wealth

Book Review: Uneasy Street: The Anxieties of Affluence by Rachel Sherman

Published by Anonymous (not verified) on Tue, 20/02/2018 - 11:13pm in

In Uneasy Street: The Anxieties of AffluenceRachel Sherman undertakes 50 in-depth interviews with rich New Yorkers to consider how they navigate their anxieties and the negative connotations surrounding extreme wealth. The frank accounts offered in the book provide a complex picture of elite consumption and the attempt to reconcile affluence and moral legitimacy, finds Jonathan Yong Tienxhi.

If you are interested in the topic of this book review, listen to a panel discussing ‘The Challenge of Richness: Rethinking the Giant of Poverty’ at LSE on Tuesday 20 February 2018 as part of LSE Festival Beveridge 2.0 (Mon 19 Feb – Sat 24 Feb 2018). The Festival offers a week of public engagement activities exploring the ‘Five Giants’ identified by Beveridge in his 1942 report in a global 21st-century context. Tickets to all the events, which are free and open to all, can be booked here.

Uneasy Street: The Anxieties of Affluence. Rachel Sherman. Princeton University Press. 2017.

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We live in an era which has every appearance of being increasingly obsequious towards the extremely wealthy: Donald Trump crassly boasted of his status as a ‘really rich’ man in the run-up to the 2016 US Presidential election, while Oprah Winfrey’s recent proclamation that she is ruling out a presidential run has not deterred political pundits and media outlets from fantasising about the prospect of a campaign between two celebrity plutocrats in 2020. In this political climate, it is refreshing to read Rachel Sherman’s Uneasy Street: The Anxieties of Affluence, which purports to consider a sociological phenomenon that is as easy to mock as to overlook – the stigma attached to great wealth.

Sherman is a professor of sociology at The New School of Social Research, with over a decade’s worth of experience in using ethnographies and qualitative interviews to uncover how class inequalities are justified and entrenched in contemporary capitalism. Her latest work utilises 50 in-depth interviews with affluent New Yorkers to consider how the wealthy interpret and understand their own consumption patterns. Sherman’s subject matter invites comparison with Thorstein Veblen’s landmark study of affluent consumerism, The Theory of the Leisure Class: An Economic Study of Institutions. Yet Uneasy Street differs from Veblen’s treatise in both form and substance: Sherman is as empathetic as Veblen was sardonic, and she eschews broad socio-economic analysis for a more intimate examination of New York’s privileged elite. At the core of her argument is the proposition that the wealthy do not simply use consumption to publicly display economic power and solidify social status (contrary to Veblen). Rather, she explores how the affluent seek to avoid the stigma associated with exorbitant wealth by emphasising the modesty of their spending, using money for social purposes and raising children in a non-materialistic fashion.

Much of the allure of Uneasy Street lies in its author’s ability to convince her interviewees to give frank accounts of their lifestyles, a conversation which one respondent describes as akin to talking about masturbating. This offers glimpses into the social lives of the wealthy, which few outside the elite have witnessed, through a range of memorable anecdotes. One interviewee points out that he pays ‘a shitload of federal income tax’ when asked about charitable giving (146); another person recounted her son’s words after flying on a commercial airline: ‘It was great, but next time we fly private like everyone else’ (210). Yet, Sherman urges us to refrain from our inclination to be judgmental, instead offering an account in which members of the affluent class generally desire to act morally and are to some degree aware of their own advantages. Many of her interviewees perceive themselves as having acquired wealth through luck (64), and others offer detailed critiques of how their own lifestyles serve to perpetuate poverty (52). This allows Sherman to paint a more complex picture of elite consumption than typically portrayed in popular media.

Image Credit: (Pixabay CC0)

Uneasy Street is an insightful guide through the struggle faced by elites in reconciling extreme wealth with the desire for moral legitimacy. Sherman writes with great nuance and subtlety, skilfully navigating social taboos in her interviews while providing thoughtful reflections on the research process. This includes the challenge of deconstructing the logic of moral judgment while being subject to the same ideological pressures as well as practicalities, such as her need to upgrade her wardrobe in preparation for the interviews. Reading Uneasy Street provoked me to re-evaluate my own mechanisms for coping with the tensions Sherman describes: I recall complaining about the difficulties of living on a scholarship stipend while among certain social circles at the LSE, in order to deliberately draw boundaries between myself and the stereotype of the rich, ethnically Chinese international student who did not face such financial restrictions – a manoeuvre that Sherman would undoubtedly identify as a means of deflecting from my own class privilege.

