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SECTION 1 2 3 EXTREME INEQUALITY THE BILLIONAIRE BOOM Inequality of wealth is even more extreme than the inequality of income. The number of dollar millionaires – known as High Net Worth Individuals – rose from 10 million in 2009 to 13.7 million in 2013. 146 Since the financial crisis, the ranks of the world’s billionaires has more than doubled, swelling to 1,645 people. 147 The billionaire boom is not just a rich country story: the number of India’s billionaires increased from just two in the 1990s, 148 to 65 in early 2014. 149 And today there are 16 billionaires in sub-Saharan Africa, 150 alongside the 358 million people living in extreme poverty. 151 Oxfam’s research in early 2014 found that the 85 richest individuals in the world have as much wealth as the poorest half of the global population. 152 This figure was based on the wealth of the 85 billionaires at the time of the annual Forbes report in March 2013. In the period of a year from March 2013 to March 2014 their wealth rose again by a further 14 percent, or $244bn. 153 This equates to a $668m-a-day increase. Once accumulated, the wealth of the world’s billionaires takes on a momentum of its own, growing much faster than the broader economy in many cases. If Bill Gates were to cash in all his wealth and spend $1m every single day, it would take him 218 years to spend all of his money. 155 But in reality, the interest on his wealth, even in a modest savings account (with interest at 1.95 percent) would make him $4.2m each day. The average return on wealth for billionaires is approximately 5.3 percent, 156 and between March 2013 and March 2014, Bill Gates’ wealth increased by 13 percent – from $67bn to $76bn. 157 This is an increase of $24m a day, or $1m every hour. “ No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. NICK HANAUER 154 ” The richest ten people in the world would face a similarly absurd challenge in spending their wealth, as the following calculations show. there are 16 billionaires in sub-saharan africa living alongside the 358 million people living in extreme poverty 32
SECTION 1 2 3 EXTREME INEQUALITY TABLE 1: The number of years it would take for the richest 10 people to spend their wealth, and earnings on modest and average interest 158 Name Wealth ($bn) Years to spend all money, at $1m/day Earnings per day at ordinary rate of 1.95% Interest ($m) Earnings per day at average billionaire rate of return (5.3%) ($m) Carlos Slim Helu and family (Mexico) 80 220 4.3 11.6 Bill Gates (USA) 79 218 4.2 11.5 Amancio Ortega (Spain) 63 172 3.3 9.1 Warren Buffett (USA) 62 169 3.3 8.9 Larry Ellison (USA) 50 137 2.7 7.2 Charles Koch (USA) 41 112 2.2 5.9 David Koch (USA) 41 112 2.2 5.9 Liliane Bettencourt and family (France) 37 102 2.0 5.4 Christy Walton and family (USA) 37 101 2.0 5.3 Sheldon Adelson (USA) 36 100 1.9 5.3 The decision of Bill Gates and Warren Buffet to give away their fortunes is an example to the rest of the world’s billionaires. In fact, many billionaires and millionaires have been vocal in their agreement that extreme wealth is a problem that threatens us all. In the USA, a group called the Patriotic Millionaires is actively lobbying congress to remove tax breaks for the wealthy, writing: ‘for the fiscal health of our nation and the well-being of our fellow citizens, we ask that you increase taxes on incomes over $1,000,000’. 159 The aggregate wealth of today’s billionaires has increased by 124 percent in the last four years and is now approximately $5.4tn. This is twice the size of France’s GDP in 2012. 160 33
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