> Together, they now own three times more than the poorest half of humanity, or 2.8 billion adults. While the gap has stabilized since the end of the Covid-19 pandemic, it has grown sharply over recent decades: Back in 1995, the 0.001% held "only" twice as much as the poorest half.
Important context: here debt is counted as negative. This means a person with no debt but zero wealth also owns more wealth than bottom 20% or so cumulatively because the debts of people cancel out with others wealth. I think this is misleading.
Yes, people underwrite their own debt with their future labor. Economists don’t count this leverage on future labor as wealth for the poor but for some reason count it for the rich after renaming it to bonds.
while debt might be well marketed as acceptable, I worry that you have allowed yourself to consider it not real: if someone is in debt to the bank for the majority of their homes value of 300k while earning 50k PA and then someone else pays 10k rent PA but earns 40k PA then the person on 40k is still wealthier
Not quite - because the person with the 300k house still owns the house. They have a 300k asset and <300k in debt. (assuming house value didn't crash after they bought it.
Why is it misleading? Debt is negative wealth. Being indebted to the very rich puts you lower than people who at least have nothing. Would it be less misleading for you if they silently ignored bottom 20% of people?
Because of the lifestyle you can live while in debt. If you're driving expensive cars and living in nice houses and eating good food because you pay for it with a credit card, sure, you're in debt, but your life is better than someone that isn't using a credit card to pay for things. Are you going hungry? is the question.
Life in debt is better for now. But it will be way worse in the future if things won't go your way and they most likely won't. There's plenty of people willing to indebt almost everybody, because it's profitable. They sell temporary life above means for future wage slavery.
The question is, do your really believe loan sharks and other lenders are saviors of the poor?
In absence of lenders the issue of poor people would need to be solved systemically. Instead the government abstains and lets poor sell themselves to the highest bidder.
When it comes to calculating wealth in the context of social justice it's absolutely correct to count debt as negative.
Yeah and if you make US median income you’re in the top 0.3% of worldwide income. I don’t see all these people giving away to the bottom 99.7%, hahaha.
I'm not sure that's actually all that relevant. Political power and social class are much more determined by the wealth distribution within a society than they are by the worldwide wealth distribution.
It is and it isn't. Relative wealth within society has consequences regardless of absolute wealth. But globally power is absolutely shaped by wealth distribution as well, as wealth distribution is influenced by power relations too.
If you paid attention then you would notice that the article isn't about income. You can have top 0.3% worldwide income and still have massive student loans to pay off.
Someone who is using all their income to pay off student loans is "giving away".
Someone in a capital city can be living paycheck to paycheck, spending all of their money due to high rent. Meaning they're "giving away", except not to people poorer than them. They're giving away to people richer than them, so the last part is somewhat correct, but it's not funny so why are you laughing?
People with median US income probably gave away more than the people above them because they are losing their purchasing power for decades. What they gave away was immediately scooped up by the very rich, with very little going to people below them.
The question is where this will lead and what, if anything will, should or can be done to put the brakes on this wealth (re-)distribution.
It feels as though over the last few decades, all we have seen is a continuing trend of increasing amounts of wealth being amassed by a smaller and smaller circle of people.
What I find incredibly hard to judge is the point at which the current system leading to this will face violent reorganisation.
We've had feudalism, communism and fascism (and even a few attempts at egalitarian democracies long before that), but they all failed. It is tempting to say they all failed because "they could have never worked". That's easy to say with hindsight.
Once the current experiment implodes, will we all be armchair experts, scoffing at the idea that this could have ever worked also? And if so, why isn't anyone looking at the system and trying to change something?
The other systems usually ended in world wars or violent revolution. Often the ruling class became too comfortable / belligerent, just to then be replaced by the same thing (but maybe with a bit of lag. See the 2nd world war's ending. The middle class thrived up until about the 70s/80s).
Would feudalism have stayed if they'd had the levels of surveillance and AI-powered control we are currently facing? How about communism? Could a planned economy work if that is suddenly super-charged with computers and AI (and the necessary oppression to achieve it)?
Capitalism mixed with strong safeguards ensuring that there is a return for productivity for everyone feels like the best attempt we've made at a system that works for everyone until all the safeguards began being dismantled in the 70s.
