Earlier today Paul Krugman plugged the Stone Center, which recently created The GC Wealth Project, a cross-country database of wealth and wealth inequality. I decided to go play with it, but I didn't look much at inequality. I mostly looked at average wealth in half a dozen advanced economies:
As recently as 2012, every country was relatively close to everyone else. Then US wealth suddenly exploded. Today the average person in the US is about 50% wealthier than any other large advanced economy. If this series were extended to 2023 the difference would probably be even larger.
In the US, the richest 10% own 70% of all wealth. This is the third highest inequality among the 43 countries in the database, behind only Russia and South Africa.
The countries with the highest inequality, therefore:
- a country that was an explicit oligarchy under white rule
- a country that turned into a de facto oligarchy
- a country, whose highest court granted rich people unfettered political power through their money and granted corporations personhood, is now controlled largely by oligarchs
Correction: Woke Oligarchs.
Name one.
The people running the corporations. Most notably Larry Fink.
Your implication is that there's an important differentiation between oligarchs. Whereas, a de facto oligarchy, regardless, redirects wealth away from the poor and working class.
So I ask you, what's the use of your bifurcation -- Is it to distinguish the difference between irony and a self-serving system that requires federal intervention?
You can ask any progressive if they think a de facto oligarchy, "woke" or not, is bad, and they'll all say the same thing: There shouldn't be billionaires, period.
"There shouldn't be billionaires, period." That is a strong moral statement. I give you, and the other progressives points for consistency. It doesn't matter who the billionaire is (Bill Gates, Larry Ellison, Jeff Bezos, Elon Musk, or Sergey Brin); no one should have a billion $ or more net worth.
I think it wrongheaded to believe that if people were not allowed to be billionaires, the living standard for the poor and middle class would improve.
Re: Bifurcation
I attempted to make the point that many powerful players in the corporate world are liberal. My experience gave me the notion that liberals tend to think of corporations as conservative. Hell, I used to believe that corporations were conservative.
And that's why we can't afford nice things.
Don't suppose there's a "median wealth" plot?
That was my thought exactly. The chart seems to use the arithmetic mean as the "average" — I would very much like to see the *median*, which would be much more meaningful. The US has a number of individuals whose extraordinary wealth distorts the mean, moving it away from the more meaningful median.
Don't suppose there's a "median wealth" plot?
They're out there. And yes, they show a very different story. I saw an "average vs. median household net worth graph" a few years back. It stuck in my mind because the data were so striking: the US was #2—behind Switzerland, when it comes to average household net worth.
The median figure dropped the US down to, like 28th, behind such powers as Portugal, Taiwan and Greece.
America's political economy—characterized as it is by increased risk-shifting, financialization, debt, etc—simply isn't set up to maximize the well-being (financial or otherwise) of the non-affluent.
Check out Credit Suisse's Global Wealth Reports: https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html
They are quite eye opening. In 2021 in the US, the median wealth was just 16% of the mean wealth. That's more unequal than even Russia (pre invasion). Of course, median Russian wealth is extremely low, and likely even lower now.
Thanks for the link.
Explains a lot. And people will put up with a lot if they have someone to blame--so give them someone to blame, else the rich might be taxed.
Several years ago I ran some numbers on wealth. I don't remember the exact numbers I ran, for example if it was the top 1% or .1% but the group was able to pay off the entirety of our national debt and after doing so would still be worth five times the bottom 50%. And, somehow, we need tax cuts for them job creators....
It's the kind of number that should be devasting when we talk about budget cuts but somehow the left can't math in those debates.
I would love for you to rerun those numbers.
Several years ago I ran some numbers on wealth. I don't remember the exact numbers I ran, for example if it was the top 1% or .1% but the group was able to pay off the entirety of our national debt
Has to be 1%, not 0.1%. Spitballing here, but: The top 1% would be 1.3 million households. To pay of the debt owed to the public, the average net worth of such households would have to be around $19 million. Which sounds do-able (the figure was $11 million as of 2019). So, a bit over $19 million and we've got the requisite remainder.
That's no surprise. We borrowed most of that money to pay for tax cuts for the wealthiest. The Republicans are still at it. That's their current big legislative push, borrow more billions to give to those who have the most.
1.3 million * 19 million = 24 trillion. I am assuming the 19 million average that you cite is net worth. That is all of their assets and money. They would be selling all their possessions. The national debt is almost 32 trillion.
So, let me focus the Mk I eyeballs on the chart at 2012. The lowest was approximately $160,000. The highest was approximately $240,000. So the highest was 50% higher than the lowest, or if you prefer, the lowest was 33% lower than the highest. I don't think that counts as relatively close even in horseshoes or hand grenades.
Average wealth in a place with high inequality is a statistic designed to mislead.
I see some other folks highlighted how different this looks if you use median wealth.
Having lived in both the US and France for long periods, Americans have a much lower quality of life. The difference is pretty shocking considering all the stats that are designed to tell you otherwise. This can probably be applied to most of Europe, but i dont have the experiences to know that for sure.
One killer for the US is how much of our wealth is tied up in our cars and homes which are incredibly unproductive assets.
"As recently as 2012, every country was relatively close to everyone else. Then US wealth suddenly exploded. Today the average person in the US is about 50% wealthier than any other large advanced economy. If this series were extended to 2023 the difference would probably be even larger."
Careful with the conclusions here. First, we do not know how close the countries were before 2000. Second, the Euro is now significantly weaker than it was 10 years ago, and this could account for a significant part of the recent trend.
Also, some more observations about the data. Until 2013, Germany was lower than all other countries, including Italy and Spain which have significantly lower per person GDP. But Germany has doubled its average wealth since 2000 -- it was slightly over 50% of the US in 2000 and is now about 70% of the US.
Also, homeownership probably plays a significant role in the data, due to real estate price and homeownership rates that vary significantly between countries. (See https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate)
Spain and Italy have much higher homeownership rates (about 75%) than the "much richer" Germany and Switzerland (below 50%). Whenever the real estate market is hot, the mediterranean countries suddenly become wealthier than Germany. (Even Greece at some was wealthier on paper due to this.)
Interestingly, many countries in Eastern Europe have homeownership rates above 90%. If their real estate market ever takes off, they will suddenly appear very rich, with no change in the underlying economy.
Anyway, it is complicated. No clear trend.