Global poverty. Global oligarchy.

Written By: - Date published: 1:09 pm, April 3rd, 2016 - 13 comments
Categories: Economy, Financial markets, Globalisation, International - Tags:

Zero Hedge has published some fascinating information on the geographical location of wealth (and poverty) in 2015.

Of course, electronic financial assets exist in a highly mobile deregulated ‘global financial ether’ but the individuals who hold those assets still have to live in the real, physical world.

I’d be interested in observations on this info from readers of The Standard.

My quick summary would be:

  1. The US and Europe now have significant populations at the poorest end of the spectrum, wealth deciles 1 and 2. Africa and India are very heavily represented there – but China has successfully escaped the severe poverty trap.
  2. The populations of Africa and India are heavily weighted towards the bottom end of global wealth.
  3. Today, India, China and the Asia Pacific have the lions share of working class wealth (which I describe as deciles 4-8). However the working class in the USA has utterly collapsed and is being squeezed in Europe.
  4. Global oligarchy (decile 10) is still dominated by the west, but with Asia Pacific now making a strong appearance. Both Africa and India remain small holders of global wealth.
  5. Asia Pacific has the most even wealth distribution of all geographical areas – if that’s how you can describe equal numbers of the very poor and the very rich.

Global wealth distribution

13 comments on “Global poverty. Global oligarchy.”

  1. Hutty 1

    Interesting graph CV. I was wondering if there was absolute wealth comparability between the different geographies wealth deciles? (i.e. would a decile 1 absolute wealth in Africa = decile 1 absolute wealth in North America)

    Or is it relative within the geography?

    • Colonial Viper 1.1

      My understanding is that the deciles represent global wealth.

      For instance, the bottom 10% in the world and the top 10% in the world. Which geographical locations are those deciles concentrated in.

      So that would be absolute wealth comparability, yes.

      Of course, if it were more finally gradated, say to 1% intervals, we would probably see more variation between regions again.

      Eg the US may have more people sitting at the 9% and 10% levels whereas Africa would have more people sitting at the 1% and 2% levels.

      However they are all grouped into the bottom decile.

  2. Andre 2

    There’s no hard numbers in the linked article or the source article behind that. So I’m guessing a bit.

    If you’re in net debt, your wealth is zero and you’re in decile 1. So the large numbers of North Americans in decile 1 are student loans, underwater mortgages, have never earned enough to save anything, bankrupt…

    But I suspect that if you’re in a wealthy western country, as soon as you start building a bit of equity in your house, have a bit of money in your retirement account to lift you into the bottom end of middle class wealth, then on a global scale you’re actually quite wealthy, maybe decile 7.

    The large numbers of developing world (and poorer european) citizens in deciles 2 to 8 may reflect those with a modest house and plot of land that has a relatively low selling price (by wealthy westerner standards).

    While I think that disappearing middle class wealth in western countries is a huge problem, this chart doesn’t show what’s happening very well.

    • Colonial Viper 2.1

      What would be great to see is a kind of time lapse analysis where we can see the shifting proportions over say the last 20 or 30 years.

      Just dreaming.

      I also read reports now that the US Gov has started to dock social security from people with overdue student loans. Which is millions upon millions of Americans.

      • McFlock 2.1.1

        Well, twenty years dreaming.
        Credit Suisse has its publications back to 2010 online for free.

        They also go into their methodology pretty thoroughly – like most economics, it’s extrapolations based on generalisations based on extrapolations based on a smallish dataset that they assume to be representative, but what the hooo…

    • McFlock 2.2

      I suspect your net debt suggestion is well on the money

  3. Bill 3

    Also confused by that graph. It would appear to suggest that China has a flourishing internal consumer market. Yet, almost everything I’ve read on China’s economy has mentioned the problem that’s presented by their lack of an internal consumer market.

    • Colonial Viper 3.1

      Chinese families tend to save a very large part of their income compared to their western counterparts. Spending on consuming goods and services therefore remains weak even as household wealth increases.

      • greywarshark 3.1.1

        In the book Affluenza Oliver James looks at China’s middle class and notes that they are not as consumerist as the west Anglos. He notes that they do not show the same levels of social distress that the consumerist west do, which he calls the Virus.
        And he connects it with television watching. So perhaps the saving, the limiting their spending so they can save, is a ‘saving’ grace for them.

      • RedLogix 3.1.2

        Yes, typically they save anywhere between 25 – 40%. Mainly because China has a very weak social welfare system, and they need to save in order to cover sickness, unemployment and old age.

        I guess you could think of it as a tax of sorts. Just one that everyone is forced to impose on themselves.

        • David

          “Yes, typically they save anywhere between 25 – 40%. Mainly because China has a very weak social welfare system, and they need to save in order to cover sickness, unemployment and old age.”

          Correct, and western countries have significant social welfare that is a significant ‘wealth’ that is not measured in this.

  4. David 5

    Anyone who believes there is more poverty in the US and Europe than in China needs a serious rethink.

    Just a hit as too why this report shows this, according to the method used, the worlds poorest man is Jérôme Kerviel.

Recent Comments

Recent Posts

  • New digital service to make business easy
    A new digital platform aims to make it easier for small businesses to access services from multiple government agencies, leaving them more time to focus on their own priorities. Prime Minister Jacinda Ardern and Minister for Small Business Stuart Nash ...
    4 days ago
  • Million-dollar start to gun collection events
    Million-dollar start to gun collection events  Police Minister Stuart Nash says a solid start has been made to the gun buyback and amnesty after the first weekend of community collection events. “Gun owners will walk away with more than ...
    5 days ago
  • Praise after first firearms collection event
    Police Minister Stuart Nash has praised Police and gun owners after the first firearms collection event saw a busy turnout at Riccarton Racecourse in Christchurch. “Police officers and staff have put a tremendous effort into planning and logistics for the ...
    5 days ago
  • New Police constables deployed to regions
    Seventy-eight new Police constables are heading out to the regions following today’s graduation of a new recruit wing from the Royal New Zealand Police College. Police Minister Stuart Nash says the record high number of new Police officers being recruited, ...
    2 weeks ago