I really wish this point was better understood. The rhetoric around the "1%" has completely missed the point, as the vast majority of the 1% is comprised of our doctors, lawyers, small business owners, and other normal successful people. Pitting the poor and working classes against them makes no sense. The real problem is the 0.00000001% of people who control now half the world's wealth [0].
http://fortune.com/2017/01/16/world-richest-men-income-equal... [0]
This is nonsense. Your source compares the wealth of the richest few people to the net worth of the "poorest" 50% of people. Net worth takes into account debt, and it happens that the half of the population with the lowest net worth has a total amount of debt about equal to its total amount of assets, so its total net worth is almost zero. A little more credit card spending, and an eight year old with a nickel in his pocket will have "more wealth than the poorest half". Needless to say this is not anything like half of the world's wealth. The total wealth of individuals is (according to my quick Google search) something like $250 trillion, and that presumably doesn't take into account wealth held by governments.
It's also silly to use net worth to identify the "poorest". Supposedly Donald Trump had a net worth in 1990 of negative 900 million. Your source's calculation would presumably call him the "poorest" person in the world and his presence would subtract $900 million from the wealth of the "poorest half". Is that sensible?
The richest people are very, very rich compared to most individuals. But no individual has much compared to the wealth of the whole world, and I suspect the share is shrinking. In the 19th century JP Morgan bailed out the US government, rather than the other way around!
A more interesting analysis would be to look at the distribution of total lifetime consumption.
Look at it this way -- if a company A has an EBITDA of $20k/year and company B has an EBITDA of $40k/year, the MBAs will have no problem assigning values to these companies. And companies can increase their earnings by going into debt such that their net worth as measured by these calculations can increase. But substitute a human in, and suddenly everybody has negative net worth.
The cash from the loan is an asset for the borrower, until it is presumptively paid to a third party.
The 1% is roughly half a million in yearly income or ten million in net assets (remember to subtract your mortgage from that!). It is true that this goes beyond the ultra wealthy to largely include "doctors, lawyers, small business owners, and other normal successful people", but that doesn't mean most doctors, etc. are in the 1%.
There's an urban legend that 19% of people think they are in the 1%, but the actual poll was that 19% of people think they would be affected by tax cuts affecting the 1%. I'd like to see a study of what percentage of people think they are in the 1% or soon will be, because I bet it's a lot more than 1%.
So you have a term that was meant to vilify the ultra-rich, but makes the average doctor, etc. worry about being vilified.
How many people live in the Valley?
The 1% on the other hand, are rich enough to enjoy outsized political influence, but poor enough to retain some economic anxiety, and be genuinely affected by changes to taxation, inheritance, redistribution, etc. And they are numerous enough to form a corporate whole that acts to protect its own interests.
The 1% are the middle managers of the world's socioeconomic hierarchy. They don't possess great power individually, but their collective power to shape the culture is vast, and has a tendency towards toxic outcomes as they attempt to safeguard what wealth they have managed to accumulate.
Even if we could confiscate his and all similar holders of wealth money we could not pay for government for even a year.
the realization we must have is that this amount of personal wealth is not harming the worlds poor and it really doesn't harm those of us here.
the world has such incredible poverty because of government. Government that does not respect property rights, rights to one's self, nor the product of their work.
What makes capitalist societies work is property rights and it is that incentive which provides the stable society many of us enjoy.
If you want to raise the poorest in the world up you do so by encouraging their governments to respect the property rights of even their weakest citizen. To respect the earnings of those who work.
Some Uncommon Knowledge video of Thomas Sowell makes an interesting point about how the real question is not to ask why people are poor, that's the default position he claims. The real question to ask is why is there wealth in the first place.
I'm as pro-capitalist, pro-democracy, pro-make-a-fuck-ton-of-money as you can get... But even I am blown away by the wealth of some of the top billionaires.
Just think about the good that some of that could do for the country. Put it into science. Put it into social welfare systems. I don't care, put it into something!
I don't know what the solution is. The naive comment would be if you make above X billion everything else goes to some re-distribution fund... Obviously that will turn a lot of people off. But the point is, I just don't think anybody needs that kind of wealth.
"All the good you can do with this tons of money" Money at that scale is power. Bezos could give away a little each year to a science institut for example, but it would not work for short term stuff. You are not going to discover 1000x more stuff tomorrow by pouring billions in science. But for a long term goal yes Jeff Bezos could nudge more people getting into science if he wanted that. And that's what he might do for Space exploration / technologies (at least that's what he publicly says) and that is called... Investment.
So which investment is the best ? Who knows ? Who has the power to decide it ?
PS : not spending its own money is NOT throwing it away, it increase power purchase of all others people that uses the same money. Spending it increases money circulation and can cause inflation for example.
PS2 : "I just don't think anybody needs that kind of wealth" who said anyone was given money because he "needed" it ? We don't live in a communism utopia
What makes you think gates and bezos aren't corrupt?
