back to article Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'

You can't have failed to notice those massed ranks of people stamping their feet and going blue in the face as they shout about how inequality is rising and something, anything, really must be done to stop it. However, you may not have noticed those arguing the opposite, that inequality is falling, which is why we should carry …

  1. Anonymous Coward
    Anonymous Coward

    Wealth is relative. I read somewhere that in 1900 England had one of the highest per capita income in the world and the workers were paid very well compared to other countries. My grandfather told me that when he was growing up in Hungary the dream of the workers was to live and get paid as well as the English workers. In inflation adjusted constant pound Bangladesh is about at the same level as England was in1900 and is regarded as one of the poorest most miserable country..

    1. Voland's right hand Silver badge

      The study shows exactly what we have known all along

      Income study is correct, the conclusions by Mr Worstall are a bit different from what I would have made out of it.

      1. The study shows what we have noticed all along - that income rise is slowest in the 60-90 percentile band. That is what used to be called the "white collar" - engineers, qualified labour, professionals. Globalization or not, this continues to be decimated. Some of it is natural - you used to need a tehcnically qualified person for each 20-30 workers. You now need one per thousands (if not tens of thousands). Technology has allowed it and the graph reflects that.

      2. Blue collar (or its replacement - the zero contract floater) average income as a statistic when averaged across whole of the world has increased. Again, nothing new here. Globalization has clearly played the part here - if we redo the same graphic for let's say UK it will be different. We will see a _NEGATIVE_ growth in absolute dollars (this is what the national statistics say) growth across 0-97% percentile over the last decade. Moving the stats to wo decades may bring things above 10-20%, but not more. The sub-3% to percentile will however have not 100%, it will have 500%+ rise. This is also what the stats say. If we go to anywhere else in Western Europe it will not be any different either.

    2. alwarming

      > In inflation adjusted constant pound Bangladesh is about at the same level as

      > England was in1900 and is regarded as one of the poorest most miserable country..

      References ?

  2. Vociferous

    Apologetic.

    > The difficulty here is not that one side is wrong. It's that both sides are correct: inequality within countries is rising. However, inequality across the global population is actually falling.

    That simply means that income inequality is rising.

    The measure has no meaning outside the country being measured, it's deleterious effects are psychological and result from comparing self to those at the top in your community and country. The only importance is your relative wealth in society.

    That inequality between countries is dropping is nice, but has none of the positive effects on society which reduced inequality within a country does: reduced crime, reduced mortality, reduced child mortality, reduced unrest, increased trust, increased well-being, increased longevity.

    1. DavCrav Silver badge

      Re: Apologetic.

      "That simply means that income inequality is rising.

      The measure has no meaning outside the country being measured, it's deleterious effects are psychological and result from comparing self to those at the top in your community and country. The only importance is your relative wealth in society.

      That inequality between countries is dropping is nice, but has none of the positive effects on society which reduced inequality within a country does: reduced crime, reduced mortality, reduced child mortality, reduced unrest, increased trust, increased well-being, increased longevity."

      This just sounds like rubbish. Reduced inequality across the globe has far better effects *for the average human* than keeping most people poor so a few working-class people in Europe can keep getting tax credits. Of your list, reduced mortality and reduced child mortality, increased well being and increased longevity are far better served on a global scale by taking money from the 80-90 decile and giving it to the bottom 50%. This will increase unrest and crime in the rich countries, but obviously reduce crime and unrest in poor countries, so again we are better globally.

      Sure, your country or city will be in flames, but there won't be a war in Syria killing hundreds of thousands, so as a globe we are still doing better.

      It's OK to be selfish, we have to be otherwise we'd give all of our money to poor countries, but we should also recognize that we can be selfish even while seemingly being selfless, because we are also generally ignorant of the big picture. Of course, taxing the 1% in the West and giving that money to the poor in the West doesn't appear to stop companies doing very well, and hence standards rising in poor countries as well, so we can maybe even do both!

      But I want to take special issue with this line of rubbish: "The only importance is your relative wealth in society." That is complete garbage, as it is only true once you don't really have any problems. Poor people have to worry about clean water, shelter, food, how they would feed themselves if they get ill, access to medicine, etc. That you have to worry about whether you can afford a second flat screen, and you should because everyone else on your street has two, means that you don't have any actual real problems, and should shut up on a global scale. On a local scale, you might be right, but clearly what is important to *you* might not be important to *everyone else on the planet*. You getting that second flat screen might feel important to you, but is it worth killing a thousand children in Mozambique? You might think so, but morally surely it isn't.

      1. Vociferous

        Re: Apologetic.

        > This just sounds like rubbish.

        Yeah, I know, it is unintuitive, but it is the probably only really well-supported finding of socioeconomics ever.

        You're right that first the basic necessities of life must be filled: income inequality in society means little until everyone has sufficient food and housing, but once they do it comes in to play. Even in poor countries like Cuba.

        I refer to for instance Richard Wilkinson: https://www.ted.com/talks/richard_wilkinson

        1. Tim Worstal

          Re: Apologetic.

          Yeah, but you did notice the bit in the piece where I say I think the Spirit Level is hokum?

          1. Anonymous Coward
            Anonymous Coward

            Re: Apologetic.

            > That's a difficult one to maintain. Because you're trying to straddle "community" and "country". And they're not actually the same thing. We could obviously say that my community is "Bradford Road, Doncaster" and it's the inequality in that which is important. At which point the inequality between my bit of Doncaster and Bradford isn't all that important. Or we could say that my community is Bradford, and it's the inequality in that which is important.

            The real issue is that the country's laws and taxes constrain the reality and economic situation and how it relates to others outside that country. Yes, I feel for my brothers and sisters in poor countries who are far poorer than I, but there is a reason why countries have such radically differing economic situations.

            Our countries are fairly isolated silos of development. Globalisation is making this situation leak somewhat as is the wealth redistribution policies of the EU. This is why countries are desparate to get into the EU. It pulls them up as much as it pulls down the others. You just cannot compare radically different countries in such a superficial way and draw from it any inference about what we perceive in our localised economic climate. The economic and political drivers are so different. Some face problems of war, some face poverty because of drought. Some, like the US, face obscene tax and the problem of an out-of-control government run almost exclusively by corporate interests.

            It is an interesting question of how to guage the condition of people across the globe and how we can help them and something that should concern us all. But beware of drawing too much from the figures.

          2. Raumkraut

            Re: Apologetic.

            > Yeah, but you did notice the bit in the piece where I say I think the Spirit Level is hokum?

            Yeah. but do you have any actual evidence or reasoning behind that belief?

            1. Tim Worstal

              Re: Apologetic.

              Yes: http://spiritleveldelusion.blogspot.cz/

              Not written by me although I orginally made a couple of the points that it then picks up.

              Perhaps the most important one to make is that the very start of the Spirit Level is looking at the Easterlin Paradox. That, past a certain point (some $15,000 a year in GDP per capita is the usual identified point, this being where the basics of Maslow's Heirarchy are covered) greater wealth or GDP in the society doesn't seem to increase happiness very much. This is in fact wrong, as it does, just not very much. But let's go with the idea that it's correct. It's at that point that inequality, according to Pickett and Wilkinson, becomes the defining issue.

