The wealth of nations

How do we measure the wealth of nations, to use the title of classical economist Adam Smith’s famous book?

Using Gross Domestic Product (GDP) to measure the annual value of production for each national economy has been under criticism since it was first invented by Simon Kuznets for a report  to US Congress in the depth of the Great Depression in 1934.  It was the benign view of Kuznets that when capitalist economies ‘take off’ and industrialise, inequality of incomes will rise, but eventually, as economies ‘mature’, income inequality declines.  So GDP as an overall measure of the ‘wealth of nations’ was adequate.

But actually annual production is not a measure of wealth (the stock of assets and accumulated efforts of human labour), but a measure of annual productive power.  And it crucially excludes the inequalities in the distribution of that power.

So just a few years ago, the UN came up with a more comprehensive measure of ‘human development’.  The human development index (HDI) purports to measure the overall well-being of each national population by including health, life expectancy, education and communications in its index.

What the index reveals is that there were substantial gains in world human development from the mid-19th century as the world economy industrialised and urbanised, but especially over the period 1913-1970.  The major advance in human development across the board took place between 1920 and 1950, which resulted from substantial gains in longevity and education.

According to the index, although the gap between the advanced capitalist economies and the ‘Third World’ widened in absolute terms; in relative terms, there was a narrowing.  The Russian revolution from the 1920s and the Chinese one after 1947 led to fast industrialisation and a sharp improvement in health and education for hundreds of millions.  The second world war killed and displaced millions, but it also laid the basis for state intervention and the welfare state that had to be accepted by capital after the war, during the so-called ‘Golden Age’.

But after 1970, the gap in human development widened once again with globalisation, rising inequalities and the capitalist neo-liberal counter-revolution.  Only China closed the gap.  Since 1970, longevity gains have slowed down in most emerging economies, except China, and all the world regions have fallen behind in terms of the longevity index.

Now the World Bank has entered the fray with its own measure of ‘wealth’ per person.  The World Bank economists have measured not GDP levels but wealth i.e. assets such as infrastructure, forests, minerals, and human capital that produce GDP. The World Bank’s Changing Wealth of Nations 2018: Building a Sustainable Future covers national wealth for 141 countries over 20 years (1995–2014) as the sum of produced capital, 19 types of natural capital, net foreign assets, and human capital overall as well as by gender and type of employment.

The results show that that some countries with GDP growth actually saw per capita wealth fall.  Asia had a big increase in per capita wealth in the 20 years, driven mainly by China’s phenomenal rise, but sub-Saharan Africa slipped back, largely as a result of continued high birth rates in many countries that offset a rise in nominal wealth. Indeed, the poorest African countries are “shearing away” from the rest of the world.

When countries use their natural resources well, investing primarily in their people to increase labour productivity, then countries leap forward in terms of wealth per capita.  As nations develop, they convert natural capital into other forms — roads, factories, hospitals, schools and universities — so the share of natural capital in their total wealth falls, as other forms rise in importance. In high-income OECD countries, natural capital makes up just 3 per cent of total wealth as human and produced capital become the main drivers of growth. In poor countries, natural capital contributes 47 per cent of total wealth, according to the report.

But the UN’s HDI and the World Bank’s wealth per capita measures still do not account for inequalities of distribution, both between national economies globally and within each national economy, between rich and poor. The annual Credit Suisse wealth report does a great job in showing the huge inequalities globally between the richest 1% of wealth holders who currently own more than 50% of the world’s wealth and the bottom 90% who own no more than 14%.

Remember this is wealth across the whole world and so reflects not just inequality of wealth within a country but also inequality between countries.  Indeed, most of the top 10% live in the top seven (G7) advanced capitalist economies.

Global inequality has been definitively studied by Branco Milanovic, formerly of the World Bank.  I have referred to his work before in numerous posts.  Milanovic regularly refines and updates his research on global inequality.  Recently he presented a comprehensive summary of his results in a lecture to the Annual Research Conference Brussels, in honour of the Anthony Atkinson, recently deceased and a pioneer in inequality studies.

Using the traditional measure of inequality, the gini index, Milanovic found that global income inequality has risen inexorably from the early days of modern industrial capitalism, interrupted only by the impact of the two terrible world wars of the 20th century.  But since 2000, the gini index had fallen back a little, entirely due to the rise in living standards of the mass of the Chinese population.

