Economy International Jake Johnson

Richest 1% Took 38% of New Global Wealth Since 1995. The Bottom Half Got Just 2%.

Hands of businesspeople holding dollars in a row
(401K 2012 / Flickr)(CC BY-SA 2.0)

By Jake Johnson / Common Dreams

In the nearly three decades since 1995, members of the global 1% have captured 38% of all new wealth while the poorest half of humanity has benefited from just 2%, a finding that spotlights the stark and worsening gulf between the very rich and everyone else.

That’s according to the latest iteration of the World Inequality Report, an exhaustive summary of worldwide income and wealth data that shows inequities in wealth and income are “about as great today as they were at the peak of Western imperialism in the early 20th century.”

“Indeed, the share of income presently captured by the poorest half of the world’s people is about half what it was in 1820, before the great divergence between Western countries and their colonies,” the report notes. “In other words, there is still a long way to go to undo the global economic inequalities inherited from the very unequal organization of world production between the mid-19th and mid-20th centuries.”

The authors of the new report, released in full on Tuesday, go out of their way to stress that contemporary inequities in wealth and income are not inevitable, but rather the consequence of deliberate decisions by policymakers within individual countries and on the global stage.

“The Covid crisis has exacerbated inequalities between the very wealthy and the rest of the population,” said Lucas Chancel, co-director of the World Inequality Lab and lead author of the new report. “Yet, in rich countries, government intervention prevented a massive rise in poverty—this was not the case in poor countries. This shows the importance of social states in the fight against poverty.”

“If there is one lesson to be learnt from the global investigation carried out in this report,” he added, “it is that inequality is always a political choice.”

The new analysis shows that 2020—a year of pandemic-induced economic dislocation that pushed tens of millions of people worldwide into extreme poverty—marked “the largest increase in the share of global billionaires wealth available on record.”

“In the U.S., the return of top wealth inequality has been particularly dramatic, with the top 1% share nearing 35% in 2020, approaching its Gilded Age level,” states the report, whose contributors include prominent economists Thomas Piketty and Gabriel Zucman. “In Europe, top wealth inequality has also been on the rise since 1980, though significantly less so than in the U.S.”

At present, the richest 10% of the world’s population grabs more than half of all global income, the researchers found. The billions of people in the poorest half of the global population, meanwhile, get just 8% of the world’s income.

“Global wealth inequalities are even more pronounced than income inequalities,” the report finds. “The poorest half of the global population barely owns any wealth at all, possessing just 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth.”

In keeping with their argument that skyrocketing incoming and wealth inequality is a choice, the report’s authors recommend that world leaders pursue several policy solutions to the global inequity crisis, which has far-reaching economic, political, and ecological implications.

With a “modest progressive wealth tax on global multimillionaires, the report argues, “1.6% of global incomes could be generated and reinvested in education, health, and the ecological transition.”

If implemented in the U.S., such a tax would help reverse the decades-long trend of falling income taxes paid by the wealthiest individuals. The report notes that “today, the effective tax rates of the working class, the middle class, and top 1% are very close.”

The report also suggests progressive corporate taxes and government crackdowns on “pervasive tax evasion” by the super-rich could help reduce yawning wealth inequities.

More broadly, the authors argue that in order to “put an end to large imbalances in capital and income flows between the Global North and the Global South, it is necessary to reassess the basic principles of globalization.”

“It is not unreasonable to assume that each country in the world should have equal rights to development, in the sense that each human being should have equal access to basic education and healthcare services to start with,” the report states. “The question of how to fund such basic services is entirely political, thereby depending on the set of rules and institutions put in place by societies across the world.”

15 comments

  1. The exaggerated disproportion of wealth distribution is a function of hierarchical structure where the structure is reinforced by a hierarchical debt based monetary model that is yet incomplete without the addition of debt-free market driven medium which acts as “Yang be added to the existing Yin” to create a “rounder world”.

    The apex is a dangerous and dark place, rank with temptation and like a light to moths in what it attracts. Add the debt-free assets from the free market ….. and stirrrrr …… balance and symbiosis can only follow.

    …… and then there is light !

  2. The middle class fret about the gap between middle class and poor while ignoring the canyon between poor and middle class. The rich don’t want a penny to trickle down to the middle, who don’t want a penny to trickle down to the poor.

  3. In the 1980s, it was popular to talk about people “falling through the cracks,” and moreover, to discuss this in terms of its inevitability.
    I began to question the whole set of assumptions. These cracks aren’t caused by nature, such as the cracks in a roadway caused by winter conditions or the cracks in mud when a rain puddle dries up.
    I hypothesized that, if society was man-made, then the cracks in it must be man-made also. Then I asked myself, who is in a position to create these cracks for others to “fall into”? My answer: Legislators and the administrators of programs.
    Next, I asked myself, “Why would anyone fall into these cracks?” At the time, I was both a student at the university and a welfare mother. I was around many other poor people, and I knew from familiarity that poor people are not stupid. They, like any other reasonable person, would do what they could to avoid any cracks that might potentially lay in their path.
    So how do people end up in these cracks? My answer? They don’t “fall in,” they are pushed. Who is in a position to push another person into a crack? My answer? Social workers. Landlords. Employers.

    You have just corroborated my hypotheses. This is all political.

    Thank you.

