Plunder and Progress. How the ultra-rich sink the middle class and the poor.

According to the latest report According to Oxfam, the 3,000 ultra-richest people now control 15% of the world's GDP. In 1987 they controlled 3%. The ultra-rich and their mega-corporations manage governments and shape the rules of the game, provoke perpetual crises, perpetual wars and exorbitant public deficits, which are always resolved in their favor, at the expense of the rest of the population. 

Fear has always been the strongest ally of these power groups and governments, who try to make people live immersed in it. Every real or invented or artificially promoted and extended crisis or war is an opportunity for their agenda. A frightened and silenced society accepts without complaint what under normal circumstances it would never accept. The result is that wealth is increasingly concentrated in a few hands.

The data

I have made this chart which, without claiming to be exact, may serve to give a numerical context to this message:

In reality, in the last 35 years the nominal wealth of the whole world has grown significantly, also that of the middle and poor classes. World GDP per capita in 1987 was 3.400$ nominal, or 8.500$ adjusted for "official" inflation, while in 2023 it was 13.125$, which means a growth of 286% nominal and 54% adjusted, on average for the whole population. So far so good. The world seems to be "progressing".

But for 99.99% of the population their wealth has grown by 35% since 1987 (adjusted for inflation), while for the richest 0.1% it has grown by 1135%. Again, these figures are not intended to be exact calculations, but they serve as a frame of reference to show growing inequality.

Purchasing power

In any case, regardless of how growth is distributed, the fact that nominal wealth in terms of GDP per capita has grown for all individuals (+286% nominal and +54% adjusted) does not necessarily mean that their purchasing power has grown in the same proportion, because real inflation is higher than official inflation. A good reference to measure the real purchasing power of the citizens of any country is the evolution of the gold price against its currency. On average, all currencies have been depreciating dramatically against gold for decades. The gold ounce has appreciated against the dollar by more than 4000% since 1974, 600% since 1994, and more than 100% since 2014.

Although this sharp devaluation of currencies against gold does not directly mean that the purchasing power of citizens has been reduced in the same proportion, it is an indicator that real inflation has been substantially higher than official inflation. There are other indicators that this is so, such as median real home prices, which in the US have risen +1150% since 1974, while overall official inflation has been +540% and official housing inflation has been +680%. Higher real inflation than official inflation means that inflation-adjusted per capita GDP growth does not mean growth in the same proportion of wealth and purchasing power.

Inflation

Whatever the inflation is, it is mainly due to the nefarious management of governments, as it says Elon Musk himself. Managed by the big power groups, with their real or artificial crises, their continuous public deficits and public spending excesses, their wars and their economic and monetary policies (in many cases neo-communist), it is the governments that have caused the skyrocketing inflation. 

For the majority of the population, their incomes have not risen in the same proportion as real inflation, contrary to what has happened for the ultra-rich and the big power groups. One could summarize by saying that since 1987, 99.99% of humanity has increased its wealth by about 35% while the relative purchasing power of its currencies has probably devalued by a further %. And that, conversely, the richest 0.1% have seen their wealth increase by more than 1100%, while the relative purchasing power of their currencies has devalued much less (by the same % applicable to the rest of the population).

Data from the FED

The Fed data (the US central bank) on the evolution of wealth distribution in the US by population percentile, corroborate many of these conclusions. They show that the richest 1% Americans have steadily increased their share of wealth over the last 35 years, from 16.6% to 23.3%, at the expense of the poorest.

The most comprehensive summary of this Fed data is that the richest 20% has increased its share of wealth, income and assets over the past 35 years by about 10%, from 60% to 70%, at the expense of the poorest 80% of the population, whose share of wealth, income and assets has increased by about 10%, from 60% to 70%, at the expense of the poorest 80% of the population, whose share of wealth, income and assets has increased by about 10%. wealthThe top 10%, income and assets has decreased by the same 10%, going from 40% to 30%. This is more striking as we break down the top 20% into smaller percentiles, down to the richest top 0.1% which, as we have seen, owns 15% of the wealth when in 1987 it owned 3%. There is no redistribution of wealth, quite the contrary.

Fundamentally, the richest top 10%-20% of the population are the managers of companies and the direct or indirect owners of these companies. It seems like a bad joke to see these businessmen, top managers, successful entrepreneurs, coaches and professors of large business schools saying that the most important thing is to take care of and motivate the teams...