Capitalism: pro competition, pro markets. Corporatism: anti-competition, Freedom Markets™.
Conflating the two is the biggest failing of modern leftists, such as myself. We can hardly criticize, mitigate our modern winner-takes-all economy until we stop defending it.
They could've done something for the country. They could've put $1,046.00 into science. Cut a $1,046.00 check to a social welfare system. Yet they chose to exchange $1,046.00 for a single share of Amazon.com.
It already has. Bezos has created value for millions of people and businesses, generated huge tax receipts and completely revolutionarised entire industries.
https://www.gatesfoundation.org/
http://www.bezosfamilyfoundation.org/ <- Jeff's parents, not Jeff
> "we are impatient optimists working to reduce inequity"
Ironic considering that these foundations literally exist because of the consolidation of wealth and resources, aka, inequity.
And if the global trend of further wealth consolidation is any indicator, they're not succeeding.
People with this level of money are equivalent to kings or other monarchs. On some level it really isn't their money at the same time. When he dies, it's not his money any more.
Say you have $1M. Then Donald Trump might have 200 times more than you, or $200 M (they were saying he's not really a billionaire). But Bill Gates has 200 times more than him -- $40 B. (And apparently now Bill Gates has $90 B).
And I guess you could extend it further say that an average young person working in retail might have $5K in savings, which is 200x less than the Silicon Valley employee.
So people think that there are three classes: poor, middle, class, rich (Donald Trump). But there is actually another full class above him: the super-rich like Bill Gates.
Doubtful. Even if you assume a minimum wage of $10, which is well above the Federal minimum (but slightly below some state minimums), that's 500 hours of wages. That's almost three months of 40 hours work weeks where you put every penny into savings. Before taxes. Before living expenses. The vast majority of Americans have far less than $5k in their savings account.[1]
1: http://www.cnbc.com/2016/10/03/how-much-americans-at-every-a...
Now I've spent a lot of time daydreaming about how awesome it would be to be rich. One day I added up what it would take to have the most obscene, ridiculously opulent lifestyle imaginable...private jets, presidential suites, chauffers, megayachts, basically anything and everything imaginable that I would possibly want if money were no object. I never surpassed a requirement for more than $20M per year. $20M per day is ludicrous...and that's just what it would take for him to not get any richer.
Then you grossly underestimated your requirement. The first Google result on the subject of megayachts, for example, tells me that they cost tens or hundreds of millions to build (the record is 600M) and that their yearly upkeep can be on the order of 10% their build cost.
So that alone would eat a good chunk of your 20M. Now consider how much more you could spend on palaces (plural, because they don't move) than you could on your humble dinghy.
[1] https://en.wikipedia.org/wiki/The_Culture#Economy
[2] http://angry-economist.russnelson.com/money-is-not-a-sign-of...
Democratize their companies. control them by employment or by employee or government committee if they are too big. Make the big corporations work for the benefit of everyone, rather than shareholders and owners.
For what it's worth US laready has large ownership stakes in such corporations as AIG, Amtrak, USPS, Freddie Mac, etc.
Great analogy btw. I might have to borrow it to explain it to other people.
And yet, there was a time when the richest were significantly richer than they are now.
Adjusted for inflation, Rockefeller was worth at least four times as much as Bezos is.
Honest question - can anyone refute the claim that it is currently not the point in time when the largest share of wealth is in the smallest number of hands?
($340B in 2017 USD)
The $340 billion figure is from a semi-nonsensical calculation that is popular because it yields eye-popping large numbers. They figured Rockefeller's assets equaled 1.5% of the US GDP at the time. And 1.5% of the current GDP would be about $340 billion dollars. But assets as a fraction of GDP is not very meaningful. It's like saying if I moved to a country with a small GDP such as Samoa I'd be richer than Bill Gates.
In effect, the $340B Rockefeller number is big because the US economy has grown. The worst part is many websites often confuse the scaled-GDP numbers with constant-dollar numbers, resulting in much confusion.
They can though. wanna buy a car for 150k, sell off some shares, buy a car. right?
Honestly, though, even the interest on whatever liquid assets they do have probably yields more than my current savings total.
I guessed all of these values, I might do the actual math at some point, but not right now.
Our culture tells us that our motivation to do better (or more) work should be the power to dominate others (being rich is just that).
And that's just what humanity will have to change in the coming years: Change our culture to replace the incentive of domination with humane incentives and values.
Give a person a meter and they'll take a kilometer. Ehh?
Just take the use of dB in acoustics or the magnitude system in astronomy.
The root of the magnitude system in astronomy can be found in the logarithmic nature of the eye as a sensor as well.
It's funny because I first imagined the seeing/hearing comment as pitch & color, rather than volume & brightness. Pitch certainly feels somehow naturally logarithmic. But we can hear linear differences as easily as we can hear logarithmic differences. Within certain ranges, of course.
Citation needed. I've never heard of human senses being anything else than logarithmic.