              But please do note: this is them stating this. Growth to beat absolute poverty is great, it's only when we get above that Paradox level that inequality becomes so important. That's why all of their comparisons are with OECD countries only.

              I am comparing matters across global levels of poverty: including many countries that are quite clearly well below that $15k a year standard. Even by the Spirit Level arguments raising incomes there in an absolute sense is more important than inequality.

              Further, I'm discussing something, globalisation, that has different effects on the two things. It increase the incomes of the absolutely poor. It also increases inequality within the rich countries. We thus do face a moral point. Should we continue for the good being done to those absolutely poor? Or should the harm done to the relatively poor outweigh that?

              It's not explicitly stated in the Spirit Level that the gains of the absolutely poor are worth more in terms of human happiness or utility. But it's certainly a possible outcome of their analysis.

              1. Raumkraut

                Re: Apologetic.

                > Yes: http://spiritleveldelusion.blogspot.cz/

                Ta for that. Though maybe it's just my own biases, but I'm highly sceptical of any "scientific" argument (or rebuttal, for that matter) made via sales of a book. Especially if its (sub)title refers to "the left" or "the right" as if that means anything.

                > Further, I'm discussing something, globalisation, that has different effects on the two things. It increase the incomes of the absolutely poor. It also increases inequality within the rich countries.

                This is my other point of contention. Is this necessarily the case? Are the two really inextricably entwined? Are there not governmental mechanisms which can be used to reduce national inequality, without lowering the demand for international trade?

                I would guess that the money/trade going from the wealthy nations to the growing ones is generated from goods and services in demand by the general public, moreso than those just the very wealthy demand. So would it not be logical that more wealthy-nation people with more money to spend (via closer income/wealth equality) would increase the demand for such goods, thus increasing global trade, and reducing global inequality further?

                I'm also idly curious as to how global inequality is affected by clamp-downs on grey-market imports (an anti-globalisation policy, AFAICT), but that's an aside.

                1. Tim Worstal

                  Re: Apologetic.

                  "This is my other point of contention. Is this necessarily the case? Are the two really inextricably entwined? Are there not governmental mechanisms which can be used to reduce national inequality, without lowering the demand for international trade?"

                  Sure, there are other policies that can be used to change inequality. But the effects of this particular one, globalisation, will be as advertised.

                  I'm not particularly opposed to reducing within rich country inequality either (I don't think it's very important and I might well oppose certain methods of doing so for the side effects of those methods, but no great ideological objection to the idea). I would be greatly opposed to choking off globalisation for the sake of reducing that inequality though. Precisely because the effect on hte absolutely poor is directly linked.

          3. CRConrad

            Spirit Level is hokum?

            Yeah, we saw that -- but did you see the bit where most of the world thinks you're wrong on that?

            1. Matt Bryant Silver badge
              FAIL

              Re: CR-Con-rad Re: Spirit Level is hokum?

              ".....but did you see the bit where most of the world thinks you're wrong on that?" And I assume you took the time to go round the World, interview everyone (sorry, I must have missed your call), and got everyone's opinion on the matter, before proclaiming that you knew what the whole World thinks? No, I didn't think so.

        2. Anonymous Coward
          Anonymous Coward

          Re: Apologetic.

          No, it's still rubbish.

          That decrease in global inequality means billions more people with access to food, clean water, healthcare, education, family planning, electricity, internet, telecommunications....

          That is what actually matters, not the fact that some relatively rich middle class people in the west resent some other middle class westerners getting richer faster than themselves.

    2. Cipher

      Re: Apologetic.

      "That inequality between countries is dropping is nice, but has none of the positive effects on society which reduced inequality within a country does: reduced crime, reduced mortality, reduced child mortality, reduced unrest, increased trust, increased well-being, increased longevity."

      Assumes facts not in evidence.

      That said:

      If the top 20 % of earners, who btw pay north of 80% of all taxes in the US, had every dime confiscated from them and redistributed, it wouldn't make any significant difference in equality.

      If the goal is to raise all ships, then hitting the rich isn't gonna get it done. What might get it done is to draw substantially more from a pool of people with enough members to make a difference, the middle class. This would have the effect of lowering most people's boats.

      If the goal is to punish the rich, the idea has merit. I don't care for this approach, rich people have always kept me employed at good salary through the years. Me and many others, say the middle class...

      1. Vociferous

        Re: Apologetic.

        > If the goal is to raise all ships, then hitting the rich isn't gonna get it done.

        Actually yes, it does. It turns out that it doesn't matter how you compress the income structure, by very high progressive taxation (like Sweden does) or by reducing difference in wages (like Japan does), as long as the result is shorter distance between the well-off and the less-well-off, you get the positive effects for society.

        The reason is because the effect is psychological: if you earn 15000 pounds/year in the UK you're not starving, but you see around you that you are obviously poor, and suffer the downsides and stress of being poor. If you earn 15000 pounds/year in Bangladesh you can't buy your own island in the Caribbean, but you can see around you that you're a comfortably wealthy man, and have the contentment which comes from that.

      2. tesmith47

        Re: Apologetic.

        bollocks! the top percent pay most of the taxes , true BUT the top percent take most of the income!!!.

        the real issue is not "soaking" the rich(even though the rich have soaked the poor for ever) but a change in the political and economic systems that impoverishes an increasingly larger percent of our citizens wile lavishing unlimited wealth on a small percent of the population.

        one example capital gains for the wealthy are taxed at a lower % than the working persons income, how in the hell does that make sense considering the lower 90% of income earners have virtualy no capital gains ever and the wealthiest take home almost ALL of the capital gains generated!!!???!!!

      3. CRConrad
        Facepalm

        Where have you been this century?

        "If the goal is to raise all ships, then hitting the rich isn't gonna get it done. What might get it done is to draw substantially more from a pool of people with enough members to make a difference, the middle class. This would have the effect of lowering most people's boats."

        That might have been true back when the middle class collectively actually had a bigger slice than the 1%, but that's not the case any more: The whole outrage the last few years, with "Occupy Wall Street" movements and so on, is because the very few richest people actually own MORE than the large masses below them -- not just per capita, but compared to the WHOLE middle class or working class or unemployed class.

        In order to have missed that, one must either have been hiding under a rock, or... Idunno, pretend to an ignorance one doesn't actually possess?

    3. Tim Worstal

      Re: Apologetic.

      "The measure has no meaning outside the country being measured, it's deleterious effects are psychological and result from comparing self to those at the top in your community and country."

      That's a difficult one to maintain. Because you're trying to straddle "community" and "country". And they're not actually the same thing. We could obviously say that my community is "Bradford Road, Doncaster" and it's the inequality in that which is important. At which point the inequality between my bit of Doncaster and Bradford isn't all that important. Or we could say that my community is Bradford, and it's the inequality in that which is important.

