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The top one percent could own more than the rest of the world next year
The rising tide of populism is lapping at the feet of billionaires and businesses.
Many of the world’s wealthiest and most influential people will be gathered in the Swiss ski resort of Davos for the World Economic Forum this week; so Oxfam decided it was just the right time to highlight how ridiculously privileged they are.
According to the charity, the world’s richest 1 percent are on course to be wealthier than the remaining 99 percent of the 7.29 billion people on this planet next year. Meanwhile, more than 1 billion people live on less than R14 a day.
At the moment, the 1 percent – who have assets amounting to a minimum of R926 6960, and an average of R29-million – owns 48.2 percent of the world’s wealth. That’s up 44 percent from 2009, the lowest ever proportion, according to the available Credit Suisse data from 2000 onwards.
There’s no guarantee they’ll overtake the rest of us – after all, the 1 percent had 48.7 percent of global wealth at the height of the dot-com bubble at the turn of the millennium.
Nonetheless, the figures are still staggering, which makes it all the harder to argue that absolute poverty, rather than inequality itself, is the only problem. For example, the top 80 billionaires are worth more than R20.9-trillion – more than the poorest half of the world’s population, and a R6.9-trillion increase in the last four years, according to the Oxfam analysis of Forbes data.
There is a good motivational argument for allowing entrepreneurs to hang onto much of their self-made wealth. Moreover, as the right-wing Adam Smith Institute pointed out, ‘rising global wealth inequality… has come with unprecedented declines in global poverty.’
But, would more redistributive policies, and less ridiculous employee-executive pay multiples in the west, really have killed the incredible phenomenon of hundreds of millions of people, particularly in China, joining the middle class?
Quite possibly not – if various research from the International Monetary Fund and the Organisation for Economic Cooperation and Development is anything to go by. The latter pointed out that poorer people tend to spend proportionally more than those who have it all (who needs another yacht anyway) hence why more equal economies tend to be faster-growing.
President Obama’s proposal to raise taxes on the banks and the wealthiest 1 percent in the US to fund middle class tax credits was predictably met with huffing and puffing from his Republican adversaries in Congress today. Redistributive taxation, though, can be a blunt tool with plenty of negative, unintended consequences.
On the other hand, closing the inequality gap through better education and encouraging the creation of higher-paid jobs isn’t easy either – and takes time. Meanwhile, equality of opportunity, which only really holds in the West anyway, is ringing pretty hollow, as the Piketty-esque populists baying at the gates of billionaires and businesses are becoming increasingly restive. The debate is far from over.