Monday, January 28, 2013

The Feral Rich Are Destroying Our Civilised Society


The latest New Internationlist has published statistics regarding the world's wealthy and the increasing divide between rich and poor. They refer to the "Feral Rich" and ask, "what can we do to stop them?"
  • 8% of the world's population own 82% of its wealth.
  • There are now 180 more billionaires than before the global financial crash.
  • The world's richest man is Carlos Slim and his total wealth is $69 billion (the New Zealand Government's annual income is 70 billion).
  • The world's richest woman is Australian mining heiress Gina Rinehart. She is worth $28 billion and she has $52 million a day to survive on.
  • The average household wealth in the world declined by 5.2% over the last year.
  • The 400 richest Americans have a combined wealth of $1.7 trillion
  • In 1980 the average US CEO earned 42 times as much as the average worker and by 2012 this had skyrocketed to 380 times.
  • The top rate of US income tax in 1980 was 70% and in 2012 it was 35%.
  • Mitt Romney and his wife pay 14.1% of their income in tax, while the average worker pays 30%.
  • $21 trillion is stashed away in tax havens which is the equivalent of the entire US and Chinese economies combined.
  • In the US 47% of the members of Congress are millionaires.
  • 62% of British cabinet ministers are millionaires.
New Zealand reflects what is happening in the rest of the world but our income inequality is growing faster than most.
  • Our 100 richest New Zealanders have a combined wealth of $52 billion.
  • Our richest saw their incomes increase by an average of 20% in 2011
  • Over the past four years the median income for Maori families has dropped by $40 a week and Pasifika families have seen a drop of $65.
  • The median weekly income in New Zealand (from all sources) is $550, many obviously live on much less.
  • The median rent for a 3 bedroom house in Auckland is $370 a week and rents across the country increased by $10 over the past year.
  • Tax evasion cost the Government $6 billion while benefit fraud cost around $39 million.
While the rich have got richer around the world, most are paying far less in tax and most governments are struggling to pay for core government services and infrastructure. Many rich, including writer J K Rowling are happy to pay tax because of the support they received from the state early in their careers. They also believe that tax is the price to pay for a civilised society. Would a truly civilised society stand back and watch 25% of their children live in poverty? Would a civilized society have their elderly live in rest homes that can't pass minimum standards of care and pay the minimum rate for their workers (one of our wealthiest New Zealanders, Kevin Hickman, owns rest homes and his personal wealth increased by $15 million last year)? 

The fact that Governments and most people of the world struggle to manage on their incomes is not because there isn't enough money in the world, it's because the world's wealth has been captured by a few and they refuse to share. Many Governments are guilty of perpetuating this wealth capture by lowering taxes and not standing firm to lobbyists.  

43 comments:

Shane Pleasance said...

How would you define a civilised society?

Anonymous said...

Good stuff - may I repost on The Standard?

r0b

bsprout said...

Certainly Rob.

bsprout said...

Shane, I can't speak for whoever said this originally but I would have thought it would refer to a society that cares for its most vulnerable and looks to treating all its citizens equitably and without prejudice.

Shane Pleasance said...

So a compassionate society is a civilised society?

bsprout said...

The Free Dictionary says this:
1. Having a highly developed society and culture.
2. Showing evidence of moral and intellectual advancement; humane, ethical, and reasonable
I would agree with this and would include compassionate in this too.

Anonymous said...

Thanks...

r0b

Shane Pleasance said...
This comment has been removed by the author.
Shane Pleasance said...

Which countries would you then consider to be civilised?

bsprout said...

Shane, perhaps a better question would be "which countries do you consider are the most civilized?". No country is perfect in this regard.

Using the Human Development Index http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index#List_of_countries_by_continent
(which is probably the closest indication of being "civilized") then Norway tops the ranking.

Shane Pleasance said...

Not a particularly compassionate country, Norway.

bsprout said...

Perhaps it wasn't the best index to use then, because New Zealand is also ranked quite high and we have one of the OECD's worst statistics for child health and welfare. Any suggestions of a better way of establishing what you are looking for? There is supposed to be an index for compassion but I couldn't find it.

Shane Pleasance said...

http://www.guardian.co.uk/news/datablog/2010/sep/08/charitable-giving-country

We are talking at cross purposes, however. My view of compassion is different to yours, it seems.

bsprout said...

However, giving to charities is just one example of compassion. There is giving money but also committing time to supporting those in need. We have many in New Zealand who work for minimal wages to do caring jobs and volunteering in community roles. One could also look the the mandate given to Governments to spend on health, welfare and supporting children. Our country spends less on early childhood education than average in the OECD, for example.

