Associated Press December 5, 2006:
The richest 2 percent of adults still owns more than half of the world’s household wealth, perpetuating a yawning global gap between rich and poor, according to research published Tuesday.
The report from the Helsinki-based World Institute for Development Economics Research shows that in 2000 the richest 1 percent of adults — most of whom live in Europe or the United States — owned 40 percent of global assets.
The richest 10 percent of adults accounted for 85 percent of assets, the report said.
By contrast, the bottom 50 percent of the world’s adult population owned barely 1 percent of the world’s wealth.
“Income inequality has been rising for the past 20-25 years and we think that is true for inequality in the distribution of wealth,” said James Davies, a professor of economics at the University of Western Ontario, one of the report’s authors.
It’s lose, not loose. You lose something. Your untied shoelace is loose.
#22
Honduras.
#30 – As to your argument about raising K, that was not what I was talking about, but about the return of K v.s. the return of L. And then you’ve got timespan in the middle. The point is, if you have lower wages, the return of K will be higher in the short run. If you have higher wages, you will have a lower return on K in the short run. In a certain point in time you’re either paying more to your stockholders or to your employees. Well, what happens is that when capitalism is practiced Ford’s way, you are in fact paying more for L in the begining, instead of paying K. However, in the long run K ends getting a lot more of return because you end doing much more business and hiring more L and doing more business and on and on. You know, all that production does need to be sold, otherwise neither K or L get anything in return… something we know as an economic crises.
When I was a young boy, I lived down the road from an L&K restaraunt and lodge. They had those jukeboxes where there was a song selector at each table. Does anyone else remember the L&K chain of diners and motels? I have many fond memories of eating glorious Frisch’s-like meals there with my family. Yes sir, those L&K’s were just jim dandy-liscious.
Once, when my mother got really mad at Dad, she stayed at the L&K lodge overnight. I know I should have been frightened as I was a small child and it seemed like she might have been gone for good. But frankly, it was nice to have some peace and quiet for the day.
Yep… I loved the L&K.
Sorry…
Was that off topic?
#31, Oops, typo. Thank you for correcting me.
#33, Actually I would really love to have much more K so I wouldn’t need to sell my L. 😉
#12 “The problem is the K is getting better paid and L worse and worse.”
‘Then they should quit.’
They can’t. Under capitalism, the worker is compelled to sell his labour, just as the capitalist is compelled to try to generate increasingly larger returns. As Miguel said, this is one of the structural contradictions of capitalism, not a moral thing, or an individual choice. Capital has to either increasingly exploit (neutral descriptive: ‘make instrumental use of’) labour (either through productivity gains or by ‘squeezing’ workers and/or continually expand market share. These are the only two ways for manufacturers to respond to the imperative to increase the rate of profit, known respectively as relative and absolute surplus value. Fordism marked an era of increasing productivity, and thus workers were able to better their conditions. But since 1973-ish, absolute surplus value has largely given way (since their has been a glut in productive capacity) to the ‘squeezing’ method, both at home and by exporting manufacturing jobs to ever lower-waged countries. This is called the post-Fordist era, since globally speaking, the Fordist/Keynesian consensus that marked the post-war boom years has collapsed, and America is living in a house of cards produced by ‘wealth effect’ of easy credit, an emphasis on finance over manufacturing capital, and deficit spending.
Well I guess Time’s justs bad. Are you going to say there was no middle class before Ford?
Having more capital means more money for labor. A higher return for capital leads to more capital being invested. That’s why the last two capital gains tax cuts have led to growth. Now if they could just keep the illegal immigrants from eating up labor’s share.
I think in the future some of the things we accept now as normal in our society, such as the huge pay people like artists, politicians and sports stars get, compared to the average income of the population, will be seen as outrageous. It’s no secret that the societies where income is more evenly distributed, like Japan, Sweden, etc., have less crime (there still is, but I guess that to eradicate it completely goes beyond the powers of economics) .
You do deserve more for doing more, but I dare say there is a limit, because even stars get their money from the audience in some way… they don’t make them themselves. Besides, complaining about crime in the streets when you refuse to share and understand how difficult it is to just cope with everyday expenses for some people is nonsense. If poverty is to be eradicated, people will have to realize this and do more to really provide real oportunities to the lower classes. If they are not paid attention, they will revolt, either by revolutions or more simply and likely, turning to the tentation of crime, whether single-handedly or organizedly.