Can we return to that system or is regulatory capture irreversible and therefore capitalism will always inevitably lead back to feudalism? And what can be done about it once AI and automation ensure the hegemony can't be touched anymore?
The only thing that can be done is to adjust the tax rate on the rich to the point that their wealth doesn't grow faster than the economy. Then it's going to really be "tide rises all boats".
And yes, for that you have to raise tax all investments. The exactly opposite of what we are doing where investments usually get tax breaks. Will it kill the growth? Only one way to find out. Without AI companies growth is zero already.
> Capitalism mixed with strong safeguards ensuring that there is a return for productivity for everyone feels like the best attempt we've made at a system that works for everyone until all the safeguards began being dismantled in the 70s.
You mean when the US left the gold standard and began a 50 year period of inflationary money printing?
That same inflation is a direct transfer of wealth to the asset class, and a hidden tax on the working class.
> Can we return to that system
Not directly. There is zero chance that the US can return to the gold standard, but they could lose their position as the world currency and be replaced by something that is resistant to inflation.
If you take any ancient or not so ancient civilization or kingdom, all the wealth including land and people's lives belonged to king/imperator which was appointed by god or something like that.
Isn't is exactly the same with the system we have now?
The question we have to ask is about 99% of population of peasants who work 8h a day same as they did in Mesopotamia. Do they have a living standard, healthcare, possibility to have social bonds, possibility to retire. Basically all the things to have a life.
If peasants are able to have all this, I really don't care if some King of ours has 20 trillion or 50 bazillion. In money or in gold.
Peasants worked ~14 hours a day, and they had no healthcare or ability to retire. The reason you work 8 hours a day, have health care, and the ability to retire is because the 19th and 20th centuries saw an unprecedented transfer of wealth and power from the rich to everyone else, which manifested in labor laws, pensions, etc. Unless you can prove otherwise, the default assumption needs to be that consolidation of wealth will lead to all those privileges being erased.
This is very close to saying you wouldn't be against slavery. A slave could be given a decent quality of life. Does that mean slavery is acceptable? A person with 50 bazillion will be able to make you a slave if he wants to.
Slaves are free to think that slavery isn't acceptable. Always have been.
Oh, sure, you aren't a slave. You can't be bought and sold like property. But try going a few months without a paycheck and tell me how that goes. And if you happened to get lucky at some point and escaped wage slavery - you have to be cognizant of the fact that most didn't, and never will, by design.
Modern wage slavery vs whatever they had in Mesopotamia is just details of the perks that the owners decide to hand out.
The question is why we have to work 8h a day to begin with. Or why we don't earn more.
If productivity goes up, something has to give. We either work less or we earn more.
If productivity goes up and we work the same amount of time for the same amount of money (and let's not kid ourselves, if anything we'll end up working more time for less money), the social contract has been broken.
I don't care how rich some outlier becomes, so long as it isn't at the sacrifice of our own self-actualisation. But that is exactly what is (and has been since the 70s) occurring. That trend is unlikely to reverse and it won't lead anywhere good.
So the past was shitty too? You don't care? Okay, well some of us do.
Wealth grants power. Opinions from money matter gain greater reach and traction, and these very quickly turn into influence and power. The current US administration clearly shows how wielding power for your own ends gives you money. It's a toxic cycle that rewards grift instead of work.
You don't care, but this is a serious problem for society because it's a negative aspiration. Don't be good, don't try hard, just be rich or die a peasant.
But the peasants have limited appetites for gruel and work when all they see is grift and abuse. They revolted until old money stopped stopped demanding fealty. Will the new masters learn before we peasants eat the rich?
This has been happening for a very long time. The current administration is just worse and/or more blatant about it than previous ones.
So I agree with your sarcasm and I also agree with the parent comment that the current admin is doing a better job "clearly showing" how this works to everyone.
We don't live in those times anymore. Just because something was a certain way for most of history doesn't mean anything about how we should shape our future.
Eventually that king will demand more and more. Humans are just fundamentally incapable of wielding that much wealth and thus power. And the pattern repeats again and again and again: billionaires actively lobby to destroy the livelihoods of huge swaths of people, destroy the environment, kill jobs or complete companies, do whatever they feel is necessary just so they can get even more money.