Shane Pleasance said...

Redristibution through taxation is the opposite of compassion.

bsprout said...

If only we could rely on the compassion of the rich to deliver consistent support to those who need it if there was a world without tax. Sadly although we have many altruistic wealthy most are inclined to ignore any suffering around them. In the US the tax rate has dropped considerably for the wealthy but their level of giving has not increased to the same extent.

Perhaps you have evidence supporting the opposite?

Shane Pleasance said...

Gee, I can smell weasel again...

bsprout said...

Shane, if you want to have a real discussion you have to support your own arguments with some evidence and substance. You are an idealist with too much faith in the best elements of humanity. The Libertarian view that promotes individual freedom before collective responsibility is essentially flawed and the fact that there has been no community or state that has managed to operate under your philosophy is telling.
While you continually ask me to come up with examples that show elements of my political ideals, you have come up with nothing yourself (or did I miss it?).

Shane Pleasance said...

This is your blog and your mouthpiece (and apparently no longer the mouthpiece of the Green Party).

I am, as ever, interested in finding the values that underpin your - and accordingly - socialist values.

I make no promise of any Libertarian Utopia.

Regretfully we have many examples of the failed philosophy of socialism - the hatred of fellow man, the despising of success, the use of force on one group of human beings to justify the values of another group of human beings in the pursuit of 'equality' or 'democracy'.

In my defence I was interested in your understanding of a civilised society and subsequently, compassion.

It would seem that our definitions differ. I believe the use of force, through taxation, is the opposite of compassion, it is tyranny.

Man giving freely of his own to others less fortunate - that underpins my definition of compassion.

Anonymous said...

"Sadly although we have many altruistic wealthy most are inclined to ignore any suffering around them"

Would like to see your source for this statement. I mean, you must have some pretty comprehensive statistical backing behind something as sweeping as that.

Must admit I am intrigued to see a survey of the opinions of all wealthy people.

bsprout said...

Anonymous- here is a small selection of the evidence I used to support my statement (I think you will struggle to find much to support a counter view):
http://nymag.com/news/features/money-brain-2012-7/
http://www.scientificamerican.com/article.cfm?id=how-wealth-reduces-compassion
http://www.huffingtonpost.com/2011/12/22/rich-people-lack-empathy_n_1165425.html
http://www.nytimes.com/2011/01/02/fashion/02studied.html?_r=0
http://healthland.time.com/2011/12/21/got-money-then-you-might-lack-compassion/
http://www.livescience.com/8978-read-emotions-helps-poor.html

bsprout said...

And even when the rich do give up there money for charity there can be complications, as Owen Glenn discovered. Those who got rich through their own efforts can often be quite charitable but the following generations, who inherit that wealth, are often more reluctant to share. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10862977

Shane Pleasance said...

Yep, definitely 'feral rich'.

http://www.forbes.com/pictures/mel45gflk/bill-gates-24/

I have looked through that rather thin collection of self referencing references based on just a very few actual papers, and am not really convinced.
It has long been held that the best CEO's bring emotional intelligence as a cornerstone skill. Without this, it is hard to develop a sustainable return for investors. Greed is not exploitation. It is not a fine line, either.

Anonymous said...

Ok, so that proves nothing. The majority of those sources are referencing the same one or two recent studies. One or two studies is not sufficient for proof. To show that "most (wealthy people) are inclined..." You would need to have a study of OVER HALF of the world's wealthy. Your generalisation remains as sweeping and idiotic as ever.

In any case, they do not support your point anywhere. They claim that perhaps the wealthy are more likely to engage in unethical behaviour and be less attuned to the suffering of others. Nowhere is it shown the "most" wealthy people do anything.
For example, say 20% of the non-wealthy engage in unethical behavior as opposed to 25% of the wealthy. That means that the wealthy are indeed more likely to engage in such activities, but 25% is a long was from a majority.

As such, I am still waiting for you to back up your statement regarding "most" wealthy people.

bsprout said...

Anonymous, you are a very passionate advocate for the wealthy, but you are beginning to sound like a climate denier. If you had to survey more than half a population to get a reasonable result then we should ignore all political polls and most surveys would be deemed pointless. There is always a margin of error when surveying a sample of people on any issue but they can still be considered valid.