  4. I wouldn’t contrast the “Global North” and the “Global South” if I were you. The United States, the self-appointed leader of the “Global North,” is failing egregiously at providing its citizens with housing, food, and health care.

  5. We have seen statistics like this for many years but nothing is done to change it… until now, when President Joe Biden comes to the rescue! /s

  6. > there is still a long way to go
    > to undo the global economic inequalities

    No, there isn’t. There is no “way” at all. The rich have won for as long as humanity will last (three more generations, at most). Technology has made them untouchable; the days of storming the Bastille are over. We are all ‘tank man’ now.

    > it is necessary to reassess
    > the basic principles of globalization

    That’s like saying “it is necessary to reassess the basic principles of cancer”. Globalization has worked like a charm for the few who profit from it (I am typing this on an el cheapo PC made in China, so I guess I belong to that bunch), so it will never change. Going back to local supply chains is a ridiculous utopia, as the best of them are.

    But it’s good that academics with cushy jobs keep reminding us of how shitty things are for the majority of the world’s population. No doubt it helps them sleep at night, those precious tenured snowflakes.

    Forgive my cynicism, but it is what it is. Be thankful for every meal you have, take care of your loved ones, give a little to charity if you can afford it — and either don’t have kids or tell your kids not to have any. We’re fucked.

    Peace out.

  7. The problem is that money exists in the first place. “Each country in the world should have equal rights to” destroy ecosystems and kill plants & nonhuman animals? Um, no. Quite the contrary, NO country should have the right to do that. And if you don’t know what I mean, “development” really means destruction of the environment and all life there.

    1. –> The problem is that money exists in the first place.

      The problem is that too much debt money exists in the first place. Greasing the economic wheels with debt-free transactions can now enhance liquidity while also removing a tremendous amount of inflationary debt. Interest rates can safely and efficiently rise on the back of real economic growth.

      The environmental problems, energy problems, agricultural problems , as well as a few other issues can be vastly addressed and improved upon with more ability provided for by unrestrained debt-free trade as a whole new platform for people powered cooperation, peace and prosperity.

      https://members.lode.one/register/joinwith/1130057960/link

  8. If inequities of wealth and income are “about as great today as they were at the peak of Western imperialism in the early 20th century,” reports like this are meant to keep people sleeping through another century of pillage and plunder, if we make it that long.

    Economics is a ‘science’ which serves capitalism, and it’s had a long history of whitewashing class war upon society as a business system of accounting, supposedly subject to parliamentary politics as a neutral arbiter over (pillaged and plundered) resources.

    “Modest progressive wealth tax(es)” are among the crumbs, often no more than symbolic, perpetually thrown the restless masses, while the predators continue to profit, including from tax loopholes and tax havens.

    Oh dear, inequities (or is it inequalities?) have worsened with the ‘pandemic’ – as if the opportunists upon crises have never thought to create crisis for their opportunism, and as if wealth is not about power, or oligarchs who are now out to destroy the remains of the parliamentary facade by establishing direct dictatorship over our lives through such means as centralized digital currency and social credit scores.

    Ho-hum, what else can you expect but numbing number-crunching and anemic recommendations from the World Inequality Report, tied as it is to the EU and boasting such funding sources as the Ford Foundation (CIA).

    1. Plundering seemed like a necessary evil in the past when there was a lack of liquidity.

      Liquidity has taken on various forms in our monetary evolution and this continues now as we see signs on the blockchain that full backed bullion based medium is trading with real-time price measurements.

      Without the advent of real-time pricing it has ALWAYS been totally impossible to be congruent with economic reality, given that the economy is a real-time event ….. and always has been ! It’s truly amazing how people can react to this revelation which really seems to be the gigantic elephant in the room.

      more… https://members.lode.one/register/joinwith/1130057960/link

    2. –> business system of accounting

      This caught my eye because without a congruence with economic reality, the accounting could never truly reflect market balancing and proper price discovery. It’s always been dysfunctional in the absence of real-time pricing and real-time price comparisons that now support DEBT-FREE transactions in eCommerce.

      Said another way, we could never pour new wine into an old wineskin.

  9. “emphasis on economic arrangements is criminal short sightedness”. M Bakunin
    CD censors anything that questions Covid fascism—now known to have enriched billionaires in US by more than a trillion $
    the childish narcissism blaming trump now senile Biden merely demonstrates passivity—rather than address social conditions we observe tantrums

  10. I’m sure these reports are well meaning by those who produce them, but they are a pointless waste of time. Nothing will change because those in power do not fear the rest of us. Only fear will move them. Not charts, graphs, or statistics. Not reason, morality, a sense of justice, fairness, or the betterment of anyone or anything. Only fear. Because those in power are sociopaths and they are evil.

    1. I disagree. What moves them is the prospect of greater wealth and there is no greater wealth generator than the whole economy. The REAL growth and efficiency of the whole economy is a focal point and has been a focal point for the elite since the formation of Bretton Woods in 1944, likely beforehand too, but BW gave us something very objective and measurable in the process toward debt-free transactions that might eventually use sovereign market gold that is owned, priced and distributed by all elements of the free market, eactly how the consumer is now taking the monetary stage.

      https://members.lode.one/register/joinwith/1130057960/link?fbclid=IwAR0C21tmBw9LBIsLIztgl-xWRkiTsKehaCPwuXv1nF4OdYAHU9T9nQl3Ptw

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