      In either case the inequality between my community and the bankers of London isn't all that important. Or we could say that it's English, or UK inequality that is: but then that's not really a "community". And if there's something special about the political entity that we belong to then why is Scottish v English inequality important? Or why isn't entire EU inequality important (and worth noting that if we did measure that then it would be considerably worse than US).

      I'm entirely willing to believe that there's gradations in this: perhaps it depends upon quite how in your face it is. Meaning that local inequality in a village is more pernicious than the same level across a country perhaps. But if that's true then that does leave room open for it to still have some importance, even if less, across the world.

    4. Anonymous Coward
      Anonymous Coward

      Re: Apologetic.

      Basically this article was written by a US conservative who wants to justify further tax cuts for the 1%. The reality is that in the US the income for the bottom 90 has fallen dramatically while the income for the upper 3 percent has grown dramatically. I think that this whole thing can be interpreted as the conservatives in the US has screwed the lower 90 percent blue!

      1. tesmith47

        Re: Apologetic.

        you are exactly right, and, to add insult on top of injury the right wingers here what to reduce taxes for the wealthy, decrease workers wages even though American productivity is at a all time high!!

  3. DropBear
    FAIL

    Ditch the white cat, please

    Lovely argument concluding that the poor have only themselves to blame (would they just be more skilled, they'd be positively swamped in money - or so we're told).

    Me, I'm less concerned with the well-being of other countries (although I do wish them good luck), I'm simply making the argument that no-one needs to own luxury yachts, barns full of Veyrons and zip around in Learjets between their various palaces and penthouses (unsurprisingly, those possessing said items seem to disagree). I'm looking forward with great interest to hearing your argument that conversely, those generally not in possession of said items really, really, really don't need plentiful food, a roof above their head they can call their own, or affordable healthcare and education (we don't want them skilled after all do we - it's more money for us!).

    1. Tim Worstal

      Re: Ditch the white cat, please

      Eh?

      "Lovely argument concluding that the poor have only themselves to blame"

      I thought I wrote a piece pointing out that we've got to decide which poor we want to help before we can decide our policy. Because this globalisation thing is great for the global poor but not for the rich world poor locally on our doorsteps.

      I can't quite see the leap from that to the idea that poor have only themselves to blame. Could you point it out to me?

      1. DropBear

        Re: Ditch the white cat, please

        I already did, right after the end of that sentence (in parentheses like these, in case you missed them). And I do believe (beside failing to address my point following that controversial bit) you're conflating issues (like the effect of globalization on developing countries and the way we currently understand to handle distribution of wealth within a single country) that are in my opinion quite tenuously connected.

    2. Richard Jones 1

      Re: Ditch the white cat, please

      While it is true that no one needs any of the Learjets/Veyrons, etc. in order to live a whole army of other people do need someone to buy those things, So never mind let us take them out of the equation. Now we have a group of unemployed who are struggling to eat in a high price economy. So they will no longer buy the clothes, luxuries and even necessities they need. So a whole other group of lower paid have no income, but never mind the 1% no longer have it all. Sadly neither does anyone else. One really serious issue is that a $1.00 income in a $1.00 economy is at least passable. A zero cost for food economy does even better for those with no income other than the direct effects of their own labour, since they can grow it all themselves. In short monkey with any key aspect and expect to get bitten by the law of unintended consequences.

      Not for nothing do aid workers, genuine aid workers say give a man a bag of food and feed his family for a day, teach people how to grow or harvest food and feed them for life. It is useful, more useful if no money changes hands, as that way nothing is left about for the other scourge of poor countries their corrupt leaders to steel.

      One of the complexities of all economic models is that they only account for the known economic factors. So, get rid of the economic leaders, (which as the article points out includes 100% of the readers here) and what happens, frankly not a great deal. Sure they stop spending so money velocity slows down, so more people often have less, but people do not always react as you expect and who can blame them. For a start unless you kill off the entire 1% rather you just rob them and sad to sad waste your money, a large number will get the urge to reclaim what they feel they are owed It is not all going to be replaced by the penniless tribesmen of the Kalahari. The world will have a reduced value, and possibly a few million less people but apart from not having diversions like The Register and the internet to absorb weekend down time will anything much have changed.in the world order frankly no.

      One example of the law of unintended consequences came clear a few years ago. Young women from villages flocked to work at factories making clothes. Sure the conditions were not always wonderful but, in many cases the girls did get (a) paid, (b) fed and (c) some education. New employment laws/rules saw them sent back to their villages without food, education and money, who gained? (I am not talking about the frankly crap buildings used in several countries which did need to be closed down before they fell down or were burned down)

      Frankly beggar thy neighbour is never a recipe for harmony or success, but as the Ebola problem is showing, it can be hell trying to teach and help some people. Just getting some to accept healthcare, e.g. polio vaccines can be an uphill struggle or do such things not count.

      1. DropBear
        WTF?

        Re: Ditch the white cat, please

        "in order to live a whole army of other people do need someone to buy those things"

        Really...? Are we still beating that "trickle down" dead horse? Never mind that it's so dead even the bones are long gone...? No, thanks.

        1. Richard Jones 1
          FAIL

          Re: Ditch the white cat, please

          Dropbear, I am sorry for you but I guess that simple minds can only deal with simple things. I never once mentioned trickle down though I did mention that a number of people are required to build complex things or do you believe in cargo cults. Still if you are happy to be part of the sacrificed 1%, please do not let me stop you. Go right ahead now if you do not mind, just please do not make a mess for others to clear up.

          You sound as though you have no experience of other poorer countries, you might like to correct this on the way out.

          Goodbye

          1. CRConrad

            You seem to be misunderstanding.

            "I did mention that a number of people are required to build complex things or do you believe in cargo cults"

            I think he meant if society decides that it doesn't really need rich people to have "barnfuls of Veyrons and Learjets to zip between their palaces", then no, we *don't* actually need anyone to build Veyrons and Learjets and palaces, either.

            1. Matt Bryant Silver badge
              FAIL

              Re: You seem to be misunderstanding.

              "I think he meant if society decides that it doesn't really need rich people to have "barnfuls of Veyrons and Learjets to zip between their palaces", then no, we *don't* actually need anyone to build Veyrons and Learjets and palaces, either." I think the non-rich people employed to make the Learjets and Veyrons, who depend on such for the money that pays their bills, might like to tell you which bodily orifice you can insert that theorem into.

              1. CRConrad
                Holmes

                Re: You seem to be misunderstanding.

                Oh, sorry, of course. How silly of me. How could I not realise that those are the only possible jobs ever for those people? How could I think that in a society where there was less demand for these things from fewer rich people because more of the total wealth were transferred to other, poorer people (among them, possibly, precisely these builders of Veyrons and Learjets), the increased demand for other, more modest goods would lead to more jobs building those goods in stead of Learjets and Veyrons.

                Silly me, and stupid Adam Smith and J.M. Keynes, for ever thinking that employment would follow demand. Thank you so much for pointing out the errors of my ways to me, oh Grand Moff of economics Bryant.

                Or something.

                1. Squander Two

                  Re: You seem to be misunderstanding.

