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posted by martyb on Saturday January 27 2018, @12:43PM   Printer-friendly
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.

The 1% grabbed 82% of all wealth created in 2017

More than $8 of every $10 of wealth created last year went to the richest 1%.

That's according to a new report from Oxfam International, which estimates that the bottom 50% of the world's population saw no increase in wealth.

Oxfam says the trend shows that the global economy is skewed in favor of the rich, rewarding wealth instead of work.

"The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system," said Winnie Byanyima, executive director of Oxfam International.


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  • (Score: 1) by khallow on Saturday January 27 2018, @02:11PM (15 children)

    by khallow (3766) Subscriber Badge on Saturday January 27 2018, @02:11PM (#628856) Journal

    More than $8 of every $10 of wealth created last year went to the richest 1%.

    First, why aren't they measuring income, a better measure of wealth creation? Just because you create wealth, doesn't mean that you keep it (such as paying for basic necessities).

    Second, wealth on the high end is of notoriously dubious value. For example, capitalization [blockchain.info] of Bitcoins surged from somewhere around $10-15 billion at the start of 2017 to well over $300 billion by December. That doesn't mean that $300 billion in wealth was created over the time period, but it's the sort of thing that would be treated as wealth creation. It's not clear to me whether Credit Suisse [credit-suisse.com] (the originators of the wealth data) did count Bitcoin and other cryptocurrencies, but their definition of wealth is merely (page 11):

    Notes on concepts and methods

    Net worth , or “wealth”, owned by households, minus their debts. This corresponds to the balance sheet that a household might draw up, listing the items which are owned, and their net value if sold. Private pension fund assets are included, but not entitlements to state pensions. Human capital is excluded altogether, along with assets and debts owned by the state (which cannot easily be assigned to individuals).

    With total wealth creation estimated to be of $8.5 trillion (page 4) for 2017, Bitcoin would actually be a significant contributor, if it is being counted. It didn't stay above $300 billion in capitalization, but I think they could managed 2-3% of all wealth creation of last year.

    Moving on, we have the usual problem with a vast number of people being uninterested or unwilling to keep wealth. If the first thing you do with any wealth you receive is give it all away to friends and family (for example, a common occurrence with lottery winners in the US), then why should we consider your lack of wealth accumulation to be significant?

    Finally, once again, what exactly is wrong with the current level of wealth inequality? It's not even remotely relevant how many zeros someone has in their wealth when it doesn't affect you. You still have just as much trouble feeding yourself, if they're worth a few zeros less.

  • (Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:37PM

    by Anonymous Coward on Saturday January 27 2018, @02:37PM (#628870)

    You still have just as much trouble feeding yourself, if they're worth a few zeros less.

    Not if you get one of those zeros.

  • (Score: 5, Insightful) by AthanasiusKircher on Saturday January 27 2018, @02:41PM (10 children)

    by AthanasiusKircher (5291) on Saturday January 27 2018, @02:41PM (#628873) Journal

    Finally, once again, what exactly is wrong with the current level of wealth inequality? It's not even remotely relevant how many zeros someone has in their wealth when it doesn't affect you.

    This strikes me as incredibly naive. If a company makes X profits, and they decide to distribute those earnings so that executives earn hundreds of times more than the average worker, it most certainly creates a difference compared to if they distributed things so executives only earned on the order of ten times more than the average worker, for example. And this trend toward inequality among salary has worsened significantly over the past 50 years or so. So yes, it CAN significantly affect poorer people when work they do (they are participating in the company too) isn't as valued, so they share less in the profits.

    Note that I am NOT at all arguing for EQUAL distribution. Some workers are clearly worth more to a company than others should be paid more. But there's little evidence that paying a CEO 200 times the average worker rather than 100 times the average worker salary is actually making companies better or more successful or more efficient or whatever. To the contrary, there are studies suggesting the opposite: that CEO pay correlates very little with company performance, and that bonuses or salary increases to lower-level workers are perceived as so much more significant to them that they can create much stronger incentives for improvement.

    Yes, I'm using the example of a company here, but a similar argument can be made for the population of a nation as a whole. As I noted in a post above, wealth provides incentives for innovation, but at some level of concentration it stops benefitting the rest of society. There are arguments to be made that society progresses better overall when quality of life improves for everyone (including the poor and middle classes).

