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The Continental Drift of Billionaires
With the help of Forbesmagazine, we and colleagues at the Institute for Policy Studies have been tracking the world’s billionaires and rising inequality the world over for several decades. Just as a drop of water gives us a clue into the chemical composition of the sea, these billionaires offer fascinating clues into the changing face of global power and inequality.
After our initial gawking at the extravagance of this year’s list of 1,426, we looked closer. This list reveals the major power shift in the world today: the decline of the West and the rise of the rest. Gone are the days when U.S. billionaires accounted for over 40 percent of the list, with Western Europe and Japan making up most of the rest. Today, the Asia-Pacific region hosts 386 billionaires, 20 more than all of Europe and Russia combined.
In 2013, of the nine countries that are home to over 30 billionaires each, only three are traditional “developed” countries: the United States, Germany, and the United Kingdom.
Next in line after the United States, with its 442 billionaires today? China, with 122 billionaires (up from zero billionaires in 1995), and third place goes to Russia with 110. China’s billionaires have made money from every possible source. Consider the country’s richest man, Zong Qinghou, who made his $11.6 billion through his ownership of the country’s largest beverage maker. Russia’s lengthy billionaire list is led by men who reaped billions from the country’s vast oil, gas and mineral wealth with devastating consequences to the environment.
Germany is fourth on the list with 58 billionaires, followed by India (55), Brazil (46), Turkey (43), Hong Kong (39), and the United Kingdom (38). Yes, Turkey has more billionaires than any other country in Europe save Germany.
Moving beyond these top nine countries, Taiwan has more billionaires than France. Indonesia has more billionaires than Italy or Spain. South Korea now has more billionaires than Japan or Australia.
This surging list of billionaires is tribute to the growing inequality in almost all nations on earth. The richest man in the world, for example, is Carlos Slim of Mexico—with a net worth of $73 billion, comparable to a whopping 6.2% ofMexico’s GDP. The world’s third richest person is Spain’s retail king, Amancio Ortega, who has accumulated a net worth of $57 billion in a country where over a quarter of the people are now unemployed.
U.S. billionaires still dominate. The United States’ 442 billionaires represent 31% of the total number. Bill Gates and Warren Buffett remain numbers two and four, and are household names given the combination of their wealth, their philanthropy, and their use of their power and influence to convince other billionaires to increase their own charitable giving.
But, also among the 12 U.S. billionaires in the top 20 richest people in the world are members of two families who have used their vast wealth and concomitant power to corrupt our politics. Charles and David Koch stand at numbers six and seven in the world; they have drawn on a chunk of their combined $68 billion to fund not only candidates of the far right but also political campaigns against environmental and other regulation. So too do four Waltons stand among the top 20; their combined wealth of $107.3 billion has skyrocketed thanks to Walmart’s growing profits as thecompany pressures cities and states to oppose raising wages to livable levels.
How have the numbers changed over the years? Let’s travel back to 1995, a time of surging wealth amidst the deregulation under the Clinton administration in the United States, and the widespread pressure around the world to deregulate, liberalize, and privatize markets.
In 1995, Forbes tallied 376 billionaires in the world. Of these, 129 (or 34%) were from the United States. The fact that the number of U.S. billionaires rose to 442 over the next 18 years while the percentage of U.S. billionaires fell only from 34% to 31% of the global total is testimony to how the deregulatory and tax-cutting atmosphere in the United States under Clinton and Bush proved so favorable to the super-rich.
Notable over these past 18 years is that the so-called developed world has been eclipsed by the so-called developing world. In 1995, the billionaire powerhouses were the United States (129), Germany (47), and Japan (35). These three countries were home to 56% of the world’s billionaires. No other country came close, with France, Hong Kong, and Thailand tied in fourth place, with 12 billionaires each. Russia and China didn’t have a single billionaire in 1995, although for Russia,Forbes admitted that financial disclosure in that country in the years after the Berlin Wall fell was sketchy. And, in 1995, Brazil had only eight billionaires and India only two.
Today, these four countries (Russia, China, Brazil, and India) host 333 of the world’s 1,426 billionaires—23% of the total. And, Japan’s total number of billionaires has actually fallen in the last 18 years, from 35 to 22.
The figures offer a dramatic snapshot of the relative decline of the United States, Europe, and Japan in less than two decades and the stunning rise of Brazil, Russia, India, and China, as well as the rest of Asia. And, they remind us that countries where income was relatively equal twenty years ago, like China and Russia, have rushed into the ranks of the unequal.
Across the globe, the rapid rise of billionaires in dozens of countries (again, with Japan as the notable exception) is testimony to how the deregulatory climate of these past two decades sped the rise of the super-rich, while corporations kept workers’ wages essentially flat.
Suffice it to say: More equal and more healthy societies require a vastly different approach to public policy. As Institute for Policy Studies Associate Fellow Sam Pizzigati has chronicled, fair taxes created a vast middle class in the United States between the 1940s and 1960s. Such fair tax policies are needed today the world over if the gap between the super-haves and the have-nots is to be narrowed rather than widened.
Robin Broad is Professor of International Development at the School of International Service at American University.
John Cavanagh is a fellow in Global Economy at IPS. He is the co-author of 10 books and numerous articles on the global economy, including Development Redefined: How the Market Met Its Match (2008, Paradigm Publishers), written with Robin Broad.
This article originally appeared on Triple Crisis.
The column is distributed by Other Words.