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Richest 2% Own Half the World's Wealth

kdawson posted more than 8 years ago | from the disparity dept.

The Almighty Buck 1330

kop writes "The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute. Most previous studies of economic disparity have looked at income, whereas this one looks at wealth — assets minus debts. The survey is based on data for the year 2000. Many figures, especially for developing countries, have had to be estimated. Nonetheless, the authors say it is the most comprehensive study of personal wealth ever undertaken." The study itself is available from the World Institute for Development Economics Research.

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Not just true for humans (5, Funny)

Anonymous Coward | more than 8 years ago | (#17127452)

Look at the duck world. Scrooge McDuck had enough money that he could swim in it!

Re:Not just true for humans (4, Insightful)

TrisexualPuppy (976893) | more than 8 years ago | (#17127534)

And the richest 2% pay 50% of the taxes.

Re:Not just true for humans (3, Informative)

diersing (679767) | more than 8 years ago | (#17127862)

The numbers sound staggering, but the majority of the world's population are dirt poor (of course something should be done about that). If you live the west and don't believe me, enter your income here [globalrichlist.com] and find out for yourself.

Quoting a senator: (2, Funny)

Anonymous Coward | more than 8 years ago | (#17127456)

All fellow members of the Roman senate hear me. Shall we continue to build palace after palace for the rich? Or shall we aspire to a more noble purpose and build decent housing for the poor? How does the senate vote?


Pareto Distribution (5, Insightful)

eldavojohn (898314) | more than 8 years ago | (#17127458)

An Italian by the name of Vilfredo Pareto once made the statement that 20% of the population will always own 80% of the wealth (also known as the 80/20 rule of thumb). From a site [newschool.edu] on him:
In the Cours, his main economic contributions was his exposition of "Pareto's Law" of income distribution. He argued that in all countries and times, the distribution of income and wealth follows a regular logarithmic pattern that can be captured by the formula:

log N = log A + m log x

where where N is the number of income earners who receive incomes higher than x, and A and m are constants. Over the years, Pareto's Law has proved remarkably resilient in empirical studies.
It's not necessarily a bad thing. It's only a bad thing when you need money in order to make money which is often the case. This translates to the rich getting richer while the poor get poorer. If you make sure that those with money don't influence the market so they make more money than Pareto law is actually good for the economy in my opinion

Re:Pareto Distribution (3, Interesting)

Elvis77 (633162) | more than 8 years ago | (#17127518)

Good for the economy, but bad for the 80% in my opinion... but then I can joke about it because I live in one of the wealthy countries mentioned, but I guess if I didn't I probably wouldn't be writing this

Re:Pareto Distribution (0, Redundant)

Moby Cock (771358) | more than 8 years ago | (#17127546)

It's not necessarily a bad thing.

It is a bad thing. As you say, the rich get richer, and the poor get poorer. That is system unsustainable, and will eventually collapse.

Re:Pareto Distribution (4, Insightful)

tomstdenis (446163) | more than 8 years ago | (#17127634)

Even through the depression the wealthy were not bad off. It was the rich that suffered.

As the man himself, Chris Rock put it, Michael Jordan is rich, the man who signs his pay cheque is wealthy.

All that will happen is more and more economic bubbles will burst, the rich will join the poor and the wealthy will be further separated.

The only real balancing acts comes at the end of a sword during a revolution. Well I guess in modern times we'll use guns, but the idea is the same. Wealthy people keep taking and taking, hording cash and assets, till the point where the rest of society will just plunder and steal. The real trick is how far can society be pushed until this actually happens (again).

Frankly, hording cash and assets is the worst thing wealthy people can do. Money only has value when it's being traded for something. Which is also a form of wealth distribution. Keeps the rest of us fed and warm at night.

If you look at an average income of say $25,000/yr for a low income person, then realize that the wealth accumulated by people like Gates could pay the yearly salary of ~1.7 million people, it kinda makes you think what exactly are they doing with this money anyways? (Yes, I know Gates has his charity, but there is only so much money a person needs...)


Re:Pareto Distribution (1)

fossa (212602) | more than 8 years ago | (#17127802)

I don't fully understand the economics of the situation, but money in the bank is money that may be loaned out for others to buy houses or start businesses...

Re:Pareto Distribution (0)

tomstdenis (446163) | more than 8 years ago | (#17127894)

That's all good and said. Except that doesn't make people money.

If the top echelon of MSFT (just picking on them because I hate MSFT, but others are just as bad) make so much, why not spread the wealth? Pay your developers more, pay the janitorial and maintenance staff (who usually make slave wages...) more, etc, etc, etc.

The point of paying your staff like shit and hording all the money is so you can have the money and power it commands. It's not about "oh I'll put it in the bank so people can get home loans that they can't afford to pay off because I won't pay them their fair share of the pie."


Re:Pareto Distribution (2, Funny)

Anonymous Coward | more than 8 years ago | (#17127838)

Paul Allen seems to be doing a fair amount of stuff, even given his considerable wealth. Shit, he's even hanging out with Laura Harring. The dude's actually living his life, unlike some rich, wealthy, and poor.

Yes, I know Gates has his charity, but there is only so much money a person needs...

oh please. If you had his money I very much doubt you'd be off spending most of it to slow world hunger. Personally I could go for a platinum statue of myself, but that's just me. That, or fund research of sexbots (of course, that could be considered philanthropy)

Re:Pareto Distribution (4, Insightful)

TopShelf (92521) | more than 8 years ago | (#17127640)

To be more precise, the rich get richer, and the poor get richer, just not as fast. It's that disparity that people focus on.