Yet, it is difficult to escape the conclusion that the broad arguments made in Uneasy Street espouse rather than debunk conventional wisdom. After all, evidence that the wealthy try to interpret their spending behaviour as morally worthy is prevalent across the political landscape, from countless articles in business websites celebrating the frugality of certain members of the billionaire class, to the swaggering anonymous email that went viral around Wall Street trading desks for describing the intensity of trading workdays: “We don’t demand a union. We don’t retire at 50 with a pension. We eat what we kill.’ Uneasy Street is unusual in choosing to focus on respondents who are less emblematic of the greedy millionaire cliché – Sherman’s interviewees are culturally curious, mostly women and generally politically liberal. Sherman is too attentive not to anticipate the objection that this sample group is unrepresentative of the affluent classes, yet her response that most privileged people still want to feel morally worthy (254) feels unsatisfactory. The need for moral validation in consumption is not limited to any social class, and Sherman does not articulate why her respondents interpret legitimate consumption so differently from the plutocrats described in Robert Frank’s Richistan, for instance.

The preponderance of women in Sherman’s interview samples is surely a significant part of this explanation, and indeed Uneasy Street is particularly insightful when exploring the gender dynamics within affluent households. Sherman provides sympathetic and detailed depictions of how women are unevenly yoked in the quest to attain morally worthy spending power. The stay-at-home mothers interviewed struggle to establish their consumption as legitimate due to the absence of financially rewarding labour in their lives, while their husbands are able to authorise or reject certain expenditures due to their position as the source of monetary income. Sherman is astute enough to point out that this remains the case even in situations where the husband is outwardly supportive, as he retains the prerogative to withdraw this when convenient. Thus, Uneasy Street presents a useful exploration of the intersection between class privilege and the sociology of gender, highlighting the unequal relations of distribution in affluent families even as they live vastly privileged lives compared to the rest of the population.

Sherman contends that the attraction of the affluent towards morally legitimate consumption has a clear political implication. Rather than drawing distinctions between members of the affluent class who are ‘moral’ or ‘immoral’ based on their spending patterns, capacity for charity or self-awareness of privilege, we should focus on dismantling systems of distribution that reproduce such wealth disparities. Sherman is surely correct to assess that exorbitant wealth inequality is immoral regardless of how such individuals seek to legitimise their expenditure, whether these are Trump’s vulgar pretensions or the gentler, sophisticated rationalisations found in Uneasy Street. However, severing the link between moral judgement and wealth inequality could potentially obscure the fact that the latter tends to exacerbate the demise of the former. Not only is there a growing body of academic research which indicates that there is an association between higher social class and unethical decision-making, but it is also intuitively true that increasing a person’s affluence would reduce their capacity for reasonable consumption patterns and tendencies towards critiquing unjust economic systems. Or, as one of Sherman’s interviewees puts it: ‘I used to say I was gonna be a revolutionary, and then I had that first massage’ (115).

Jonathan Yong Tienxhi recently completed an MSc in Sociology with distinction at the London School of Economics and Political Science. His research focuses on the intersection between ethnicity and class inequality, particularly in the context of Southeast Asia. He was a recipient of the Chevening scholarship as well as the Hobhouse Memorial Prize.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 


Being the 1%, or What It Means to Be Entitled

Published by Anonymous (not verified) on Tue, 13/02/2018 - 2:21pm in

by Rachel Sherman

Most contemporary research on economic inequality focuses on the causes, contours, and consequences of unequal distributions of resources. But how they do such distributions become legitimate? Why do people accept them, and even take them for granted? Why is it okay for some people to have a lot, while others have so little? Drawing on evidence from my recent study of wealthy New Yorkers Uneasy Street: The Anxieties of Affluence, this essay takes up one understudied facet of the problem: the concept of entitlement, especially in relation to the affluent.
In the United States, “entitlement” is usually a dirty word. For the poor, it is associated with stigmatized welfare dependence. More broadly—but particularly for the rich—to be “entitled” is to believe you are more important and deserve more than other people, to imagine the rules don’t apply to you, and to be unaware of your own advantages. In this sense, which I focus on here, the term actually connotes a lack of deservingness. But this colloquial, negative usage refers only to illegitimate entitlement. In fact, I’ll suggest that to mark some entitlement as illegitimate actually creates a category of legitimately entitled people: those who don’t act entitled. Think, for example, of Warren Buffett’s legendary down-to-earth affect and lifestyle or Bill Gates’ enormous philanthropy—perhaps contrasted to Donald Trump’s fake charities, ostentatious lifestyle, and braggadocio.