    • (Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:56PM

      by Anonymous Coward on Saturday January 27 2018, @02:56PM (#628877)

      there's little evidence that paying a CEO 200 times the average worker rather than 100 times the average worker salary is actually making companies better

      Male 400M record (43.03s), female 400M record (47.60s), female 4x100M relay team world record (40.82s). No one person is worth 200x average salary and the only way to make that money as an individual should be a result of taking on risk.

    • (Score: 3, Interesting) by Whoever on Saturday January 27 2018, @03:59PM (4 children)

      by Whoever (4524) on Saturday January 27 2018, @03:59PM (#628909) Journal

      There is evidence that better paid CEOs actually perform worse.

      • (Score: 1) by khallow on Saturday January 27 2018, @06:23PM (2 children)

        by khallow (3766) Subscriber Badge on Saturday January 27 2018, @06:23PM (#629017) Journal
        Look at Sulla's reply [soylentnews.org]. The worse performing companies probably have higher risks for their CEOs.
        • (Score: 2) by Whoever on Sunday January 28 2018, @06:35AM (1 child)

          by Whoever (4524) on Sunday January 28 2018, @06:35AM (#629353) Journal

          Perhaps you should look at my comment [soylentnews.org] and Sulla's reply.

          • (Score: 1) by khallow on Sunday January 28 2018, @11:47AM

            by khallow (3766) Subscriber Badge on Sunday January 28 2018, @11:47AM (#629404) Journal
            Well, let us also keep in mind that good companies are more likely to attract talent below normal rates just for the sake of getting in on a good thing, while failing companies are sinking ships that your would-be executive would normally flee from. Yes, illegal activity drives up the costs of hiring new executives who would be in on the crime. But so does any sort of business problem - particularly when those problems could result in mass layoffs and bankruptcy.
      • (Score: 2) by AthanasiusKircher on Saturday January 27 2018, @10:28PM

        by AthanasiusKircher (5291) on Saturday January 27 2018, @10:28PM (#629179) Journal

        Yeah, it's a mixed bag. I've read a few of these studies including ones that claim the negative correlation as you do. My take is that it's mostly random. I'd really like to see a company secretly run by Magic 8 Ball making decisions and offering advice. See how it performs compared to average high-paid CEOs. I'm not hopeful that CEOs will come out ahead.

    • (Score: 2, Informative) by Sulla on Saturday January 27 2018, @05:38PM (2 children)

      by Sulla (5173) on Saturday January 27 2018, @05:38PM (#628988) Journal

      Sarbanes-Oxley allowing criminal prosecution of CEOs would have driven CEO wages up as they want additional pay to make up for the liability. I am not saying SA is bad, but now you are paying for a fall guy instead of an actual leader.

      --
      Ceterum censeo Sinae esse delendam
      • (Score: 2) by Whoever on Sunday January 28 2018, @03:05AM (1 child)

        by Whoever (4524) on Sunday January 28 2018, @03:05AM (#629303) Journal

        So what you are saying is that higher paid CEOs are being paid to break the law?

        If they are not breaking the law, then there is no additional risk.

        • (Score: 1) by Sulla on Sunday January 28 2018, @06:12AM

          by Sulla (5173) on Sunday January 28 2018, @06:12AM (#629349) Journal

          Thats pretty much the assumption that I have always been under.

          --
          Ceterum censeo Sinae esse delendam
    • (Score: 2) by Arik on Sunday January 28 2018, @12:09AM

      by Arik (4543) on Sunday January 28 2018, @12:09AM (#629228) Journal
      "But there's little evidence that paying a CEO 200 times the average worker rather than 100 times the average worker salary is actually making companies better or more successful or more efficient or whatever."

      This is a very good and underappreciated point.

      The sort of naïve libertarian view that one hears at times is that the fact they are able to find work at that pay shows they are worth it, and there is a level of truth to that. We don't have a better definition of value than what we're willing to pay for something. In theory, if companies are overpaying for certain positions this should work itself out in the long run as they fail or improve. In practice this is no free market and some companies are 'too big to fail.'

      "As I noted in a post above, wealth provides incentives for innovation, but at some level of concentration it stops benefitting the rest of society"

      Does it really? I'm not sure that's proven.