Re:Pareto Distribution (2, Interesting)

Azghoul (25786) | more than 8 years ago | (#17127858)

Thank you for pointing this out. Incredibly vital, yet missing entirely from most minds.

Re:Pareto Distribution (5, Insightful)

RevMike (632002) | more than 8 years ago | (#17127756)

As you say, the rich get richer, and the poor get poorer. That is system unsustainable, and will eventually collapse.

It isn't quite that simple. It depends on whether you measure wealth in some sort of absolute or relative terms.

The gap between rich and poor may indeed be widening, but the poor are becoming wealthier as well. In absolute terms, therefore, the rich are getting richer, but the poor are getting richer as well. This can be measured in lots of ways. Life expectancy and infant mortality are usually pretty good indicators. India and China alone account for roughly 2 billion people who were barely scraping out an existence two generations ago, but who now have a much higher degree of food security, have access to a much higher level of health care, access to technology (i.e. the cell phone is rapidly becoming ubiquitous, even in rural areas).

For the system to be clearly unsustainable, one would need to believe that people would undermine a system that is delivering them a rising standard of living. It would seem unlikely that they would do so in any sort of broad, universal way.

Re:Pareto Distribution (1, Insightful)

Anonymous Coward | more than 8 years ago | (#17127822)

Let me rephrase: The hard-working get richer, and the lazy get poorer. Just look at America and China - I wouldn't call China either "rich" or "getting poorer". And neither is the richest nation in the world getting noticeably richer.

But forgive me, I let facts stand in the way of your leftist propaganda. Won't happen again.

Re:Pareto Distribution (0)

Anonymous Coward | more than 8 years ago | (#17127570)

There will now follow a list of specious, "but it's my wealth. Wahh!" arguments from silly right-wingers who can't grasp the idea that, perhaps, personal enrichment beyond a certain point is pure greed... and that most decent humanist governments around the world (like most of Europe) believe that wealth redistribution as a safety net (and healthcare) is an important part of why those nations are much nicer places to live.


Re:Pareto Distribution (2, Insightful)

Lorkki (863577) | more than 8 years ago | (#17127574)

If you make sure that those with money don't influence the market so they make more money than Pareto law is actually good for the economy in my opinion

So the world would be a better place if everyone would just be nice and play by the rules? Why hasn't anyone thought of that before!

Re:Pareto Distribution (1)

Lord Lemur (993283) | more than 8 years ago | (#17127668)

I kinda think Jesus said something along those line...

Humanism Distribution (-1, Flamebait)

Anonymous Coward | more than 8 years ago | (#17127804)

"I kinda think Jesus said something along those line..."

You mean the one that doesn't exist? Dump religion and replace it with humanism and you get problems like what the story talks about.

Re:Pareto Distribution (-1)

bigjocker (113512) | more than 8 years ago | (#17127700)

It's not necessarily a bad thing

Yes, you are right. Tell that to the 80% without any money.

How naive can you get? It's a huge injustice. How can you say that while kids keep dying for not having something to eat??? It's amazing how we have the technology for almost anything and children keep dying of hunger.

It's a sad state of affairs. And don't come with that crap that it's the way things are, or that's the way economy works, or any other bullshit. The fact that 2% of the people owns half the world's wealth is not only mind boggling ... to read to such news and read such idiotic comments sickens me.

And they keep asking themselves why Chavez keeps winning ...

Re:Pareto Distribution (5, Interesting)

montyzooooma (853414) | more than 8 years ago | (#17127776)

In general the places with starving kids aren't attracting the interest of the mega-rich so how can you blame them? In fact when Western companies bring employment to poorer countries it's looked on as exploitation or off-shoring and they get dog's abuse anyway.

Re:Pareto Distribution (2, Insightful)

Falesh (1000255) | more than 8 years ago | (#17127914)

When western companies bring employment to poor countries that's great. When they bring sweat shops, horrible working conditions, repression, etc then they damn well should get dog's abuse.

Re:Pareto Distribution (3, Insightful)

BigDogCH (760290) | more than 8 years ago | (#17127850)

And don't come with that crap that it's the way things are

But isn't that true

It is a sad reality, but this is the way it must be. Maybe not dying of hunger, but poverty is inevitable. If everyone had plenty of money, then the money is simply worth less. The world will always have poverty stricken people. Sure, take 99% of the money from the rich, spread it out to the poor. What happens now? Goods and services will all of a sudden cost more, and now the formerly poor are poor again. The only difference is, now the rich are not quite as rich.

Even so, I agree, 2% holding 80% does seem like it could be balanced out. There must be a happy medium between this, and the reality that some groups will always be in poverty.

Re:Pareto Distribution (1)

192939495969798999 (58312) | more than 8 years ago | (#17127896)

You got the saying wrong, it may not be politically correct, but it's "rich getting richer while the poor get children".

Hey!!! (0, Funny)

Anonymous Coward | more than 8 years ago | (#17127466)

It's because of "news" like this that the terrorists will win!!!

Rich People Have all the Money! (5, Funny)

ReidMaynard (161608) | more than 8 years ago | (#17127472)

It's not an Onion story?

Yes, that's many of us (0)

sznupi (719324) | more than 8 years ago | (#17127486)

A thing to think about when bitching about some aspect of socioeconomic status or buying "luxury" items...

But... (4, Insightful)

inviolet (797804) | more than 8 years ago | (#17127504)

...just because an asset is owned by some over-rich guy, doesn't mean that it is unproductive. Tomorrow we could send Bill Gates the title deed to all farmland in the Midwest, and that land would still continue to grow wheat for everyone's Raisin Bran.

And even if we then sent Bill Gates the profits from all those boxes of Raisin Bran, Bill would only have a pile of cash. Cash is not an asset; it represents assets, which usually remain in production somewhere.

