The 2022 World Inequality Report, a huge undertaking coordinated by economic and inequality experts Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, was the product of four years of research and produced an unprecedented data set on just how wealth is distributed.
“The world is marked by a very high level of income inequality and an extreme level of wealth inequality,” the authors wrote.
The data serves as a complete rebuke of the trickle-down economic theory, which posits that cutting taxes on the rich will “trickle down” to those below, with the cuts eventually benefiting everyone. In America, trickle-down was exemplified by President Ronald Reagan’s tax slashes. It’s a theory that persists today, even though most research has shown that 50 years of tax cuts benefits the wealthy and worsens inequality.
Piketty, who was Zucman’s doctoral adviser, wrote the tome “Capital in the 21st Century” which used an unprecedented data set going back to the French Revolution to expose how centuries of growing wealth inequality was a feature of capitalism, not a bug. The World Inequality Report was his effort to do the same for recent history.
They argue in the new report that the last two decades of wealth data show that “inequality is a political choice, not an inevitability.”
For instance, when it comes to wealth, which accounts for the values of assets people hold, researchers found that the “poorest half of the global population barely owns any wealth at all.” That bottom half owns just 2% of total wealth. That means that the top half of the world holds 98% of the world’s wealth, and that gets even more concentrated the wealthier you get.
Indeed, the richest 10% of the world’s population hold 76%, or two-thirds of all wealth. That means the 517 million people who make up the top hold vastly more than the 2.5 billion who make up the bottom. The world’s policy choices have led to wealth trickling up rather than down.
Billionaires now hold a 3% share of global wealth, up from 1% in 1995
The report notes that “2020 marked the steepest increase in global billionaires’ share of wealth on record.” Broadly, the number of billionaires rose to a record-number in 2020, with Wealth-X finding that there are now over 3,000 members of the three-comma club.