1% of the world population own 82% of the wealth

[Cyclone]

I'm not mixing anything up. I take your point as well meant but I've held back from splitting that particular hair because it would blow the mind of some people even before we start talking about debt etc.

 

It's not splitting hairs at all, wealth and income are really quite different.

 

A 20 year old (lets say a very lucky one) working for google and earning £1,000,000 a year isn't wealthy. Not on day one of employment, or day 30.

They are well into the top 1% of income in the UK, but in terms of wealth, they have practically nothing.

 

A pensioner on a moderate pension of 20,000 a year isn't even in the top decile in the UK (they're still close to top 1% worldwide), in income terms.

But they might well be sitting in a house worth £1,000,000 in London, paid for years ago.

They have far more wealth than the 20 year old (although he's in a position to surpass them within a few years if he's sensible).

 

And a more average couple in Sheffield in a 300k house with a 200k mortgage and a household income of 50k. Well into the top 1% income wise (globally), but they have only 100k in wealth (plus maybe a bit more in a car and a few bits and bobs, savings, pension pot, etc).

[Cyclone]

I presume not many of us are in the same league as the trumps or the rothschilds?

 

No, but there are billions of people on the planet who don't own a single thing.

So you're doing a lot better than they are if you own a property.

 

I guess in the UK, for the majority of people the assets to consider would be property (minus mortgage), pension pot, savings and investments.

[Cyclone]

I don't see how the distinction between wealth and income is pointless, when the thread is supposed to be about wealth, but several people were talking about income.

They're different things. Best to establish that clearly and early.

[mort]

Post(s) have been removed because they could be considered to breach our Terms of Service or Forum Rules.

 

 

 

The personal attacks can cease now . If it starts up again then I will be issuing suspensions.

[AmberLeaf]

No, not in the 1 percent.

[hauxwell]

I would like a bit more money, but it makes me wonder if people who were born with a silver spoon appreciate the small things.

My parents were working class and it makes me appreciate how much they tried to help me in life and the sacrifices they had to make.

[El Cid]

Bit hard to predict correctly but it does give food for thought

 

class war not race war

 

With inflation at 3% and wages at 2.5%; assuming that the wage rate does not include the assets of the rich.

 

That means the average wage earners are getting poorer by £125 per year.

[ENG601PM]

For anyone who actually cares about the subject more than their virtue signalling, have a read of this article published today.

 

 

Oxfam is entitled to its own opinions. But not its own facts

 

Credit to Oxfam’s communications team. Each year, riding on the coattails of the jamboree in Davos, they manage to make a huge splash about global wealth inequality.

 

And every year, it is pointed that, as Tim Worstall explained on CapX last January, wealth is not some fixed pie. It is usually accumulated through entrepreneurial activity that fulfils wants and needs, enhancing global welfare. Sadly, most readers who pay only a passing interest in the story will miss this nuance and receive claims such as “82 per cent of all wealth created in the last year went to the top 1 per cent” with the shock they are designed to trigger.

 

Oxfam is, of course, a development charity. Their implicit message, amplified through major broadcasting outlets such as the BBC, is that the wealth of global rich causes the poverty of the poor. But where exactly is the evidence that more interventionist government is the way to reduce global poverty? In fact, recent economic history suggests the opposite: global poverty has plummeted as major countries have liberalised and ceased trying to “manage” their economies in the way Oxfam wants.

 

It would bad enough if Oxfam’s ideological bias was blinding the organisation to what works in the fight against poverty. But the charity also appears to be playing fast and loose with the facts. Take just one of the claims in their report, subsequently republished on the BBC website. Oxfam makes the astonishing claim that “two-thirds of billionaires’ wealth is the product of inheritance, monopoly and cronyism”. Given previous assessments by Forbes, Wealth-X and others have found that around 60 per cent of American billionaires are “self-made,” this seems a particularly striking statistic, in which monopolies and cronyism are doing a lot of heavy lifting.

 

Intrigued by this finding, Sam Dumitriu of the Adam Smith Institute sought out its source. He found that the methodology was devised in an Oxfam discussion paper called Extreme Wealth Is Not Merited by Didier Jacobs. Overall, that study concludes that 19 per cent of wealth arises from monopolies, with the rest of the 65 per cent coming from inheritance or cronyism. To calculate the share coming from inheritances, he used Forbes data, which chalks up all wealth for individuals who inherited fortunes as “inherited wealth”, regardless of whether that wealth has grown substantially since the inheritance. This figure, by definition, ignores any extra wealth generated by that inheritance and so is hardly representative of genuine passive inheritance.

 

The cronyism figure is more speculative still. It includes “wealth mainly acquired in a corruption-prone country and state-dependent industry (high presumption of cronyism)” or “wealth mainly acquired in the mining, oil and gas industry.” Again, while in many countries these industries do depend on state favours and are prone to crony capitalism, it seems a little much to suggest that all wealth in these industries in certain countries can be recorded as wealth driven by cronyism.