No matter how rich Bill Gates gets, he still consumes very little, perhaps a half-million dollars a year in food, real estate, clothing, maids, butlers, and the like. Everything else that he owns is (if he is an even half-wise investor) still producing something elsewhere.

Re:But... (2, Interesting)

Anonymous Coward | more than 8 years ago | (#17127584)

That ignores the aspect that the owner controls what the assets are used for. If Bill Gates owned all farmland in the Midwest and decided that he wants cheap fuel more than cheap food, he could send food prices up by dedicating a good fraction of that farmland to biodiesel production. Or for a more realistic example: The current trend among ultrarich people is to own a private Jumbo jet. The resources that go into making one of those are not available to satisfy the needs of other people. The people who build the jet get paid, but they trade their productivity for money. That productivity serves only the needs of the ultrarich, not the needs of the masses.

Re:But... (1)

Suspended_Reality (927563) | more than 8 years ago | (#17127868)

I wish you hadn't posted AC, because that was a really good comment and actually changed my opinion a little bit on the right of government to try to intervene on economic production.

The point that the rich play a large role in dictating how production is oriented is something that needs more study.

Mod parent up!

Re:But... (2, Funny)

Anonymous Coward | more than 8 years ago | (#17127646)

>> No matter how rich Bill Gates gets, he still consumes very little

Steve Ballmer, on the other hand...

Re:But... (1)

polar red (215081) | more than 8 years ago | (#17127694)

"Everything else that he owns is (if he is an even half-wise investor) still producing something elsewhere."

Suppose it isn't farmland, but houses. Now suppose that he can raise the value of 80% of those houses by more than 20%, just by holding the rest of the market ?

Re:But... (3, Interesting)

karmatic (776420) | more than 8 years ago | (#17127766)

I wouldn't worry too much about it. [housingdoom.com]

Housing has been rather screwy lately after the mad rush we had in '05. Like all things, the market eventually starts to correct itself. Gotta love supply and demand.

Re:But... (1)

polar red (215081) | more than 8 years ago | (#17127806)

"Gotta love supply and demand."
That was my point : if the "rich" get too "rich" they can screw around with supply ...

What I'd like to see is a comparison (4, Interesting)

A beautiful mind (821714) | more than 8 years ago | (#17127516)

between the current state and the feudal times.

It is possibly very hard to create such comparison given that probably the definition of wealth changed, the definition of feudal times is loose, the overall human population was much less and the world used to be much more fragmented back then. I think that 500 years is a nice round number, so a comparison between 1500 and 2000 could be made with some difficulty. Hard, but I don't think it's impossible.

Currently my gut feeling tells me that the "wealth" used to be even more centralized in those times, but we probably made some progress in social equality since then. I'd be interested to see in the amount of progress though.

Re:What I'd like to see is a comparison (3, Insightful)

Carewolf (581105) | more than 8 years ago | (#17127622)

Try comparing with 50 years ago instead of 500. Then we have not made progress, but taken many step backwards in social equality.

Re:What I'd like to see is a comparison (1)

maxume (22995) | more than 8 years ago | (#17127674)

"some progress in social equity"

Right, since the transition of slavery from commonplace to a very small problem that people deal with the best they can doesn't count for much. Yeah, there are lots of places where it is still a problem, but it certainly isn't 'acceptable' to very much of the global population. (if anybody wants to throw 'wage slavery' into this, go ahead, but that's their problem)

Nearly successful attempts to eradicate diseases on a global scale probably shouldn't count for much either, as there are still diseases that science hasn't dealt with yet, so all that good can't be counted, not until there isn't any bad left.

The propagation of knowledge and technology is another clear non-counter, as the top still seems to have more of it. That they generate it doesn't change that.

Relative social equity might not have changed much, but absolute social equity has changed so much that there isn't any sane way to make a comparison.

Re:What I'd like to see is a comparison (3, Interesting)

Noryungi (70322) | more than 8 years ago | (#17127726)

Remember the definition of "feudal": everything belongs to the local Lord. Meaning: your house only exists because he has let you build it (he can take it or destroy it at any time), the land you work and/or live on -- if you are a peasant -- is his, the grain and animals you grow and take care of are his as well, your physical power belongs to him -- for war (cannon fodder) and peace (let's add a new wing to ye olde castle) -- and he is allowed to kick your ass pretty much anytime he wants to.

And, to top it all off, he has the right -- nay, the sacred duty -- to report you to the Holy Inquisition for heresy or just not being a good Christian, and woe to you if you actually criticize him. Situations were pretty much identical in, say, China under the Mandarins and during most of the history of the Moslem countries.

Needless to say, the Middle Ages were not exactly equalitarian: thank the enlightnment for making things change, a little. So comparing, say, feudal Europe with modern-day Canada really is comparing Apples and Oranges.

Re:What I'd like to see is a comparison (3, Interesting)

A beautiful mind (821714) | more than 8 years ago | (#17127876)

So comparing, say, feudal Europe with modern-day Canada really is comparing Apples and Oranges.
No it isn't. I know what feudal means, which still essentially says that the lords owned everything and the rest nothing much. See, you can then take the number of lords and the rest of the population and produce a percentage.

Another poster made the critique that the wealth distribution doesn't take into account the scientific and social progress since then. Now that's talking about apples and oranges! Yes, I'm aware that those things have changed but they have no relevance here. (Unless you consider scientific knowledge wealth, which I do, but they are usually treated separately from traditional wealth because it is much harder to put into numbers, etc.) What I would be interested in is the change of wealth distribution over a long period of human history. I by no means am saying that the number produced would be indicative of progress as the other poster seems to think. It would be just interesting to see, so you know, you can have another datapoint to put current numbers and trends into context.

