Time to whip out the notes about the Lorenz Curve again, as a new report shows that 2% of the world's population owns 50% of the wealth. What do you think would be a cause, and a consequence of this inbalance?
Tuesday, December 05, 2006
World Lorenz Curve
Time to whip out the notes about the Lorenz Curve again, as a new report shows that 2% of the world's population owns 50% of the wealth. What do you think would be a cause, and a consequence of this inbalance?
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6 comments:
I think it's a more than a little unfair that only 2% of the world's population should own more than 50% of the entire world's assets. How can people be so insanely wealthy they own 10 cars when there are people in the world struggling to earn their next meal? Perhaps the richest people in the world earned their money, but it's obviously been taken too far. It's sort of ironic that many well off people are actually some of the poorest people in the world due to debt. It's strange that some people can buy homes and cars with borrowed money that puts them in debt, while there are people in the world who can't even scrounge up a bit of money to buy a loaf of bread.
I knew that the world's wealth distribution was unequal, but not to this extent! At this point the Lorenz curve is pushed so far away from the line of equality that you probably can't even distinguish it from the axes. It seems that incomes are becoming increasingly unequal because once you are rich it is easier to become richer. The more money you have, the more you can use to invest and make more money. I'm not really sure what explains why the poorer are remaining poor or getting even poorer, but something really needs to be done. I'm sure the people in the top percentiles of wealth could sacrifice a little money to help everyone else out? An interesting point this article made was about how some of the richest people are in the most debt because of their spending habits. This shows how the psychological aspect of economics comes into play; people's expectations of their wealth will cause them to spend even more money than they actually have.
The most frightening trend of this is definately the fact that the richer 2% are only going to get richer, while the poorer majority will get poorer and poorer, until what? What will eventually happen if nothing is done about this? Where's my boy Robin Hood at?
I think that it is crazy how only 2% of the world's population owns half of the wealth. As we have learned in class, wages are remaining relatively constant and since prices are rising at the rate they are, the middle class is slowly disappearing. What is crazy too is that this is a somewhat recent effect-Reagan's supply-side economics was the starting point of the wealth gap. As Devin said it's interesting how these people also have the highest debts but that is that confidence factor where if you have the money, you spend it. These people are the reason why the costs of houses are so ridiculously high that it is almost impossible to buy a new home out here. I hope that we see some more of the super rich do something good with their money, like Oprah, and give some of their money to charities to help the people who really need money. I don't think that is asking too much of someone in the same calliber as Donald Trump or the even wealthier Bill Gates.
These statistics are really unbelievable. Honestly these rich people need to give up some money or something. To have an opportunity to help the less fortunate with ease should deffinetly most of these peoples priorities. It's not that unusual to see that big of a gap between the two ends but the size of the difference is insane.
The article talks of how the wealth is unevenly distributed throughout the world. By comparing the distribution of wealth between countries the figures can become skewed. For instance when comparing the distribution in the United States to a country like China, China will seem to be evenly distributed, but this is because China is running a different economic system than the US. China is a communist country so technically there should be entirely even distribution. In the US the uneven distribution of wealth is integral because it is a capitalist society. It is this uneven distribution that gives the poor the incentive to try to move up in society. I believe that it is not a problem; the problem is raising the poor above the poverty line. As the article said that if all the wealth was evenly distributed each person would have around $20,500 in assets to use, this of course would not make everyone even either though. In areas such as Africa or the Middle East $20,000 could be enough to live on, but in the US 20,000 would not last very long. Also for those who proposed the re-allocation of funds from the super rich to the poor, I have this to say. While transfer payments and charities would help to raise some above the poverty line, those given the payments would most likely become dependant on that money. This is seen in those people who live off of an unemployment check. Transfer payments just allow people to live in a manner and a condition that they cannot sustain on their own, thus causing them to leach off of society. Understand though that I do believe that there is a place for safety nets and transfer payments, like for those who are unable to work such as the disabled, and for the recently unemployed.
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