1.6% of all world’s adults own 48.1% of all the world’s personal wealth

Just 1.6% of all world’s adults own 48.1% of all the world’s personal wealth

by Michael Roberts

Every year, I do a post on the inequality of global wealth using the annual data compiled by economists working for the Swiss bank, Credit Suisse.  But Credit Suisse is now no more, swept away by scandal and the banking crisis of 2023.  The other major Swiss bank, UBS, took over the assets of CS and now produces its own annual Global Wealth report.  It’s not so clear and useful as the CS ones were, but nevertheless, it still produces a global wealth pyramid, as below.

The wealth pyramid shows that just 60m adults, or 1.6% of all world’s adults, have net personal wealth of $226 trn, or 48.1% of all the world’s personal wealth.  At the other extreme, 1.57bn adults (around 41% of the world’s adults) have only $2.7trn, or just 0.6% of all the world’s personal wealth!  This result matches closely the estimate of the World Inequality Lab, which finds that 50% of the world’s population (not just adults) have only 0.9% of total personal wealth. 

And that the top 1% of world’s population have about 42% of all personal wealth, the same as in 1995.

Indeed, if we add in the middle rung of wealth holders in the UBS pyramid, it turns out that 3.1bn adults (or 82% of all adults) have personal wealth of $61trn, or just 12.7% of total global personal wealth.  The other 87.3% is owned by just 680m adults or just 18.2% of the total number of adults in the world (3.8bn).  At the very top of the pyramid, there are 2,891 dollar billionaires in the world, with just 31 adults having a fortune of over $50bn each.

In 2024, personal wealth rose most in Eastern Europe (from a low level) and North America, but fell in Latin America, Western Europe and Oceania (Australia etc).  Average household wealth in Britain fell 3.6% in 2024, the second largest drop of any major economy.

The rise in North America was mainly due to the rise in the value of stocks and bonds for the very rich. Globally, total financial wealth leapt 6.2%, while non-financial wealth (property) expanded just 1.7%.  Average personal wealth per adult in North America is nearly six times higher than in China, 12 times higher than in Eastern Europe; and nearly 20 times higher than in Latin America.

According to the UBS report, the extreme inequality of personal wealth globally has worsened (if only slightly) since the start of the 21st century.  Post-apartheid South Africa remains top of the world league for inequality of wealth as measured by the gini coefficient for inequality, followed as always by Brazil.  And that gini ratio has worsened significantly during the Long Depression since 2008.  Of the advanced capitalist economies, Sweden has the most unequal distribution of personal wealth, something that may surprise those who praise social democratic Scandinavia.  The US is as unequal as Sweden.

Remember these are measures of wealth, ie what is owned net of debt by each adult globally.  The pyramid is not a measure of personal income inequality.  But I have found in previous analyses that wealth and income are closely related. There is a positive correlation of about 0.38 between wealth and income; in other words, the higher the inequality of personal wealth in an economy, the more likely is it that the inequality of income will be higher.

Inequality analysts like Gabriel Zucman and Saez echo Marx’s view when they say that “progressive income taxation cannot solve all our injustices. But if history is any guide, it can help stir the country in the right direction, …. Democracy or plutocracy: That is, fundamentally, what top tax rates are about.”  But having said that, the cause of high and rising inequality is to be found in the process of capital accumulation itself.  It is not primarily the lack of progressive taxation of incomes or the lack of a wealth tax; or even the lack of intervention to deal with tax havens.  Such policy measures would certainly help to reduce inequality and deliver badly needed government revenue.  But if pre-tax income from capital (profit, rent and interest) continues to rise at the expense of income from labour (wages), then there is a built-in tendency for inequality to rise. And if capital continues to accumulate, then those that own the bulk of it will get richer compared to those who own no capital. Rising global inequality will not be reversed by a redistribution of wealth or income through taxation alone.  It will require a complete restructuring of the ownership and control of the means of production and resources globally.  

