Concentration of wealth in the hands of the 1%

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Indeed, in 2013, in France the wealthiest 1% owned 25% of the total wealth, [3] 30% in the United Kingdom, 20% in Sweden, and 32% in the United States. [4] If we include the portion of wealth that is hidden in tax havens or in other ways, that percentage would increase by at least 2 or 3 points. To simplify, the wealthiest 1% represents the capitalist class that possesses an impressive amount of the total wealth. [5]

If we increase that number to the richest 10%, we arrive at the following percentages: in France, the wealthiest 10% own 60% of the wealth; in the UK, 70%; in Sweden, 60%; and in the US, 70%. Overall, we can consider that the additional 9% represent the circle or allies –in the broad sense of the term—of the capitalist class. The concentration of wealth in the hands of a few has further increased since Piketty’s book came out.

Popular movements should make precise claims in terms of the measures that should be taken with respect to the richest 1% and the next 9%. The amount of tangible and intangible assets that this 10% possesses reveals to what extent wealth is unequally distributed. It also shows where a left-wing government could find the necessary resources in great abundance for implementing policies that would 1) improve the living conditions of most people, and 2) bring about the profound structural changes needed to move beyond productivist capitalism, and launch the ecological transition process.

In a compelling table, Piketty sums up the share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of wealth owned by the richest 10%, the next 40%, and the poorest 50%.

Table 1. The unequal ownership of capital

Share of the various groups in the total amount of wealth Europe 2010 United States 2010
Richest 10% 60% 70%
(richest 1% alone) 25% 35%
(next 9%) 35% 35%
Middle 40% 35% 25%
Poorest 50% 5% 5%

50% of the population in Northern countries owns but 5% of the total wealth. When the left argues for a tax on wealth, this is obviously an important figure to mention in favour of not taxing the poorest 50%. Meanwhile, the middle 40% in Piketty’s model, who own 35% of the total wealth in Continental Western Europe, and 25% in the US and the UK, are mainly employees, with a small percentage of self-employed. At least three quarters of them could be exempted from a tax on wealth.

If we go from percentages to amounts in euros, we can understand even better what it means when we say that wealth is concentrated in a very small fraction of the population.

 An idea of wealth distribution among the various groups

According to Piketty, in several European countries where the standard of living is close to the French standard, the average wealth of the poorest 50% is about €20,000; however, the fact that many of these households have no wealth or are in debt is also an important consideration.

The middle 40%, to use Piketty’s terms, have an average personal wealth of €175,000 (ranging from €100,000 to €400,000). The next 9% have €800,000, and the upper 1% owns €5 million. Of course, at the top of this 1%, there are super-wealthy individuals like Bernard Arnault (LVMH), who is currently the richest European with a wealth of over $76 billion.

 From the unequal distribution of private wealth in the European Union to its necessary redistribution

The case of the European Union is worth analyzing. In 2013 it had a GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
of €14,700 billion. The total private wealth of European households amounted to approximately €70,000 billion. The richest 1% had €17,500 billion (25% of €70,000 billion). The next 9% owned €24,500 billion (35%), as did the middle 40%. The remaining 50% had €3,500 billion or 5% of the total. [7]

The annual budget of the European commission (€145 billion) is equivalent to approximately 1% of the EU’s GDP. Meanwhile, a 1% annual tax on the wealth of the richest Europeans would raise €175 billion (€30 billion more than the EU’s annual budget). How about a 5% wealth tax? This simple illustration gives a concrete example of what is potentially achievable, if social movements can succeed in obtaining radical change in European policies or even of the policies in only one EU country. [8]

A 1% annual tax on the wealth of the richest Europeans would raise €175 billion, i.e. more than the EU’s annual budget

An exceptional tax (i.e. a tax levied only once in a generation) of 33 % in the wealth of the richest 1% in the EU would provide nearly €6,000 billion (that is over 41 times more than the EU’s annual budget!). And we are not even close to an 80% rate!

These examples help us to size up the issues at stake in terms of taxing the private wealth of the capitalist class and the possibilities that exist for coming up with propositions so that we can find money where it is plentiful, in order to put it to use to bring about social justice.

An exceptional tax (i.e. a tax levied only once in a generation) of 33 % in the wealth of the richest 1% in the EU would provide nearly €6,000 billion (that is over 41 times more than the EU’s annual budget!)

Many economists keep repeating that it is of no use to tax the wealthiest, because as there are so few of them the amount raised would not be very significant. On the contrary, Piketty shows that the richest 1% has concentrated such a phenomenal amount of tangible and intangible assets that a tax policy targeting the richest 1%, 2.5%, or even 10% would provide substantial means for breaking with neoliberalism. [9]

To those who claim that wealth is inaccessible, because it can cross borders easily, we must respond that sequestration, the freezing of financial assets, heavy fines, and the control of capital movements are powerful tools that could be applied if there is the public will and political determination.

 The unequal distribution of private wealth throughout the world

What has just been said about the European Union could be extended to the rest of the world, because from the North to the South there has been a substantial increase in the personal wealth of the richest.

We could also focus on an even smaller minority of wealthy individuals as Piketty does: In 1987, there were 150 people in the 1/20,000,000 richest part of the adult population worldwide, with an average personal fortune of $1.5 billion. [10] Twenty-six years later, in 2013, the 1/20,000,000 richest part of the population numbered 225 people with an average personal fortune of $15 billion, which represents a 6.4% increase per year. [11] The .1% (1/1000 of the world population) [12] richest in the world own 20% of the wealth in the world, the richest 1% own 50%. If we take into account the wealth of the richest 10%, Piketty estimates that it holds 80% to 90% of the total world wealth, while the poorest 50% certainly have less than 5%. [13] These figures allow us to understand just how much redistribution must take place, and that this redistribution would require the confiscation of a very significant share of the personal wealth owned by the richest.

The richest 0.1% at a global level (1 thousandth of the world population) owns 20% of the world’s wealth; the richest 1% owns 50%

Piketty observes that the wealth of the richest 1/1000 on the planet increased by a rate of 6% per year in recent decades, whereas the wealth of the overall population increased by only 2%. If a radical shift does not occur, and all else remains the same, within 30 years, the .1% will own 60% of total world wealth, three times the 20% they possessed in 2013! [14]

 The distribution of income is also extremely unequal

Piketty also analyses labour income, and shows that the 10% who earn the most take home 25% of the income from labour in Europe, and 35% in the United States.

Table 2. Total labour income inequality

Share of various groups in total labour income Europe 2010 United States 2010
Richest 10% 25% 35%
(richest 1% alone) 7% 12%
(next 9%) 18% 23%
Middle 40% 45% 40%
Poorest 50% 30% 25%

If we add labour income and other forms of income (rent, interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. on savings, corporate profits, dividends, and so on), the distribution is even more unequal, as shown in Table 3.

Table 3. Total inequality of income from labour and capital

Share of various groups in total income Europe 2010 United States 2010
Richest 10% 35% 50%
(richest 1% alone) 10% 20%
(next 9%) 25% 30%
Middle 40% 40% 30%
Poorest 50% 25% 20%

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