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December 5, 2006

The Rich ARE Richer

-- by Dave Johnson

Richest 2% hold half the world’s assets,

Personal wealth is distributed so unevenly across the world that the richest two per cent of adults own more than 50 per cent of the world’s assets while the poorest half hold only 1 per cent of wealth.
You often hear that it wouldn't matter if the wealth of the rich were divided up - there would still be poor people. That's not the case:
So much of the world’s wealth is concentrated in few hands that if all the world’s wealth was distributed evenly, each person would have $20,500 of assets to use.
We're talking everyone IN THE WORLD here. Every single poor, starving African, Indian and everyone else would be relatively rich if only the top few percent would settle for only millions.

Should the people of the world do something about this? Discuss.

Posted by Dave Johnson at December 5, 2006 7:25 PM

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Comments

All of these points are irrelevant. Actually redistributing wealth in this way would stop virtually all wealth creation (in fact, it would destroy wealth because it would cause it to be spent faster).

The fact is, right now is the best period ever in human history, in terms of lifting people out of poverty. As we speak, hundreds of millions of Chinese and Indians are moving from peasantry to the middle class. This is thanks to free trade and virtually cost-free communications via telephone and the internet. (Read Tom Friedman's "The Earth is Flat")

I would love the progress in eliminating poverty to go even faster. However, other than busting down trade barriers, there are no good ideas. The idea presented above is a terrible one and would reverse the wonderful progress that we are making today.

Posted by: jaymuntz [TypeKey Profile Page] at December 5, 2006 8:58 PM

Ah yes -- here we got a Friedmanite "greed is good" affirmation. The only reason contemporary societies survive is that some people within them persist in upholding pre-capitalist virtues like solidarity and sharing. And if we, globally, don't figure out some post-capitalist virtues that restore community and commity, we can forget the planet surviving.

Posted by: janinsanfran [TypeKey Profile Page] at December 6, 2006 6:37 AM

Mmm.. I don't believe "greed is good." I do believe that people are primarily self-interested, and that economic systems that are organized to harness that self-interest for the common good are best. (BTW janinsanfran - Was the "Friedmanite" comment about Milton or Tom? I mentioned Tom, but I think you're referring to Milton).

But anyway, does redistributing wealth work? Where has any redistribution scheme ever had a sustainable positive affect on the rate or severity of poverty? It sounds neat and easy to take from the rich and give to the poor. However, the poor end up still being poor, and the rich end up having to start all over again, or they don't even bother with that because they believe it will all be confiscated once again. It doesn't achieve the objective of reducing poverty. It doesn't work!

Posted by: jaymuntz [TypeKey Profile Page] at December 6, 2006 8:10 PM

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