What's worse (4, Insightful)

Moby Cock (771358) | more than 8 years ago | (#17127524)

While it is pretty awful that 2% own 50%. The study reveals that 1% of the population owns 40% of the weatlth. Also the poorest 50% own 1% of the wealth.

More tax cuts for the rich!!!

Re:What's worse (2, Insightful)

berashith (222128) | more than 8 years ago | (#17127626)

Does it make things fair that the poorest 50% pay 1% of the taxes ?

Re:What's worse (0)

Anonymous Coward | more than 8 years ago | (#17127916)

Do they? After all the tax cuts from the top 2% of the population in the US whining that they have to pay 50% of the taxes on their 50% of the wealth, I'd suspect that the money must be coming from somewhere else now.

Re:What's worse (1, Insightful)

Anonymous Coward | more than 8 years ago | (#17127656)

Ironic that in response to an article regarding how poor people are, you'd not recognize that tax cuts for the business owners = jobs for the poor people. Hard to imagine that there actually exists a scenario where everybody wins (except those unwilling to work). Did anyone else notice that to be in the top 10% worldwide you only need to accrue 61,000 USD in assets? Funny that the midwestern farmers receiving federal assistance to "survive" are actually in the top ten percent of wealthy people.

Having lived in the third world for some years I can say their situation is exactly that of the United States: While most people say the rich are getting richer and poor getting poorer, that's not the case generally. The more general, accurate statement is the educated are getting richer, and the uneducated are getting poorer.

Re:What's worse (2, Interesting)

jackbird (721605) | more than 8 years ago | (#17127888)

Tax cuts for the business owners in the US has indeed been followed by job growth for the poor. Unfortunately, those poor are in South Asia.

Also, $61k in assets does sound fairly affluent, when you remember to subtract liabilities such as student loans, mortgage, credit card debt, and car loans from your assets.

The farmers are in the top 10% because they're sitting on increasingly valuable land that can only make so much when used for food production. It's totally nonliquid unless they sell out to ADM or a tract home developer. The federal assistance ensures that we have farmland and farmers around in case we need to stop importing so much of our food for some reason.

Re:What's worse (2, Interesting)

Anonymous Coward | more than 8 years ago | (#17127658)

According to the article, if you have more than US $2200 in assets, you are in the top half. Since this is slashdot, you probably an American that typed your idiotic comment on a laptop/notebook that is worth US $2200. If you have US $61,000 in assets, you are in the top 10%. With almost %70 percent of Americans owning a home, nearly every American is at least in the top 10%. So quit your bitching about the rich, because you are one of them, dumb ass.

Re:What's worse (1)

chill (34294) | more than 8 years ago | (#17127890)

Can you back up your stats to show that ~70% of Americans have more than $61,000 in Net Equity in their home?

Wealth is assets minus debt. If you own a house valued at $100,000, you would need to have > $80,000 in equity and only ~$20,000 in mortgage to surpass that number. (I used $100,000 for the math simplicity. Feel free to multiply that up to whatever you believe is median home value.)

I don't believe most Americans have >80% equity in their homes.

Subtract from that equity the amount of credit card and other debt, and you're looking at a very sad number.

Re:What's worse (1)

maxume (22995) | more than 8 years ago | (#17127712)

Please explain why it is a bad thing. Some people are better looking, some people are healthier, both pretty much by luck, how come being rich, even by luck, is bad?

Re:What's worse (1)

Moby Cock (771358) | more than 8 years ago | (#17127750)

Because the rich are getting richer, and the poor are getting poorer. This situation is unsustainable and, if history is our guide, can only be solved by revolution. Good looking people don't keep getting better looking. Healthy people don't get healthier.

Re:What's worse (1)

homer_s (799572) | more than 8 years ago | (#17127864)

The good looking people get good looking spouses and have good looking children. The healthy people have healthy children.

Musically gifted people have gifted children.

Do we need a revolution to fix that too? What you have is called 'class envy'.

Re:What's worse (1)

maxume (22995) | more than 8 years ago | (#17127904)

But it isn't clear that the poor are getting poorer, if you look at it in absolute terms. The 'poor' in first world nations are certainly better off than the poor of 100 years ago, and the poor in other countries see real benefits from technology exports(medicine, mobile phone infrastructure, small scale power generation, sanitation equipment, etc) of rich countries. Yeah, those benefits tend to create new imbalances in those countries, but it isn't clear that the imbalance is bad for the bottom, or just a side effect of everybody becoming better off.

Re:What's worse (1)

aadvancedGIR (959466) | more than 8 years ago | (#17127774)

Property is not the only thing.
Give 10 bucks to a poor man and that money will go back in local economy in no time, with several other people also benefiting from that money.
On the other hand, while some rich people invest their money in productive project, most of that money is used to finance states or normal people debts and gain even more money from that, which, on the overal, is loss for the economy.

Darwinism (1, Funny)

Anonymous Coward | more than 8 years ago | (#17127540)

Maybe these people are just genetically superior. Models are wealthy due to their looks, athletes for their physical abilities, inventors for their ingenuity, politicians for their ability to manipulate and businessmen for their ability to facilitate trade. Course resources play a part on a macro sense.

Re:Darwinism (0)

Anonymous Coward | more than 8 years ago | (#17127620)

Models are wealthy? And inventors? Are you 10 years old?

How is this news ... (0)

Anonymous Coward | more than 8 years ago | (#17127542)

... all of a sudden?

Communism or Socialism (2, Interesting)

bogaboga (793279) | more than 8 years ago | (#17127578)

"The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute.