So, I think no citations are needed to explain basic absolute limits and the simple fact that logarithmic perception is only valid "within certain ranges." But, since you asked for citations, here are some starting points for understanding lightness perception, and how it's not quite logarithmic even in the middle of the valid range.
http://www.telescope-optics.net/eye_intensity_response.htm
"All this only scratches the surface of the complexities of eye response to light intensity, but should illustrate well that the common notion of it being described as simply logarithmic is oversimplification, to say the least."
https://en.wikipedia.org/wiki/Lightness
"At first glance, you might approximate the lightness function by a cube root, an approximation that is found in much of the technical literature. However, the linear segment near black is significant, and so the 116 and 16 coefficients. The best-fit pure power function has an exponent of about 0.42, far from 1/3."
https://en.wikipedia.org/wiki/Weber%E2%80%93Fechner_law#Visi...
"The eye senses brightness approximately logarithmically over a moderate range (but more like a power law over a wider range)"
https://en.wikipedia.org/wiki/Absolute_threshold
"For white light, the absolute sensitivity found was 5.9 x 10−14 watts / steradian-cm2"
https://en.wikipedia.org/wiki/Orders_of_magnitude_(luminance...
"100 Mcd/m2 Possible retinal damage[1]"
https://www.ecse.rpi.edu/~schubert/Light-Emitting-Diodes-dot...
see page 276, Fig. 16.2 "Approximate ranges of of vision regimes"
http://retina.anatomy.upenn.edu/~rob/lance/units_photometric...
See "Light levels important to vision"
The goal of the comment you replied to, however, is to demonstrate the vastness that orders of magnitude have. It's to compare average people to super-rich, and get a stronger intuitive sense of how much wealthier a billionaire is than the average person, and how much wealthier Bezos is than the average billionaire. Using a log scale doesn't help that goal at all, a log scale actively compresses the range and prevents intuitive physical comparisons & analogies.
1) First stages of the visualization would show people from country where the money measure doesn't mean anything at all
2) Then powers of ten later it show how disparately "rich" people are in countries where this measure has a little more significance
3) Powers of tens later you see big companies and rich billionnaires like in this article == Money Is Power (Jeff Bezos is not going to buy one billion baguette de pain tomorrow I can assure you that)
4) Then of course you see higher in the scale huge aggregate of macro economics stuff which no one really have control over or understands
The point here isn't to say that Bezos will buy a billion baguettes, but it is show to show that he could buy 90 billion baguettes and feed every single person on the planet several times over. There are only a few people who could do this. And, of course, they won't.
EDIT: I meant simply that 90B baguettes would go as far as they go, and 90B baguettes is several times more than 7B people. I was only demonstrating magnitudes in the context of a thread about magnitudes. I am not suggesting that either baguettes or Bezos are a permanent and global solution to world hunger & politics, but either way I can't afford to buy very many people baguettes.
Because, even if they did, buying baguettes won't fees the hungry; acquiring food isn't the hard/expensive part, distributing it is. And it's not hard in a “We know how to make it work but have insufficient funds dedicated” way, but in a “we don't know how to do it effectively at any cost” way.
Jeff Bezos CANNOT solve world issues like this (food crisis for our example). This is so silly I don't know even where to start. Theses issues were not solved in our countries thanks to the Jeff Bezos of 1817... What makes you think that giving 1 / 10 / 100 billion dollars would feed Africa for example ? Describe to me all the steps I'm very interested
You may notice that comparing things across panels is more difficult than the effortless comparison of two categories within a single panel. It's easy to understand conceptually when you study this map that the insurance industry in the US is a lot more money than Kate Middleton's wedding dress. But you don't see visually and immediately how much more money, because they're not side-by-side in the same units.
On a log scale, plotting everyone's income puts Bezos and Gates side by side with very little visible difference, while the difference between someone who makes 20k a year and someone who makes 10k a year has a larger log difference. That emphasizes the ratio of difference, rather than the absolute difference. The log scale completely hides the fact that you could pay 75,000 people 20k a year with only the amount extra that Bezos has over Gates.
Your suggestion to use log scales hides that fact, and shows the ratio of $20k to $10k as visually larger than the ratio between $92.3B and $90.8B. That is why log scales are counter intuitive and not great for physical analogies. You asked, I answered.
You could spend 1 million dollars a day for 270 years before you ran out.
Here's what I've come up with to visualize wealth in the United States. Suppose you start counting, going up by 1 million dollars every second, and people sit down when you reach their net worth. Most people will sit down immediately. After about 9 seconds, people in the "1%" will start sitting down. Near the 17 minute mark, billionaires would start sitting down. Donald Trump would sit down just before the hour mark. A day later - an hour and 10 minutes into the second day of billionaires sitting down - Bill Gates would sit, followed by Jeff Bezos just three minutes later.
The point of this is there's a huge range of billionaires (analogous to comparing 17 minutes to a day). The 1% hardly even registers on this scale (a few seconds). (I should also mention that there should be huge error bars on reported net worth numbers.)