Book Review: What went wrong with capitalism?

by Michael Roberts

Ruchir Sharma has a book out called What went wrong with capitalism?  Ruchir Sharma is an investor, author, fund manager and columnist for the Financial Times. He is the head of Rockefeller Capital Management‘s international business, and was an emerging markets investor at Morgan Stanley Investment Management.

With those credentials of being ‘inside the beast’ or even ‘one of the beasts’, he ought to know the answer to his question.  In a review of his book in the Financial Times, Sharma outlines his argument.  First, he tells us that “I worry about where the US is leading the world now. Faith in American capitalism, which was built on limited government that leaves room for individual freedom and initiative, has plummeted.”  He notes that now most Americans don’t expect to be “better off in five years” — a record low since the Edelman Trust Barometer first asked this question more than two decades ago. Four in five doubt that life will be better for their children’s generation than it has been for theirs, also a new low. And according to the latest Pew polls, support for capitalism has fallen among all Americans, particularly Democrats and the young. In fact, among Democrats under 30, 58 per cent now have a “positive impression” of socialism; only 29 per cent say the same thing of capitalism.

This is bad news for Sharma as a strong supporter of capitalism.  What has gone wrong?  Sharma says that it’s the rise of big government, monopoly power and easy money to bail out the big boys.  This has led to stagnation, low productivity growth and rising inequality.

Sharma argues that the so-called neoliberal revolution of the 1980s that supposedly replaced Keynesian-style macro management, reduced the size of the state and deregulated markets was really a myth.  Sharma: “the era of small government never happened.”   Sharma points out that in the US, government spending has risen eight-fold since 1930 from under 4 per cent to 24 per cent of GDP — and 36 per cent including state and local spending.  Alongside tax cuts, government deficits rose and public debt rocketed.

As for deregulation, the result was actually “more complex and costly rules, which the rich and powerful were best equipped to navigate.”  Regulatory rules actually increased.  As for easy money, “fearful that mounting debts could end in another 1930s-style depression, central banks started working alongside governments to prop up big corporations, banks, even foreign countries, every time the financial markets wobbled.” So there was no neoliberal transformation freeing up capitalism to expand, on the contrary. 

But is Sharma’s economic history of the period after the 1980s really right?  Sharma tries to portray the post-1980s period as one of bailouts for banks and companies during crises in contrast to the 1930s when central banks and governments followed the policy of ‘liquidation’ of those in trouble.  Actually, this is not correct, saving corporate capital and the banks was the driving force of the Roosevelt New Deal; liquidation was never adopted as government policy.  Moreover, the 1980s were mostly a decade of high interest rates and tight monetary policy imposed by central bankers like Volcker, seeking to drive down the inflation of the 1970s.  Indeed, Sharma has nothing to say about the ‘stagflation’ of the 1970s – a decade, according to him, where capitalism had small government and low regulation.

Sharma makes much of the rise in government spending including ‘welfare spending’ in the last 40 years.  But he does not really explain why.  After the rise in spending and debt during the war, much of the increased spending since has been due to a rise in population, particularly a rise in the elderly, leading to an increase in (unproductive for capitalism) spending on social security and pensions.  But the rise in government spending was also a response to the weakening of economic growth and investment in productive capital from the 1970s.  As GDP grew more slowly and welfare spending grew faster, then government spending to GDP rose.

Sharma says nothing about other aspects of the neo-liberal period.  Privatisation was a key policy of the Reagan and Thatcher years.  State assets were sold off to boost profitability in the private sector.  In this sense, there was a reduction in the ‘big state’, contrary to Sharma’s argument.  Indeed, starting as early as the mid-1970s, public sector capital stock was sold off. In the US, it has been halved as a share of GDP.

Source: IMF investment and capital stock database, 2021

Similarly, post the 1980s, public sector investment as a share of GDP has been nearly halved while the private sector share has risen 70%. 

