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|New Tally of Global Wealth Illuminates Staggering Disparities|
New figures show that global wealth has increased by 72 percent since the year 2000. With half of the world's population still only owning 2 percent, the last decade of growth has clearly only benefitted the rich, writes Sam Pizzigati.
22nd October 2010 - Published by AlterNet
Who owns, right now, the wealth of the world? Until just over a week ago, we really didn’t have much in the way of specifics for an answer.
The United Nations University in Helsinki, in 2006, did try to tally household assets for the entire world. But that UN University World Institute for Development Economics Research report didn’t cover data from any year beyond 2000.
Now two of the scholars behind that 2006 report, Anthony Shorrocks and Jim Davies, have joined with the Credit Suisse Research Institute in Zurich to produce an even more ambitious global wealth tally, current all the way into 2010.
This new body of research, the first Global Wealth Report the Swiss banking giant Credit Suisse has published, crunches the data for over 200 countries worldwide. The data cover the wealth holdings of the world’s rich -- and everybody else.
That makes this effort something of a statistical landmark. Other global banks have, over recent years, tried to total the wealth of the world’s wealthy. The new Credit Suisse research has targeted “the entire wealth spectrum,” from the super rich “at the top of the wealth pyramid to individuals at the bottom.”
So what does all this targeting have to tell us? Those inclined to see the sunny side will certainly try to give the new Credit Suisse numbers a positive gloss. The Credit Suisse figures show that total global net worth, despite the 2008 global economic meltdown, has rocketed up 72 percent since 2000.
The world’s 4.4 billion adults, notes the new Credit Suisse research, now hold $194.5 trillion in wealth. That’s enough, if shared evenly across the globe, to guarantee every adult in the world a $43,800 net worth.
But the world’s wealth, of course, does not stand evenly divided, and the new Credit Suisse study, to its credit, neatly breaks down the arithmetic of our staggering global unevenness.
We now have, at the wealth spectrum’s uppermost reaches, just over 1,000 billionaires and another 80,000 “ultra high net worth individuals” worth over $50 million each. We can add into this wealthy summit still another 24 million adults worth between $1 million and $50 million.
At other end of the global spectrum sit three billion people -- “more than two thirds of the global adult population” – with an average wealth per adult less than $10,000. About 1.1 billion of these adults hold net worths less than $1,000.
“Our analysis,” the Credit Suisse study says plainly, “finds some stark differences in the distribution of wealth.”
The study’s starkest data snapshot? Maybe this: Half the people aged 20 and over in the world today hold under $4,000 in net worth, after subtracting debts from assets. This half the world’s population holds under 2 percent of world wealth.
The world’s richest 1 percent, adults with at least $588,000 to call their own, hold 43 percent of the world’s wealth, all by themselves.
The new Credit Suisse report takes pains to point out that personal wealth actually means much more in some places than others. If you live in a society with a frayed social safety net, the amount of personal wealth you have means just about everything. Without substantial net worth, you’re going to be vulnerable“to shocks like unemployment, ill health, or natural disasters.”
By contrast, if you live in a society with a robust safety net -- a nation that boasts “good public health care, high quality public education, generous state pensions,” and the like -- the size of your personal fortune matters considerably less.
Everyday people in the United States -- a society with a inadequate social safety net -- need, this Credit Suisse insight suggests, more personal net worth than everyday people who live in nations with healthier social service networks. But everyday people in many nations with stronger social safety nets than the United States are actually holding more net worth than their American counterparts.
Consider Canada, a nation with national public health insurance. Credit Suisse calculates the 2010 median wealth in Canada -- the wealth of the typical Canadian family -- at $94,700, about double the $47,771 U.S. median net worth.
No other nation, to be sure, holds as much total wealth as the United States. With only 5.2 percent of the world’s population, the United States can claim 23 percent of the world’s adults worth at least $100,000 and an even greater proportion, 41 percent, of the world’s millionaires.
The United States also currently tops the world in total household debt. And Credit Suisse analysts see that debt as a clear sign of shifting global economic times. Middle class consumers in China and other fast-growing economies, as Credit Suisse private banking research chief Giles Keating predicts, will soon “replace indebted U.S. households as the global economic growth locomotive.
That locomotive, the Credit Suisse wealth report prognosticates, will move the world in the right direction. Sums up the study: “In time, we expect and hope that the distribution of the world’s wealth becomes more even.”
The Credit Suisse data, unfortunately, don’t lend much support to this optimistic projection. The number of adults globally worth over $50 million each, the Credit Suisse research notes, “appears to be considerably greater than a decade ago.”
Even with the financial industry meltdown, Credit Suisse acknowledges, “the past decade has been especially conducive to the establishment and preservation of large fortunes.” Banking giants may be able to live comfortably with that reality. The rest of us need to change it.
Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.
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