85 richest people as wealthy as poorest 3.5bn

[gla22]

The production of goods and services requires both capital and labor. Workers receive a wage for hours committed to production, and capitalists receive a return for the use of their capital in production. This system has been very good at generating output effectively and efficiently.

However as the workers role in the production process has been automated and replaced by machines, as the world population continues to increase, and governments engage in pro-globalization trade and immigration policies, it is a race to the bottom for those who work for a living. The majority of those who work for a living and generate the majority of their income from selling their labor should expect more competition and lower compensation. The end result of this is lower aggregate demand and a likely continuation of the current state of affairs, expansionary monetary policy enacted by governments combined with sluggish growth.

Global trends fueling the race to the bottom

Increasing global population: In 1960 the world’s population numbered only 3 billion. Now there are approximately 7 billion people and within our lifetimes we are likely to see a world with over 9 billion people. Although population growth has slowed from its peak, it is still rapidly increasing. More people will increase competition for a quantity of jobs that has remained stagnant. The effect will be lower wages and more immigration to places with higher wages.

Elderly staying in the workforce: In developed countries like the U.S. and Europe those over 65 are staying in the labor force longer. This is caused by longer life expectancy, an inability (or unwillingness) to save, decreasing retirement benefits and the difficulty of receiving good returns on savings. The more elderly that stay in the workforce increases the supply of labor and makes it more difficult for young workers to enter the labor force while driving down wages.

Increasing automation & Increasing Efficiency: Many jobs that used to require humans have been automated and machines have taken the place of workers. This has happened notably in the automotive industry. In addition to automation, the improvement of tools and business processes combined with more highly educated workers has dramatically increased the production per worker. This has allowed the productivity per worker to increase substantially while compensation has stagnated.

Less organized labor: The rate of private sector union participation in the U.S. is down significantly. While public sector unions can effectively hold the government (and the taxpayers) for ransom, private sector unions have been decimated by the outsourcing of jobs and poor legislation. In developing countries governments are so authoritarian that organized labor is crushed in its infancy. Dissatisfied workers in China often opt for suicide instead of striking or rioting for conditions and benefits that workers in developed countries enjoy.

Increasing and more flexible immigration:
Mass migration and immigration is not a new phenomenon. It has occurred many times throughout history and is occurring at an increasing rate now. As in previous instances, immigration has the effect of driving down local wages as the quantity of labor increases.

Globalization of trade: As the barriers of trade have decreased, manufacturing jobs in countries with workers rights, living wages have been outsourced to the impoverished billions in the developing world. As cheap U.S. food imports and international food aid disrupts local economies residents have no choice but to leave their farms and join the assembly lines. The owners and the consumer derive the benefits of lower prices and higher margins, but at the expense of the workers.

All these trends are driving down wages as more of the wealth generated from production goes to the holders of capital and a select few of highly skilled employees causing increased wealth disparity. Apart from the broader societal problems cause by increased wealth disparity a purely economic problem is that aggregate demand cannot be stimulated as well by the wealthy as by the poor and middle class. While the poor and middle class spend most of their earnings, the wealth have the ability to save a vast portion of their earnings. This slowdown in aggregate demand threatens to stifles growth. In addition to spending less, the wealthy need to park their cash in safe places to protect themselves from inflation. This drives up asset prices and drives down returns.

[The Dharma Bum]

The point is capital should be communally owned, as it is communally derived. No one man can do the work necessary to generate millions of dollars worth of capital, so why does an individual get to own that much of what society produced? Why does one guy get to start off with a billion dollars worth of monopoly money while another has a hundred?

Is it because of the familial/genetic prerogatives of certain family lines, as in the days of feudalism? Because I'm not convinced that road is what is objectively best for society as a whole. If that is the case why shouldn't the lower classes look at the upper class as nothing more than a deadly parasitic variant species that has infected the colony?

They don't individually really produce anything more than any other one individual does, if they even actually produce something useful that is, and they take the loin's share of resources. Never really heard an adequate social justification for that. It is something that seems to me to hinder society much more than it fosters progress.

[gla22]

[The dane]

[Indy]

Yeah I don't think that we should fall into the this is the "new normal" complacency when our income disparity is this far out of whack.

It's like crazy out of whack.

It's funny, because the Alex Joneses of the world will squawk about conspiracy theories all day that make no sense but this almost seems James Bond-ian when you look at the wealth redistribution over the past decade.

Speaking of ironies: people who go off about "wealth redistribution" (Joe the Plumber!) have their sites trained on... poor people. Oh and black ones, naturally.

[exploited]

Wealth inequality has been building for twenty or thirty years. It is not a new phenomenon.

[The Comrade]

[exploited]

Agreed. Our numbers differ but the simple truth is that insane levels of wealth inequality have been reality for decades.

[Medius]

[The Comrade]