Understanding entitlement rhetoric

To back up for a moment: we might expect that inequality would be morally problematic in the United States, which has a deeply egalitarian ethos. In fact, as Leslie McCall has recently demonstrated using survey data, Americans do have a more critical view of inequality than scholars have usually recognized. But, she asserts, Americans mostly care about inequality as it may affect equality of opportunity, a concept closely linked to the American Dream.[1]
A central tenet of this culturally prominent and powerful ideology is its emphasis on hard work as leading to success. Crucial for my purposes here, the American Dream discourse not only suggests that hard work explains monetary success, but also that it legitimates such success morally. The notion of “meritocracy” implies not only that people are able to get ahead based on their hard work, but also that, if they do get ahead on that basis, they deserve the fruits of their labor.
Indeed, hard work as the bedrock of legitimate entitlement stands out in public discourses and policies about all kinds of entitlements. Poor people are cast as “undeserving” if they don’t work, in public opinion and in welfare policy.[2] Immigration advocates have often claimed that the hard work and economic contribution of immigrants are grounds for belonging even in the absence of citizenship.[3] And, of course, the idea that wealthy people work hard for their money is an argument for not taxing them further. In general, to have a strong work ethic emerges not only as a criterion for economic or political entitlement but also as a crucial measure of moral worth.[4]
Yet, despite producing a vast literature on Americans’ opinions about economic issues, scholars have rarely asked how advantaged people understand their own entitlement. Recent survey research has looked at the policy preferences of the top 1 percent,[5] for example, and much research has looked at the social boundaries elites use to exclude others.[6] But, despite a long history of qualitative research on working-class people’s lived experience, few scholars have explored wealthy people’s experience at all, much less how they feel about their privilege.
This neglect doubtless stems in part from the well-documented difficulty of gaining access to elites, especially for in-depth conversations.[7] Substantively, scholars may also imagine that wealthy people are untroubled about their privilege, that it is somehow “natural” to be comfortable with being at the top of the heap. Such an assumption is supported by social psychology experiments suggesting that rich people are more unethical, more narcissistic, less generous, and generally less “prosocial” than others.[8]
In fact, the few interview studies of the wealthy that have been done tend not to identify discomfort with inequality among respondents.[9] The wealthy women Susan Ostrander studied around 1980, for example, were quite complacent about their social advantages, even referring to themselves as “better” people than those in less elite communities.
But times have changed. As Shamus Khan has argued, meritocracy has displaced aristocracy as a criterion of legitimate privilege over the last few decades.[10] Most recently, beginning with the economic crisis of 2008 and especially with the emergence of Occupy Wall Street in 2011, critiques of inequality and specifically of “the 1 percent” have become prominent in public discourse. Thus, elites who have come of age in this period may have a new set of feelings and discourses about their own privilege.

