numbers to make you mad
ok so gonna talk about Geert Reuten’s On the Distribution of Wealth and Capital Ownership; an Empirical Application to OECD Countries around 2019 I mentioned in the Historical Materialism 31.4 book review ... didn’t talk at length there since there were other papers to talk about.
So Reuten mentions that most measurements of wealth inequality compare all kinds of wealth, and that types of wealth aren’t really comparable.
I’ll give an example from my own life: I make min wage based on annual income, tho I probably work more than full time being a postgrad. Min wage is enough to get by, and I have a little bit left over each month, provided an unexpected large expense doesn’t come up. My husband also works so it’s not prosperity but we’re not in the torment nexus, & I am grateful to be able to have money set aside to donate, to save for emergencies, and to buy things. This means I do own some stuff, like bits of furniture, and the most valuable stuff being my electronics (as my apartment itself is, of course, a rental).
Generally, this is the kind of wealth most people have. They’ve got some belongings, some of which can be worth quite a bit. Sometimes, like some of my friends, their parents managed to buy a house before houses were so horribly expensive, so folks with income levels that would absolutely not be house-buying income do own a house ... even if they don’t have the money for important repairs like the roof caving in. These things, of course, do give people a bit of a leg up. Myself having a laptop means it’s easier for me to access the internet when I want to, so I can get news, resources, connection, information, more reliably than the many folks who have to go to the library to use a computer. The folks that can go to the library have an advantage over people who have no place to go to access a computer at all. But idk if someone with a high end computer would have a huge advantage over me, because unless their WiFi is a lot faster or we’re talking about files that are huge, being able to run AAA games or whatever doesn’t necessarily give one a lot more social moving-power over me, compared to the difference of having internet access at all vs not at all.
when wealth inequality is generally measured, these things (homes, computers, clothes...) are included in the measure. & they’re certainly good to have. But wealth measures also include shares in companies which, depending on the amount of shares, can give someone immense sway over the behavior of that company, and depending on the company, immense sway over the world … consider the power held by people with major shares in Lockheed Martin, in British Petroleum, in privatized healthcare & pharma companies like Pfizer, in companies literally shaping the laws of impoverished countries like Monsanto and Syngenta that force farmers into such poverty they commit suicide. People who own these shares have the lives of thousands in their hands, and they don’t give a fuck.
This kind of wealth is not the same thing as me owning a laptop or my friend’s immigrant parents who work in fast food owning an apartment or the guy who runs the shop next door, who has seen half his family deported, owning his home & work.
therefore Reuten asks: what if we measured wealth inequality with JUST shares, stocks, & investments? what if we measured wealth inequality JUST with the wealth that lets people change the political, cultural, economic, ecological landscape of the world?
measuring the assets highlighted in blue in the above table, Table 2 from the paper, makes wealth inequality so much worse.
Look at this chart. The average wealth distribution in the countries measured here is that the top quintile (20%) owns 92% of the capital ownership assets, and the top decile (10%) owns 85% of the capital ownership assets. Reuten states that within that top 10%, much of that ownership may likely be concentrated into the top 5%, the top 1%.
on average, 80% of us own only 8% of capital ownership, 8% of the wealth that translates into social and political punching-power. this is so much more unequal than when looking at other assets, where the numbers look more like the bottom 80% having about 32% (which is still of course fucked up).
Extrapolating to a global scale isn’t difficult, for example seeing that in the USA, a very wealthy and influential country, in which companies are “people” and money is “speech” so wealth is a form of direct political power, 20% of people own 98% of that wealth, and 10% of people own 94%.
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there is an addendum to this topic (the topic being "numbers to make you mad"). A while after reading Reuten's work, I saw a similar kind of enraging-numbers on a daily-links post on Pluralistic, the blog of author Cory Doctorow.
Doctorow points out the money discrepancy between the highest-paid and lowest-paid people in the same company. e.g. Lowe's — CEO Marvin Ellison netted 18m USD in the past five years. Splitting that between the ca. 140,000 employees earning less than 33,000 USD/year, they'd only get 126 USD/year. But Doctorow explains that CEO pay isn't in money, it's in stocks, so that $18m Ellison earned was due to each stock being worth more. & how did those stocks appreciate? Stock buybacks.
Stock buybacks divert a company's profits to buy its own shares on the open market, reducing the supply of outstanding shares, which makes each outstanding share worth more. Say a company is worth a billion dollars and has issued a million shares. Each of those shares is worth 1,000[USD] (because 1,000[USD] times one million is 1 billion [USD]). The company uses its profits to buy half of those shares, so now the remaining 500,000 shares are worth 2,000[USD] (2,000[USD] times 500,000 is 1 billion) ... So stock buybacks increase the value of a company's shares – without increasing the value of the company.
Ellison's 18m USD comes from stock buybacks, which cost money to do. To net that 18m, Ellison spent 43 billion on stock buybacks. That's that amount that could've been used for useful things like employee pay, better product quality, etc ... split between those 150,000 employees, each worker would be getting a 30,000 USD bonus, every year.
As seen in Reuten's piece, the discrepancy between the rich and the rest of us – and the true amount that they steal from us – are much more vast than surface-level statistics would reveal.
They steal vast amounts of financial resources from the everyday worker, and those financial resources serve as uniquely potent loci of control over the direction of companies (companies like BP, Monsanto, Lockheed Martin, Apple ... companies that destroy lives, landscapes, histories; companies like Nike, Zara, H&M, subjugating ethnic minorities into slavery).
If we fight back on only the financial axis, we're outgunned.
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This is why we act in collectives, this is why people advocate for finding ways of manifesting power and action outside of the typical economic & political systems. because the world is more than just this one measurement, and if we capitulate to the demand that we act only within its bounds, we are at a most profound disadvantage.
This is why we boycott, divest, sanctions. The magnitude of power that a share represents can be influenced – diminished – if the company it’s a share for loses billions.
This is why we say that the people killing thousands in war, polluting the planet, have names, faces, and addresses. While individual actions are for-sure beneficial, even if just for one’s psyche, attacks that treat the average person as equally liable as the ultra-rich are misguided, attacks that think the world’s poorest people subsistence-hunting and burning coal for heat are as liable as a celebrity with a private jet are morally reprehensible and running counter to liberation.
so on, so forth. Carry this.
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