I can’t get my mind around the recent report by Oxfam that 62 families have greater combined wealth than half the world’s population, which is between 3 billion and 4 billion, and that 1 percent of the world’s population has greater wealth than the remaining 99 percent.
Source: Our World in Data.
Source: Humble Student of the Markets.
It is possible for growth in equality to be an indication that things are getting better. If you have a large population of poor people, and over time some of them become rich, some of them become middle class and some remain where they are, then they are more unequal, but better off overall.
On the other hand, if a population starts out with a high degree of inequality, there can be considerable improvement in percentage terms of people at the bottom of the scale without much change in overall distribution.
It also is possible for people to become better off in ways that are not measured in money income, due to the quiet progress of science or due to public policy.
If there is better nutrition, medical care, sanitation and education, people’s lives will be better even if their money income stays the same. Kerala state in India is an example of this.
The Oxfam report doesn’t attribute growing inequality to any of the things I’ve mentioned. Instead the authors write about crony capitalism, bank-imposed austerity and tax havens. I don’t know whether getting rid of these things would have much impact on inequality. I think it is worth making the experiment..
An Economy for the 1%: How privilege and power drive extreme inequality and how this can be stopped, an Oxfam briefing paper.