Researching the 1 percent 

Uneasy Street Rachel ShermanTo investigate the lived experience of affluence in this generation, I conducted fifty interviews with wealthy New York parents, mostly in their thirties and forties, in forty-two households. All were college-educated, and two-thirds held advanced degrees. With a few exceptions, these respondents were in the top 2 percent of income or wealth or both; most were in the top 1 percent; a few were in the top tenth of 1 percent. The median income of the sample was about $625,000; the median wealth about $3.25 million. Earners in households supported primarily by earned wealth typically worked in finance, corporate law, or business. Those who lived on inherited wealth tended to work in the arts, nonprofits, and academia. Three-quarters of respondents were women; about one-fifth were people of color. They ranged from Republicans to people left of the Democratic Party, though most were socially liberal.[11] I talked with them about how they made consumption and lifestyle decisions, such as choosing kids’ schools and buying and renovating their homes, and in the course of these conversations I got a sense of how they felt and talked about their privilege.
As it turned out, my affluent respondents were quite aware of and often uncomfortable with their advantages over others. They wanted to be worthy of their privilege and were anxious not to be “entitled.” As we might expect, avoiding entitlement meant working hard. Those with highly paid, demanding jobs emphasized this labor. Even stay-at-home mothers and inheritors of wealth represented themselves as productive workers, explicitly resisting the “rich dilettante” stereotype.
But hard work was not the only dimension of meritocracy. Another critical aspect was reasonable consumption. My respondents repeatedly emphasized that they spent prudently, buying basics for their children and families rather than extravagances for themselves. They often described snagging bargains, but they never bragged about spending a lot. They strongly distinguished themselves from the materialistic, ostentatious spending often associated in the public mind with the rich.
In this way, they drew on the Protestant Ethic, which emphasizes discipline in consumption as well as in work. Prudent consumption thus emerges as another, though less frequently noted, dimension of meritocracy. Indeed, moral critiques of excess consumption are also directed at other “unworthies” such as the poor, including the iconic image of the “welfare queen” driving a Cadillac.
These New Yorkers also emphasized “giving back,” although they did this in different ways. Some gave away large amounts of money. Others—especially the stay-at-home mothers—volunteered, often at their children’s schools. For some, social responsibility took the more private form of being “aware” of their privilege and careful about how they talked about it with others. In fact, another criterion for deserving one’s advantages was not to mention them. My respondents thought discussing money with anyone, but especially with those who had less, was rude. They also claimed to treat other people well regardless of their class position.
Finally, to be worthy of one’s advantages meant to raise “good people”—children who were themselves not “entitled.” My interviewees wanted their children to be hard workers, rather than “lazy jerks,” in the words of one man with over $50 million in inherited wealth. Parents tried to limit children’s consumption and their consumer desires and expectations. They hoped to ensure that kids were “aware” of their privilege and to “expose” them to those with less, and they wanted to make sure they treated all others with respect and reciprocity. Although parents across class doubtless share some of these concerns, wealthy parents are ultimately preparing their children to occupy their class entitlements appropriately rather than challenging these in any way.[12]
It is hard to evaluate whether these respondents “truly” worked hard or consumed reasonably, since these concepts are relative. But what matters for my purposes is their desire to see themselves as hard workers and reasonable consumers who give back. These emphases also helped these parents cast themselves as “normal.” They used this word often, usually to signal a lack of excess in their lifestyles. In these ways, my respondents frame themselves as part of the morally worthy American middle-class, downplaying their elite status and distancing themselves from the images of lazy over-consumers that attach to both rich and poor.
These requirements of legitimate entitlement are not limited to these affluent New Yorkers. For example, social norms that proscribe talk of money and require equal treatment of everyone (the Golden Rule) are taken for granted in the United States; such norms ultimately silence and deny class difference. More specific to the rich, to have earned wealth oneself, to work hard, to eschew ostentation, to give back while keeping quiet, and in general to seem “normal” are all ways in which having wealth is legitimated broadly in American public discourse.

Conclusion

These ideas about the legitimate entitlement of individuals have important implications for legitimating inequality more generally, because making moral judgments of individual behaviors distracts us from any possibility of thinking about redistribution. First, such judgments reproduce evaluations of the legitimacy of wealth as an individual-level enterprise rather than having anything to do with systematic ways in which resources are unequally distributed. To judge wealthy people in these moral terms is analogous to judging poor people on the basis of their behavior—both tend to naturalize inequalities that are actually a function of social systems and structures.
Second, these legitimate entitlements have primarily to do with affect and behavior. As one stay-at-home mom with a household income of about $1 million put it, “entitlement” is a “feeling that you deserve it, because you were born into it, or had the right education, and [that] it should be this way.” That is, what matters is what individuals do and how they feel, not what they have. If they don’t act entitled, they become entitled. A recent example of this logic appeared in a New York Times column by James B. Stewart in November, in which he argued that “no one resents” J. K. Rowling’s “success” because she worked for it and is generous philanthropically.
Finally, to make these distinctions at all reproduces a system in which being astronomically wealthy is acceptable as long as wealthy people are morally good. If there are “bad” rich people, there can be “good” rich people.
What would it mean, instead, to say that we should be critical of the fact that J. K. Rowling is a billionaire—regardless of how she came by her fortune, how she spends it, or whether she gives it away—solely on the basis of the idea that such wealth is inseparable from extreme inequality, which is both pernicious for society and itself immoral? To try to separate ideas about individual moral behavior from those about material entitlement would, at the very least, shed light on deep cultural ambivalence about legitimate entitlement. At most, it could remove one of the cultural pillars that supports a radically unequal distribution of resources.

