Billionaires and their billions
"Ask what you can do for your country."
JFK inaugural speech
Today's Guest Post tells billionaires what they can do.
For the first 35 years of the postwar era, the income of working Americans tracked the overall productivity of the nation. Everyone was getting richer. Then, in 1980, things changed. Productivity kept going up, but the workers' share of that pie flattened. What happened to the "excess value" produced by the rising productivity? It went to capital, not labor. It created people of unimaginable wealth.
Perhaps it all goes back to Ronald Reagan's breaking the air traffic controllers' demand for higher wages and better working conditions by firing the ones on strike. Or maybe it was the mass of Boomers like me entering the workforce faster than we could be absorbed. Or maybe it was increase in immigration numbers with President Reagan's blessing. Or maybe it was something as simple but profoundly important as shipping containers, which put low-wage labor in China into direct competition with American workers. Or maybe it was something else.
One thing is clear: The middle class got poorer and America began creating a class of fabulously wealthy people who owned the businesses that participated in the rising productivity.
One thing is clear: The middle class got poorer and America began creating a class of fabulously wealthy people who owned the businesses that participated in the rising productivity.
Michael Wallace is a college classmate who became a Peace Corps Volunteer in Nepal, then an international career worker in social and economic development in Pakistan, Nepal, Philippines, Russia, and Macedonia. He is coiner of "numbulary" (number-vocabulary), and shares his insights at a Twitter account, @numbulary, where he posts interesting and useful observations about numbers.
Guest Post by Michael Wallace
How much is enough?
During a recent visit with college classmate Peter Sage, I commented: "America has done a great job with the production side of things. “We can create lots of stuff for Americans. But we haven’t figured out the distribution side of a prosperous economy. Amid all this plenty, so many people are destitute.” I promised to provide my perspective on distribution for Up Close.
The distribution of stuff reflects the distribution of income and wealth, and income and wealth are easier to measure and analyze than stuff such as land and houses and cars and clothes, so let's look at income and wealth:
In 2019, the world’s billionaires (2,153 people) had more wealth than the poorest 4.6 billion people (3/5 of humanity). The richest 22 men in the world own more wealth than all the 700 million women in Africa. The world's billionaires have $9 trillion of wealth, while the poorest 60% of humanity has barely $6 trillion--less than $2,000 per person. The billionaires could double the wealth of each member of the poorest 60% and still be billionaires.
The 400 richest US citizens have more wealth than the 150 million adults in the bottom 60% of the country's wealth distribution. The top 0.1% of the population (333,000 people) has nearly 20% of the nation’s wealth, giving them a greater slice of the American pie than the bottom 80% of the population (266 million people) combined.
These descriptions illustrate the same point: There is too much money concentrated in the hands of too few people, both globally and in the US.
Countries move extremely slowly in solving global problems, and we cannot expect individual countries or groups of countries such as the European Union or the African Union or the United Nations to solve our global wealth and income inequality problems. We must pursue other avenues to address the global wealth and income inequality problem: we must define and present this as a global philosophical and ethical problem and address it from that perspective.
If the world’s 2,000+ billionaires gave $6 trillion of their wealth to the poorest 60% (the poorest 4 billion people), doubling the wealth of the poor, would the world be a happier place? The 4 billion would certainly be happier, and the 2,000+ billionaires would still be billionaires.
The key to solving problems is to define them in ways that allow for solutions. We must define this as a problem that individuals can help solve. We must define this problem in a way that the rich themselves must see as a problem and see themselves as the problem-solvers.
Peace Corps Training Group. Wallace is front row, second from left
We must convince the rich that the distribution of global wealth is a global problem and enlist their help in solving it. We must convince the rich that they can help solve this problem in their own best interests. Let's take a clue from Bloomberg, which publishes lists of the world's richest people.
(https://www.bloomberg.com/billionaires/).
The Chronicle of Philanthropy publishes lists of the largest charitable donations each year. This should be expanded to highlight the people who are the largest overall donors each year, and this list should be published as front page headline news. (https://www.philanthropy.com/article/jeff-bezoss-10-billion-environmental-gift-tops-chronicle-list-of-the-biggest-charitable-donations-of-2020}