Yes, inequality is getting worse every year. In early 2016 Oxfam reported that just 62 individuals had the same wealth as the bottom half of humanity. About a year later Oxfam reported that just 8 men had the same wealth as the world’s bottom half. Based on the same methodology and data sources used by Oxfam, that number is now down to 6.
How to account for the dramatic increase in the most flagrant and perverse of extreme inequalities? Two well-documented reasons: (1) The poorest half (and more) of the world has continued to lose wealth; and (2) The VERY richest individuals — especially the top thousand or so — continue to add billions of dollars to their massive fortunes.
Inequality deniers and apologists say the Oxfam methodology is flawed, but they’re missing the big picture. Whether it’s 6 individuals or 62 or 1,000 doesn’t really matter. The data from the Credit Suisse Global Wealth Databook (GWD) and the Forbes Billionaire List provide the best available tools to make it clear that inequality is extreme and pathological and getting worse every year.
How It’s Gone from 62 to 6 in One Year
As of 02/17/17, the world’s 6 richest individuals (all men) had $412 billion. Tables 2-4 and 3-4 of the 2016 GWD reveal that the poorest five deciles of the world population own just .16% of the $256 trillion in global wealth, or $410 billion. That latter figure is based on mid-2016 data, but since then the status of the bottom 50% has not improved, and has in fact likely worsened, as both global debt and global inequality have increased.
Just a year ago, on 03/01/16, the world’s 6 richest men had $343 billion. They’re the same men today, although slightly rearranged as they play “king of the hill”: Bill Gates, Warren Buffett, Jeff Bezos, Amancio Ortega, Mark Zuckerberg, Carlos Slim Helu (with Larry Ellison jockeying for position). The wealth of these six men increased by $69 billion in just one year.
Just a year ago, according to the 2015 GWD, the poorest five deciles of the world population owned much more than today, close to $1.5 trillion. What happened? It’s very clear: the world’s richest 10% (mostly the richest 1%) gained nearly $4 trillion while every other segment of the global population lost wealth.
That’s worth a second look. The world’s total wealth is about $256 trillion, and in JUST ONE YEAR the richest 10% drained nearly $4 trillion away from the rest of civilization.
It’s Not Just the Bottom Half: A 500-Seat Auditorium Could Hold As Much Wealth as 70% of the World’s Population
According to the Forbes Billionaire List, the world’s richest 500 individuals have $4.73 trillion in wealth. Tables 2-4 and 3-4 of the GWD reveal that the poorest seven deciles of the world population own just 1.86% of the $256 trillion in global wealth, or $4.76 trillion. That’s over two-thirds of all the people on earth. That means 5,000,000,000 people — FIVE BILLION people — have, on average, and after debt is figured in, about a thousand dollars each in home and property and savings.
In the U.S., the Forbes 400 Own as Much as 3/5 of the American People
The bottom 60% of Americans, according to Table 6-5 in the GWD, own 3 percent of the nation’s $85 trillion in total wealth, or $2.55 trillion. The Forbes 400 owned $2.4 trillion in October 2016, and that’s been steadily increasing.
So as apologists like the National Review refer to “a growing upper-middle class” of people earning over $100,000 a year, they’re inadvertently offering an explanation for the demise of the middle class: Some are moving up, way up; many others are dropping to the lower-middle-class or below. The once sizable and stable middle of America is splitting into two.
The Deniers Are Lurking
Jacoby’s column includes some stunning assertions. He says, “Just as capitalism made it possible for Gates, Zuckerberg, and the others to reach the highest rung on the economic ladder, it is making it possible for billions of men and women to climb up from the lowest rung. Oxfam’s billionaires are richer than they used to be. So is almost everyone else.” And he quotes writer Johan Norberg: “Poverty as we know it is disappearing from our planet.”
Billions moving up? Almost everyone getting richer? Poverty disappearing?
While we keep hearing about the world “climbing out of poverty,” much of the alleged improvement is due to rapid economic growth in China and creative math on the part of the UN. And yes, many Americans have negative wealth because of debt. A human being doesn’t have to live in a third-world slum to be impoverished.
Yet as inequality ravages the American and world economies, denial grows right along with it. Cato’s Michael Tanner suggests that “even if inequality were growing as fast as critics claim, it would not necessarily be a problem.” George Will, of course, agrees. But like the other deniers, they all protest too much as they try to explain away reality.