Oxfam International, a poverty fighting organization, made news at the World Economic Forum in Davos earlier this year with its report that the world’s 85 richest people own assets with the same value as those owned by the poorer half of the world’s population, or 3.5 billion people (including children). Both groups have $US 1.7 trillion. That’s $20 billion on average if you are in the first group, and $486 if you are in the second group.
Oxfam’s calculations of the richest individuals are based on the 2013 Forbes Billionaires list. I decided to take a closer look at this group of 85 in search of trends. That’s when I realized that they are by now a much wealthier group. The rich got richer. And it was quite fast and dramatic. For example, while last year it took $23 billion to be in the top 20 of the world’s billionaires, this year it took $31 billion, according to Luisa Kroll, Forbes wealth editor, writing on Forbes.com.
As a result, by the time Forbes published its 2014 Billionaires List in early March, it took only 67 of the richest peoples’ wealth to match the poorer half of the world. (For the purpose of this blog, I will put aside the conversation about the importance of income inequality versus impoverishment. This has recently been skewing strongly toward recognition of the importance of income distribution and its inequality, most recently with the publication of Capital in the Twenty-First Century by Thomas Piketty.)
Each of the 67 is on average worth the same as 52 million people from the bottom of the world’s wealth pyramid. Bill Gates, the world’s richest man, with a net worth of $76 billion, is worth the same as 156 million people from the bottom.
Who are the 67? The biggest group—28 billionaires, or 42% of them—is from the United States. No other country comes close. Germany and Russia have the second-highest number, with six each. The rest are sprinkled among 13 countries in Western Europe, APAC and the Americas.
That the biggest group of the super rich comes from the U.S. should not be a surprise, as the country holds almost a third of the world’s wealth (30%), significantly more than any other country, according to the Global Wealth Databook, from Credit Suisse Research Institute. However, Europe, with a slightly bigger chunk of the world’s wealth (32%), produced substantially fewer of the richest. That is due to less dynamic economies, which do not equal the U.S. in how they foster innovation, on which many of the newest U.S. fortunes are based.
When comparing the ratio of the richest to the percentage of the world’s wealth held by each country, it is Russia that comes out the most lopsided, with its holdings skewed to the super rich. As a country, Russia holds only half a percent of the world’s wealth, and yet it has 9% of the 67 richest.
The 67 fortunes come from three main industries: technology (12), retail (12) and natural resources-based sectors such as oil and gas, mining and steel. The geographical split by industry illustrates the state and progression of the various economies. Almost all technology fortunes are recent and from the U.S. (Microsoft MSFT -0.4%, Oracle, Facebook). Retail is dominated by second- or third-generation Western Europeans. The majority of the rich whose money comes from natural resources are from emerging markets, with most of them from Russia.
The majority of the 67—40, or 60%, to be precise—are self-made.