Milanovic notes that global inequality is much greater than inequality within any individual country.  The global gini is around 70, substantially greater than inequality in Brazil, the highest for a country. And it is almost twice as great as inequality in the US.

Milankovic finds that the 60m or so people who constitute the world’s top 1% of income ‘earners’ have seen their incomes rise by 60% since 1988. About half of these are the richest 12% of Americans. The rest of the top 1% is made up by the top 3-6% of Britons, Japanese, French and German, and the top 1% of several other countries, including Russia, Brazil and South Africa. These people include the world capitalist class – the owners and controllers of the capitalist system and the strategists and policy makers of imperialism.

But Milanovic finds that those who have gained income even more in the last 20 years are the ones in the ‘global middle’.  These people are not capitalists.  These are mainly people in India and China, formerly peasants or rural workers have migrated to the cities to work in the sweat shops and factories of globalisation: their real incomes have jumped from a very low base, even if their conditions and rights have not.

The biggest losers are the very poorest (mainly in African rural farmers) who have gained nothing in 20 years. The other losers appear to be some of the ‘better off’ globally.  But this is in a global context, remember. These ‘better off’ are in fact mainly working class people in the former ‘Communist’ countries of Eastern Europe whose living standards were slashed with the return of capitalism in the 1990s and the broad working class in the advanced capitalist economies whose real wages have stagnated in the past 20 years.

Milanovic reckons that global inequality can be decomposed into two parts. The first part is due to differences in incomes within nations, which means that that part of total inequality is due to income differences between rich and poor Americans, rich and poor Chinese, rich and poor Egyptians and so on for all countries in the world. If one adds up all of these within-national inequalities, you get the aggregate contribution to global inequality. Milanovic calls this the traditional Marxist “class” component of global inequality because it accounts for (the sum) of income inequalities between different “income classes” within countries.

The second component, which he calls the “location” component, refers to the differences between mean incomes of all the countries in the world.  Around 1850, ‘class’ explained nearly half of global inequality.  But around 2011, around 80% was due to where you lived, ‘location’.

When Milanovic first developed this distinction, he concluded that the Marxist class analysis has been proved wrong.  “Karl Marx could indeed eloquently write in 1867 in “Das Kapital”, or earlier in “The Communist Manifesto” about proletarians in different parts of the world—peasants in India, workers in England, France or Germany— sharing the same political interests. They were invariably poor and, what is important, they were all about equally poor, eking out a barely above-subsistence existence, regardless of the country in which they lived. There was not much of a difference in their material positions.”  But not now.

However, his latest data suggest that inequalities within nations have increased so much that, given current trends, by 2050 such inequalities will play just as important role as they did 200 years ago when modern capitalism first rose to dominance as a mode of production.

Indeed, the only reason that ‘location’ has been so important for global inequality is the huge difference in living standards for the working populations of the leading imperialist powers and those living in the ‘global south’.  That gap has been closed partially by the rise of China (and east Asia and India to a lesser extent), although, as the World Bank data show, not anywhere else.  But inequality within China and India has also risen sharply.  That adds back to the global inequality index.

In his lecture Milanovic dealt with a technical issue in measuring inequality in the US that has arisen.  The work of Piketty, Saez and Zucman in recent years has shown that the share of national income going to the top 1% of income earners had increased substantially since 1960.  However, this has recently been disputed by two economists at the US Treasury who argue that the Piketty et al tax return based measures are biased by tax base changes and missing income sources. Accounting for these limitations reduces the increase in top 1% share by two-thirds. Further, accounting for government transfers reduces the increase by over 80%.

So instead of the top 1% taking 20% of national income currently up from around 10% in 1960, the rise is only from 8% to 10% – not much at all.  Well maybe, says Milanovic, but the distortion or gap in the data (strongly denied by Piketty et al by the way) does not seem to apply to any other country, for example, Norway.

As the recently deceased Atkinson had shown, rising inequality of income (and wealth) has been a feature of all major capitalist economies in the neo-liberal period since the 1970s.