 

Oxfam’s real agenda becomes clear, though, when we look at their methodology for the monopoly portion of the claim. As Dumitru has described in detail, Jacobs first defines monopoly to include any industry with “network effects.” By construction then, firms such as Facebook and Google would be monopolists, even though their existence has been overwhelmingly beneficial for consumers. He then makes the same intellectual leap again, asserting that all wealth coming from the IT industry should be recorded as “monopoly”. Not content with this intellectual bankruptcy, this same blanket approach is applied to finance, health care, legal industries and wealth acquired as a CEO of a company, if the billionaire neither founded nor inherited the business.

 

To claim this is shoddy methodology which hugely overestimates wealth acquired by “bad” means is a spectacular understatement. Again and again, the mere possibility of cronyism or a theoretical argument for market failure in an industry is taken to prove that all billionaire wealth in that industry is ill-gained. That this kind of report is being taken seriously and propagated by our state broadcaster is a travesty.

[I1L2T3]

We might as well have been taken over by the Tripods after all.

 

---------- Post added 23-01-2018 at 19:22 ----------

 

For anyone who actually cares about the subject more than their virtue signalling, have a read of this article published today.

 

 

Oxfam is entitled to its own opinions. But not its own facts

 

Credit to Oxfam’s communications team. Each year, riding on the coattails of the jamboree in Davos, they manage to make a huge splash about global wealth inequality.

 

And every year, it is pointed that, as Tim Worstall explained on CapX last January, wealth is not some fixed pie. It is usually accumulated through entrepreneurial activity that fulfils wants and needs, enhancing global welfare. Sadly, most readers who pay only a passing interest in the story will miss this nuance and receive claims such as “82 per cent of all wealth created in the last year went to the top 1 per cent” with the shock they are designed to trigger.

 

Oxfam is, of course, a development charity. Their implicit message, amplified through major broadcasting outlets such as the BBC, is that the wealth of global rich causes the poverty of the poor. But where exactly is the evidence that more interventionist government is the way to reduce global poverty? In fact, recent economic history suggests the opposite: global poverty has plummeted as major countries have liberalised and ceased trying to “manage” their economies in the way Oxfam wants.

 

It would bad enough if Oxfam’s ideological bias was blinding the organisation to what works in the fight against poverty. But the charity also appears to be playing fast and loose with the facts. Take just one of the claims in their report, subsequently republished on the BBC website. Oxfam makes the astonishing claim that “two-thirds of billionaires’ wealth is the product of inheritance, monopoly and cronyism”. Given previous assessments by Forbes, Wealth-X and others have found that around 60 per cent of American billionaires are “self-made,” this seems a particularly striking statistic, in which monopolies and cronyism are doing a lot of heavy lifting.

 

Intrigued by this finding, Sam Dumitriu of the Adam Smith Institute sought out its source. He found that the methodology was devised in an Oxfam discussion paper called Extreme Wealth Is Not Merited by Didier Jacobs. Overall, that study concludes that 19 per cent of wealth arises from monopolies, with the rest of the 65 per cent coming from inheritance or cronyism. To calculate the share coming from inheritances, he used Forbes data, which chalks up all wealth for individuals who inherited fortunes as “inherited wealth”, regardless of whether that wealth has grown substantially since the inheritance. This figure, by definition, ignores any extra wealth generated by that inheritance and so is hardly representative of genuine passive inheritance.

 

The cronyism figure is more speculative still. It includes “wealth mainly acquired in a corruption-prone country and state-dependent industry (high presumption of cronyism)” or “wealth mainly acquired in the mining, oil and gas industry.” Again, while in many countries these industries do depend on state favours and are prone to crony capitalism, it seems a little much to suggest that all wealth in these industries in certain countries can be recorded as wealth driven by cronyism.

 

Oxfam’s real agenda becomes clear, though, when we look at their methodology for the monopoly portion of the claim. As Dumitru has described in detail, Jacobs first defines monopoly to include any industry with “network effects.” By construction then, firms such as Facebook and Google would be monopolists, even though their existence has been overwhelmingly beneficial for consumers. He then makes the same intellectual leap again, asserting that all wealth coming from the IT industry should be recorded as “monopoly”. Not content with this intellectual bankruptcy, this same blanket approach is applied to finance, health care, legal industries and wealth acquired as a CEO of a company, if the billionaire neither founded nor inherited the business.

 

To claim this is shoddy methodology which hugely overestimates wealth acquired by “bad” means is a spectacular understatement. Again and again, the mere possibility of cronyism or a theoretical argument for market failure in an industry is taken to prove that all billionaire wealth in that industry is ill-gained. That this kind of report is being taken seriously and propagated by our state broadcaster is a travesty.

 

It’s not about Oxfam though is it.

 

It doesn’t matter if Oxfam exists or not.

 

The fact is that there is massive wealth inequality.

[ENG601PM]

The fact is that there is massive wealth inequality.

 

Very much so. The good and bad folk of SF have far too much but they aren't willing to give it up so they pretend to be poor.