                  Employment follows demand in aggregate. Changing career can still be very difficult for individuals.

                2. Matt Bryant Silver badge
                  FAIL

                  Re: CR-Con-Rad Re: You seem to be misunderstanding.

                  "...,Silly me.... ". Yup.

                  "....and stupid Adam Smith and J.M. Keynes...." You are simply misapplying their writings. In a stupid way.

                  "...for ever thinking that employment would follow demand...." Yes, you failed to notice the 'follow' bit, as in 'take away Learjet and Veyron builder jobs and theirs current income and force them to retrain and wait for new jobs that may come about, and just hope they manage for that gap without an income whilst the demand adapts'. Strangely enough Lefties have no problem asking the employees of 'luxury goods' companies to swallow such a loss of income and job security, but seem to get very upset when it is applied to more traditional socialist voting groups such as miners, steelworkers, shipyard workers, dockers, etc., etc. Their hypocrisy is quite marked - whilst they have no problem removing the livelihoods of workers for luxury car manufacturers such as Bugatti, they are all out to support 'the comrades' when it is more commoner fare such as British Leyland. Beyond duh!

        2. Matt Bryant Silver badge
          FAIL

          Re: DropBear Re: Ditch the white cat, please

          "....Really...? Are we still beating that "trickle down" dead horse?...." Seeing as El Mod rejected my appraisal of your denying trickle-down, maybe you should actually provide some form of actual and reasoned argument that trickle-down is a 'dead horse'. If you can, that is.

          1. Martin-73 Silver badge

            Re: DropBear Ditch the white cat, please

            Why should anyone have to deny that the economics of selfishness is wrong? If you have difficulty with that concept, I wish you luck

      2. Vociferous

        Re: Ditch the white cat, please

        > it is true that no one needs any of the Learjets/Veyrons, etc. in order to live a whole army of other people do need someone to buy those things

        If there is one thing the post-Reagan era has taught us, it is that trickle-down economics do not work.

        What actually happens when the very rich get more money, is that they hoard it. Because there are only so many things to spend on. If you want to stimulate the demand and economy, you make sure that the middle class gets money.

        1. Allan George Dyer Silver badge
          Joke

          Re: Ditch the white cat, please

          "If you want to stimulate the demand and economy, you make sure that the middle class gets money."

          Especially THIS part of the middle class. I've got this compelling evidence that giving money to me is more effective at stimulating the economy than giving it to anyone else.

          More seriously, if you're mega-rich, then you might spend a million on another jewel-encrusted skull (it's art, innit!), making a starving artist rich. However, that same million spread among the middle class buys 2000 fridges, keeping a whole factory of workers and their suppliers working.

          1. Cipher

            Re: Ditch the white cat, please

            " However, that same million spread among the middle class buys 2000 fridges, keeping a whole factory of workers and their suppliers working."

            Finally someone sez, sorta, what the core issue is here:

            Who do we take money from to give to others? How much do we take? Do we set an amount above which no one can keep another unit of money?

            Will this apply equally to all? Will the movie stars and sports heroes also be forced to a limit? Special exemptions for the politically connected based on need? Will some people's income caps be more equal than others?

            Politicians make these appeals for income equality/redistribution based on the average voter's propensity to vote their self interest, taking from the rich to give them more has appeal and keeps politicians in power.

            The question really is "By what moral authority do we take legal earnings from one group to give to another?"

            For all the noble bleatings these appeals make, we are talking about "from each according to ability and to each according to need." It won't work today, it will result in a larger gap just as it has in the past. It merely changes who the elites will be. If you think crony capitalim is bad, try living under crony communism. And forget any notion that "This time we'll get it right", we won't...

            Let us call these plans and notions what they are, the idea that some have the right to take and give what they didn't produce. Put the altruistic platitudes aside and defend this theft...

            1. This post has been deleted by its author

            2. Phil.T.Tipp

              Re: Ditch the white cat, please

              @ Cipher : I wish I could upvote this comment many, many times.

            3. ecofeco Silver badge

              Re: Ditch the white cat, please

              " If you think crony capitalim is bad, try living under crony communism. And forget any notion that "This time we'll get it right", we won't...

              Or worse yet, Corporate Communist Capitalism©®™.

              Better known as the U.S.A. Currently masquerading as fascism.

          2. Tom 13

            Re: you might spend a million on another jewel-encrusted skull

            That right there is your problem. The rich don't spend a million on another jewel-encrusted skull. They spend it on another factory to make fridges for the middle class. Maybe 2000, maybe more, maybe less. But they're the ones who build and manage the factories where the middle class works.

            Yes, the children of the rich may spend a million on another jewel-encrusted skull, but not the rich themselves. And those children, absent a tax free trust fund, will rapidly find themselves in the not rich group if they don't revert to the investment modes of their parents.

            1. ecofeco Silver badge

              Re: you might spend a million on another jewel-encrusted skull

              "That right there is your problem. The rich don't spend a million on another jewel-encrusted skull. They spend it on another factory to make fridges for the middle class. Maybe 2000, maybe more, maybe less. But they're the ones who build and manage the factories where the middle class works.

              No they don't. They spend YOUR pensions plans and savings and your small self trading investment accounts. OPM. Ever heard of it? Other Peoples' Money.

              Did everyone here completely miss the last 6 years? COMPLETELY?!

              Noble rich? Kiss that arse some more! Go on, you know you want to!

            2. Allan George Dyer Silver badge

              Re: you might spend a million on another jewel-encrusted skull

              @Tom 13 - re: the rich are "the ones who build and manage the factories where the middle class works"

              Well, I'd say most of the jobs in the factories would be working class, and the middle class would be the factory managers, but that's a minor quibble.

              What you're saying is that some rich people buy the luxuries and others do the investing, but I think that applies at any level of society. If people have a surplus, some will fritter it away on frivolities, others (or, perhaps, the same people at a different time) will invest it in the future - maybe a few shares, or a pension fund, or a tractor. We don't need rich people to provide investment if there is a surplus among the lower classes.

              So, the problem is not a problem after all.

        2. Squander Two

          Re: Ditch the white cat, please

          > If there is one thing the post-Reagan era has taught us, it is that trickle-down economics do not work.

          I see lefties make this claim from time to time (usually verbatim, interestingly (is there a manual or something?)), and find it frankly baffling. What we've seen in the post-Reagan era is more of the planet than ever before drag more of its people further out of poverty than the wildest dreams of our ancestors ever envisaged. (OK, maybe not the very wildest. Some of our ancestors were crazy.) And it's not thanks to Communism, is it?

          > What actually happens when the very rich get more money, is that they hoard it.

          No, they invest it. They may well invest it out of pure selfishness, because they want it to breed more money, but that doesn't matter to those who are invested in, does it?

          There may well be a handful of crazy super-rich people who convert all their money into cash or gemstones or whatever, place it into big wooden chests, then bury it. I agree that such people's wealth is not trickling down (unless a poor person finds one of their maps). I don't agree that such people are representative of the economy or significantly influential on it.