What all this empirical work offers up some important political implications.   The UK’s Resolution Foundation found that, while real incomes have risen for lower middle and working classes in the advanced capitalist countries since the 1980s, the bottom 80% labour share of GDP in the UK and US has declined as a proportion of GDP (defined as the labour share of GDP multiplied by the proportion of labour income received by the bottom 80% of the income distribution.

And, as I have pointed out before in previous posts, the management consultants, McKinsey found that in 2014, between 65 and 70 percent of households in 25 advanced economies were in income segments whose real market incomes were flat or below where they had been in 2005 (Poorer Than Their parents? Flat or Falling Incomes in Advanced Economies.  This does not mean that individual households’ wages necessarily went down but that households earned the same as or less than similar households had earned in 2005 on average.

US households in the 10th percentile(those poorer than 90 percent of the population) are still poorer than they were in 1989. Across the entire bottom 60 percent of the distribution, households are taking home a smaller slice of the pie than they did in the 1960s and 1970s.

So let’s sum up; what does all the analysis of global and national inequality tell us?

First, that global inequality has increased since capitalism really got going from the 1850s.  Second, that the partial fall in global inequality is down to the growth of average income in China, and to a lesser extent and more recently, India.  Otherwise, global inequality would have continued to rise.  Third, there has been a rise in average household incomes in the major advanced capitalist economies since the 1980s, but the growth has been much less than in China or India (starting from way further down the income levels) and much less than the top 1-5% have gained.  So inequality within most national economies has risen, particularly from the 1980s.  Fourth, since the beginning of the millennium, most households in the top capitalist economies have seen their incomes from work or interest on savings stagnate.

These outcomes are down partly to globalisation by multinational capital, taking factories and jobs into what used to be called the Third World; and partly due to neo-liberal policies in the advanced economies (i.e. reducing trade union power and labour rights; casualization of labour and holding down wages; privatisation and a reduction in public services, pensions and social benefits).  And it is also down to regular and recurrent collapses or slumps in capitalist production, which lead to a loss of household incomes for the majority that can never be restored completely in any ‘recovery’, particularly since 2009.

Milanovic reckons that the majority of the world’s population are ‘trapped’ in low-income countries while real income growth for those in the OECD has slowed.  At the same time, the top 1% or even 0.1% are (and will) usurp an even greater proportion of global income and wealth.  Thus, Marx’s prediction of a widening chasm between those who own and those who must work for a living has gained even more credence in the 21st century.

Milanovic’s answer is more migration from poor countries to rich ones, faster growth in the emerging economies and reduced inequalities within the advanced capitalist economies.  Such solutions are, of course, impossible while the capitalist mode of production survives.

38 thoughts on “The wealth of nations

  1. A very informative and clear piece, thanks. It’s worth reading in conjunction with this work from Univ of Leeds which looks at the extent to which countries are meeting basic human needs of their populations (as UN Sustainable Dev GOals – SDGs) while staying within the planetary boundaries beyond which the eco-bio-physical systems we rely on are endangered:
    As always, some critical perspective is needed on the data sets used (and indeed the SDGs are flawed).

  2. This has a much more accurate account of Branko Milanovic’s work than the earlier one I criticised:

    But having more accurately described the data and avoided distorting it with cute quasmi-logarithmic scale, why so gloomy? Why not celebrate the results of globalism?

    The graph clearly and dramatically shows a substantial increase in the real incomes of the overwhelming majority of the world’s population so that the there is far less of a gap between them and the minority of better off workers in the most advanced capitalist countries.

    Thus a larger and more unified global proletariat confronts a tinier minority of “magnates of capital” just as Marx described.

    I am surprised by the quote of Milanovic claiming that Marx believed peasants in countries like India were at a similar subsistence level to workers in countries like England and thus had been proved wrong. Plainly any such belief would have been not merely wrong but absurd and could not possibly have been held by the Karl Marx who wrote extensive descriptions of conditions in both countries.

    The previous article (URL above) struck me as unambiguously joining the pseudoleft “antiglobalist” Trumpism demanding protection against jobs and living standards being exported to the poorer countries.

    I don’t have the same impression of this one, which is a great improvement. But why not explicitly call out how how EXTREMELY REACTIONARY the dominant pseudoleft anti-globalism has been?

    It wasn’t just Trump who campaigned against NAFTA, EU etc pretending to side with workers. This view dominated and still dominates what passes for the “anti-imperialist” pseudoleft.

