I learned recently about a new website, inequality.org, which bills itself as a project of the Institute for Policy Studies (a think tank in Washington, D.C. — we obviously need more D.C. think tanks). Inequality, specifically of the wealth and income type, is a trend that has been underway for decades. One has to be living under a rock not to have noticed by now where trends are pointed. The site linked to above no doubt contains quite a lot of information and resources, but I admit I don’t have the patience to wade in only to discover needless details of what is already well known. So where, in fact, has all the money gone? OxFam International provides a disturbing snapshot:
The Oxfam report An Economy for the 1%, shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent. This has occurred despite the global population increasing by around 400 million people during that period. Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows how women are disproportionately affected by inequality — of the current ‘62’, 53 are men and just nine are women.
The title of the Oxfam report is misleading, of course, because the numbers don’t support the populist reference to the 1%. In 2010, when the estimated midyear world population was 6,916,183,482, (6.9 billion, if you prefer) the number of people who accounted for half of the world’s wealth was 388, or 0.000000056% (that’s seven zeroes before the 56). In 2016, with an estimated midyear world population of 7,404,976,783 (or 7.4 billion), the now 62 people who account for half the world’s wealth (assuming the number 62 doesn’t diminish further between now and July 1) is 0.0000000084% (that’s eight zeroes before the 84). The absurdity of so few people having consolidated so much wealth, a trend that continued (probably accelerated) from 2010 to 2016, cannot be lost on any thinking person. Those dates are relatively arbitrary for purposes of comparison.
To say that economic systems are rigged in favor of the few is a statement of the obvious. No rational argument could be made that the value of social contribution or labor of a mere 62 people is equivalent to half the world’s population. Nor can it be reasonably argued that such large pools of money, stagnant or otherwise, are good for economic systems that require both liquidity and diversity. Is anything being done to dismantle this entrenched and deepening inequality? None that I can observe within the context of geopolitics or economics. However, considering how convinced I am that our economic arrangements will fail utterly when the house of cards we’ve built shakes itself apart, not least because so much of it is based on growth fueled by cheap energy that has been losing ROI for over a century, I would argue that what we are doing to ourselves by doing essentially nothing ought to crash things back to where the value of fiat currency is nothing. Poof: no more 1%, no more 0.000000056%, no more 0.0000000084%.