It's in situations like these that I support communism or even its loose form (socialism). In many cases these rich folks are able to remain rich because of influence peddling, crony-ism, threats and corruption. In these Unites States, the above unwelcome features have become so apparent that our congress has also become the "no action congress."

Can somebody tell me what significant thing congress did in this term? Nothing was done for the common man. In 365 days of the year, congress will sit for about 110 days, and pull US$165,000 in salaries alone for congressmen and women. Overall, the picture is not good at all.

Re:Communism or Socialism (5, Insightful)

jimmy_dean (463322) | more than 8 years ago | (#17127644)

That's interesting. So convenient on your part. I would venture to say that if you made more money (I'm assuming you're not currently), somewhere in the $60k+ range, you wouldn't have this attitude. Would you like the government to give your money away forcefully to someone else just so that it's "fair?" Why should the government be in charge of this? And what's to stop them from becoming corrupt in this which is more than likely to happen? Power like this always corrupts...you place way too much faith in a system that doesn't work because people are people. Something like capitalism, although far from perfect, allows the greedy to get what they want and it gives a non-law regulated way for anyone to also work hard and earn their wage. Communism would only work in a perfect society. Your views are very dangerous and convenient.

Re:Communism or Socialism (1)

antiaktiv (848995) | more than 8 years ago | (#17127720)

Whoa there! Did you just call socialism a loose form of communism? That's like calling OSX a loose form of Unix.

Re:Communism or Socialism (1)

joschm0 (858723) | more than 8 years ago | (#17127846)

Whoa there! Did you just call socialism a loose form of communism? That's like calling OSX a loose form of Unix.

Someone please mod this funny!

Re:Communism or Socialism (1)

Ham_belony (820906) | more than 8 years ago | (#17127742)

Communism, never. Very simple in a communist society, 92% is owned by the Government and 6% is owned by the upper class of that regime and about 2% by its people. In a Socialistic society, The poor pay for the benefits of the poor, the wealthy just don't receive what they pay for but again, their wealth pays for the better things the poor can't have in services. The biggest difference here is that between lower and middle class incomes you hardly would notice a difference in wealth or income. Where the upperclass continue to make more money.

If it's legal (4, Insightful)

Threni (635302) | more than 8 years ago | (#17127596)

then it must be fair. Well, either that, or bad laws can be passed.

Still, as long as the issue is `do I cough up for a PS3 or is the Wii good enough` and not `why do millions of people die from easily and cheaply preventable/treatable diseases/issues such as malnutrition, malaria and sleeping sickness` I don't see things changing.

You still think the `war on terror` is important? Perhaps if the number of deaths on 9/11 we repeated in every country, every day, otherwise no - statistically, not really. And yet, look at the ratio of money spent on that futile little endeavor to money spent on issues that affect millions daily.

They deserve it (0, Flamebait)

kentrel (526003) | more than 8 years ago | (#17127600)

They deserve it, because the majority of poor people are poor because they don't understand how money works, and just fritter what they have away. They waste money on lotteries (!!) and other gambling idiocy, they take out loans they know they can't afford to pay back and rarely use the money to invest in anything that will generate money like a business. Usually it's money for personal use like holidays or they hire-purchase big scren TVS, cars, etc. Most poor people only think month to month, and not long term, like smart (and rich) businessmen. I admire anyone who sets up their own business, these people are rare. There are also lot of poor people who may have a substantial income, but also have huge credit card and other debts, and don't realise their net worth is in the negative.

The only thing that surprises me here is the "2%". I generally went by the 20/80 rule, but it seems there are only a few people who understand how to make money, and a majority of people who are either not interested in being superwealthy (forgiveable) or who never bother to dig their way out of their financial woes (unforgiveable).

Re:They deserve it (2, Insightful)

Anonymous Coward | more than 8 years ago | (#17127692)

Right, of course... wait... how does one get educated in these financial matters again, without being able to afford an education? Nah, you are right, pretty much all those people in Latin America, Africa, and every other phenomenally poor areas of the world completely 'deserve' to be poor because they are all ignorant fools who burn their money. Who would have known that 98% of the world is just plain stupid?

Re:They deserve it (1)

Gabrill (556503) | more than 8 years ago | (#17127696)

Wow, you don't sound elitist at all. You probably ride the backs of all those blue collar workers, and despise them for not wanting your job.

Re:They deserve it (2, Insightful)

gbarta (139877) | more than 8 years ago | (#17127704)

You have a warped view of poverty.

The vast majority of poor people in the world have never set their eyes on a big screen TV.

Re:They deserve it (2, Insightful)

Shard013 (530636) | more than 8 years ago | (#17127734)

You are thinking too small if you think the poorest people in the world spend their money on lotto tickets. I'm sure some of the poorest people in America might spend their money on gambling, but the real poor people, those in third world nations don't have the luxuries of buying lotto tickets, they struggle not to starve to death or not die from drinking the polluted water. If you have clean water, food and shelter, you are not poor by world standards. To say these people "deserve" it sickens me, but again I will pass it off as your ignorance for thinking the "world" is only the "USA".

Re:They deserve it (3, Insightful)

FhnuZoag (875558) | more than 8 years ago | (#17127772)

But why don't they understand how money works?

Are they poor because they don't understand how money works, or do they not understand how money works because they are poor, and so have little access to MBA degrees and financial newspapers, and are forced to spend the majority of their income on living expenses (hence having little to save for long term schemes), and take lotteries because their 'nothing to lose' situation creates a risk-taker utility function, and have jobs that are unreliable and so will likely not give them a predictable future income - hence also forcing them to take loans?