          1. Solmyr ibn Wali Barad

            about that trickle-down

            "You need rich people in your society not so much because in spending their money they create jobs, but because of what they have to do to get rich. I'm not talking about the trickle-down effect here. I'm not saying that if you let Henry Ford get rich, he'll hire you as a waiter at his next party. I'm saying that he'll make you a tractor to replace your horse."

            -- Paul Graham

            paulgraham.com/gap.html

            paulgraham.com/wealth.html

            1. Solmyr ibn Wali Barad

              Re: about that trickle-down

              And to follow up on that - it is actually a good litmus test for judging the 'filthy rich' types. Some of them have got their riches by providing useful improvements for the society. Like better tools that are enhancing our productivity. Some provide entertainment, which is not so clear cut anymore. There are, to put it mildly, those who will part fools from their money. Even some outright leeches abusing their power to the detriment of many.

              1. ecofeco Silver badge

                Re: about that trickle-down

                "That right there is your problem. The rich don't spend a million on another jewel-encrusted skull. They spend it on another factory to make fridges for the middle class. Maybe 2000, maybe more, maybe less. But they're the ones who build and manage the factories where the middle class works."

                NO. Most of them got it by lying, cheating and stealing and lobbying.

                Or did you forgot about some recently failed government IT projects? Defense contracts? Insider trading? Market gaming? Rate rigging? Let us know when one these sounds familiar.

          2. ecofeco Silver badge

            Re: Ditch the white cat, please

            "No, they invest it.

            Oh they do, do they?

            From FT. You know, that bastion of lefty ideologues.

            1. Squander Two

              Re: Ditch the white cat, please @ecofeco

              > Or did you forgot about some recently failed government IT projects? Defense contracts? Insider trading? Market gaming? Rate rigging? Let us know when one these sounds familiar.

              You seem to be implying that, because some rich people are corrupt and/or criminal, they all are. That's the same as saying that all poor people are burglars.

              >> No, they invest it.

              > Oh they do, do they?

              > From FT. You know, that bastion of lefty ideologues.

              I honestly have no idea what point you're trying to make there. There's certainly nothing in that FT piece suggesting, for instance, that Asian billionaires refuse to use banks. In fact, it says:

              Yet, one of the common characteristics of the world’s billionaires is their entrepreneurialism.

              So that's job creation. And:

              Billionaires increased their holdings of cash and cash equivalents such as shares or bonds in the period to an average of $600m each from $540m last time. ... Wealth-X and UBS said the level of cash held signalled that many are “waiting for the optimal time to make further investments”.

              So they've invested lots of money and are intending to invest even more.

              What did you think the article said?

      3. Matt Bryant Silver badge
        Facepalm

        Re: Ditch the white cat, please

        "While it is true that no one needs any of the Learjets/Veyrons, etc....." The use of such high-end luxury goods is a staple misdirection of the Lefties intended to focus attention on 'the excesses of the rich'. Instead, would they be so happy to consider the elimination of lower-end luxuries enjoyed by 'the common people'? How about chocolate - do we really need chocolate, even for 'that time of month'? No, if we are to only focus humanity's efforts on the noble goal of producing 'what is best for all' then chocolate appears to be a frivolous luxury item. But the chocolate industry employs millions of people both directly and indirectly in both the developed and developing World, and is a key crop in many of the less-developed countries where cocoa is grown. How about the tourism industry - do you really need your annual two weeks in Ibiza, or is another 'luxury'? Yet the tourist industry similarly employs millions and generates incomes throughout the World.

        Or how about the computer you are using to read this, possibly a tablet or smartphone, do you really need that or is it a luxury that used up 'precious resources' that could have been diverted to the 'betterment of mankind'? How about The Register itself, should the 'luxury' of such websites consume resources and skills that could be better applied? Don't let the carefully crafted and deceitful envy-politics arguments blinker your viewpoint, otherwise you could soon find your yourself daily queuing for your government-assigned loaf of bread, reading your one government-approved 'newspaper', whilst on the waiting list for your one-model Lada (whilst 'the guardians of the people's revolution' that replaced 'the rich' are chauffeured around in their Zil's, eating caviar, on their way to their weekend dachas).

        The Wall came down for a reason - democracy and Capitalism is better.

        1. Squander Two

          Re: Ditch the white cat, please @ Matt Bryant

          > The use of such high-end luxury goods is a staple misdirection of the Lefties intended to focus attention on 'the excesses of the rich'.

          Exactly. And I don't think these people realise what the 1% are actually like. The demonic Lear-jetting, whore-quaffing fat cats they envisage are probably more like the 0.01%. Most of the 1% are a bit more normal, I find: they have very nice cars and big houses, but they drive the cars themselves and the houses have mortgages. And a lot of them are Guardian-readers.

          Course, that's 1% by income, not by wealth. Which is fair enough, since that's what this article is about. That's the other thing: the anti-one-percenters don't seem to even be aware that there's a difference between income and wealth, just bandying their favourite number around without thinking about what it means. Personally, I'm in the top 10% in the UK by income and the bottom 10% by wealth -- I have negative wealth -- which just goes to show how silly it is to conflate the two.

          > How about chocolate - do we really need chocolate, even for 'that time of month'? No, if we are to only focus humanity's efforts on the noble goal of producing 'what is best for all' then chocolate appears to be a frivolous luxury item.

          Funnily enough, that's what the law actually says in the UK: biscuits are VAT-free, but chocolate biscuits, being luxury items, are taxed. Our lords and masters at work.

        2. tesmith47

          Re: Ditch the white cat, please

          bull, western capitalism has had all of the wealth stolen from damn near everyone else in the world, including the mind boggling wealth generated by the enslavement of hundreds of millions of africans for 200 years (yeah, i am looking at you too America) the Russians are sob's in their own right but they did not participate and did not profit in this world wide rape, plunder and theft by the west.

          1. Squander Two

            Slavery

            > western capitalism has had all of the wealth stolen from damn near everyone else in the world, including the mind boggling wealth generated by the enslavement of hundreds of millions of africans for 200 years (yeah, i am looking at you too America)

            Slavery was the normal way of humanity for millenia. What distinguishes Western civilisation in history was not that it participated in it just like everyone else but that it stamped it out, completely unlike everyone else. America was a bit later than the British Empire in that regard, but they still got there in the end.

            There is some reasonable debate about just how much wealth slavery actually generated. Slave owners at the time certainly thought that they needed it, but the fact is undeniable that productivity has increased massively since it was abolished -- and the British Empire reached its height after abolition. Worth remembering, too, that very few Africans were enslaved by white Europeans; they were mainly enslaved by other Africans and then sold to white Europeans. So, if enslavement generated so much wealth, we should be able to see a lot of that wealth in Africa, especially in the Arab states.

            I know some historians argue that what really killed slavery was mechanisation, the simple fact that machines work better than slaves and so destroyed the economic argument for it. Certainly, all nations that industrialised became rich, whilst not all nations that used slavery did.

  4. scrubber

    Fine up until the last point...

