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  • FILE PHOTO - High-rise buildings are seen in the background with slum dwellings in the front, near a polluted river in Manila May 31, 2013.

    FILE PHOTO - High-rise buildings are seen in the background with slum dwellings in the front, near a polluted river in Manila May 31, 2013. | Photo: REUTERS

Published 11 February 2019

Extremely high concentrations of wealth seems to correspond to the rise of right and far-right wing governments as they use their wealth to pursue political agendas.

Global wealth inequality has increased substantially since the 1980s according to a study coming out of the University of California Berkeley.  Additionally, 400 Americans own more wealth than 160 million Americans, which is triple the amount from 1980 and the most since its heyday of inequality in the 1920s.

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The study, published in a working paper titled Global Wealth Inequality, was done by inequality expert at the University of California, Berkeley economist Gabriel Zucman. The study found that the richest 0.00025 percent of the American population now owns more wealth than the 100 million adults in the bottom 60 percent, and that globally wealth inequality has increased.

It also traces wealth patterns around the world and finds a similar trend happening in many countries of the world including, China, Europe, Russia and the United States. There is a caveat, however, in that wealth is more difficult to track because globalization disperses data all over the world, and can often only be captured by “leaks from financial institutions, tax amnesties, and macroeconomic statistics from tax havens.”

Tax havens allow people or companies to avoid paying taxes and has in itself become an industry. The authors of the study writes:  “Since the 1980s, a large offshore wealth management industry has developed which makes some forms wealth (namely, financial portfolios) harder to capture.”

He continues, saying “statistics recently released by the central banks of a number of prominent tax havens suggest that the equivalent of 10% of world GDP is held in tax havens globally.”

Despite these leaks it can still be difficult to tamp down any numbers. During the height of the Panama Papers 2015 leak that exposed around 11 million documents of the offshore services of Mossack Fonseca , around 70 percent of clients were unable to be identified by even the company itself.

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As a result, the study says, “It is unclear, in particular, whether global wealth inequality as whole is rising or falling” but notes that the data suggests that inequality can be tracked within each country, and is shown to be increasing.

Extremely high concentrations of wealth seems to correspond to the rise of right and far-right wing governments as they use their wealth to pursue political agendas and to gain political power by either donating small fortunes to right-wing candidates or creating, in the U.S. at least, political action committees (PACs) to influence public opinion.

This trend is only likely to increase, as a study from April 2018 showing that the top 1% of the world's population will own 64% of the world’s wealth by 2030 with current trends continuing.

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