It's an interesting topic, and the ration seems horrendous. On the other hand, how has the overall development been since 1970? It's been fantastic for the people on the "wrong" end of that ratio.
Realistically, systematic starvation and abject poverty has dropped so much since 1970 that today we can see when it will be solved - obviously to the degree that it can be "solved" as such. By that I mean that, for example, in war-torn regions there is always going to be people with limited access to food. However, starvation as a systemic problem outside of war zones is being solved so fast today that we simply have reason to smile and be happy. Depending on the socio-economic development in the developing world in the next two decades, it is reasonable to assume that about the time 2030 comes around, there is not going to be any statistically significant amount of starvation in the world.
Poverty is going in the same direction with fewer and fewer people living in poverty every day.
So, what if the concentration of wealth, the ability of some to gather extreme amounts of wealth, is linked to the extreme reduction of poverty and suffering we have been seeing in the past four decades? What if the fact that some people are getting extremely rich is based on their ability to "exploit" the poor in the developing world (and by that exploitation lift them out of poverty - for the record this is the main, almost only reason people are getting richer in the developed world, they've been "exploited" by multinational companies).
If the two are linked I welcome our new economic super-over-lords.
>>>Poverty is going in the same direction with fewer and fewer people living in poverty every day.<<<
There are more people living in poverty today than at any time in human history. India and China alone probably have over 2 billion poor people. Go back to 1920 or 1930 there weren't even that many people on the entire planet. Add the rest of Asia, Africa and South America and you are over 3 billion.
Just because you're not dying of starvation does not men you're not poor; plenty are still starving too.
Didn't UNICEF recently state that 1/2 of all children on the planet live in poverty?
The rich do not lift anybody out of poverty. They take what's yours then they make you work to buy it back, verrrry sloooowly.. Then they pretend they are helping you by creating jobs. Oldest trick in the book.
My wife and I are huge Dave Ramsey-phile's. (or whatever the correct term would be). We facilitate his Financial Peace class a couple of times a year and you would not believe how many people have been helped by it. According to CNN 76% of Americans live paycheck to paycheck. This 9 week class gives people the tools to break that cycle, save for emergencies, pay off debt, and build wealth for retirement.
I haven't heard these segments on wealth inequality yet but I'm pretty sure I know where DR stands. He's all about personal responsibility and controlling your behaviors to influence your life, including your position with money. If you choose not to work or make stupid decisions with money, you don't have a "right" to share wealth from someone who did make smart choices with money. Yes, bad things can happen to people but (for example) it's your own fault if you signed up for a bigger mortgage than you could afford.
If I weren't earning an income doing what I'm doing now I would be a personal finance coach following his methods. I may transition to doing that as I get closer to retirement age (shudder).
<edit> ok, so SCS believes that $t00pid is a bad word. My sincerest apologies.
So what Dave Ramsey teaches plays well into the hands of those people that got you into bad situation in the first place: "learn to live with less".
I am not for total equality but I am for fair play. To give tax breaks to those that don't need it is simply wrong. To move jobs overseas so that shareholders can get more without having any input into a company is wrong too. I have not been to a Toyota factory but I would like to know how many parts of the car are made locally. As for the bigger mortgage; it is the lenders fault to give access to such a mortgage. But the lender doesn't really care because he can't fault, he is covered by the government who will bail him out with tax payer money.
I definitely don't favor direct wealth redistribution, but in America at least, the inequality is a result of being more of a plutocracy than a democracy ever since our origin. For a good part of our history we were content with having the "elite" as our leaders. What has happened is that those creating the rules are more frequently creating them to benefit only their own economic class. Our laws on campaigns and elections have pretty much solidified that no representative from the middle economic class can even afford to get on the ballot. Until campaign reform comes, nothing will change in the realm of "fair play" in America.
@deusx >> There are more people living in poverty today than at any time in human history
Sorry, That statement simply isn't in accordance with reality. For one, talking absolute numbers is nonsensical. If the worlds population is two billion and one billion are poor, it makes zero sense to claim that the number of poor people has doubled if the worlds population doubles to four billion and the number of poor people goes to two billion. If you double the population and the number of poor people double, by any reasonable measure the amount of poor people in the world has stayed the same. So, even if the absolute number of people living in powerty increases, it's the relative number that tells us of there is an improvement or not. HOWEVER, are you correct that the absolute number is going up? Of course not. At least not according to the UN.
