December 2015        

Global wealth and distribution

In October the Swiss banking company Credit Suisse published its sixth report on global wealth in two informative and useful publications, Global Wealth Report, 2015 and its complementary Global Databook, 2015.
     Not surprisingly, it confirms that most of the world’s wealth still remains in Europe and the United States. However, it recognises the tremendous growth of wealth in China, which has increased fivefold since 2000.
     Interestingly, the make-up of this wealth recognises the historical and contemporary nature of capital accumulation. Wealth in the United States and Europe is more sustainable and stable. Its role as plunderer and imperialist power is relevant here, while much of the growth in Chinese wealth has been in asset inflation and so is far more vulnerable and unstable, as we have seen in recent times. While China’s wealth has increased, and the country has been accumulating capital at an extraordinary rate, it is not a core imperialist country, and this is reflected in the nature of its wealth accumulation.
     “However, the growth of wealth in emerging markets has been most impressive, including a fivefold rise in China since the beginning of the century. The fact that financial assets accounted for most of the wealth growth in China highlights the relevance of financial markets in the creation of wealth, but also points to short-term vulnerabilities of wealth to financial shocks. Stock prices in China gained over 150 per cent between June 2014 and mid-June 2015, only to decline sharply thereafter.”
     And so to the detail of the report. Globally, 0.7 per cent of the world’s population are millionaires, and they own 45 per cent of global wealth. So in fact it is fewer than 1 per cent who have almost half global wealth!
     Clearly Europe and the United States have the most significant disproportionate share of wealth related to population, and India and Africa have the least (fig. 1).

Fig. 1: Wealth and population by region, 2015
     In recent years the United States and China, and, to a lesser degree, Britain, have seen their share increase, while Japan and France have had the biggest losses (fig. 2 and 3).

Fig. 2: Change in total wealth, 2014: Biggest gains and losses (billion US dollars)
     Clearly Europe and North America still accumulate and concentrate most global wealth, with well over half shared by these two areas and with close on 80 per cent of all millionaires between them (fig. 4).

Fig. 3: Total global wealth, 2000–15 (trillion US dollars, current exchange rates)

Fig. 4: Number of millionaires by region, 2000–15
     And finally, the Credit Suisse report produces the global pyramid of wealth, an annual indictment of the inequality inherent in capitalism. This shows just how unequal the world is. 71 per cent of the world’s population have less than $10,000 in wealth, which makes up approximately 3 per cent of total global wealth, while 0.7 per cent of the world’s population have a little more than $1 million collectively, possessing 45 per cent of total global wealth (fig. 5 and 6).

Fig. 5: The global wealth pyramid

Fig. 6: The top of the pyramid
     So 71 per cent have 3 per cent, and 0.7 per cent have 45 per cent. And some people still say capitalism works!

■ Source: James Davies, Rodrigo Lluberas, and Anthony Shorrocks, Credit Suisse Global Wealth Databook, 2015.

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