When I Googled for information on the generosity and empathy shown by wealthy people I ended up with pages of articles and studies saying similar things. I quickly chose a selection that came from the more reputable Newspapers and scientific institutions. Given the number I found and the paucity of those providing a counter view I felt it was a safe statement to make.

I guess you could always back up your own argument with evidence...?

Anonymous said...

It seems that you have missed, either deliberately or through ignorance, the point I am trying to make. A passionate defender of the wealthy? I stated no opinion in favour of the wealthy or otherwise, I am speaking against ridiculous generalisations which attempt to demonise many people unfairly. If you had said the same thing about most poor people, I would have reacted in the same way.

Next, you say I sound like a climate denier. I am not sure why this is relevant, apart from as an attempt to once again associate me with beliefs I have not stated and make my opinions less valid in the eyes of you and the half dozen troglodytic denizens of your crazy little hate filled blog, but I am 100% not a climate denier. There is absolutely such a thing as a climate.

In regards to backing up my own argument with evidence, my only argument is that what you have stated is unfair and clearly cannot be proven without canvassing the feelings of more than half of wealthy people. For example, you could reasonably state something like "some recent (and seemingly non peer-reviewed?) studies with a small number of subjects suggest that there may be a trend regarding the more wealthy having less sympathy for others". This would be a fair statement to support your argument. Saying that most wealthy people do not care about others is a clearly ridiculous, bitter, intentionally inflammatory statement which doesn't support your argument, it makes you look like an angry teenager (and I can say this, as an angry teenager)who is unable to satisfactorily back up his argument with reality and instead resorts to hyperbole that anyone with half a brain can see is unfair.

bsprout said...

Anonymous, I stand by my statement regarding the wealthy as there is ample evidence beyond the many studies that you will find in any Google search. I even Googled "Wealthy show empathy and generosity" thinking that I may get some research or evidence to support the opposite view, but it still came up with similar links. In science a good test of a hypothesis is to look for evidence that does not support it. I made a genuine effort and drew a blank. perhaps you can prove me wrong.

Of course an informed person would only have to look at the demise of the worlds financial systems to see that wealthy bankers, investment managers, hedge fund managers etc were all motivated by greed than helping their fellow man. Widespread tax avoidance and capture of the world's wealth that I referred to in my blog also provides ample evidence.

Wealthy benefactors are obviously the exception rather than the rule and those who are generous are more likely to do so at the end of their careers. We are also inclined to revere a billionaire who gives the odd million to charity when it may actually be only a very small percentage of their total wealth.

I deserved your climate denier comment (it was a good come back) but I mentioned it because you do seem to be defending the characters of the wealthy against overwhelming evidence of the opposite (not just from the links that I provided).

I'm afraid you haven't provided convincing evidence that I should retract my statement, as that is probably a good way to challenge another's views.

Until then I will continue to entertain the "half dozen troglodytic denizens of my crazy little hate filled blog" in my current crazy way. :-)

(FYI My hate filled blog received around 31,000 visits over the last month)

Anonymous said...

There's very little point even replying to this, because once again you have danced around the point I am making.

I will repeat : I am not trying to argue whether or not wealthy people are less inclined to be empathetic or not, as you keep trying to prove to me with bogus evidence.

Now you are trying to prove your point (that MOST wealthy people lack sympathy for others) by saying that wealthy investment bankers were motivated by greed, rather than a desire to help others. While this is correct, it is not relevant. These were corrupt bankers, the fact that they were wealthy does not factor into it. There are many many wealthy bankers the world over who are honest and give much to charity, and there are many poor people committing awful crimes equally motivated by greed. Is a poor man who bashes an old lady and steals her purse working to help others? Crime is committed by all demographics, including people of every income bracket. These bankers were simply in a position where their actions had larger consequences. Once again, the case of the corrupt bankers does absolutely NOTHING to validate the statement that most wealthy people do not care about others, it shows that a few wealthy people wanted to increase their wealth.

The next part discusses wealthy people who do give money to others. I love the disdain with which you treat people giving away millions of dollars. Have you given millions of dollars to anything? Would you prefer if these selfish bastards didn't give anything? I think you would, just so you would have more to complain about. And yes, I am inclined to revere someone who works for years to earn their money and then chooses to give away huge tracts of it to help people they have never met. That is a noble thing to do. Much more noble than working for a modest living and then trying to cut down all the more successful out of envy, spite and bitterness. Is it not better to celebrate the success of our fellow man than try to rid the world of the successful and minimize their achievements? Regarding billionaires who give away "a very small percentage of their total wealth", I direct you to the Giving Pledge. http://en.wikipedia.org/wiki/The_Giving_Pledge
Yes this is a small example, but it constitutes huge amounts of money, and very small evidence seems to be all that is required in this blog to be considered "overwhelming".

