The global wealth distribution is predictably spiky. That’s mostly because scarcely anyone owns anything:
… it does not take that much to get into the top 1% of wealth holders. Once debts have been subtracted, a person needs only $3,650 to be among the wealthiest half of the world’s citizens. However, about $77,000 is required to be a member of the top 10% of global wealth holders and $798,000 to belong to the top 1%. So if you own a home in any major city in the rich North on your own and without a mortgage, you are part of the top 1%.
This looks like what you’d expect if population — at the global level — expanded approximately to the resource limit. (There are no doubt cuddlier interpretations out there.)
The 21st century is looking like a nightmare for egalitarians, according to UBS. The bank anticipates an “automation and connectivity” explosion on a scale amounting to a fourth industrial revolution, widening gaps within and between nations:
These changes will have very different effects on nations, businesses and individuals. Automation will continue to put downward pressure on the wages of the low skilled and is starting to impinge on the employment prospects of middle skilled workers. By contrast the potential returns to highly skilled and more adaptable workers are increasing. Among corporations, a wide range of traditional businesses – especially those that act as intermediaries – can be expected to suffer. Many labor-intensive firms should be able to boost profit margins as they substitute costly workers for cheaper robots or intelligent software. And a range of entirely new companies and sectors will spring into existence. For nations, the largest gains from the Fourth Industrial Revolution are likely to be captured by those with the most flexible economies, adding a further incentive for governments to trim red tape and barriers to business.
The default outcome benefits the capitalism-competent. The Guardian is among those concerned.
The simplicity of this story has to make it appealing:
If you want to understand income inequality, you have to be willing to look at the bigger picture of what happened to wages after the introduction of mass-produced computer technology in the mid-1970s.
Various versions of this graph can be found all over the Internet and economists agree on the fundamental soundness of the underlying data. The graph basically shows that wages parted company from productivity in the 1970s. The epochal event that transformed economic reality in the mid-1970s was the introduction of mass-produced microprocessor technology, first in pocket calculators, then in affordable computers.
(Those confounding factors though …)