It’s not the ‘big state’ that is in control of investment and output decisions, it is the capitalist sector.  This hints at the reason for reducing the role of the public sector.  The problem for capitalism in the late 1960s and 1970s was the drastic fall in the profitability of capital in the major advanced capitalist economies.  That fall had to be reversed.  One policy was privatization.  Another policy was the crushing of the trade unions through laws and regulations designed to make it difficult if not impossible to set up unions or take industrial action.  Then there was the move of manufacturing capacity out of the ‘Global North’ to the cheap labour regions of the Global South, so-called ‘globalization’.  Combined with weakening trade unions at home, the result was a sharp drop in the share of GDP going to labour along with cheap labour abroad; and a (modest) rise in profitability of capital.

Sharma admits that “globalisation brought more competition, keeping a lid on inflation in consumer prices” against his thesis of monopoly stagnation, but then argues that globalization and low imported goods prices “solidified a conviction that government deficits and debt don’t matter.”  Really?  Throughout the 1990s onwards, governments tried to impose ‘austerity’ in the name of balancing budgets and reducing government debt.  They failed, not because they thought that ‘deficits and debt don’t matter’ but because economic growth and productive investment slowed.  Public sector spending cuts were significant, but the ratio to GDP did not fall.

Sharma reckons that ‘recessions were fewer and farther between’ in the post-1980s period.  Hmm.  Leaving out the huge double slump of the early 1980s (another key factor in driving down labour power), there were recessions in 1990-1, 2001 and then the Great Recession of 2008-9, culminating in the pandemic slump of 2020, the worst slump in the history of capitalism.  Maybe fewer and farther between, but increasingly damaging.

Sharma notes that after each slump since the 1980s, economic expansion has been weaker and weaker.  This appears as a mystery for proponents of capitalism. “Behind the slowing recoveries was the central mystery of modern capitalism: a collapse in the rate of growth in productivity, or output per worker. By the outset of the pandemic, it had fallen by more than half since the 1960s.”

Sharma presents his explanation: “a growing body of evidence points the finger of blame at a business environment thick with government regulation and debt, in which mega-companies thrive and more corporate deadwood survives each crisis.”  The bailouts of the big monopolies (‘three of every four US industries have ossified into oligopolies’) and ‘easy money’ have kept a stagnating capitalism crawling along, breeding ‘zombie’ companies that only survive by borrowing.

Sharma puts the horse before the cart here.  Productivity growth slowed across the board because productive investment growth dropped.  And in capitalist economies, productive investment is driven by profitability.  The neo-liberal attempt to raise profitability after the profitability crisis of the 1970s was only partially successful and came to an end as the new century began.  The stagnation and ‘long depression’ of the 21^st century is exhibited in rising private and public debt as governments and corporations try to overcome stagnant and low profitability by increasing borrowing.

Sharma proclaims that social “immobility is stifling the American dream.”  Whereas, in the rosy past of ‘competitive capitalism’, through dint of hard work and entrepreneurial drive, you could go from rags to riches, now that is not possible.  But the ‘American dream’ was always a myth.  The majority of billionaires and rich people in the US and elsewhere inherited their wealth and those that did become billionaires in their lifetime did not do so without sizeable start-up funds from parents etc.

And let me add, Sharma’s thesis is entirely based on the advanced capitalist economies of the Global North.  He has little to say about the rest of the world where most people live.  Has social mobility been stymied or never existed? Is there a big state with massive welfare spending in these countries?  Is there easy money for companies to borrow?  Are there domestic monopolies squeezing out competition?  Are there bailouts galore?

That brings us to Sharma’s main message about what is wrong with capitalism.  You see, for Sharma, capitalism as he envisages it no longer exists.  Instead, competitive capitalism has morphed into monopolies bolstered by a big state.  “Capitalism’s premise, that limited government is a necessary condition for individual liberty and opportunity, has not been put into practice for decades.”

The myth of a competitive capitalism that Sharma projects sounds similar to the thesis of Grace Blakeley in her recent book, Vulture Capitalism, where she argues that capitalism has never really been a brutal battle between competing capitalists for a share of the profits extracted from labour, but instead a nicely agreed and planned economy controlled by big monopolies and backed by the state. 