Next, the climate debate. It is just as irrelevant as the last time you brought it up. I think you will need to reassess what the word "overwhelming" means, because we certainly have different ideas on that point. We used to have "overwhelming" evidence that the world was flat, we used to have "overwhelming" evidence that the bible was fact. Some people believe we still do. We had some "overwhelming" evidence from The University of East Anglia regarding climate change, until we found out they published that evidence knowing it was invalid.

You argue that I haven't convinced you to retract your statement. I never will. You are the kind to clamp your hands over your ears and scream when something is said which refutes the strange ideas you have somehow lodged into your head. No one could ever convince you of anything that didn't suit your agenda, not even your beloved Karl Marx.

So please, can I have some "overwhelming" evidence explaining the innermost thoughts, emotions and feelings of most wealthy people in the entire world, in all countries and all ages? Considering there are an estimated 10,000,000 millionaires in the world, with no study surveying them all on this point, if you want to back up your generalisation, you had better get started.

bsprout said...

Anonymous, oh dear you are reading so much into my words, here is another post where I take a slightly different stand : http://localbodies-bsprout.blogspot.co.nz/2012/07/economic-leadership-lacking.html

I actually also blame Governments who bow to lobbying, lower taxes and support legislation that causes the flow of money goes in one direction.

It does amuse me that you criticise me for not providing evidence to prove most rich lack empathy and are not generous with their wealth. I provided some evidence of this and also all the statistics that I provided. If 82% of the world's wealth is controlled by 8% of the people then it is fairly obvious the money flow largely goes mainly one way. This is probably the most overwhelming evidence of all!

I challenged you to find evidence to support the opposite view and, like me, you found very little. You also do what you accuse me off and make a wild claim that many many bankers are honest and give much to charity and yet have no proof of this. I am sure many are but I am also fairly sure few are truly generous with their money.

You claim that I treat those wealthy who do give to charity with disdain...I did not! I also believe that I give more of my income to charity than most wealthy and most of my time is spent working for non profit organisations in a voluntary capacity. I guess I also consider myself wealthy, in that there is little I want for. If I was truly wealthy with millions of dollars I wouldn't feel comfortable living in a mansion and driving expensive cars...and there is the final proof of a lack of compassion because all those who live that way are obviously able to ignore the fact that 25% of our children live in poverty.

Try looking on Trademe property, search for houses of over six bedrooms and worth more than $2 million, you should come up with around 208 homes. I personally could never live in any of them (even if I could afford it) when I know all the causes and charities that need financial support.

The Salvation Army in Invercargill had to move out of their hostel because it is an earthquake risk and they had looked after many of Invercargill's struggling men with mental health issues and alcoholism etc. I used to pass on food to them when I could, but now they can't afford to replace the facility and I am not sure of the fate of those who used it. The wealthy in Invercargill could have spent money in strengthening or rebuilding the hostel but they didn't despite the newspaper articles explaining their fate.

If the wealthy of NZ shared the 20% increase in their income that they achieved in 2011 and gave it to charity it would total around $10 billion. They haven't even given 5% of their wealth to charity. Luxury car sales have never been better (a new Rolls Royce costs around $700,000) and yet 50% of NZ children experience poverty at some point in their childhood.

If you are still underwhelmed with all this evidence then perhaps you should go and torment another blogger, or perhaps you need to visit this place: http://www.youtube.com/watch?v=ppK6sxz6epk


Ms Mouse said...

DK - you have been repeatedly and humiliatingly spanked here on your own blog.

Beaten by science, logic, humour and humility.

Not content to bludge off the income of your smarter half, and as an average quality primary school teacher, is it not unsurprising you really have no insight into your shortcomings?

How could you have?

With your words, you have clicked the lights on in your sad little hate filled world, and we can you sitting in your little pyjama bottoms in front of the computer screen.

Like a gormless Homer Simpson, but worse.

You think you are better than everyone else, and thrive on playing groups off against each other.

Good luck with your candidacy.

I shall not be supporting you.

Shane Pleasance said...

Yeah Dave, I am a little concerned about your understanding of science and the scientific method.

As I found with basic economics, its probably not worth discussing with you, though.

Anonymous said...

It seems pointless to try and debate Mr Kennedy when a legitimate challenger is labeled a tormentor, and anyone who actually thinks about his words enough to see the obvious faults with them is dismissed as simply "reading too much into" them.

