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.
To me this is only a problem if you believe that wealth is merely distributed. If you believe it’s earned, then the issue is nonsense.
What do you consider earned?
“What do you consider earned?”
Any wealth you own that was not stolen.
What do you considered distributed?
What percentage was the wealth concentrated in the 18th or the 14th century? May look bad, but it had been worse.
“What do you considered distributed?”
Dictionary.com Unabridged (v 1.0.1)
dis·trib·ute
–verb (used with object), -ut·ed, -ut·ing. 1. to divide and give out in shares; deal out; allot.
2. to disperse through a space or over an area; spread; scatter.
3. to promote, sell, and ship or deliver (an item or line of merchandise) to individual customers, esp. in a specified region or area.
4. to pass out or deliver (mail, newspapers, etc.) to intended recipients.
5. to divide into distinct phases: The process was distributed into three stages.
6. to divide into classes: These plants are distributed into 22 classes.
7. Logic. to employ (a term) in a proposition so as to refer to all individuals denoted by the term.
8. Physical Chemistry. to dissolve uniformly in a solvent consisting of layers of immiscible or partially miscible substances.
9. Printing. a. to roll out (ink) on the table to attain the proper consistency.
b. to return (type) to the proper place after printing.
I take it at its face value.
Didn’t someone once say money comes from money?
Or was it, poor people need better birth control?
#5. Thanks. Where exactly is the line where they “give out in shares” in the world’s wealth?
All this time I’ve been working, earning, and buying. Who knew they simply gave it out?!
I’m not a classical (as opposed to welfare state) liberal but for those that are, from John Locke to the late Harvard prof Charles Nozick, property or ‘holdings’ are just if and only if the entire history of the holding is just. Just transactions can be (1) purchases (2) gifts and (3) inheritances, all of which must take place via mutual covenant or contract. Property is also subject to the ‘culture of improvement’ in that the is an IMPERATIVE for it to return a profit to its owner.
Several practical implications from this follow. Taxation is theft, since there is no overt mutual consent (an argument for tacit consent may then be trotted out). Reparations for slavery, etc must be made, since wealth produced from such practices is unjust. And the original colonization of America was just because the native peoples had no culture of improvement of agricultural land, unlike England, which had perfected the imperatives of agrarian capitalism in the 15C, and exported them to Ireland and America.
‘Earned’ thus involves a number of historically contingent concepts, and it all depends upon whether you feel that Lockean capitalism is ‘natural’ or not. Locke anchored his theory of natural rights in the transcendent Xian God, but thoroughly secular Nozick had no such luxury, and his arguments suffer for it.
#1, I also believe in meritocracies. However, things are not that simple.
– Economic production is accomplished by the application of two factors:
-> K = Capital
-> L = Labour
The problem is the K is getting better paid and L worse and worse. This happens because each time more you’ve got easier access to extremely cheap L. I am thinking about China, India, etc. An even bigger problem than that is that return on K is not linear. So, the bigger the K, the exponentially bigger is it’s payof. In other words, it is extremely hard to make small business prosper as it doesn’t have access to things big corporations have like political power, for instance.
The problem with all this is indeed related with distribution and an even bigger problem is that it is the big capitalists who must understand how dangerous things are getting. Capitalism does indeed tend to self-destruct itself. There was one big capitalist, probably the one I admire the most, who understood this and acted accordingly. I am talking about Henry Ford, who basically created the middle class, by demanding a lot from his employees, but paying them very well, thus expanding tremendously his own market. The appearance of the middle class is widely attributed to him.
We need more Henry Fords.
#7 – Food Stamps or SSI or some other sort of monetary-object that is keeping the poor/destitute in check.
They’re giving em out like hotcakes (or condoms, #6) last time I checked.
What about government subsidies to business, is that earned? What about profits due to predatory business practices? What is “honest work”? Who earned the money, the person who owns the land, or the person that extracts value from it?
“The problem is the K is getting better paid and L worse and worse.”
Then they should quit.
“it is extremely hard to make small business prosper as it doesn’t have access to things big corporations have like political power, for instance.”
Since when does anyone have a right to prosper?
“The problem with all this is indeed related with distribution…”
Exactly where is this wealth distribution center? I’m tired of working, I’d much rather show up and have it given to me. Give me an address please!
“I am talking about Henry Ford, who basically created the middle class, by demanding a lot from his employees, but paying them very well.”
If he did create the middle class, he did it so the market of car buyers would be larger, which would increase his over all profit. There was absolutely nothing altruistic about Ford.
What about the education comparison?
I think that anyone who at least graduates from high school becomes at least a low-wage middle class.
“What about government subsidies to business, is that earned?”
If it’s legal.
“What about profits due to predatory business practices?”
If it’s legal.
“What is “honest work”?”
I have no idea. Work that is done honestly?
“Who earned the money, the person who owns the land, or the person that extracts value from it?”
The guy who ended up with it without stealing it.