    "What happens to the one per cent is of course trivia"

    Except the rich happen to run the political discourse that affects everyone: they write the laws and set the policies that the rest of us have to abide by. Their wealth alone is not important but the rules/barriers they put in place to maintain their, and their offspring's, wealth and political influence actively harm the rest of us.

    1. Squander Two

      Re: Fine up until the last point...

      > the rich happen to run the political discourse that affects everyone

      Oh, so that's why they're so poular.

  5. Steve Knox

    Read the original

    This is not a bad article, but it is a small percentage of the information and perspective available in the original paper, which anyone can read here: http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2012/11/06/000158349_20121106085546/Rendered/PDF/wps6259.pdf

    (Oh, and Tim, if you really wanted a representative chart of the state of global inequality, you should have used the chart on page 9 of the original paper. The chart you chose actually does not show changes in inequality, but changes in distribution. There's a subtle but important difference.)

    1. ecofeco Silver badge

      Re: Read the original

      Thanks for the link Steve.

  6. Caoilte

    So many bum assumptions,

    1) Lower Inequality between nations and lower inequality within nations are not mutually exclusive.

    2) If we're going to talk about rising inequality within our nation, why not talk about rising inequality within developing nations?

    3) Since the 1% within our nation _runs_ our nation we have to contend with rising corruption that both undermines our growth and stability and feeds on itself in an un-virtuous circle of further growth in inequality.

    4) The transfer of growing inequality between generations is as pernicious to our growth and societal prospects. Smart kids from poor families have no prospects. Below average kids from rich families end up running the country.

    Your whole article read like a smoke screen. You knew your conclusion, "1% holding a third of the country's wealth is trivial" and you worked back from there.

    Is good that you mentioned Branko Milanovic - but it also seems odd you didn't mention Piketty at all.

    1. Tim Worstal

      Re: So many bum assumptions,

      "but it also seems odd you didn't mention Piketty at all."

      Piketty is all about wealth distribution. This is all about income distribution. Further, Piketty, when he does mention global inequality, does so pretty much only to note that it is falling. For he's read Milanovic too.

      1. CRConrad

        Piketty is all about wealth distribution. This is all about income distribution.

        And as everybody knows, the two can't possibly have anything to do with each other.

        Heck, man, are you working hard at coming off the way you do, or does it come naturally to you?

        1. Squander Two

          Re: Piketty is all about wealth distribution. This is all about income distribution.

          Of course they have something to do with each other, but they're nowhere near as closely correlated as you seem to think. As I mentioned elsewhere, I'm in the UK's top 10% by income and bottom 10% by wealth. And I am not remotely unusual in that respect. Most people with mortgages, for instance, have negative wealth.

  7. William Donelson

    Fastest growing Jobs...

    Of the 10 occupation categories projecting the greatest growth in the next eight years, only ONE pays a middle-class wage. FOUR pay barely above poverty level and FIVE of the TEN PAY BENEATH POVERTY LEVEL.

    THIS IS WHAT THE SUPER-RICH DID with the tax breaks Cheney-Bush gave them: Invested them overseas, and shifted your jobs and infrastructure to China, etc.

    http://www.nationofchange.org/what-job-creation-numbers-don-t-tell-us-1403096844

    1. Matt Bryant Silver badge
      FAIL

      RE: William Donelson Re: Fastest growing Jobs...

      Third edit due to El Mod....

      "Of the 10 occupation categories projecting the greatest growth in the next eight years, only ONE pays a middle-class wage. FOUR pay barely above poverty level and FIVE of the TEN PAY BENEATH POVERTY LEVEL....." There have always been more lower-paid jobs than highly-paid ones due to the different levels and types of skills required. For example, there will always be a greater demand for shelf-stackers in supermarkets than brain surgeons, especially in a growing economy recovering from a recession. And because shelf-stacking requires much less skills, knowledge and training, supermarkets are going to pay shelf-stackers a lot less - the barriers to entry are a lot lower. A brain surgeon, however, requires years of highly expensive training in a specialized environment, must be a person already from the top end of a very elite group, and cannot be replaced easily. In a purely economic argument, you could claim a shelf-stacker does much more directly for an economy as their work helps the supermarket sell goods and creates profits, whereas in a publicly-funded health service (like the NHS in the UK) the brain surgeon has very little direct economic impact and could be seen as an economic loss-maker. Do you really want to make the economic argument for no brain surgeons?

      1. tesmith47

        Re: RE: William Donelson Fastest growing Jobs...

        most people dont die of brain issues, most people diefrom lack of basic health care, so yes there is a argument that we need a lot more general doctors and nurses than brain surgeons.

      2. ecofeco Silver badge

        Re: RE: William Donelson Fastest growing Jobs...

        Millions and millions of people can't afford a brain surgeon, so for them, they already don't exist.

        1. Matt Bryant Silver badge
          Facepalm

          Re: ecofeco Re: RE: William Donelson Fastest growing Jobs...

          "Millions and millions of people can't afford a brain surgeon...." A very poor attempt at evading the point raised. As I pointed out, in an economy with publically-funded health for all, such as the NHS, a brain surgeon would be available on an equal basis and would also be of less economic 'import' than the horde of shelfstackers the same economy would employ. Stop dodging the issue and admit you were wrong.

  8. Anonymous Coward
    Anonymous Coward

    Race to the bottom

    I would argue that the transformation of the fortunes of the dirt poor is simply the result of the elite finding cheaper ways to make their products in locations that were once off-limits, in terms of infrastructure and transport. Wealth naturally concentrates so in that regard it's a race to the bottom - long term we *all* get poorer at the expense of the megarich.

    Until there's a reliable method of global taxation (ha ha!), then this problem will continue.

    $32 trillion in liquid assets squirrelled away off-shore, doing NOTHING, is a disgrace not to mention a giant black hole in the economy:

    Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280 billion in lost income tax revenues, according to research published on Sunday.

    The study estimating the extent of global private financial wealth held in offshore accounts - **excluding** non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between $21 and $32 trillion.

    http://uk.reuters.com/article/2012/07/22/offshore-wealth-idINL6E8IKF6120120722

    1. Anonymous Coward
      Anonymous Coward

      Re: Race to the bottom

      What percentage of that ~32T is held in banks, and would the banks' use of it as lending reserve change your opinion?

      1. Tim Worstal

        Re: Race to the bottom

        Quite.

        "$32 trillion in liquid assets squirrelled away off-shore, doing NOTHING, is a disgrace not to mention a giant black hole in the economy:"

        Because banks do tend to lend out the money that is sitting in them. And if shares are simply registered as belonging offshore, well, they're still shares in that company that's doing the work.

        Even the people who came up with that $32 trillion number (Tax Justice peeps I think) don't say it's doing nothing. They do say it ain't being taxed but that's not the same as doing nothing.