The economic statistics we have suggest the latter - while income inequality is rising, social mobility is falling. Quite simply, a large number of people are poor because they are stuck in the low income trap inherited over several generations.

Mod parent down! (0)

Anonymous Coward | more than 8 years ago | (#17127782)

Go trolling elsewhere. Do you think all those starving kids in Africa are buying plasma TV's so they can play PS3 in high definition? What about all of those people who file for bankrupcy because of otustanding medical bills. They don't understand how money works and fritter it away on useless things like medical care. Unfortunately, Joe Sixpack doesn't have a decent health insurance plan because senior management at his company decided to go with the cheapest health plan possible for the grunts because it allows the investors to earn an extra $0.01 per quarter.

I wonder why those poor people plan month to month. Oh, I know, IT'S BECAUSE THEY ARE WORRYING IF THEY HAVE ENOUGH MONEY TO MAKE ENDS MEET. It's kind of hard to start your own business, set up an IRA, and invest in google when you can abrely afford your heat, electricity, and food. And credit card debt? Oh, I wonder why, because they can't afford to pay their bills so they use credit cards instead. They can only afford minimum payments, so they have a high APR. Looks like a vicious circle to me. Check out Wikipedia [wikipedia.org] for the percentage of people living below poverty level. I'd like to see you start your own business on that.

Re:They deserve it (1)

orcus (21207) | more than 8 years ago | (#17127788)

Yeah - let them eat cake!

Re:They deserve it (2, Insightful)

TheVelvetFlamebait (986083) | more than 8 years ago | (#17127824)

They deserve it, because the majority of poor people are poor because they don't understand how money works, and just fritter what they have away.
I hope you are mixing up the scale of these figures, otherwise I'd be forced to call you an idiot. When they say "Richest 2% Own Half of the World's Wealth", they mean the World including all those third-world countries. Yes, you know them. Those countries where millions of people have no chance of experiencing any significant wealth, let alone knowing how do deal with it. You're probably right though. They'd probably piss away wealth on food, clean water, or medicine, rather than sensibly investing it and watching it grow.

Re:They deserve it (5, Insightful)

majaman (958076) | more than 8 years ago | (#17127832)

That has to be the most ignorant post I have ever read and I have read a few. Open your eyes to look beyond the realms of your own limited vision. Most poor people have no choice but to live hand to mouth. And I don't mean trailer-park-poor but living-on-a-handful-of-rice-a-day-if-your-lucky-po or. Do you invest half of that rice in bonds or stock? Ignorant bastard.

It was worth the karma loss.

Re:They deserve it (0)

Anonymous Coward | more than 8 years ago | (#17127880)

What a stupid mofo, why on earth doesn't the poster try living in the real world rather than some ivory tower.

Re:They deserve it (4, Insightful)

lovebyte (81275) | more than 8 years ago | (#17127886)

This reminds me of a joke.

A very rich man is asked by a journalist how he made his first million dollar. The rich man answered that he started off with just a few pennies, put them in a phone box and made a phone call: "Dad, can you lend me a million dollar, please?".

Re:They deserve it (3, Insightful)

dabadab (126782) | more than 8 years ago | (#17127910)

I find it rather fortunate, that we have this genius called Paris Hilton. She sure deserved her wealth with her superior intelligence and financial insight.

How's it feel to be rich (on a global scale)? (4, Insightful)

nelsonal (549144) | more than 8 years ago | (#17127606)

The top 1% only required wealth of $500,000 which a USer making $40,000 annually should easily eclipse with a 5% 401(k) contribution (assuming you have an employer match) and an 8% return. I'd guess that almost all of the college graduates here are above the 10% level (don't forget the value of cars, computers, clothes, any retirement accounts and such).

How unfair! (4, Interesting)

rlp (11898) | more than 8 years ago | (#17127614)

For the good of humanity we must take all that wealth and re-distribute it equitably! But before we do, we might want to check out some countries that have tried that. The results aren't pretty (for example Zimbabwe).

Seriously, the wealthy of the world can be divided into kleptocrats, heirs, and entrepreneurs. As far as I'm concerned, you can shoot the former. Certainly not the second, though you may debate the merits of inheritance tax (which I'm personally against). Mess with the third at the peril of your nations well being.

FLAME ON!!! (1)

Slithe (894946) | more than 8 years ago | (#17127618)

Cue Capitalist/Communist flamewars in 3...2...1...

Like (4, Funny)

styryx (952942) | more than 8 years ago | (#17127628)

Hippy: "Like, you can't OWN property, man!"

Prof. Farnsworth: "I can. But that's because I'm not a penniless hippy!"

Smash capitalism with socialist revolution! (0)

Anonymous Coward | more than 8 years ago | (#17127630)

Power to the workers!

Where's the problem? (0)

Anonymous Coward | more than 8 years ago | (#17127636)

To the extent that this reflects corrupt dictators stealing from their people, it's bad news.

To the extent that it reflects entrepreneuers taking risks and creating useful products, and savers putting off that next SUV purchase so that they can loan money to those entrepreneuers, I don't see any problem at all with this.

If you want the other 98% to start getting richer, then here are some things you can encourage:

- free trade
- secure property rights for poor as well as rich
- tax-advantageous savings and investment by the poor (in the U.S., e.g., raise the 401k contribution limit)

and here are some things you can discourage:

- corrupt governments, such as those that plague most of the third world, that use the power of the state to take all the wealth
- measures that impede the poor's access to capital markets: lack of title to their real estate, ability to take out debt secured by their property
- rich people who say they are for "fair trade" but who in reality don't lift a finger to extend trade and prosperity to the world's poor

Somehow, however, this being socialismdot, I suspect that much of the discussion will be about those bastards at the top.