In effect, both Sharma and Blakeley agree on the rise of ‘state monopoly capitalism’ (SMC) as the reason for what went wrong with capitalism.  Of course, they differ on the solution.  Blakeley, being a socialist, wants to replace SMC with democratic planning and workers coops.  Sharma, being ‘one of the beasts’, wants to end monopolies, reduce the state and restore ‘competitive capitalism’ to follow its ‘natural path’ to provide prosperity for all. Sharma: “capitalism needs a playing field on which the small and new have a chance to challenge — creatively destroy — old concentrations of wealth and power.” 

You see, capitalists, if left alone to exploit the labour force, and freed of the burden of regulations and for having to pay for welfare spending, will naturally flourish. “The real sciences explain life as a cycle of transformation, ashes to ashes, yet political leaders still listen to advisers claiming they know how to generate constant growth. Their overconfidence needs to be contained before it does more damage.”  So, according to Sharma, capitalism will be fine again, if we let the capitalist cycles of boom and slump play out naturally and not try to manage them. 

“Capitalism is still the best hope for human progress, but only if it has enough room to work.” Well, capitalism has had plenty of room to work for over 250 years with its booms and slumps; its rising inequalities globally; and now its environmental threat to the planet; and the increasing risk of geopolitical conflict.  No wonder 58% of young Democrats in the US would prefer socialism.

 

Inequality: the middle way

by Michael Roberts

Last week I attended a book launch at the London School of Economics on behalf of Liam Byrne, a Blairite Labour MP, who has written a book, Inequality of wealth.  Byrne was a stalwart of the Blair and Brown Labour governments in the UK and most famously known for his quip when handing over his role in the UK government’s finance ministry to the winning Conservatives in 2010 with a note saying that “I’m afraid there is no money”. (ho, ho).  An ex-tech entrepreneur, Byrne now heads up the UK parliament’s Business Select Committee and will probably be in the Labour Cabinet if Labour wins office at the end of this year.  

Byrne reckons that the social mission of the UK Labour party is for ‘equality’ and ‘fairness’, not for any radical transformation of the economic structure of the capitalist economy i.e. socialism – in this sense, he represents the ‘moderate’ wing of the party, or you might say, the current dominant pro-capitalist wing. 

In his professed mission for equality, he tells us in his book about the shocking levels of inequality of wealth (and income) that exist in modern Britain.  Byrne presents us with lots of factoids about inequality – some of which are confusing and incorrect – but no matter, something must be done, because “the inequality of wealth is toxifying our politics and our society. It’s destroying our economy, and it’s about to get 10 times worse.” The feeling is, he notes, like the very last days of Rome. “The average wealth of a Roman aristocrat was about one and a half million times that of the average income of the Roman citizen. But in the last Sunday Times rich list, the wealth of the [Indian-born, London-based billionaires] Hinduja brothers was about 1.2m times the average earnings in our country.”

He is concerned about tax avoidance schemes for the rich. “It’s wrong that someone who [thanks to capital gains on investments as well as his salary] makes £2m a year, like Rishi Sunak (current UK premier), is paying half the rate of tax of a senior teacher” – although he holds out little hope that a Labour government will do anything about this if it takes office at the end of this year.

Inequality is going to get worse, he reckons.  The ‘baby boomers’ are about to die and five and a half trillion pounds of wealth is going to get transferred down the generations. “Some people are going to inherit millions and others are going to inherit care bills. Generation Z is about to become the most unequal generation for half a century, and we would be naive to think it isn’t going to have political consequences. Wealth inequality is at the heart of the new populism.”  And populism is very worrying to Byrne as it threatens democracy. Growing inequality threatens to cause a break-up of the existing democratic order. 

At the LSE launch, Byrne said he aimed to find ‘a middle way’ to rectify things between the view that nothing can be done and the view that some revolutionary transformation of the economic structure was needed, which the electorate would not accept.  What were his policies for his ‘middle way’ to greater equality?  What we want, Byrne said, was a “wealth-owning democracy” – a phrase recalling Thatcher’s 'property-owning democracy', which actually kickstarted the sharp rise in UK inequality in the 1980s.  The phrase also echoes the position of the current Labour leader, Keir Starmer, who pledges to make Labour “the party of home ownership”. 