    2. Matt Bryant Silver badge
      FAIL

      Re: AC Re: Race to the bottom

      ".....Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens....." The presumption is that 'the rich' will never use that money in a manner that generates taxes in their home countries. Again, it is an attempt to focus attention only on the mega-rich and ignores a few simple facts. Such as how the UK Government gives tax incentives to the non-rich to build up savings because having liquidity, especially for retirement, is seen as better than building up debt. Are those attacking the rich so quick to accuse those non-rich with ISAs or other tax-exempt savings as 'deliberately stashing good money away'? No. How about workers' pensions, are they 'taking money out of the system' if the pension provider invests them in a foreign country with lower taxes? Again, no.

  9. Anonymous Coward
    Anonymous Coward

    Life is just a ride..

    I think the author has written this article just to get a reaction.

    1, Money does not exist, it is not based against any earth resource for example redeeming the notes for gold like it used to be, it is crazy we have lengthy discussions about the economy in the news and get so heated about it.

    2, The so called 1% are feeling persecuted because they feel they are being left out of society, (socially excluded), people have to believe in society and money its very existence for it to work (including the wealthy) , once the lemon is squeezed too much people tend to drop out, adjust and question society i.e. critically think how is money generated, who owns the bank of England or the Federal reserve for example?

    3, A clearer way of looking at things was a graph i saw describing the wealth and income from the 1920' to present day shaped like a half pipe Great Depression to present day it pictures the wealth that different generations have had access to> Present day job for example you could earn a nice salary in the city and still think you are hard done to and not be able to buy a coffee because things are so more expensive for example housing or transportation. The demographics of wealth income in terms of assets, and investments are far more abundant with the Boomers. If you don't have bank of mum n dad and are currently aged 20-40 your pretty much stuffed in terms of an affordable roof over your head.

    4, Being Gen X, I would rather have more free time and not be a slave to this illusion, an employer could pay double my wage and still that would not cover what is needed in later life in terms of an retirement pot.

    Do not participate in this illusion, Switch off TV, enjoy what you have right now, make the most of life, help others and don't bash the wealthy unless they are corrupt and harming others.

    1. Anonymous Coward
      Anonymous Coward

      Re: Life is just a ride..

      I think the author has written this article just to get a reaction.

      Yup, every one of his articles that I've read are cherry picked facts and seemingly deliberate misrepresentation or misinterpretation of statistics. Plus a bit of speculative neo-liberal dogma thrown in for good measure.

      Basically Worstall's a click troll.

    2. Squander Two

      Re: Life is just a ride..

      > Money does not exist, it is not based against any earth resource for example redeeming the notes for gold like it used to be

      Can you explain what makes what you think of as money valuable and why what I think of as money isn't valuable?

      What's so great about gold? It's just stuff. Why should it be worth more than a person's time and effort? Or, more precisely, why should some solid stuff have a more "real" value than a person's time and effort?

      If I ask you to build me a new house, and I pay for all the materials and your food, will you do it for free because you won't be giving me any earth resources?

      1. Tom 13

        Re: What's so great about gold?

        It's not gold per se although for the better part of history gold has been the most frequently chose rare-ish resource we pull from the ground to back our money. We've used copper, silver, tobacco, and animal skins at various points in time. The key factor however was that whatever was chosen for the medium of exchange was relatively fixed as far as the ability of government to create more of it at whim. These days The Fed gets together at least once a quarter to decide how much more money they are going to create. While I see the point of not having something that grows to allow the economy to grow, I think we've gone too far in the other direction. It's too easy for the government to inflate the currency.

      2. Anonymous Coward
        Anonymous Coward

        Re: Life is just a ride..

        There is only a set amount of Gold, just like any other resource on this planet be that human or mineral etc Money is currently generated without a limit, hence the huge amount of debt that we can never pay back. As a country we hardly produce anything to trade.

        Fractional reserved banking keeps the majority working "more for less" in debt paying interest hence the social inequality. In some extreme cases people cannot continue and the system fails. I am pointing out that if a system is to work it has to include all. At some point the system will crash and will be reset again. Lets hope there is a better way next time around.

        1. Squander Two

          Re: Life is just a ride..

          > As a country we hardly produce anything to trade.

          That's wrong for two reasons. Firstly, we produce quite a lot of expertise, which is very tradable. Secondly, even if you insist that that people's time and effort and knowledge don't count for some reason and that the only produced things that matter are solid objects, British manufacturing has been steadily increasing in output for decades. When people talk about the death of our manufacturing industries, they are referring to the fact that we no longer emply a lot of people in manufacturing. But that's for the same reason we no longer employ half the population of the country in agriculture: we've got much better at it. We didn't stop doing it.

          > Fractional reserved banking keeps the majority working "more for less" in debt paying interest hence the social inequality. ... I am pointing out that if a system is to work it has to include all.

          You are implying that jurisdictions in which banking is not available to the masses are preferable for the poor. The evidence is against you.

  10. Identity
    Boffin

    Generally correct

    However, a couple of things bear mentioning:

    We hear here nothing of cost of and standard of living. Raw numbers really tell us very little.

    Further, I heard this morning from Naomi Klein that in Ontario, where she lives, "the government passed a really ambitious green energy plan, and there's a requirement that if you want to benefit from the subsidies, you have to produce a certain amount of your solar panels and wind turbines in Ontario. It was successful: 31,000 manufacturing jobs were created, closed down auto plants opened up and were turned into solar production plants; in the green economy that everybody talks about. And then Japan and the European Union took Canada to the WTO and said that this violated our obligations because you're not allowed to favor local industry, and in fact, there have been several trade challenges like this: the U.S. has challenged China, has challenged India, for its subsidies it supports for renewable energy." Bang goes the income for those 31,000 and the thousands or millions similarly afflicted.

    1. Tim Worstal

      Re: Generally correct

      I've written about that elsewhere. And I find Klein's attitude to be truly fascinating.

      Ontario had feed in tariffs on solar. This is to encourage people to install solar panels to beat climate change. It makes installation cheaper for those who do it by providing a subsidy.

      OK.

      Then they say that you can only get these subsidies is 60% of the solar panels are made in Ontario. Hmm, well, that clearly does violate WTO guidelines. You can have all the renewable energy subsidies you want but you can't have place of origin qualifications for them.

      So, yes, Ontario gets sued and the origin requirements are scrapped. So Klein's right so far. It's the implication that she gets so wrong though.

      What's the point of the subsidies? To make installing solar cheaper and thus make sure more of it happens. What's the effect of allowing cheaper EU and Chinese panels to collect the subsidy? To make panels cheaper to install and thus lead to more being installed.

      And we can tell that imports are cheaper: because the local to Ontario factories can't sell any when the local origin requirements are abolished. So, the abolition of the local content rules means that solar panels in Ontario are cheaper, ergo more will presumably be installed and climate change is closer to being beaten.

      Klein then says that the trade rules frustrate the fight against climate change. But the outcome of the trade rules is cheaper solar panels and thus more fight against climate change.

      Someone, somewhere, is very confused here. And it ain't me.

    2. Matt Bryant Silver badge
      WTF?

      RE: Identify Re: Generally correct

      "......subsidies......" So you really can't see the problem the U.S. had, nor can you see the artificialness of declaring a subsidized industry 'a success'? Any industry can be turned into 'a success' if government money is thrown at it, the real measure is can it stand on its own, otherwise it is not sustainable and just tax-funded vote-buying.

