Hoarding the wealth

Dan Grech Dec 5, 2006

KAI RYSSDAL: If your net assets are more than a half a million dollars, you’re in a pretty exclusive club. The richest 1 percent of the people on the entire planet. The figure comes from a study released today by a United Nations development institute. Marketplace’s Dan Grech has the story of the other 99 percent.

DAN GRECH: The richest 2 percent of the world owns half of the world’s wealth. The bottom half of the population controls a scant 1 percent of wealth. So found a study by the UN’s World Institute for Development Economics Research.

Ninety percent of wealth is concentrated in North America, Europe, and increasingly, parts of Asia. But co-author James Davies says you don’t have to shaft the rich to shift the balance.

JAMES DAVIES: Improving the distribution of wealth doesn’t mean that we have to take from the rich and give to the poor. That is probably not the most effective way of improving the distribution. The most effective way is trying to make sure that the poor have the opportunity to become wealthier.

He believes giving people access to financing and reducing bureaucratic hurdles to business would be a good start. Just in case you’re feeling smug about being in that half-a-million-buck club, you should know: You share this rung of the ladder with 37 million other people.

JAGDISH BHAGWATI: These numbers are totally meaningless. I would just sort of pick them up and throw them into the first body of water I could find.

That’s Jagdish Bhagwati, a development economist at Columbia University. He says it makes no sense to compare a man on a yak in Mongolia to a Manhattan yuppie.

BHAGWATI: Households in outer Mongolia are not thinking about what households on Park Avenue in New York are doing. So what’s the point of putting them together and comparing the wealth of one group to the wealth of another group?

While the wealthiest people in the world are concentrated in the U.S., so are some of the least wealthy. That’s because so many of us are deep in debt, particularly during the holidays.

I’m Dan Grech for Marketplace.

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