You pinko, commie bastards! It's all your fault!

Is it really so bad? (1)

Zarxrax (652423) | more than 8 years ago | (#17127654)

Like my economics professor tells us, when you have economic growth, EVERYONE gets a bigger slice of the pie. The slice of the rich grows much more than the slice of the poor does, but the slice of the poor is still growing. Some people may go on about how its not fair, and we should live in a more socialized economy where everything balances out, but when you stifle economic growth it's not just the rich who will be getting a smaller slice, but everyone. People living in poverty in America today have it better off than my grandparents did about 60 years ago. I'm not too concerned with how much the rich have, because as a lower-middle-class American citizen, I have everything I need. I also suspect that in 50 years time, most of what we call poor today will also have most of the things that they need (we are already close to that point in many countries).

The rich are disproportionately heavily taxed (1, Insightful)

Toby The Economist (811138) | more than 8 years ago | (#17127666)

The richest 2% pay considerably more than 2% of taxes, however.

They are disproportionately heavily taxed.

I believe in the US, for example, the richest 1% bear 18% of the total tax burden.

The purpose of tax is not to reduce the wealth of those who have done well to the level of those who have not; unfortunately, class envy is a very significant factor in the perception of the masses of poor and averagely well off.

Re:The rich are disproportionately heavily taxed (0)

Anonymous Coward | more than 8 years ago | (#17127820)

Actually, it's more like the richest 1% bear nearly 35% of the total income tax burden.

The richest 5%, almost 55%.

So, over half of every service and benefit that our income taxes provide is paid for by around 1.5 million people.

Be nice to the rich. They're taking care of you (because they're forced to).

Re:The rich are disproportionately heavily taxed (5, Insightful)

teg (97890) | more than 8 years ago | (#17127836)

The richest 2% pay considerably more than 2% of taxes, however. They are disproportionately heavily taxed. I believe in the US, for example, the richest 1% bear 18% of the total tax burden.

Do they have more than 18% of the income (including capital gains, interest etc) and/or own more than 18% of the assets?

Re:The rich are disproportionately heavily taxed (1)

FhnuZoag (875558) | more than 8 years ago | (#17127840)

So what? Even without a redistributionist agenda, there are good reasons to tax the rich disproportionately more - we tax according to utility rather than in cash terms. Losing the same amount of cash hurts alot less if you are rich than if you are poor.

Rich (1)

El Lobo (994537) | more than 8 years ago | (#17127670)

The people at the top of America's money pyramid have so prospered in recent years that they have pulled far ahead of the rest of the population, an analysis of tax records and other government (data by The New York Times). They have even left behind people making hundreds of thousands of dollars a year.

Call them the hyper-rich.

While most economists recognize that the richest are pulling away, they disagree on what this means. Those who contend that the extraordinary accumulation of wealth is a good thing say that while the rich are indeed getting richer, so are most people who work hard and save. They say that the tax cuts encourage the investment and the innovation that will make everyone better off.

Viva la Revoultion... (1)

hnile_jablko (862946) | more than 8 years ago | (#17127688)

This state of things was probably the underlying condition which inspired the french revolution... those who have money control the government to get richer while the lower classes remain lower and lower. This is the state of the world pretty much... read Viva La Revolution (a funny insightful book about the revolt) and also Confessions of an Economic Hitman. Class disparity still exists, yet some on the right in western countries argue the gap has narrowed. They arent thinking globally. After all it is our global village. The peasants are rising up, just as the colonists of the US rose up against those with the money and power that controlled them in 1776. Just some random thoughts to consider and which have already been stated elsewhere.

the pitfalls of capitalism (1)

Van Cutter Romney (973766) | more than 8 years ago | (#17127706)

As capitalism spreads across the world the rich will keep getting in richer and the poor will keep getting poorer. The effects are evident not only in the third world countries but also here in the United States (as seen after Katrina). The pay packages of CEOs of top companies have increased by 11% every year where on the other hand the salaries of working class people have remained stagnant or gone down. Across the Atlantic, in countries like Africa, large multinational corporations have robbed the poorest of poor from their own natural assets (look at Kenya & the Middle East).
Unless there is a change in the socio-economic tendencies across the board and corporations become responsible not only for their share holders but also for the people in the countries they are dealing in, the gap will only widen.

We just need to change the way we see things (5, Insightful)

erroneus (253617) | more than 8 years ago | (#17127738)

As I once learned a bit about the development of Japanese culture, the fact that they live on an island with very few natural resources that world considers to be useful or otherwise valuable, much of their cultural values developed around an appreciation for other things which I find not only admirable, but inspiring as well.

In my own life, I have learned to divest myself of debt financing and to save and survive with more focus on needs and less on wants. I definitely pay a lot less attention to pop culture marketting. Having grown up very poor as a child does make the adjustment easier and somewhat more natural for me, but I am definitely not an unhappy person.

Among the things that no longer hold any direct personal value for me are things like diamonds, gold or other things that do not directly enrich my life in any meaningful way. In short, I value the practical and all but ignore the impractical, useless shiny things in life. I doubt I'll see the world's culture shift in this direction within my lifetime, but if we were to simply stop valuing many of the things we currently value, much of the world's wealth would simply lose value.

Mod kdawson -1, A$$hole (1, Troll)

aquatone282 (905179) | more than 8 years ago | (#17127758)

How is this "news for nerds?"

