Home > inequality, Plutonomy, poverty, The Economy > Global economic inequality: the billionaires vs. the penniless

Global economic inequality: the billionaires vs. the penniless

from Deniz Kellecioglu

The top richest individuals of the world have economically recovered from the global financial crises and its aftermath. They are now actually wealthier than five years ago.

A look at the Forbes annual lists of the world’s billionaires reveal that this group had their wealth almost halved between 2008 and 2009. However, this proved to be just a temporary slump as all their losses were recovered in just two years (see table below). If people in poverty could also recover like that, it would be easy to eradicate poverty.

  2007 2008 2009 2010 2011 2012
Billionaires, total number 899 1125 793 1011 1210 1226
Net worth, total 3,500 4,400 2,400 3,600 4,500 4,600
Net worth per billionaire 3.89 3.91 3.03 3.56 3.72 3.75

Note 1: the amounts are in current billions of US dollars.

Note 2: the wealth is calculated each February of the year.

In fact, let us make a comparison between the world’s top rich and the bottom poor. The latest dataset available for people in poverty are for 2008, so I have used Forbes’ 2008 list to make a few comparisons. Please take the following simple mathematical exercise for what it is: a rough alternative look at to the appalling inequalities in our world today.

According to World Bank data there were about 1.3 billion people in extreme poverty (defined as living on less than $1.25 a day) and about three billion people in poverty (defined as living on less than $2.5 a day). If the number of people are multiplied with the $ per day figures and 365 days, we obtain the following results.

The ‘annual wealth’ of people in extreme poverty is about USD 600 billions, while it is about USD 1.5 trillion for the 1.7 billion people in poverty, totaling to about USD 2.1 trillions for the three billion group.

Summing the top instead, reveals that the wealth of the 17 richest individuals is enough to reflect the ‘annual wealth’ of the 1.3 billion poorest people (17 = 1 300 000 000). At the same time, summing up the wealth of the richest 140 individuals (or ‘families’ in few cases) is enough to mirror the combined ‘wealth’ of all the three billion people in poverty (140 = 3 000 000 000 000).

It does not have to be this way, of course. The three billion people in poverty would have been in a much better situation if they had meaningful opportunities to fulfill their lives. The billionaires would not have faired as good if they were not nurtured and prioritized by an elitist and aggressive governmentality throughout the world. Surely an inclusive, participatory and democratically functioning economy is the ideal alternative. The real challenge is, in my opinion, how to get there (the transition), especially considering the necessary process of empowerment and disempowerment.

  1. Bruce E. Woych
    September 20, 2012 at 8:18 pm

    Of related interest from an article posted from this blog by David Ruccio:

    “The average income of the bottom 90 percent fell 13.5 percent.”
    August 13, 2012

    from David Ruccio

    “Here is what …[David Ruccio]… come up with (using average incomes in the United States for different income groups, in real 2010 dollars) in terms of percentage increases from 1980 to 2010 :

    Top .01 percent: 502 percent

    Top .1 percent: 301 percent

    Top .5 percent: 190 percent

    Top 1 percent: 154 percent

    Bottom 90 percent: -4.5 percent

    And, yes, while “since 2000, no income group has done particularly well,” the average income of the top .01 percent did increase 6.5 percent while the average income of the bottom 90 percent fell 13.5 percent.”

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