I see many people don’t realize this and live in some kind of parallell world. I’m Colombian, and it really is unbelievable how you can see people in a 5 star hotel eating a $ 500 steak looking at starving homeless children lying in the street from the restaurant’s window and saying: “Everybody has the same opportunities… if you are poor is because you are lazy and decide to be poor…”. And then they walk outside and are anoyed by beggars and war refugees begging for coins in the traffic light stops. Many people live in conditions they CAN NOT change by themselves without outside help. Failing to acknowledge this is a conscious effort to be blind to reality through selfishness.
Well at least in the US we’re going to see a differance, now with the Democarts in charge.
The middle class won’t lose anymore ground and the Mexican invaders won’t under cut any union jobs.
It’s going to be ok, the Global movement won’t continue to bring down our relative standard of living.
I’ll be able to get a higher paying job now that the Democrats are in charge of everything, yeah right another Globalist heading down to the same ocean. Look for more of the same, just different spins and a lot less concern for individual freedom.
Actually Bush and a Democratic congress should be able to get alot done. I predict very little friction there, since it was the Republican congress to keep alot of Bush’s program for going through.
traaxx, they’ll definitely raise the minimum wage, so even if companies hire illegals, they’ll have to pay them much more money to do it, at which point they’ll just hire the American workers. They won’t be willing to take the risk of going through a cheap subcontractor who pays the Mexicans in cash.
#16, So Adam Smith with right?
#30, “However, in the long run K ends getting a lot more of return because you end doing much more business and hiring more L and doing more business and on and on.”
Except because of the Law of Decreasing Returns, eventually your marginal cost will exceed the marginal revenue gained, and you will need to either stop further production or invest in more land and capital, or develop new technology to reduce your costs.
And BTW, you are confusing me with your references to capital. Capital is just the tools and equipment used by labor in production. I don’t understand what it has any relation to political influence enjoyed by a large corporation. In the US, labor earns far more than capital; so I’m not sure from where you are basing your claim that capital is getting paid more and more, while labor gets paid less and less.
This article could have just as easily been titled, “MIDDLE 48% OWN 49% OF THE WORLD’S WEALTH”.
What’s might be missing in all the responses above (which I agree with) is that a widening gap between rich and poor drives… terrorism and other instabilities that affect us all negatively in one way or another.
Not quite – you might want to read the biographies of the 9/11 terrorists (among others). They’re hardly from the armpit of poverty.
Angel Wong –
What is the name of this one person who allegedly owns 85% of Honduras?
Wages/salaries are determined by the ease with which a worker can be replaced, not by his/physical mental effort on any given day of the job.
The reason why janitors earn less than brain surgeons is because ANYONE can be a janitor. In fact, I could walk right out of this office now, and I’d be able to find a job as a janitor before the day is over. And if janitor’s wages were increased to the point where they equalled my current salary, you can bet that I would give serious thought to making a major reduction in the stress of my worklife, and becoming a janitor.
On the other hand, there is no way I could suddenly become a brain surgeon or a CEO, without the necessary years of training and experience.
So if you want to increase your standard of living, you need to acquire a set of skills that makes you less replaceable than other workers.
traax and arbo –
You’re both wrong – increasing the minimum wage increases the incentive to hire low-end workers in the “informal” rather than the “formal” labor market – ie, hire more illegal immigrants.
43…
WRONG…
Being a programmer, long ago…and needing to find a job…I had experience as a Janitor…And COULD NOT FIND ONE…
I will take your bet…Just tell me Where you will look, first. In any major city…NO way in hell…
but I also ask 1 other…that the Job be offered and you attend in the SAME day…
Go for it..
PS, make a living wage…
dont under cut yourself..
Raising the min wage Raises the BASIC living cost…
Farm hands make About the lowest you can GET…$5.35(?) an hour..
TRY IT…
If you raise that wage you will be forced to pay MORE at the store for your food…and Every other employee will Want a raise, because they NEED FOOD… And cant afford it… they get a raise, and GUSESS WHAT, then YOU need a raise….