What’s might be missing in all the responses above (which I agree with) is that a widening gap between rich and poor drives citizen uprising (see Venezuela), terrorism and other instabilities that affect us all negatively in one way or another.
#12 “If he did create the middle class, he did it so the market of car buyers would be larger, which would increase his over all profit. There was absolutely nothing altruistic about Ford.”
Congratulations!! You got it!!!!!!!
That was precisely my point. The reason I admire him is that he wasn’t being altruistic, but extremely clever. Moreover, he figured that his *long term* profit was indeed good business for everybody, rather than trying to win it all at once with low wages and then have to market to sell to.
No one ever said Henry Ford was altruistic, but he was God damn brilliant!!!
Sorry, I meant “… then have *no* market to sell to.”
The whole distribution of wealth thing is based on the false premise that there’s a fixed amount of wealth in the world and that there’s somehow a “fair share”. Wealth is something that is generated and limitless.
#15, A corolary of what you’ve said is that the best countries to live in are the ones where most people belong to the middle class.
There was absolutely nothing altruistic about Ford.
Nope, he was just a good old fashioned fascist. Like many of the fascists of his generation, he thought Hitler had some great ideas. When the Germans lost WWII, they had to do what they could to implement fascism here without help from the nazis. They were fairly successful at it, all in all.
“I’ve got mine. Fuck you.”
A man down here owns 85% of the nation, the rest of the jewish community here doesn’t like to be associated with him.
#21 – “down here” – where?
And everyone is leaving out that a damned good portion of the wealth held by the top 10% is inherited. That is to say, distributed, not earned.
Oh, and SN, please recall that slavery was quite legal in the United States at one time. It was fine for George Washington. Is profiting from human slavery okay with you??
There is a huge difference between earning something because you actually expended some effort (mental or physical) for it and earning something just because you were born to the right parents. I will second the notion that in addition to the rest, the capacity to increase wealth increases exponentially, as does the capacity to lose it.
DAve
I’m no expert on Ford… But his ethos did include “making the best product possible, at the lowest possible cost, and paying the highest wages possible.”
Which is exactly what we do today… except the parts about quality and wages…
The fact is, the ethic of “hard work pays off” is a bullshit lie. Wealth exploits labor almost every time. The hardest working people I know are also the poorest. The laziest and sleaziest people I know are the wealthiest.
There will be exceptions, of course… And Bill “The Next President Of The United States” Gates is one of them.
Miguel, that’s nonsense. Henry Ford invented the middle class? There’s always been a middle class.
Also, it’s better to increase K, because that means you now have more money available for labor to get a hold of, especially if their union bosses can negotiate well.
Not surprising. Poor countries have land that would be very valuable if the countries could manage their economies propoerly. Instead the land is worthless, so of course all the wealth is in other countries. The bottom 50% probably accounts for 0 assets anyways.
I got a job with a company that has an awesome retirement program but the salary levels are lower than the median for most of the job positions. How companies can get away with this, I’ll never understand, but it beats looking forever for a job with people you like to work with. I guess I won’t be wealthy working in the tech industry. sigh
I loved reading Richie Rich growing up. Maybe I’ll start reading it again and it’ll be a band aid to cover the gap in my below median salary. Life can be cruel. As soon as I get a good offer somewhere, I would be stuck working with a bunch of assholes. Murphy’s Law.
SN: “If he did create the middle class, he did it so the market of car buyers would be larger, which would increase his over all profit.”
Before we canonize Henry Ford as Saint, remember that the guy was not only a Nazi Sympathizer but a traitor. Colaborating with the enemy before and during WWII.
http://tinyurl.com/cn9yq
“The relationship of Ford and GM to the Nazi regime goes back to the 1920s and 1930s, when the American car companies competed against each other for access to the lucrative German market. Hitler was an admirer of American mass production techniques and an avid reader of the antisemitic tracts penned by Henry Ford. “I regard Henry Ford as my inspiration,” Hitler told a Detroit News reporter two years before becoming the German chancellor in 1933, explaining why he kept a life-size portrait of the American automaker next to his desk”.
We need more of this type?
“…Before we canonize Henry Ford as Saint, remember that the guy was not only a Nazi Sympathizer but a traitor…”
Because the Allies won the war – if they had not of won, or hadn’t of won with such sweeping victory, then Ford would indeed be cannonized as a Saint. Bow, Kneel, Pray.
Keep in mind that capitalism, such as we know it today, was built upon the stage that was set by individuals such as Ford.
#25, No, no, no… First, I didn’t use the word “invent”, but “create”. Second, of course he didn’t invent it. Well, instead of trying to explain you what I meant, I’ll give you a link:
http://www.time.com/time/time100/builder/profile/ford.html
You know… what was brilliant about Ford was that he practiced a win-win way of capitalism, instead of a win-loose where either the boss is winning more and the employees are loosing and vice-versa.
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. 😉