Wealth grows but who pays?
It’s true what they say. The rich really are getting richer. The Bloomberg Billionaires Index is the ultimate rich list, ranking the fortunes – in both senses – of the world’s 500 wealthiest people.
The data for 2017 shows that the top 500 became US$1 trillion (NZ$1.4T) richer over the past 12 months. That means that, on average, each of the 500 took an extra US$2 billion to the bank.
Of course, some have done much better than others. Amazon founder Jeff Bezos added another US$34.2B to his fortune in 2017, making him the richest person in the world, with his net worth crossing the symbolic US$100B mark.
All this wealth raises the unanswerable question: What is it for? Bloomberg reported that Microsoft founder Bill Gates would be worth over US$150B, far surpassing Bezos, had he not given hundreds of millions of Microsoft shares and billions in cash and other assets to charity. As it stands, Gates is worth merely US$91.6B.
But unlike Gates or investors William Buffett and George Soros, who gave US$18B to his Open Society Foundations, Bezos has not made a name for himself as a philanthropist. He has focused more on his for-profit space venture, Blue Origin.
As a group, the top 500 became 23 per cent better off in 2017, controlling a total of US$5.3T between them. The majority of the top 20 are from the United States, but there are other familiar names further down. Australian Gina Rinehart, at number 85, is worth $US14.9B and media mogul Rupert Murdoch’s US $14.4b fortune puts him at number 89.
The sole New Zealander in the top 500, Graeme Hart, is worth US$7.77B according to Bloomberg. That makes him number 207.
Other notable facts reveal something of the zeitgeist. Chinese billionaires had the greatest wealth gain of any country’s billionaires; for the first time, there are more billionaires from Asia than the US; and Cameron and Tyler Winklevoss, twins familiar from the Mark Zuckerberg and Facebook back story, became Bitcoin billionaires.
The Bloomberg list was released in the context of investment advice, with the news that we are in the middle of a ‘‘robust bull market’’.
But others are noticing it and thinking about what it means. A report on inequality released in October 2017 by Citi Research and the Oxford Martin School at Oxford University revealed that income and wealth inequalities have soared. That is not exactly breaking news but the authors of the report also pursued the meaning of inequality.
They saw that it was not just rising between individuals but between regions, generations, industries and firms, even as global inequality, or the gap between rich and poor countries, has narrowed. Inequality also erodes public trust in institutions, social cohesion and faith in the political process, they wrote.
If we fail to tackle this, the authors of the report warned, the risk is ‘‘political paralysis, or worse’’. And that cost hits everyone.