Two recent studies measure poverty slightly differently and come to slightly different results, one, from the UN, uses the "standard" method of measuring average income against a set dollar value, and according to this, 1.2 billion people live in poverty. Another, more comprehensive study from Oxford measures on more dimensions such as health, mortality, child mortality etc, and concludes that 1.6 billion people live in poverty. Sadly we don't have historical data for the Oxford study, the methodology wasn't developed until 2010. I'll therefore stick to the UN numbers.
The ABSOLUTE number of people who live in poverty was HALVED between 1990 and 2010 according to the UN. At the time the worlds population grew from five billiion to almost seven billion, so the real decrease in poverty was significantly HIGHER than 50%. Absolute or relative, those are astonishing numbers. They are not mine, they are from the UN. I am therefore a little unsure how you conclude both with a higher number, and that there is an increase.
The numbers for starvation are also very, very good. In the 1970s almost 40%, of the worlds population was experiencing systematic starvation, today that number is about 15%, again according to UN numbers. That is a very, very large decline. Lets look at the absolute numbers. 1970, 3.8 billon people in the world, 37% suffers starvation, that is, about 1.4 billion people starve in 1970. In 2010 there is 6.8 billion people in the world, 15% of which are starving for a total number of people starving of almost exactly 1 billion. Even in absolute numbers we've a starvation reduction of about 1/3. Again, astonishing numbers.
Despite that fact that the worlds population is still increasing (but that will stop quite soon), living conditions for the majority of the worlds population is improving with astonishing speed. The UN today thinks that starvation and extreme poverty will be non-issues for the vast majority of the world within 20 years. Some areas are lagging and some of those are going to continue to lag behind, but these are exceptions, not the rule.
In general you can easily say that since we dropped out of the trees and moved into caves, mankind has been doing better on almost every conceivable issue every single day. Our living conditions have been constantly improving year over year and decade over decade. There have been dips and throughs, but they are the exception, not the rule.
@atom12>> the inequality is a result of being more of a plutocracy than a democracy ever since our origin
Is it? I am not sure why the income distribution in the US has been as uneven as it has been over the past few decades. It's a shame, a country with a wealthy middle class typically prospers more than one where the middle class has less. Is it because the rich are not covering their share though?
The reality is that the top 10% pay more than 70% of the total federal income tax, and more than half of the combined federal and state tax, The average rich guy pays about 35% of his income in tax, the average guy about 30%.
Another interesting number, for federal tax only, the lowest half of the US population shouldered a meager 2.25% of the total tax burden in the US. That is in the same area where the top 10% paid 70% of the total tax reaped.
I am certain that the US tax system has more or less nothing to do with the wealth gap in the US. Incomes do.
@Terje, I'm not speaking so much about the tax laws (although the burden on the hi-end was much higher during our most prosperous periods) as in the ethics of the decision-makers. When rules are made based on what's best for contributors rather than what's best for society (and both parties are quite guilty) the playing field gets tipped.
In business as well, ethics is in sad shape. To give multi-million dollar bonuses to COOs who eliminate domestic jobs for cheaper labor overseas is plain wrong. Then again, I don't think government should have the power to tell them they can't. Self over society - that's the problem everywhere.
OldSmoke said: "As for the bigger mortgage; it is the lenders fault to give access to such a mortgage."
*I* can't control what a lender does. I can only control what I do. American consumers have traditionally been "advised" to borrow to the hilt, especially when it comes to mortgages, because "your house will always go up in value". And we, as consumers, want that big nice house with a 50 year mortgage whose payment is 50% of our take-home pay. That is just s t o o p i d. There is no doubt that lenders played some part in the mortgage meltdown crisis a few years ago. However, one reason (possibly the only reason, but I don't know) that lenders previously let people borrow like that was because of the Community Reinvestment Act in the Carter administration, and subsequent administrations have promoted the "everyone should be able to buy a home" mantra. It simply isn't true. And it's my personal responsibility to know how much debt I can afford to take on.
Beleive me, I know. In late 2007 both my wife and I had fantastic FICO scores (still do). And we had $154,000 in non-mortgage debt. That's when we woke up and realized we were about to be in a big mess if we continued down the path we were on. It's taken us 6+ years but we've paid it all off save for the last $12,000. It's MY responsibility to pay it. I didn't file bankruptcy, I didn't wait around for a government program to bail me out. I saw many people during that time with junk mortgages, too-high mortgages, sub-prime mortgages, (not to mention new Hummers, Lexuses, etc) that said "I hope the government has a program to bail me out".
