The Top 1% and the rest of us

In 1985 there were only 13 US billionaires in the world. In 2013, the number had increased to 1,426 with a total net worth of US5.4 trillion. Within a generation – about 28 years – the billionaire class has increased by 10,869%.

The next category is called Ultra High Net Worth (UHNW) individuals or those with net worth of at least $30 million. In the world, there are 175,730 individuals who are UHNW individuals. With a total net worth of $27.8 trillion, around 88% are men with an average age of 58 years. Around 12% are women with an average age of 54 years.

Although this class has been called the top 1% which controls almost half of the world’s wealth, the actual percentage of the adult population in this super super rich category is only 0.7% of the world’s population. So how wealthy is the rest of the world?

According to Credit Suisse, the “lower half of the global population own barely 1% of global wealth, while the richest 10% of adults own 86% of all wealth and the top 1% own 46% of the total.” At the bottom of the pyramid are 3.2 billion adults (68.7%) of the global population who own $3.7 trillion in wealth or just 3% of total worldwide wealth.

Even more depressing news is that the World Bank estimates that 20% of the population in developing countries live on less than $1.25 or P58 a day. More than 50% live on less than $2.50 or around P120 a day.

In spite of the warnings by world leaders, including Pope Francis, that this severe income inequality will lead to social unrest, it seems that these current trends in gross inequality will in fact worsen.

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According to some economists, improved economic factors have been responsible for the increase in billionaires. These have included bullish world stock markets, a weak dollar, and surging commodity and real estate prices. Old fashioned entrepreneurialism, like in the technology sector, have also been considered another reason.

However, certain groups have advanced other factors as the main reasons for the rise of the 1%. One reason, according to The 1% and the Rest of Us by Tim Di Muzio (Zed Books, London 2015) is the control by banks of the extension of credit and, therefore, banks make all the investments decisions. This results in a system of “debt slavery and unequal access to money from which bank owners profit. Until money comes under democratic control and is produced debt free, the 99% will give a portion of their money to bankers who will make it available to the top 1%.”

“For years we have watched in silence while all the wealth of the world is gathered into the hands of a few men. Our willingness to let this happen is all the more evident because none of these men even bothers to pretend he is not doing wrong or tries to conceal his greed.”

Believe it or not, this statement was made — not by Pope Francis — but by Cicero, the Roman philosopher and statesman who was born 106 BC. Eventually, it was this greed that brought about the downfall of the Roman class and the destruction of the Roman Empire by barbarian invasions.

If we do not learn lessons from the past, history will repeat itself. –Elfren S. Cruz (The Philippine Star)