      But at any rate, assuming it does, it remains that society benefits very much from respect for private property, and it's virtually impossible to implement any sort of top-down redistribution scheme without brutally violating that principle. So it's clearly better to focus on *preventing* criminal concentration of wealth from occurring than on breaking up existing concentrations (minus proven derivation from criminal activity, of course.)
      --
      If laughter is the best medicine, who are the best doctors?
  • (Score: 3, Insightful) by NotSanguine on Saturday January 27 2018, @07:20PM

    by NotSanguine (285) <NotSanguineNO@SPAMSoylentNews.Org> on Saturday January 27 2018, @07:20PM (#629053) Homepage Journal

    Finally, once again, what exactly is wrong with the current level of wealth inequality? It's not even remotely relevant how many zeros someone has in their wealth when it doesn't affect you. You still have just as much trouble feeding yourself, if they're worth a few zeros less.

    I'd argue that isn't really the case. I'm all for profit-based economies (in most areas, there are a few where that doesn't make a whole lot of sense) and the incentives that such an economy places on innovation, efficiency and productivity are, in general, really good things that are and should be encouraged.

    There comes a point where more money and resources doesn't really add to the quality (whether it be material, emotional or intellectual) of your life and/or your family's.

    What's more, once you've passed that threshold where more money won't improve your life, it's often invested in new and existing ventures which can have a net-positive effect on the economy through innovation, efficiency and productivity. All to the good so far.

    The rub is when more and more resources are funneled into fewer and fewer hands. When the bulk of the resources (85% held by 10% of the population [wikipedia.org]) are in a very few hands, this creates a bottleneck for economic growth and innovation.

    Once you're in that place, adding more money to your coffers won't improve your life or make you more productive. In fact, it removes resources from the economy and negatively impacts growth and innovation. That's where "how many zeros someone has in their wealth" does, in fact impact the ability of others to meet their own needs.

    This has nothing to do with taxes and everything to do with economic resiliency, growth and civilizational maturation. From a short-term (on the order of a generation [isogg.org]) perspective, the concentration of resources isn't necessarily harmful to the economy at large. If this concentration continues, however, it will produce a drag on the economy, as those with more and more resources have their needs and desires sated, while those with few (and fewer) resources, find it difficult to have their desires (and in some cases, even their needs) met.

    From a longer term perspective, this will reduce overall economic activity, as more and more resources sit idle -- once those with most of the resources are sated and those with few resources are less able to contribute to economic activity due to their static or declining level of resources.

    As such, higher wages for those with fewer resources would make for stronger economies, better growth and more innovation and productivity -- without any real impact on the lifestyles and recognition of those with the most resources.

    This isn't a capitalism vs. socialism issue, nor is it a taxation issue. it's a long-term economic growth in a capitalist system issue.

    --
    No, no, you're not thinking; you're just being logical. --Niels Bohr
  • (Score: 2) by Joe Desertrat on Saturday January 27 2018, @11:52PM (1 child)

    by Joe Desertrat (2454) on Saturday January 27 2018, @11:52PM (#629221)

    First, why aren't they measuring income, a better measure of wealth creation? Just because you create wealth, doesn't mean that you keep it (such as paying for basic necessities).

    Wealth is the accumulation of assets beyond the costs required to sustain oneself. If you create 100k in income but it costs that much to sustain oneself over the same period, one is not accumulating wealth. The problem with excess wealth accumulation on the scale we have it today is manifested in two ways. One, by excess withholding of income from the laborers that worked to create the income in the first place. This essentially leaves the vast portion of productive society at, when compared to the wealth accumulators, a subsistence level in that continuing their standard of living requires continued labor producing wealth for the accumulators with only a portion of the fruits of their labors being returned to them as income. Two, by simply manipulating the wealth one has in a manner that creates no real product (and thus no real income for anyone) but still results in an increase in wealth. The second method is increasingly common and is destined to result in the sort of economic crash that hurts everyone. However, the truly productive members of society, the laborers, are usually hurt far worse.

    • (Score: 1) by khallow on Sunday January 28 2018, @03:16AM

      by khallow (3766) Subscriber Badge on Sunday January 28 2018, @03:16AM (#629306) Journal

      Two, by simply manipulating the wealth one has in a manner that creates no real product (and thus no real income for anyone) but still results in an increase in wealth.

      No real product and no real income for anyone? Then why are we counting it as wealth?