In the UK, 65% are home owners with some 38% having mortgages.  It seems we already have a property-owning democracy which has not led to a reduction in extreme inequality.  Nevertheless, apparently the answer to reducing inequality of wealth is for everybody to get a home that they can call their own.  As the Conservative ‘intellectual’, David Willetts puts it: “There is a myth that somehow young people are not aspirational.  If you look at people’s aspirations, they want to own their own home, to have a decent job with a decent wage, and be able to afford to raise their kids — young people are not young Marxists.” 

Byrne’s aim is that everybody should get on the ladder to owning their own home (presumably with a mortgage) and also have some savings to invest for their retirement.  To do this, a government should give every young person £10,000 to kick their careers off; the government should establish a sovereign wealth fund to build up funds (what for Byrne did not explain); and there should be fairer taxation eg income from capital gains should be taxed at the same rate as income from work.  Byrne even flirts with the idea of a wealth tax on the very rich that could bring in billions for the economy and for redistribution.  But that was basically it.  Moreover, all these 'radical' measures to reduce inequality of wealth would have to be slowly introduced over “three parliaments” (I make that 15 years!), so that electorate gradually got used to the policies!

The packed LSE audience along with Byrne’s fellow speakers (a professor of sociology and somebody from the Rowntree Trust, an anti-poverty research institute) had no criticism to make of the Byrne programme.  So let me make just a few. 

What Byrne never talked about was why there was such inequality of wealth and income in the UK and in all the other countries of the world?  Why are the rich rich and why are the poor poor?  Surely, there is something endemic to the capitalist economies that explains this permanent inequality.  In several posts and papers, I have discussed the underlying causes of inequality; Byrne does not do so, it’s just there and shocking and we need to do something about it before it explodes into revolts.

But here is the policy problem.  If inequality is endemic to capitalism, then what is needed are policies prior to redistribution.  It is not a question of trying to redistribute excessive wealth from the rich to the rest of us through taxes and/or closing up evasion loopholes and tax havens etc.  That might help a bit, but the underlying generation of the forces of inequality would remain untouched.  Pre-distribution policies are needed.  Byrne advocated only one – better jobs with better pay for those at the bottom of the ladder.  How that was to be achieved given the state of the UK economy (and other capitalist economies) was not explained.  He also seemed to suggest raising the social security minimum level to take people out of poverty – again how that was to be implemented was not explained. 

Byrne noted the disparity of wealth between London and the regions.  The latest IPPR North ‘State of the north’ report found that “While England’s average wealth per person grew from around £226,300 in 2010 to £290,800 by 2020, regional inequalities in wealth have widened. For instance, the gap per head between the average wealth per person in England overall and the North stood at £71,000 in 2020, almost double the gap in 2010, at around £37,300 (ONS 2022a in 2023 prices). The gap between levels of wealth in the North and Midlands, and the rest of England is growing.  Overall in England, the wealthiest 10 per cent hold almost half of all wealth. Nearly half of wealth is found in the South where 40 per cent of the population reside against a fifth of wealth being found in the North where around 30 per cent of the population live, with the remainder in London and the Midlands.”

It’s clear why.  The rich live in London and the south mostly, the most important means of production and finance are based in London, and the best jobs that pay the best are in London.  What is Byrne’s answer to this?  Give the regional mayors more money to spend, taking central government funds away from London.  This would solve little – especially given that some of the poorest boroughs in England are in London!

The point is that post distribution policies will do little to change the underlying inequality of income and wealth.  That would require a radical shift in the ownership and control of that wealth i.e. public ownership of the banks and large companies and public investment directed towards social need, not profit.  But such policies are anathema to those like Byrne, seeking the ‘middle way’. 

