Oxfam’s crystal ball confirmed: The top 1 % now own over half of the world’s wealth | Oxfam America The Politics of Poverty Blog

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Oxfam’s crystal ball confirmed: The top 1 % now own over half of the world’s wealth

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A shantytown in São Paulo, Brazil, borders the much more affluent Morumbi district. Tuca Vieira / Oxfam

The world is experiencing an immense problem with wealth inequality, and it’s not just a problem of economics, it’s a problem of power.

This blog was co-authored by Stephanie Fontana, a Research Intern at Oxfam America.

The world’s richest 1 percent now own more wealth than all of the bottom 99 percent combined. This finding comes from Credit Suisse’s Global Wealth Report for 2015, released last week. Last year, Credit Suisse found the richest 1 percent of adults owned 48 percent of global wealth. According to the new report, the top 1 percent now hold 50.4 percent of all the world’s household wealth.

Credit Suisse’s findings are in line with Oxfam’s prediction that global wealth inequality is only becoming greater. Last January, we predicted that the richest 1 percent would capture more than half of all household wealth by 2016. It looks like our prediction was right, but that we were too conservative, since it has happened a year early. Alas, our forecast was confirmed, but it’s nothing to celebrate.

Share of global wealth of the top 1% and bottom 99% respectively; Credit Suisse data available 2000–2015

When you look at the very top of the global wealth pyramid, the situation is much more alarming. When we first calculated in January 2014, the 85 richest individuals own more wealth than the poorest half of the planet. This trend has also worsened since that time. Last January, it was down to 80 people.

The implications of rising extreme wealth inequality are greatly worrying. The highly unbalanced concentration of economic resources in the hands of fewer and fewer people impacts social stability within countries and threatens security on a global scale. It makes poverty reduction harder, threatens political inclusion, and compounds other inequalities.

In many ways, today’s problem of rising wealth inequality reflects who wields power across societies. For instance, multinational corporations and the very rich are able to shift their wealth to low tax jurisdictions and often pay lower rates on their wealth at home than average citizens pay on their hard-earned incomes.

In this respect, the real challenge is how average people can take back political power from wealthy elites who have the resources to rig the economic game in their favor. The rigging is evident in the ways elites are able to undermine democracy and equal representation by infusing huge amounts of cash into the political process. It’s also clear in the influence elites use to ‘capture’ the marketplace of ideas, perpetuating myths like trickle-down policies helping the poor and austerity measures are “responsible” – both which have been consistently disproven.

Findings such as Credit Suisse’s are awaking wide publics to the huge economic disparities that define the modern world. And people are increasingly calling attention to government policies that only work for the wealthy. For instance, in a recent Pew survey respondents from 34 emerging and developing economies indicated corruption was the second biggest problem facing their country. The links between corruption, crony capitalism and inequality aren’t hard to find. A study of India’s new billionaires found that nearly half made their fortunes in ‘rent thick’ sectors, meaning their wealth depended on exclusive government giveaways (such as permission to build on public lands or control over the telecom spectrum). Corruption and bribery are often behind such exclusive privileges.

What’s encouraging is that citizens from rich and poor countries are pushing back. There seems to be a global zeitgeist that capitalism has descended from being about competition and innovation to monopoly and corporatism. The latter are responsible for the massive inequalities we are grappling with today, especially the unfathomable concentration of the world’s wealth among an incredibly small number of people. The Credit Suisse figures empower citizens to hold governments to account for today’s inequalities with the cold, hard data to back up the injustices of poverty and power we see every day.

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  1. suelea5@yahoo.com'Susan Lea

    In the US, we have the US Supreme Court to thank for the extensive power grab made possible by the Citizen’s United case where the court gave money more power than actual speech. The Court made bribery totally legal. In the US, we have all the prostitutes working as politicians to thank for being no more than bought and paid for puppets, and this goes all the way to the White House. In the US, we have the tens of millions of illegal immigrants every year for the past 25 years to thank for the vast diversity and poverty that provides cheap labor to the industries that feed from it. In the US, we have the 7 Million foreigners allowed into the US every year to take technology jobs from Americans, especially American college graduates.

    Reply
    1. Heather Schommer

      Hi Susan, thanks for your comment. The influence of money on politics is troubling, including in the United States after the Citizens United decision in 2010. It is important to flag the connection between money and political power in the context of rapidly increasing wealth inequality. As the wealthiest few come to hold a greater and greater percentage of global wealth, they can further rig the political system and economic policies in their favor. Drawing more attention to the ways inequality undermines democracy will hopefully increase pressure to curb this trend. – Stephanie Fontana

      Reply
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  4. 04gzzegewl@outlook.com'Tomasz

    To be fair, nytimes.com did feautre the article more prominently at times during the day. I remember seeing it occupying the position that Romney Beating Obama holds in your screen shot.

    Reply
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