Apologies if I'm skewing this off-topic even more...off-topic. I just think people should focus on changing what they can change and be more responsible for themselves where they can be. If those individuals spent as much time, effort, passion, and energy cleaning up their own messes as they do wishing the government would give them someone else's money they would be in GREAT shape.
I know that "you" can't control what the lender does but the government can but didn't for the sake of a free market. And I am also sure that who ever sold the mortgage got a bonus at the end of the year for reaching his/her quota. I do agree that there will always be people that will abuse the system, any system for that matter.
While I like the topic, the way Dave drove the discussion was wrong. He never let the women on the phone explain properly what she meant but rather pushed her into admitting something I am sure she didn't want to and also labeled her.
She flat out says she wants wealth redistributed equally. This was part of a “theme” hour (or maybe a complete show, I haven’t heard all of it). And the even distribution of wealth is absolutely communism. Do you have two cars? Are you OK if the government takes one of them and gives it to someone who doesn’t have even one? It’s the exact same thing. Is that the labeling you were talking about? (I'm not being confrontational, sorry if it comes off that way. We're still friends, I promise!!)
I can only find where Henry Ford filed BK twice, by the way. Not seventeen times. And I agree with Dave that she is just spouting a talking point of “big business is bad and corrupt and their profits should be redistributed”. She then jumps topics all over the place…The lady is off her meds.
If anyone is interested PM me and I can post or provide all 3 hours of that day’s show in mp3 form. I suspect he spent the entire day talking about this with callers. I know he spent at least one radio hour (about 37 minutes).
The free market does a pretty good job at assigning values to products and wages of the people who make those products. Many of the outliers in salary range, both high and low-end, are not truly a part of the "free market" system. Consumers have no say in setting the value of the CEO of a corporation. A small board may be the sole deciders who choose to give an astronomical salary or bonus. Same with a teacher. Society may see their value as very high, but the board that sets the salaries has the say.
When it comes to the stock market, there's a big difference between "investors" and "traders." Investment is a key part of the free market. Trading (as it exists today) is on the fringe, IMHO. Many middle class citizens are investors. Few are traders.
Yes she said she wants equal distribution but he should have let her finish explaining herself and this is the part I found rude.
It doesn't mean that the government has to take the car and give it to someone else. The question here is how did that person manage to have two cars. Equal opportunity should give us equal wealth and for me wealth is not just measured in material terms.
I lived in Malaysia from 1997-2010 and my kids are born there too. We where fortunate enough to afford a maid that lived with us for 10years and helped to bring up our children. We always had arguments with our friends because we "overpaid" our maid. In fact, we helped to get her daughter thru collage. Why? Because without our maid we couldn't have done our jobs, me and my wife both have jobs, and I still think we didn't pay her enough. What pains me is the disrespect many people have for low labor workers. Yes you can argue that the maid could have taken better education and work in a bank but that isn't the right argument in my opinion because the job of a maid will still be needed. We need plumbers and electricians as much as we need doctors and lawyers.
You can list as many stats and numbers from the UN as you like, it's all meaningless because the stats are bull$hit.
UNICEF says there are over 1 billion children living in poverty and 3 billion people have no access to sanitation. Why would I believe your stats and not these. Recently poverty started being defined by "people living on $1 a day", before it used to be $2.5 a day. Let's make it $0.001 a day and we could claim that only 12 people live in poverty.
Send over some RedBull and problem solved, they can drink that and UN can proclaim them have saved from poverty. Now they have a drink that will keep the energized and when they are done drinking it they have a can to pi$$ in, voila, sanitation problem solved too.
This is similar to things schools do to stay in business, lower their standards and graduate more students.
"The question here is how did that person manage to have two cars. Equal opportunity should give us equal wealth and for me wealth is not just measured in material terms."
Ok, I can't imagine that you are being serious about this question because it seems quite straight forward to me. Either they were born into money their parents made or managed well, or they earned it themselves by doing something industrious, clever, inventive, devious, or some combination of the above.
@OldSmoke: If your maid said that she wanted 60K a year because that's what her friend who was a doctor makes, would you have said yes, we'll pay it because you're just as important as a doctor? Would you have said, I can stay home and care for our home because I make 50K (I have no idea how much you make :) ) and you are asking too much money, or would you have said. There are thousands of people out there, who value their time less than you do yours, I'm glad you value it so highly, but it's valued too highly for me, and I will need to find someone else whom I can afford to pay.