That also applies to policies like a wealth tax or a minimum tax on corporate profits – policies strongly advocated by leading inequality economists (Thoman Piketty, Emmanuel Saez and Gabriel Zucman) based at the Inequality Lab in Paris. Gabriel Zucman and his colleagues have provided invaluable data on the scale of inequality globally between countries and within countries.  Zucman is a leading campaigner for reducing inequality globally.  

Last week, he was invited by the G20 finance ministers meeting hosted by Brazil to present the case for for a coordinated minimum tax on the super-rich.  Zucman addressed the ministers and reckoned that “there was strong support for the idea that we need new forms of cooperation to tax the super rich, increase tax progressivity, and fight inequality This in itself is a historic development — for too long these issues have been ignored.”  Zucman was commissioned by the G20 ministers to come up with detailed policy measures to tax the super-rich. But what are the chances of this ever being implemented through global cooperation?  As Zucman said: “it may take years to get there for the super-rich. But it's in our collective interest to act fast, because what's stake is not only the future of global inequality – it's the future of globalization and the future of democracy.” 

I am not attacking the genuine efforts of Zucman and others to find ways of reducing inequality.  And the recent attack on their analysis of rising inequality of income in the US by some US government economists has been proven bogus. But will such redistribution ever be adequate even if implemented?  And won’t such policies be watered down to accommodate vested interests (the rich) to the point that they do little to reduce inequality.

Over the last 80 years, inequality of income and wealth in the major economies has only got worse.

The World Inequality Report (WIR) shows that the world has become more unequal in wealth in the last 40 years. In 2021,“after three decades of trade and financial globalisation, global inequalities remain extremely pronounced … about as great today as they were at the peak of Western imperialism in the early 20th century.”  The global concentration of personal wealth is extreme. According to the WIR, the richest 10% of adults in the world own around 60-80% of wealth, while the poorest half have less than 5%.   According to the UBS Global wealth report, 1% of all adults in the world own 44.5% of all personal wealth, while more than 52% have only 1.2%. The 1% are 59m, while the 52% are 2.9bn. 

If you own a property to live in and, after taking out any mortgage debt, you still have over $100,000 in net assets, you are among the wealthiest 10% of all adults in the world.  That’s because most adults in the world have no wealth to speak of at all. And apart from the phenomenal rise of China, personal wealth and power remains in the rich bloc of North America, Europe and Japan with add-ons from Australia.  Just as this bloc rules over trade, GDP, finance and technology, it has nearly all the personal wealth.

In the 21^st century, inequality of wealth has risen significantly.  Indeed, the wealth of the 50 richest people on earth increased by 9% a year between 1995 and 2021, with the wealth of the richest 500 rising by 7% a year. Average wealth grew by less than half that rate, at 3.2% over the same period. Since 1995 the top 1% took 38% of all additional global wealth in the last 25 years, whereas the bottom 50% captured just 2% of it. The rise of the so-called middle class income group in the graph below is mostly due to China’s reduction of poverty levels. The top 0.01% of adults increased their share of personal wealth from 7.5% in 1995 to 11% now.  And the billionaire population increased their share from 1% to 3.5%.

Tony Atkinson was the founding father of modern research into inequality – somebody who clearly should have got a Nobel (Riksbank) prize in economics before he died.  In an address, Where is inequality headed?”, Atkinson pointed out that the biggest rises in inequality took place before globalisation and the automation revolution got underway in the 1990s.   

Atkinson pinned down the causes of inequality to two.  The first was the sharp fall in direct income tax for the top earners under neoliberal government policies from the 1980s onwards.  But the second was the sharp rise in capital income (i.e. income generated from the ownership of capital rather than from the sale of labour power). The rising profit share in capitalist sector production that most OECD economies generated since the 1980s was translated into higher dividends, interest and rent for the top 1-5% who generally own the means of production. 

Piketty, Saez and Zucman in their latest paper on US inequality of income find that “the stagnation of incomes for households in the bottom 50 percent is particularly noteworthy given the growth for those in the top 1 percent. In 1980, the bottom half received about 20 percent of national income; by 2014, their share had declined to 12 percent. For the top 1 percent, the picture is exactly the reverse: In 1980, they received 12 percent of national income; in 2014, they received 20 percent.”  And they conclude: "Given the massive changes in the pre-tax distribution of national income since 1980, there are clear limits to what redistributive policies can achieve."

Indeed. Marx considered that any distribution of the means of income and wealth was only a consequence of the of the ownership of production. The capitalist mode of production rests on the fact that the material conditions of production are in the hands of non-workers in the form of property in capital and land, while the masses are only owners of their personal condition of production, of labour power.  Capitalists accumulate profits as capital. 

As Ian Wright has put it: “Firms follow a power­ law distribution in size. And capital concentrates in the same way. A large number of small capitals exploit a small group of workers, and a small number of big capitals exploit a large group of workers. Profits are roughly proportional to the number of workers employed. So, capitalist income also follows a power­ law.  The more workers you exploit the more profit you make. The more profit you make the more workers you can exploit.”  This is the reason for rising inequality: when there are no checks on capital accumulation.  Wright sums it up: “the fundamental social architecture of capitalism is the main cause of economic inequality. We can’t have capitalism without inequality: it’s an inescapable and necessary consequence of the economic rules of the game.”

1.2% of adults have 47.8% of the world’s wealth while 53.2% have just 1.1%

by Michael Roberts

Every year, I bring to the attention of readers of my blog, the results of the latest Credit Suisse Wealth Report.  It is produced by economists Anthony Shorrocks (with whom I graduated at university), James Davies and Rodrigo Lluberas.  It is the most comprehensive study of global personal wealth and inequality between adults around the world.   

Personal wealth is defined as ownership of real estate and financial assets (stocks, bonds and cash) less debt for all the adults in the world. According to the 2022 report, by the end of 2021, global wealth reached $463.6 trillion, which is an increase of 9.8% versus 2020 and far above the average annual +6.6% recorded since the beginning of the century. Setting aside exchange rate movements, aggregate global wealth grew by 12.7%, making it the fastest annual rate ever recorded. Average wealth per adult rose to $87,489 at the end of 2021.  On a country-by-country basis, the United States added the most household wealth in 2021, followed by China, Canada, India and Australia.

This increase in wealth (real estate and financial assets) was not shared equally.  On the contrary, the wealth share of the global top 1% rose for a second year running to reach 45.6% in 2021, up from 43.9% in 2019.  This is represented in the report by a pyramid.

The wealth pyramid shows that 62 million people out of a total of 4.4 billion adults in the world, or just 1.2%, had 47.8% of the world’s wealth while 2.8 billion adults (or 53.2%) had just 1.1% - a staggering level of inequality.  While the top 1.2% had average wealth after debt of well over $1 million each, the bottom 53% had well below $10,000 each, at least 100 times less.

And within the wealthiest group, the inequality is equally stark – with yet another pyramid.  There are 264,200 ultra-high-networth (UHNW) individuals with net worth above $50 million at the end of 2021. This is 46,000 more than the 218,200 recorded at the end of 2020, which in turn was 43,400 higher than in 2019. These increases are more than double the increases recorded in any other year this century. Taken together, it means that the number of adults with wealth above $50 million expanded by more than 50% in the two years 2020 and 2021. This recent rise in inequality is due to the surge in the value of financial assets during and after the COVID-19 pandemic – and it’s the rich that own most of the financial assets.  

The overall increase in global wealth mainly reflects the rise in wealth in China and in the expansion of the ‘middle class’ in the so-called developing world.  Even so, this group’s average wealth is $33,724, or only about 40% of the level of average wealth worldwide.  The majority of rich and very rich people still live in the so-called ‘Global North’.  But note that 7% of the very poorest people in the world live in North America.

Global inequality rises or falls in response to changes in wealth inequality within countries: the so-called “within-country” component. But it is also affected by changes in the average wealth levels in countries relative to the global average: the “between-country” component. This century, the rise of household wealth in emerging markets, most notably I China and India, has narrowed wealth differences between countries, so that the between-country component has declined quite rapidly. This has been the dominant factor governing the overall downward inequality trend.

In the 21^st century, median wealth per person has risen from $1613 in 2000 to $8296 in 2021, an annual rise of 8.1%.  But this is the result of the sharp rise in median wealth in China from $3133 per person to $26752 in 2021 (12% a year), or from 7% of North America’s median wealth in 2000 to 28% in 2021.  China’s median wealth per person in 2000 was about twice the world average; now it is more than three times. 

India too saw a rise in median wealth per adult from $1005 in 2000 to $3295 in 2021, 7% a year, but in 2000, India’s wealth per adult was just 2% of that in North America; now it is just 3%; and India’s adults remain well below the world average.  Indeed, that ratio fell from 62% in 2000 to 40% now.  India is going backwards relatively, while China is going forwards relatively.

And here is a key point worth considering.  If you own a property to live in and, after taking out any mortgage debt, you still have over $100,000 in equity and any savings, you are among the wealthiest 10% of all adults in the world.  You may find that difficult to believe, but it’s true because most adults in the world have no wealth to speak of at all.

As for inequality between men and women, the report finds that of the 26 countries that make up 59% of the global adult population, 15 countries (including China, Germany and India, for example) show a decline in the wealth of women over the last two years.

As for the super rich worldwide, there were 62.5 million millionaires at the end of 2021, up 5.2 million from a year earlier. The United States added 2.5 million new millionaires, almost half of the global total. This is the largest increase in millionaire numbers recorded for any country in any year this century and reinforces the rapid rise in millionaire numbers seen in the United States since 2016. The US now has 39% of all millionaires in a population of 350m, while China has 10% with a population of 1.4bn.

As for wealth inequality within countries, at year-end 2021, the Gini coefficient (the usual measure of inequality) for wealth was a huge 85.0 in the United States (remember 100 would mean one adult owning all the wealth). Indeed, in the United States, all measures of inequality have trended upward since the early 2000s. For instance, the wealth share of the top 1% of adults rose from 32.9% in 2000 to 35.1% in 2021 in the United States.

What about China?  Well, the wealth Gini coefficient rose from 59.5 in 2000 to peak at 71.7 in 2016.  Then it eased back to 70.1 by 2021, close to where it was in 2010 and some 20% lower than in the US.  Wealth inequality in India was much higher in 2000 and has risen since. The Gini coefficient rose from 74.6 in 2000 to 82.3 at the end of 2021. The wealth share of the top 1% went up from 33.2% in 2000 to 40.6% in 2021.  Like the US, India is for the very rich.

In some advanced capitalist economies, wealth inequality fell in the first decade of the 21^st century but then rose after the global financial crisis and the pandemic slump. By 2021, the wealth Gini had risen slightly above its 2000 level, standing at 70.2 in France and 70.6 in Britain – about the same as China.

The report provides an overall perspective on the disparity of wealth across countries and regions in its world wealth map. That shows that nations with high wealth per adult (above USD 100,000) are concentrated in North America and Western Europe, and among the richer parts of East Asia, the Pacific and the Middle East, with a sprinkling of outposts in the Caribbean.

China and Russia are core members of the “intermediate wealth” group of countries with mean wealth in the range of USD 25,000–100,000. This group also includes more recent members of the European Union and important emerging-market economies in Latin America and the Middle East.

One step below, the “frontier wealth” range of USD 5,000–25,000 per adult is a heterogeneous group that covers heavily populated countries such as India, Indonesia and the Philippines, plus most of South America and leading sub-Saharan nations such as South Africa. Fast-developing Asian countries like Cambodia, Laos and Vietnam also fall within this category.

Countries with average wealth below USD 5,000 comprise the final group, which is dominated by countries in central Africa.

The imperialist bloc is North America, Europe and Japan with add-ons from Australia.  Just as the imperialist bloc rules over trade, GDP, finance and technology, it has nearly all the personal wealth.