Re:Mod kdawson -1, A$$hole (0)

Anonymous Coward | more than 8 years ago | (#17127878)

My simple law of economics: "smart people get rich, average people dont." There are numerous corrolaries and adjuncts to this, like poor people tend to be stupid etc. Back in the caveman days, Gieco ads notwithstanding, the smart guy figured out how to kill wooly mammoths more easily and safely, and his family didnt starve and his genes got passed on. The stupid guy got trampled by the mammoth, and his kids starved etc. Its called natural selection, and all the bleedin heart liberal weenie wimps that want the rich to feed the poor so they can have more fatherless children who dont understand how to work or hold down a job or have their intelect stunted by drugs/alcohol are pollutin' the gene pool. Why is this on Slashdot, except to flamebait foolish poor people like me?

It's all about scarcity.. most of it artifical. (0)

QuantumG (50515) | more than 8 years ago | (#17127770)

Why are diamonds so expensive? Because they are rare? They sure are, why is that? Oh, cause there's people who control the supply. What caused that recent spike in oil prices? Same thing. Why is software so expensive? Same thing. If the price can float, then the people who control the production can jack up the price. The only thing that stops most producers is competition. This is easily overcome by collusion. Where there is bodies that prohibit that collusion, we see markets. Where those bodies have been corrupted, we see price gouging. When those bodies start to actively sanction or require collusion, we see monopolies. There is no greater requirement for collusion than copyright - a law that requires everyone to maintain artifical scarcity, because everyone is a potential producer of goods that can be copied. By 2040 we may have a machine that can copy physical objects. Will we continue to require active collusion by everyone in society to feed our primitive obsession with scarcity? Or will we throw off these shackles and create heaven on earth?

reset the economy (2, Interesting)

operato (782224) | more than 8 years ago | (#17127808)

what i always wanted to do as an idea was to reset everybody's wealth after a few generations. this would mean that people would have to work harder instead of sitting back and waiting for their paps to die.

Top 50th, 10th, and 1st percentiles... (1)

duh_lime (583156) | more than 8 years ago | (#17127814)

Correspond to adults with the following *assets* (net value):

50th percentile: $2,200 of assets

10th percentile: $61,000 of assets

1st percentile: $500,000 of assets (37 million folks in this bucket)

(according to the data from the World Institute for Development Economics Research of the United Nations University (UNU-Wider)).

... thought provoking...

interesting article, but again only looking... (1)

jimstapleton (999106) | more than 8 years ago | (#17127834)

at part of the picture.

The absolute wealth value isn't as relevant as the wealth value related to the cost of living.

Example: If you live in a place where food costs $1/day and housing is $100/month, you can live off of not much more than $40 a week.

Now, if you live in a place where food costs $5/day and housing is $500/month, that $40/week won't even cover your food expenses.

Now assuming that other necessities and luxuries are all proportional to the house/food values, then who would be richer? The person in the first place making $80/week or the person in the second making $400? Answer: neither, in terms of what they can obtain, they are the same.

However the prices rarely scale like that, in this case the "equivalent" amounts for the first and second location might be $150 to $400 in stead, but the basic idea that absolute wealth means only so much, still holds.

Note: I'm not saying it isn't a problem that most of the wealth is in a few hands, it should be distributed around more to boost the economy (spend, not give), but instead they hoard, I'm saying that just looking at the wealth, and not the wealt compared to the cost of living and luxuries, is the problem

You act as if this is some sort of problem (5, Insightful)

Oz0ne (13272) | more than 8 years ago | (#17127844)

This is to be expected. People work disproportionately as well. High intelligence is distributed in a very similar curve.

The real reason that it seems to be getting more and more exaggerated is because the overall wealth/economy of the nation has continued to grow. This means that more people are able to afford to survive, to get health care, to be in a place where they can fill out these census instead of working their arses off or just trying to stay warm. Think back to the 1900s, or even late 1800s. People that were just scraping by would often not even survive. But really that's all besides the point.

Who cares if we have ridiculously rich people? What does it matter? It doesn't stop you from achieving your goals, you have to work to get there and earn your way the same. Just because there are enormously wealthy people doesn't mean you're prevented from acquiring wealth yourself. in fact, it makes you all the more likely to be able to get rich. These people if they want to stay wealthy, or grow their funds, must use it in some way. Maybe just earning interest in a bank, maybe investing in startup companies. Either way that money becomes a tool banks/companies can use to generate more wealth, and you can get in on that.

Quit being so classist. Just because others have done well doesn't mean you can't, but you surely can't if all you do is gripe about how you deserve more money without doing anything to earn it.

At least now we know... (3, Funny)

clickety6 (141178) | more than 8 years ago | (#17127854)

...who bought all the PS3s!

You Selfish Bastards! (0, Troll)

Slagged (985600) | more than 8 years ago | (#17127892)

I hope you all realize that most Slashdot readers (being tech geeks) will fall into this top 2% figure eventually? Most of the world is dirt poor. Is that my fault? Fuck no its not. These people have to raise themsleves out of poverty. If the government is holding them down, then they need to do something about that as well. A LOT of people died fighting for what we have. We do not need to feel guilty about it. The person who wrote this article is probably a commie asshat.

Geek issue? (1)

caffeined (150240) | more than 8 years ago | (#17127900)

How is this a geek issue?

Where's the nerdy slant?

It's not that it's not interesting - but should it be a Slashdot article?

Daily Kos, maybe, but not Slashdot.

So there's 3 billion people (1)

CrazyJim1 (809850) | more than 8 years ago | (#17127908)

9% of people in US are Millionares. 9% of 300 million is 27million. 27 goes into 3 billion as 1%. This makes sense because a lot of people in the world don't have money at all and are just dying of disease and lack of food. I was dumb. I went to school so I could cure diseases. I shoulda just donated my college tuition to the poor, it woulda done me more good. I programmed from when I was 6 until I'm 29, and I can't find a single job in what people call a booming tech industry, I still find it absurd.
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