Why are you typing these words on here, Homer, if you do not intend for them to be read into? Perhaps you want them to simply be believed without thought, like you have mindlessly accepted the dogma you spout from every orifice.

bsprout said...

Ms Mouse, Anonymous (I've noticed you both hide behind nom de plumes); you are free to comment here, but I do feel that there is more abuse coming from your comments here than my entire blog. You may not accept my arguments but at least I attempted to respond with reason and good humour (I thought the Monty Python link was particularly fitting for Master Anonymous).

Ms Mouse has provided no arguments of her own just some bizarre abuse (the spanking and pajama shorts stuff). Anonymus provided only one example of Billionaire/millionaire generosity that listed 93 billionaires who had pledged to give their money, there are around 450 billionaires in the US and around 1300 worldwide. The number of millionaires and Billionaires has actually grown since the financial crisis but the number of poor in the US has also grown (47 million on food stamps), so their generosity hasn't made much impact. More jobs would be a good start.

I don't think Shane and I will agree on a number of things but he is never abusive and he doesn't hide his identity.

Shane Pleasance said...

I am interested to see what you might think of Mark Hubbard's post here http://lifebehindtheirondrape.blogspot.co.nz/2013/02/again-capitalism-is-not-zero-sum-game.html

bsprout said...

Shane, I agree with Mark regarding the danger of being trapped with too much debt and the danger of a soviet style totalitarian state. I also support people living in communities that combine an element of a market style economy (competition can lead to better performance and new developments and initiatives. I also believe in communities working for a common good and supporting the most vulnerable. The Greens aren't communists and they certainly aren't capitalists. You can't put us in a box that easily.

Shane Pleasance said...

1. Common good? What does that mean?

2. Not communists and not capitalists? What are you then?

3. Glad to hear you support competition. Naturally that extends to the supply of money, policing, roading, education...

bsprout said...

1. When communities can work together to provide services, systems, facilities and freedoms that the majority would benefit from that wouldn't be possible without co-orperation.
2. "Not Communists, not capitalists, what are you then?" Green!
3. No, competition doesn't work in education and health :http://localbodies-bsprout.blogspot.co.nz/2012/11/the-germ-is-infecting-our-schools.html

Shane Pleasance said...

1. If communities are to co operate, why do you need to intervene?

2. Much as I am sure you are enjoying your green fantasy, there is not a lot of leeway, it is one, the other, or a mixed economy. Which is it?

3. So, monopolies are bad, competition is good, unless you say so. Are you familiar with the term cognitive dissonance?

bsprout said...

1. To ensure fairness some regulations and rules are necessary. Interventions need to occur when one party acquires and abuses a level of advantage that does not serve the community in a positive way. This could involve such things as constructing shoddy buildings that could be a hazard.

2. This is news to me that there can only be communism and capitalism or a mixture of the two. Why not this: http://en.wikipedia.org/wiki/Green_economy

3. There are numerous models for managing the provision of goods and services and some work best in certain situation where others won't. Successful health and education models tend to rely on cooperation and collaboration, whereas the manufacturing and marketing of goods tend to be enhanced by competition (horses for courses).

Shane Pleasance said...

1. Who decides what is positive?

So two parties would not be able to establish a contract to achieve a safe building? And a government could not arbitrate a dispute? I am confused.

The 'green economy' is really just an extension of communism in its utilisation of private or common property and 'resources' with regards valuation and establishment of captial value. It is an oxymoron.

3. "Tend to be enhanced by competition"?

Sorry, your whole argument sounds like paternalistic protectionism and selective use of opinion to suit agenda.
I would be keen to hear what the 'numerous models' were?

bsprout said...

At least there are examples and elements of what I support operating in the world, that I have referred to before in previous discussions, Shane. You have yet to give an example where Libertarian ideology has worked and hasn't been corrupted by those with advantage.

Shane Pleasance said...

Indeed, there are numerous examples of socialism, and the world starts to burn.

Regarding Freedom? They didn't say "hold on, how will the cotton get picked if we free the slaves...?"

It's not a matter of pragmatism, it is a moral issue. You should have no more rights over others than they do over you.

Janine said...

Actually, they did say "Hold on, how will the cotton get picked..". In fact, the moral issues of slavery, human rights and other rights are still having to be fought for in many places. I don't have the faith in individual good will and morality that you apparently do.
Social contract is more a matter of collective agreement than a private arrangement between individuals of unequal power.