmart than it does at costco. The massive scale of walmart's business coupled with the billions it spend on trans log drives prices down. If walmart weren't there, how much higher would target's prices be? or the prices at dollar general?

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