Rich people having too much wealth is not necessarily that bad a thing because most of the investment is in productive companies.
It’s not like they are using their wealth on frivolous consumption. Which means redistribution would only change who controls the investment and not the actual consumption patterns of people. Implication is that poor people will consume the same as before after redistribution with perhaps some extra assets. So nothing materially changes other than some security. Poor people will continue to consume the same as before.
Bigger problem is it’s not so clear that redistribution is necessarily a good thing because I feel the people who made money are more likely to make better decisions on their own companies. I don’t know how companies would fare if for example Amazon were redistributed and run like some public company.
> it’s not so clear that redistribution is necessarily a good thing
It's unclear what you mean by "redistribution".
> I feel the people who made money are more likely to make better decisions on their own companies
The majority of publicly-listed companies aren't majority owned by their founders. They're still focused on profits and being competitive.
Instead of "redistribution" the way you imagine it (central planning), what if it was more like a sovereign wealth fund?
The government owns shares in all companies, like an index fund. It acts like a normal institutional investor. In fact I wouldn't mind contracting out the management of these holdings to a sober company like Vanguard. And dividends from these holdings are used to reduce income taxes. Stop penalizing people for working and earning more.
I'm glad you approve of "most of the investment", unfortunately "productive companies" don't do as well as various financial instruments which operate largely on symbolic capital. Private equity, which is only accessible by "rich people", doesn't exactly worry too much about productivity vs leveraged buyouts. It's interesting that you feel so strongly about other people succeeding though. It might seem strange but other people want to succeed too (weirdly it seems all this "productivity" doesn't actually benefit those outside the privileged circles).
1. if we are talking about billionaire's wealth like Bezos, Musk etc - all their wealth is in their own company. you can decide for yourself as to whether these companies are productive or not
2. private equity is a necessary evil that tries to make something out of companies that never had a good future anyway. not a lot of billionaire wealth is in PE. in fact pension firms are one of the largest stakeholders in PE which means the common people have stake in them too. what is your take on that?
3. i want other people to succeed too - our society is built such that any rando can convince YC and get funding.
The problem isn’t necessarily the wealth itself, it’s the power feedback loop that comes with it. It’s the ability to influence the government to pass laws which maintain or amplify your existing wealth, which then increases your influence, etc.
There is nothing “free market” about this. There is no equitable or efficient destitution of resources when this kind of thing happens - and it will always happen, because it is an inevitability.
Government funding for public services does very much improve peoples lives and you cant ignore the current wealth distribution, when you want to tap into "new" sources of income/taxation.
Yes I’m aware but can you describe how redistribution can work in this case? Where does the new money come from? If poor people are spending more now then someone has to spend less. Who is it?
Then don't make claims about facts. You sound like someone trying to say the law treats everyone equally because both Elon Musk and Crazy Joe the homeless guy, are both barred from stealing bread.
i'm willing to talk about absolute as well. lets try to understand how many lives can be saved if billionaires completely cut their frivolous spending. lets be clear that this has to be compared against how much wealth they brought for others and whether they could have done this if the incentive for personal spending did not exist.
assuming billionaires spend .1% of their wealth on frivolous purchases - you would net a one time amount of around 20 billion dollars. you can't do anything with this let alone save poverty. if you could then you can simply ask the government to move 20 billion around. they have tried it and it doesn't work.
Ah, yes. Which is why we should return to tradition of the fiefdoms of yore, where the dukes and sultans famously brought great wealth and prosperity to their indentured servants!
Thank you, omnipotent billionaires, for your generosity and grace!
ah yes, I remember the prime caveat of capitalism where having a few people with all the decision making power at the top causes the wisdom of the crowd to make better micro economic decisions.
There is no functional difference between a handful of plutocrats deciding capital allocation and a handful of monarchs deciding capital allocation. If you are pro capitalism you should be against letting wealth, and the associated decision power, accumulate in a few individuals
there is a meaningful difference between monarch deciding capital allocation and a CEO deciding how to spend money on their own company.
China is a good example - they had something like a monarch allocating capital throughout the country and setting prices. Even they realised it is not scalable.
Important context: here debt is counted as negative. This means a person with no debt but zero wealth also owns more wealth than bottom 20% or so cumulatively because the debts of people cancel out with others wealth. I think this is misleading.
reply