(This essay originally appeared on Items – the SSRC’s digital forum)
————————
Rachel Sherman is associate professor of sociology at the New School. She teaches and conducts research on social inequalities, service work, consumption, social movements, and qualitative methods. Her books include Class Acts: Service and Inequality in Luxury Hotels (University of California Press, 2007) and Uneasy Street: The Anxieties of Affluence (Princeton University Press, 2017).
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[1]  In The Undeserving Rich American Beliefs McCall points out that Americans’ understandings of equal opportunity include aspects other than hard work, such as fair pay.

[2] See: Martin Gilens, Why Americans Hate Welfare: Race, Media, and the Politics of Antipoverty Policy (University of Chicago Press, 1999); Michael Katz, The Undeserving Poor: America’s Enduring Confrontation with Poverty: Fully Updated and Revised (New York: Oxford University Press, 2013).

[3]  See, e.g., Bloemraad, Voss, and Lee, “The Protests of 2006,” in Rallying for Immigrant Rights, ed. Irene Bloemraad and Kim Voss (University of California Press, 2011), pp. 3–43.

[4]  See: Michèle Lamont, Money, Morals, and Manners (Chicago: University of Chicago Press, 1992); Michèle Lamont, The Dignity of Working Men (Cambridge: Harvard University Press, 2000).

[5] Benjamin Paige, Larry Bartels, and Jason Seawright, “Democracy and the Policy Preferences of Wealthy Americans,” Perspectives on Politics 11, no. 1 (2013): 51–73.

[6]  See, e.g., Diana Kendall, The Power of Good Deeds: Privileged Women and the Social Reproduction of the Upper Class(Lanham, MD: Rowman and Littlefield, 2002); Jessica Holden Sherwood, Wealth, Whiteness, and the Matrix of Privilege: The View from the Country Club(Lanham, MD: Lexington Books, 2013); Michèle Lamont, Money, Morals, and Manners (University of Chicago Press, 1992); Lauren Rivera, Pedigree: How Elite Students Get Elite Jobs (Princeton: Princeton University Press, 2015).

[7]  Benjamin Paige, Larry Bartels, and Jason Seawright, “Democracy and the Policy Preferences of Wealthy Americans,” Perspectives on Politics 11, no.1 (2013): 51–73.

[8] See: Paul K. Piff, “Wealth and the Inflated Self: Class, Entitlement, and Narcissism,” Personality and Social Psychology Bulletin 40, no.1 (2014): 34–43; Paul K. Piff, Daniel M. Stancato, Stéphane Côté, Rodolfo Mendoza-Denton, and Dacher Keltner, “Higher Social Class Predicts Increased Unethical Behavior,” Proceedings of the National Academy of Sciences of the Unites States of America 109, no. 11 (2012): 4086–4091; Paul K.. Piff, Michael W. Krauss, Stéphane Côté, Bonnie Hayden Cheng, and Dacher Keltner, “Having Less, Giving More: The Influence of Social Class on Prosocial Behavior,” Journal of Personality and Social Psychology99, no. 5 (2010): 771–784.

[9] Susan Ostrander, Women of the Upper Class (Philadelphia: Temple University Press, 1984); Arlene Kaplan Daniels, Invisible Careers: Women Civic Leaders from the Volunteer World (Chicago: University of Chicago Press, 1988); Diana Kendall, The Power of Good Deeds: Privileged Women and the Social Reproduction of the Upper Class (Lanham, MD: Rowman and Littlefield, 2002).

[10]  Shamus Rahman Khan, Privilege The Making of an Adolescent Elite at St. Paul’s School (Princeton University Press, 2012)

[11] I recruited respondents through snowball sampling. The sample is not representative of any wealthy population, however defined, in New York or elsewhere. 

[12] Sherman, “Conflicted Cultivation: Parenting, Privilege, and Moral Worth in Wealthy New York Families,” American Journal of Cultural Sociology 5, no. 1 (2017).

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Cartoon: The next cryptocurrencies

Published by Anonymous (not verified) on Tue, 30/01/2018 - 11:50pm in

As I was penciling this, Paul Krugman's latest column on the Bitcoin bubble went up. Krugman makes some of the same points I make in the cartoon.

For more on the incredible energy use that goes into mining Bitcoin, this Arstechnica piece is a good place to start. This site has some eyebrow-raising stats, such as the fact that the number of U.S. households that could be powered by Bitcoin is 4,252,394. To quote from this Motherboard article making the Denmark comparison:

Even in the optimistic scenario, just mining one bitcoin in 2020 would require a shocking 5,500 kWh, or about half the annual electricity consumption of an American household. And even if we assume that by that time only half of that electricity is generated by fossil fuels, still over 4,000 kg of carbon dioxide would be emitted per bitcoin mined. It makes you wonder whether bitcoin could still be called a virtual currency, when the physical effects could become so tangible.

