https://www.theguardian.com/business/2018/apr/07/global-inequality-tipping-point-2030
Richest 1% on target to own two-thirds of all wealth by 2030
World leaders urged to act as anger over inequality reaches a ‘tipping
point’
The world’s richest 1% are on course to control as much as two-thirds of
the world’s wealth by 2030, according to a shocking analysis that has
lead to a cross-party call for action.
World leaders are being warned that the continued accumulation of wealth
at the top will fuel growing distrust and anger over the coming decade
unless action is taken to restore the balance.
An alarming projection produced by the House of Commons library suggests
that if trends seen since the 2008 financial crash were to continue,
then the top 1% will hold 64% of the world’s wealth by 2030. Even taking
the financial crash into account, and measuring their assets over a
longer period, they would still hold more than half of all wealth.
Business Today: sign up for a morning shot of financial news
Read more
Since 2008, the wealth of the richest 1% has been growing at an average
of 6% a year – much faster than the 3% growth in wealth of the remaining
99% of the world’s population. Should that continue, the top 1% would
hold wealth equating to $305tn (£216.5tn) – up from $140tn today.
Analysts suggest wealth has become concentrated at the top because of
recent income inequality, higher rates of saving among the wealthy, and
the accumulation of assets. The wealthy also invested a large amount of
equity in businesses, stocks and other financial assets, which have
handed them disproportionate benefits.
New polling by Opinium suggests that voters perceive a major problem
with the influence exerted by the very wealthy. Asked to select a group
that would have the most power in 2030, most (34%) said the super-rich,
while 28% opted for national governments. In a sign of falling levels of
trust, those surveyed said they feared the consequences of wealth
inequality would be rising levels of corruption (41%) or the “super-rich
enjoying unfair influence on government policy” (43%).
The research was commissioned by Liam Byrne, the former Labour cabinet
minister, as part of a gathering of MPs, academics, business leaders,
trade unions and civil society leaders focused on addressing the problem.
Actor Michael Sheen, who is campaigning against high-interest lenders,
supports the calls to rebalance global inequality.
Actor Michael Sheen, who is campaigning against high-interest lenders,
supports the calls to rebalance global inequality. Photograph: Teri
Pengilley for the Guardian
The actor Michael Sheen, who has opted to scale back his Hollywood
career to campaign against high-interest credit providers, was among
those supporting the calls.
The hope is to create pressure for global action when leaders of the G20
group of nations gather for a summit in Buenos Aires in November. Byrne,
who organised the first OECD global parliamentary conference on
inclusive growth, said he believed global inequality was “now at a
tipping point”.
“If we don’t take steps to rewrite the rules of how our economies work,
then we condemn ourselves to a future that remains unequal for good,” he
said. “That’s morally bad, and economically disastrous, risking a new
explosion in instability, corruption and poverty.”
In a sign of the concern about the accumulation of wealth in the hands
of so few, the move has gained support from across the political divide.
George Freeman, the Tory MP and former head of the prime minister’s
policy board, said: “While mankind has never seen such income
inequality, it is also true that mankind has never experienced such
rapid increases in living standards. Around the world billions of people
are being lifted out of poverty at a pace never seen before. But the
extraordinary concentration of global wealth today – fuelled by the pace
of technological innovation and globalisation – poses serious challenges.
“If the system of capitalist liberal democracy which has triumphed in
the west is to pass the big test of globalisation – and the assault from
radical Islam as well as its own internal pressures from post-crash
austerity – we need some new thinking on ways to widen opportunity,
share ownership and philanthropy. Fast.”
Demands for action from the group include improving productivity to
ensure wages rise and reform of capital markets to promote greater equality.
Danny Dorling, professor of geography at the University of Oxford, said
the scenario in which the super-rich accumulated even more wealth by
2030 was a realistic one.
“Even if the income of the wealthiest people in the world stops rising
dramatically in the future, their wealth will still grow for some time,”
he said. “The last peak of income inequality was in 1913. We are near
that again, but even if we reduce inequality now it will continue to
grow for one to two more decades.”