      1. Squander Two

        Re: RE: Identify Generally correct

        > Any industry can be turned into 'a success' if government money is thrown at it

        People who claim that subsidised renewable energy firms are a success very rarely claim that the bailouts of 2008 showed how successful our banks were.

  11. Anonymous Coward
    Anonymous Coward

    Given that all of us reading this fall into that global 1%

    Perhaps it would be more instructive to separate out the 1% of that 1% that can easily skew the income figures to see how we're REALLY doing. There are not many of them, but when some of them have seen their incomes go up with 10x or more in the past couple decades, that really skews the number for the rest of us.

    On an individual basis we may have seen that 60% jump and more because presumably as you get older you acquire more skills / get promoted / etc., but taken on a whole, there's no way that the "upper middle class" in the US has seen a jump anywhere near that. It may not be 0%, but it is a lot closer to that than 60%, that's for damn sure.

    1. Hargrove

      Re: Given that all of us reading this fall into that global 1%

      Nicely put, @Doug S.

      The problem of disparity and redistribution of wealth is extremely difficult. As automation displaces labor (which it will, not just because it eliminates labor cost but because it improves product performance and reliability) basic adjustments in societal values will need to occur.

      H. L. Mencken is reported to have observed that, "for every complex problem there is a solution that is simple, neat, and wrong." That applies to economic problems in spades.

    2. ecofeco Silver badge

      Re: Given that all of us reading this fall into that global 1%

      10%? 60%?

      Try 300%.

      Fact. (google it)

      1. Anonymous Coward
        Anonymous Coward

        @ecofeco

        Anyone who says "Fact. (google it)" is full of shit. Fact. (google it)

        Seriously, if you make a ridiculous claim you have to do your own research and post a link, not just tell us to do your research for you - you don't even give us the google search terms to arrive at whatever link you think proves whatever you're trying to claim.

        You certainly can't be saying that real incomes in the US for the upper middle class have tripled in the past two decades. Sure, for the 1% they may have, but I wasn't talking about them - and that data is very misleading due to the fact that if you take the bottom 90% of the 1% their incomes haven't increased by even 50%. It is the 10% of the 1% that (the 0.1%) that have seen massive increases that skew the numbers for the 1% taken as a whole.

        1. ecofeco Silver badge
          1. Anonymous Coward
            Anonymous Coward

            Re: @ecofeco

            Perhaps you should have read what I wrote, which didn't make any claims about the 1%, but about the "upper middle class". Unless you think the upper middle class extends to people with incomes not far from $1 million/yr, I was not talking about the 1%.

            1. Squander Two

              Re: @ecofeco

              DougS,

              I think you are mistaken. You're arguing on the assumption that The One Percent are the top 1% of society, either by income or by wealth. But they're not. "The One Percent" is a catchy marketing term used to mean "those fucking bastards with their cigars and their top hats and their private jets who are to blame for everything wrong in my world." The idea that 1% in this context indicates some sort of fraction -- a hundredth, say -- is frankly naive.

              1. Anonymous Coward
                Anonymous Coward

                Re: @ecofeco

                Maybe you should read some IRS documents if you think 1% is purely a marketing term. Politicians may have popularized the term and caused some people to misuse it, but when the IRS shows incomes and taxes paid for individuals they divide it into quartiles, and further divide the upper quartile into the top 10% overall and the top 1% overall.

                That's where the "one percenters" originated from, not on Madison Avenue.

  12. Marketing Hack Silver badge
    Holmes

    The fact is that in Western Countries where inequality is increasing...

    Working-class, middle class and poor people want THEIR prospects and the prospects for THEIR loved ones to improve, and have a rather tangential "well, that's nice" take on whether or not equality in India or China is improving. That's a very natural and understandable human reaction, and people have some expectation that their leaders will do something to help THEM, and not just try to more efficiently manage the decline of the majority of the working population in the West.

    1. ecofeco Silver badge

      Re: The fact is that in Western Countries where inequality is increasing...

      Exactly.

  13. Tim Starling

    "Moral precepts aren't economics"

    Perhaps moral precepts aren't economics, but a connection with utilitarianism is often made in introductory textbooks on economics. For example:

    "Economics is not about the financial fate of particular individuals or particular enterprises. It is about the material well-being of society as a whole. When economists analyze prices, wages, profits, or the international balance of trade, for example, it is from the standpoint of how decisions in various parts of the economy affect the allocation of scarce resources in a way that raises or lowers the material standard of living of the people as a whole."

    http://books.google.com.au/books?id=hQX6-P0N2nUC&printsec=frontcover&dq=economics&hl=en&sa=X&ei=ZJooVMHCCtLj8AWjnoGwBw&ved=0CC8Q6AEwAQ#v=onepage&q&f=false

  14. Anonymous Coward
    Anonymous Coward

    income inequality AFTER TAX is reducing

    Many of the studies are done on pre-tax and pre-redistribution incomes. This is clearly misleading. When the redistribution efforts of the UK government are taken into account income inequality in the UK is decreasing over time. Not surprising when the bottom 50% of earners pay 10% of all income tax, and the top 1% pay 29% of it.

    1. Squander Two

      Re: income inequality AFTER TAX is reducing

      > Many of the studies are done on pre-tax and pre-redistribution incomes.

      Funnily enough, that is now known as Worstall's Fallacy.

  15. knarf

    That leaves us with a problem that economics simply cannot solve .

    China solved it by fixing their currency values so the labour and material values stay the same.

  16. DocJD

    Pretty Good

    I found the article interesting and the points well thought out. Certainly better reasoned than most of the comments.

  17. ecofeco Silver badge

    Lowest common denominator

    "However, inequality across the global population is actually falling."

    Oh that makes me feel sooo much better. That my 1st world cost of living will have to be paid with 2nd and 3rd world wages.

    Not.

  18. ecofeco Silver badge

    Page 11 of actual paper

    "Global inequality is much greater than inequality within any individual country.

    The very paper you quote says your opening statement is at best, completely backwards.

    Quote: "However, inequality across the global population is actually falling."

    I've just finished reading the paper. It concludes that only the top 1% (those guys!) some of the middle class of emerging markets and a very small percentage of the truly destitute have made gains, but overall, global inequality is not decreasing and many "1st" world nation are seeing significant increases in inequality.

    The charts tell all.

    1. CRConrad

      Speaking of getting things backwards...

      "Global inequality is much greater than inequality within any individual country.

      The very paper you quote says your opening statement is at best, completely backwards.

      Quote: "However, inequality across the global population is actually falling."

      How, exactly, does this juxtaposition prove that either statement is remotely "backwards" -- are you perhaps labouring under the misapprehension that they are somehow logical opposites?

      "Johnny is much taller than Danny" isn't the opposite of "Danny is growing much faster than Johnny" either.

      1. ecofeco Silver badge

        Re: Speaking of getting things backwards...

        You're joking, right?

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