Emphasis mine. It's extremely ironic, then, that a currency this inefficient and destructive to the planet -- it's mostly powered by Chinese coal-burning plants, according to Digiconomist -- has become the darling of Libertarian utopianists who think they're creating a futuristic paradise.

Follow Jen on Twitter at @JenSorensen

Chart of the day

Published by Anonymous (not verified) on Tue, 23/01/2018 - 2:19am in

Oxfam

According to Oxfam’s analysis of data produced by Credit Suisse (which I analyzed in a different manner late last year), 42 billionaires now own the same wealth as the bottom half—3.7 billion people—of the world’s population.

Together, those 3.7 billion people own only one half of one percent (0.53 percent) of the world’s wealth, a figure that rises to just about one percent (0.96 percent) when net debt is excluded.

In 2017, 42 billionaires on the Forbes billionaires list had a cumulative net worth of $1,498 billion—more than the wealth of the bottom 50 percent. When debt is excluded, that figure rises to 128 billionaires, who had a net worth of $2,694 billion.

Over the last decade, ordinary workers have seen their incomes rise by an average of just 2 percent a year, while billionaire wealth has been rising by 13 percent a year—nearly six times faster.

Without a fundamental change in economic institutions, the arc of capitalist history will continue to bend toward greater inequality.

Coming Fiscal Derailment – Why FY 2019 Will Sink The Casino

Published by Anonymous (not verified) on Sun, 24/12/2017 - 6:00am in

Tags 

wealth

December 21, 2017 “Information Clearing House” – Since last November 8th the Russell 2000 has risen by 30% and the net Federal debt has expanded by an astounding $1.0 trillion dollars. In a rational world operating with honest financial markets those two results would not be found in even remotely the same zip code; and especially not in month #102 of a tired economic expansion and at the inception of an epochal pivot by the Fed to QT (quantitative tightening) on a scale never before imagined. And we do mean exactly those words. By next April the Fed will be shrinking its balance sheet at $360 billion annual rate and by $600 billion per year as of next October. Altogether, the Fed’s balance is scheduled to contract by upwards $2 trillion by the end of 2020.

World Inequality Report 2018: Great Data, Bright Analysis, Perturbing Reality

Published by Anonymous (not verified) on Sun, 17/12/2017 - 8:13am in

world inequality reportThe World Inequality Lab led by Thomas Piketty, Emmanuel Saez, Gabriel Zucman, Facundo Alvaredo and Lucas Chancel released today the first of its kind World Inequality Report 2018The Report aims to become the comprehensive reference report on income and wealth inequality around the world, and to stimulate extensive global and local debates about it. To pursue the essential mission to promote research on global inequality dynamics and maintain the unique World Wealth and Income Database, the Lab works in close coordination with over one hundred researchers covering nearly seventy countries. 
On the first pages of the Report, state the authors:

“By developing this report, the World Inequality Lab seeks to fill a democratic gap and to equip various actors of society with the necessary facts to engage in informed public debates on inequality…
We show that income inequality has increased in nearly all world regions in recent decades, but at different speeds. The fact that inequality levels are so different among countries, even when countries share similar levels of development, highlights the important roles that national policies and institutions play in shaping inequality…
Since 1980, very large transfers of public to private wealth occurred in nearly all countries, whether rich or emerging. While national wealth has substantially increased, public wealth is now negative or close to zero in rich countries. Arguably this limits the ability of governments to tackle inequality; certainly, it has important implications for wealth inequality among individuals…
Tackling global income and wealth inequality requires important shifts in national and global tax policies. Educational policies, corporate governance, and wage-setting policies need to be reassessed in many countries.”