If a doctor can earn just as much money doing basic tasks that do not require any additional studying, working, training and maintaining skills, would most doctors become doctors or strive to become better doctors? I'm sure some would still because of the desire to help others, but our world would go into the toilet at a much more rapid pace if those who do things most can't were not compensated for their extra effort/talents/abilities. Most people who live in poverty can do more to try and change it than they are doing, they may need help, and that help could possibly even be in the form of money at times, but giving money to people who don't manage money well, is like giving crack to a drug addict and telling him to take good care of it and saying this is how you take good care of it, here you go... All the good intentions in the world won't change what is almost certainly going to happen to that crack/money.
You might say, well then you need to regulate how that money is spent or handled to make sure they do what they are supposed to with it... maybe, but then you have someone saying "you don't have enough money, here's some money that you deserve because you have less. You have to spend it this way and that way and not this way or that other way." Now, not only are you making it so I don't have to earn money to have money, but you're taking away my freedom because I'm now subject to you if I want that easy free money,... and I think everyone wants easy free money :) And not to mention, regulation lends itself to someone making back room deals saying that if they have to spend it on X and not Y, let me encourage you to make it MY X and not my competitors.
I believe in helping those who are poor, and I have been poor much of my life by many people's standards, but I am working very hard to change that. It's possible it may all blow up in my face and I may be in ruin, but if I just sit here and wait for people to take care of me, I'm a drain on my friends, family, and community, and in a small part, our world as a whole, and I contribute even less. If it does blow up and I do end up in ruin, I will be pretty much back where I started and I'll start over again if I must.
Speaking of which, I need to get back to work so it doesn't all come crashing down around me :)
Sorry for the long post, but I'm a pretty opinionated jerk at times ;) I'm still everyone's friend too :)
I don't think anybody is saying that a maid should make the same kind of money as a doctor.
But you can't possibly think that it's all right for plastic surgeons or dermatologists to make millions a year doing mostly unnecessary surgeries and charging 100 x more than they should.. What happened to that oath they all take?
Nobody says hospitals should be free either, but charging you a few thousand for a night's stay, $10 for a single pill of aspirin?
Let's be serious here. Nobody is advocating taking stuff away from anybody, but a little common sense goes a long way. It all boils down to that most rich a$$holes could simply pay their employes decent wages and still be billionaires. Would it really hurt them to be worth only 5 billion instead of 10 billion?
And what would be wrong if you could count on a doctor not to prescribe unnecessary tests and procedures + overcharge you just because he is a greedy motherFukker working for insurance and other medical corporations and not you, even though you are the one paying him.
That is what it's all about. They just don't know when enough is enough, nor do they care.
Yes, a recent report from the Gates foundation makes the same point. We are winning the war on poverty in the 3rd world. Malnutrition amongst children is still a major issue and as we only recently have learned the effects of that continues for generations. There's certainly no denying that things are getting better however the same report also highlights the dangers of the increasing disparity between the wealthiest and the poorest.
I think it's rather easy to dodge this when all that we consider is money. What we should really talk about is the disparity in resource consumption and that is just as bad as the wealth disparity. Clearly the resources of our spaceship are finite and unless we're careful a disparity adjustment will almost certainly happen by force and it is not going to be pretty.
This depends on your definition of "can't". We do produce enough food every day to feed everyone in the world. Interestingly, given the over-consumption of food in both the first and the third world today, even the food that is consumed, if handled a little better, can feed everybody in the world today easily. In addition to that, we throw away or in other ways destroy about 1/3 of the food produced.
There is about 7 billion of us, which means we can feed at least 9.3 billion with our current wasteful production and consumption scheme. The worlds population will never go above 11 billion, so a very moderate switch away from wasteful production to a more rational and streamlined production (when counting calories produced per input parameter such as acreage etc) we will never be in a situation where feeding everybody on the planet is impossible.
The main thing we need to change to make this happen is to stop destroying the most important future food source we have, namely life in the oceans. This can be done by moving away from wasteful fishing schemes and over to more large scale farming schemes modified for less pollution than we have today from fish farming.
>> Our balance is not natural
With minor adjustments our "balance" is perfectly natural. Remember, mother nature is not naturally balanced by any means. Mother Nature is a homicidal lunatic who is trying to destroy all life everywhere. That's just her nature.