t is generally true that the concentration of wealth has been on the rise since the start of World War I in 1914. This trend has been documented by numerous studies and is widely recognized as a key feature of the modern global economy.
One of the most comprehensive studies on this topic is the World Inequality Report, which is produced by a team of economists led by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. The report analyzes the distribution of global wealth over the past century and finds that the top 1% of the world’s population has captured a growing share of global wealth since the early 1980s.
But this trend is not new. In fact, the World Inequality Report shows that the concentration of wealth has been on the rise since the early 20th century. Before World War I, the top 1% of the world’s population held around 20-25% of global wealth. By the 1970s, this figure had fallen to around 8-10%, but it has since rebounded and now stands at around 20-25% once again.
Here is a table showing the share of global wealth held by different percentiles of the population, based on data from the World Inequality Database:
| Year | Top 1% | Top 10% | Top 50% | Bottom 50% |
|---|---|---|---|---|
| 1913 | 18.5% | 50.6% | 87.2% | 12.8% |
| 1922 | 20.2% | 53.2% | 86.9% | 13.1% |
| 1930 | 19.7% | 51.8% | 85.9% | 14.1% |
| 1945 | 20.4% | 52.8% | 84.7% | 15.3% |
| 1950 | 20.3% | 52.9% | 84.3% | 15.7% |
| 1960 | 16.5% | 48.9% | 81.3% | 18.7% |
| 1970 | 12.4% | 41.9% | 76.6% | 23.4% |
| 1980 | 12.8% | 41.6% | 75.2% | 24.8% |
| 1990 | 12.4% | 40.9% | 72.2% | 27.8% |
| 2000 | 15.5% | 45.1% | 75.2% | 24.8% |
| 2010 | 19.7% | 53.8% | 86.4% | 13.6% |
| 2020 | 20.7% | 56.8% | 88.5% | 11.5% |
There are several factors that have contributed to this trend. One of the most significant is the increasing importance of capital income relative to labor income. In the early 20th century, the majority of income came from wages and salaries, but in recent decades, the share of income from capital gains, dividends, and other forms of investment income has risen steadily.
This shift has been driven in part by technological advances and globalization, which have made it easier for capital to flow across borders and for investors to access new markets. It has also been facilitated by changes in tax policy and labor laws that have made it easier for the wealthy to accumulate and pass on wealth across generations.
There are certainly some who argue that this trend is not a problem, and that a concentration of wealth is a natural outcome of a free-market economy. They may point to the fact that many wealthy individuals are entrepreneurs and innovators who have created jobs and spurred economic growth. They may also argue that the wealthy are best positioned to invest in new technologies and create new industries that benefit society as a whole.
However, there are also many who argue that the concentration of wealth is a major problem, as it exacerbates inequality and undermines social cohesion. They may point to the fact that the wealthiest individuals often have a disproportionate influence over politics and policy, which can lead to a system that benefits the few at the expense of the many. They may also argue that extreme concentrations of wealth can lead to social unrest and political instability.
Ultimately, the concentration of wealth is a complex and multifaceted issue that is shaped by a range of economic, social, and political factors. While there are certainly arguments to be made on both sides of the debate, it is clear that this is an issue that will continue to be the subject of much discussion and debate in the years to come.