The World Inequality Report 2018 is a great resource of enormous data and bright analyses, based on a cutting-edge methodology, of our perturbing and troubling socio-economic and political reality. The Report, written in a very accessible manner, is available in English, French, Spanish, German, Russian, Hindi, Chinese, Arabic, and Russian. 
In the course of the last 15 years, Piketty et al. have masterly measured and surveyed inequality in a series of groundbreaking researches. This persistent and continuous endeavour culminated in the publishing of Capital in the 21st Century (2014) which immediately became a bestseller among academics and the general public, signifying an important shift in the way economics, social sciences, and policy makers (should) consider inequality. Within this context, economic sociologists and political economists, based on the richness of our scholarships and our moral obligation to society, must be an essential part of this programmatic shift and contribute theoretical and intellectual insights to explain the socio-political origins, mechanisms, and consequences of income and wealth inequality, on the local and global levels. 
Read this new report, share it; and discuss, teach and study the topic of  inequality — Act.

world inequality report piketty

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Extreme Wealth Inequality Persists

Published by Anonymous (not verified) on Mon, 11/12/2017 - 4:15am in

Tags 

taxation, wealth

There was little or no media coverage of the release of data on the distribution of the wealth of Canadians in 2016 last week, perhaps because there has been little or no change since the last Survey of Financial Security in 2012.

The top 20% of Canadians own 67.3% of all net worth (assets of all kinds minus liabilities), almost exactly the same as in 2012.

The bottom 20% have no net worth, and the bottom 40% collectively own just 2.3% of all net worth.

The top 20% also own 74.6% of all financial assets (stocks, bonds, bank deposits etc) held outside of RRSPs and registered pension plans, while the bottom 40% collectively own just 3.5% of such assets. Financial assets outside of pensions total $1.4 trillion.

Unfortunately, the new data does not detail the breakdown within the top 20%. Even within this group, wealth is highly concentrated in the hands of the top 10% and top 1%.

Clearly, taxable income from financial assets (interest, dividends, capital gains, stock options) flows overwhelmingly to a relatively small number of people. If the federal government was serious about progressive tax reform, they would be reducing the preferential treatment of such income in the personal income tax system. Over to you, Minister Morneau.

Extreme Wealth Inequality Persists

Published by Anonymous (not verified) on Mon, 11/12/2017 - 4:15am in

Tags 

taxation, wealth

There was little or no media coverage of the release of data on the distribution of the wealth of Canadians in 2016 last week, perhaps because there has been little or no change since the last Survey of Financial Security in 2012.

The top 20% of Canadians own 67.3% of all net worth (assets of all kinds minus liabilities), almost exactly the same as in 2012.

The bottom 20% have no net worth, and the bottom 40% collectively own just 2.3% of all net worth.

The top 20% also own 74.6% of all financial assets (stocks, bonds, bank deposits etc) held outside of RRSPs and registered pension plans, while the bottom 40% collectively own just 3.5% of such assets. Financial assets outside of pensions total $1.4 trillion.

Unfortunately, the new data does not detail the breakdown within the top 20%. Even within this group, wealth is highly concentrated in the hands of the top 10% and top 1%.

Clearly, taxable income from financial assets (interest, dividends, capital gains, stock options) flows overwhelmingly to a relatively small number of people. If the federal government was serious about progressive tax reform, they would be reducing the preferential treatment of such income in the personal income tax system. Over to you, Minister Morneau.

Nietzsche on Danger in Wealth and Pretense

Published by Anonymous (not verified) on Mon, 27/11/2017 - 1:55am in

Friedrich Nietzsche“Danger in riches. — Only he who has spirit ought to have possessions: otherwise possessions are a public danger. For the possessor who does not know how to make use of the free time which his possessions could purchase him will always continue to strive after possessions: this striving will constitute his entertainment, his strategy in his war against boredom. Thus in the end the moderate possessions that would suffice the man of spirit are transformed into actual riches – riches which are in fact the glittering product of spiritual dependence and poverty. They only appear quite different from what their wretched origin would lead one to expect because they are able to mask themselves with art and culture: for they are, of course, able to purchase masks. By this means they arouse envy in the poorer and the uncultivated – who at bottom are envying culture and fail to recognize the masks as masks – and gradually prepare a social revolution: for gilded vulgarity and histrionic self-inflation in a supposed ‘enjoyment of culture’ instil into the latter the idea ‘it is only a matter of money’ – whereas, while it is to some extent a matter of money, it is much more a matter of spirit.” 

Nietzsche, Friedrich. 1996. Human, All Too Human: A Book for Free Spirits. Cambridge University Press. (p. 283-4, an aphorism no. 310)

Nietzsche Friedrich  Human, All Too Human

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The arc of (pre)history bends towards greater inequality

Published by Anonymous (not verified) on Tue, 21/11/2017 - 1:00am in

wealth-2014

The United States, as I have shown over the past week (e.g., here, here, and here), has an obscenely unequal distribution of wealth.

