If we were all billionaires, there would be no need for this website. It is the suspicion that economic inequalities produce political inequalities, which motivates our project. In order to analyze the threat of plutocracy, one needs to understand the reality of economic inequality.
In recent years, economists such as Emmanuel Saez (UC Berkeley), Thomas Piketty (Paris School of Economics) and the late Anthony Atkinson (LSE/Oxford) have established strong data that allows us to identify trends in the evolution of inequalities and to compare them across countries. International organizations like the OECD and NGOs like OXFAM also provide valuable data and analysis. Much of this section draws on their findings. In this TED-talk, Piketty presents the key findings of his much-discussed book Capital in the Twenty-First century (2014):
What is Inequality?
Material inequality in a given society describes the fact that a part of the population gets a higher share of the resources distributed among the population than the rest of the population. In a state of absolute material equality, 20 % of the population would get 20 % of the resources. Inequality is often measured in terms of what people own – wealth – and what people make – income. They are linked: if income is unequally distributed, it will trigger wealth inequality in the future. Wealth tends to be much more concentrated in the hands of the few than income.
Wealth Inequality since the 19th Century (Source)
This graph presents they findings in terms of the evolution of wealth inequality. It shows the share of total wealth held by the richest 10 % and 1 %.
● In both Europe and the US, wealth inequality rose from the beginning of the 19th century to the 20th century. It fell from the 1910s to the 1970s and has been increasing since then.
● Wealth Inequality peaked around 1910, when the 1% richest European residents held about 65% of the wealth. In the US they held around 45 %.
● Europe was more unequal than the US until the 1970s.
● In 2010, wealth inequality in the US was comparable to its 1930s level with the top 1 % holding onto around 35 % of total wealth and the top 10 % earning around 70 % of total wealth. Some researchers question the extent of inequality in the US reported by Piketty and his colleagues,but still find that the top 1% receive around 18% of income and hold 34% of wealth in 2012 (Source).
● In Europe, the top 10 % now holds onto 65 % of the riches, while the top 1 % owns about 25 %.
Wealth inequality: Recent Trends (Source)
● Since 2010, the wealth of the poorest half of the world population has been decreasing while that of the 62 richest individuals has increased.
● Today, they are equivalent.
● Income inequality fell between 1910 and the 1970s in all Anglo-Saxon countries and has been rising since then.
● In 2010, it was back at its 1940s level: the top 1 % earns about 18 % in the US, 15% in the UK, 12 % in Canada and 9% in Australia. (Source)
● Since the 1920s, income inequality is higher in Anglo-Saxon countries than in Europe.
● Income inequality in Europe fell between the 1910s and the 1950s and has been relatively stable since then.
● In 2010 the top 1 % income earners made around 9 % of total income in France, Italy and Spain. In Denmark, it is closer to 6 %. (Source)
Income can be measured via the gross domestic product: the GDP representing annual production in a given year, also represents the sum of income that was shared after production was achieved. The above graph shows how the income of the top 0.1% has evolved compared to the remaining 99.9% in the US. The dollar values have been adjusted so that they can be compared over time. Read the graph carefully! The scale increases so that the data could be represented on one graph
● In the 1960s, on average, someone belonging to the top 0.1% of income earners in the US made between 300 000 dollars more than everybody else.
● This value reached about 3 000 000 in 2010.
● Since the 1980s, the income of the top 0.1 % has been increasing about 7 times faster than that of the rest of the population.(Source)
What about billionaires? (Source)
● The share of global wealth held by billionaires has been increasing since the 90s.
● In 2014, there was 1 billionaire for 100 million adults.
● In 2017, OXFAM calculates that “eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity”.
As Alan Feuer reports in The New York Times, several American billionaires are worried about the growing gap between the super-rich and the rest. Some of them even fear that rising inequalities may lead to violent social unrest – and are preparing themselves “for the crack-up of civilization”, as Evan Osnos documents in The New Yorker.
Here, Anthony Atkinson explains what could be done to reverse the trend of rising inequalities: