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

Analysis of new data on global wealth inequality.

Michael Roberts is an Economist in the City of London and a prolific blogger.

Cross-posted from Michael Roberts’ blog

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 21^st 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. 

BRAVE NEW EUROPE is one of the very few Resistance Media in Europe. We publish expert analyses and reports by some of the leading thinkers from across the world who you will not find in state and corporate mainstream media. Support us in our work.

To donate please go HERE.