As illustrated in the chart above, the members of the bottom 90 percent own only 27.8 percent of total household wealth, while the bulk of the wealth is held by the top 10 percent: 43.9 percent by the top 10 to 1 percent, 18.2 percent by the top 1 to 0.1 percent, 9.4 percent by the top 0.1 to 0.01 percent, and finally 9.7 percent by the top 0.01 percent.

How do we put that grotesque level of inequality into perspective? One way is by taking a historical perspective; the other is by looking across the world today.

As it turns out, Nature (unfortunately behind a paywall) has just published a study in which the authors attempt to estimate the degree of wealth inequality in ancient societies for which we do not have written records.* What they did is collect data from 63 archaeological sites or groups of sites, used the distribution of house sizes as a proxy for wealth, and assigned Gini coefficients to each society.**

What they are able to show is that wealth disparities generally increased with the domestication of plants and animals and with increased sociopolitical scale. The basic idea is that wealth disparities cannot accumulate within lineages until mechanisms for the transmission of wealth across generations become common, as is much more likely within sedentary societies. Thus, less wealth is typically transmitted across generations in hunter-gatherer and horticultural societies than in agricultural or pastoral societies.

prehistory

As is clear from the chart above, there were huge differences in the responses of societies to these factors in the New World (North America and Mesoamerica) and the Old World (Euroasia) after the end of the Neolithic period. Much to the researchers’ surprise, inequality kept rising in the Old World while it hit a plateau in the New World. They argue that the generally higher wealth disparities identified in post-Neolithic Eurasia were initially due to the greater availability of large mammals that could be domesticated, because they allowed more productive agricultural extensification, and also eventually led to the development of a mounted warrior elite able to expand polities to sizes that were not possible in North America and Mesoamerica before the arrival of Europeans.

These processes increased inequality by operating on both ends of the wealth distribution, increasing the holdings of the rich while decreasing those of the poor.

The authors note that the highest modeled wealth Gini coefficients in their Old World sample (0.48 at around ad 1, 0.60 at around ∆6,000 in the chart above) are similar to contemporary values for the Slovak Republic (0.45) and Spain (0.58), although much lower than for China (0.73) or the United States in 2000 (0.80).

Thus, the authors conclude,

Even given the possibility that the Gini coefficients constructed here may underestimate true household wealth disparities, it is safe to say that the degree of wealth inequality experienced by many households today is considerably higher than has been the norm over the last ten millennia.

How right they are!

wealth-pyramid

According to the latest Credit Suisse Research Institute’s Global Wealth Report, the members of the global top 1 percent now own more than half (50.1 percent) of all household wealth in the world.

In terms of wealth bands, the United States has by far the greatest number of millionaires: 15.4 million, an increase of 1.1 million adults over 2016. For 2017, that amounts to 43 percent of the world total. (Japan holds second place, with only 7 percent of the world’s millionaires, a decline of 338 from 2016 to 2017.)

top pyramid
Much the same degree of concentration also occurs at the top of the pyramid. According to the Credit Suisse calculations, 148,200 adults worldwide can be classed as ultra-high net worth individuals, with a net worth above US$50 million—an increase of 13 percent (19,600 adults) during the past year.

Once again, the United States dominates the regional rankings, with 75,000 ultra-high net worth residents (51 percent), with China occupying second place with 18,100 ultra-high net worth individuals (up 3,000 on the year).

The authors of the report are clear: since the crash of 2007-08, top wealth holders benefited in particular and, across all regions, wealth inequality has risen, as median wealth declined. And their projections for 2022 suggest “more pessimistic scenarios for the immediate years ahead.”

Yes, indeed, the arc of recent capitalist history appears to be following that of millenia of prehistory, which bends toward greater inequality.

 

*The archaeological contexts sampled from the Old World range from around 11,000 to about 2,000 years ago (plus one recent set of !Kung San encampments), and in the Americas, from around 3,000 to about 300 years ago.

**The Gini coefficient (named after the Italian statistician Corrado Gini) is a measure of statistical dispersion intended to represent the distribution of income or wealth among the members of a group (e.g., a nation). Inequality on the Gini scale is measured between 0, where everybody is equal, and 1, where all the income or wealth is captured by a single person. I have expressed my own reservations about comparing Gini coefficients across countries or regions here.

Tagged: China, history, inequality, Japan, prehistory, United States, wealth

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