    1. “But having more accurately described the data and avoided distorting it with cute quasmi-logarithmic scale, why so gloomy? Why not celebrate the results of globalism?”

      Because the results are capitalist results, anti-working class results, cementing and extending the bourgeoisie’s power and extending and deepening the exploitation of the working class.

      Certainly Arthur you’re not suggesting Arthur that we should endorse the EU, or any country’s membership in the EU. Likewise, surely you’re not endorsing NAFTA. Or are you?

      Making a fetish of the so-called “progressive” component of capitalism is but another iteration of “developmentalism” where supposedly so-called economic development is abstracted from class struggle and the property relations that create misery inextricably linked to the “progress.”

      What’s next? Endorsement of the US invasion of Iraq as “progressive,” as bringing the benefits of the bourgeois disorder to Iraq?

      1. I kind of agree with Michael’s take on Milanovic, yes much of the status quo politics of the last few decades can be put down to massive inequalities between working classes around the world, but these inequalities will narrow as some degree of convergence occurs, at which point the politics will change again. These are cycles that economists have problems talking about because economists can only deal with easily identified variables, which in my opinion results in misguided data analysis.

        The problem with celebrating capitalist globalisation is something MarkHBurton in the first comment alluded to, namely capitalist development running into ecological and natural barriers.

        Anyone looking at the actual physics of this and not the phony financial data can easily see that in the advanced nations the average per capita energy consumption is somewhere near 10 (in the USA it is 11.2), whereas the world average is 2.2. And if we factor out the advanced world from the calculation then the average per capita energy consumption is even lower.

        In other words the disparity in actual wealth and where production is targeted to is still huge.

        And any increased development, i.e. if we assume the advanced nations stay up around 10 and the rest of the world catches up, this will run into serious barriers. Actually Brian Cox did some analysis to show that moving everyone on Earth to 5 would require a breakthrough in Nuclear Fusion. Unless we develop a way to utilise it we won’t be able to achieve an world average of 5 without some immense changes to the way we all live. Capitalism cannot deliver this at all and as it tries it will be a calamity. This is why I think capitalism is not long for this world, one way or another. Let’s hope it isn’t Arthur’s way, who i reckon would be calling on us to cheer as the Titanic was sinking, because we are getting closer to the ocean!

        We need to move on from the wealth of nations and talk about the world economy. In the UK for example we must include the wages of the people producing the goods we consume in our data. Ignoring the conditions of the entire productive sector of your economy seems faulty in the extreme to me!

      2. Arthur: “…why so gloomy? Why not celebrate the results of globalism?”


        “Because the results are capitalist results, anti-working class results, cementing and extending the bourgeoisie’s power and extending and deepening the exploitation of the working class.

        Certainly Arthur you’re not suggesting Arthur that we should endorse the EU, or any country’s membership in the EU. Likewise, surely you’re not endorsing NAFTA. Or are you?”

        I explicitly endorsed globalism and highlighted the pseudoleft’s campaigns against the EU and NAFTA etc as instances of the same sort of “EXTREMELY” reactionary politics as has become notorious in the UK with Brexit, throughout Europe with the far right campaigns against the EU and in the USA with Trumpism.

        Expressing increduility is not a substitute for argument.

        The pseudoleft got away with this explicitly reactionary hostility to “foreigners” for a long time by posing as “anti-capitalist” and “anti-imperialist”. Simply repeating that won’t work when one has to do it side by side with Donald Trump, Nigel Farage and Marine Le Pen.

        It is NOT “anti-working class” for the largest growth in working class incomes to have occurred in the poorest countries as HIGHLIGHTED by the “elephant graph”.

        It is NOT “cementing and extending the bourgeoisie’s power” that the world is increasingly becoming more polarized on class lines and less on national lines. That is precisely what Branko Milanovic’s data shows and his political conclusions about it are also a lot less gloomy.

        There is a link to a “comprehensive summary” in Michael’s post.

        p37 shows a significant increase in class polarization in six advanced capitalist countries.

        I can certainly understand the ruling class feeling both alarmed and gloomy and seeking to focus resentment on the “threat” from workers in poorer countries.

        It is equally natural that they follow an isolationist policy refusing solidarity with democratic revolution in Syria and standing by while a fascist regime and fascist “Takfiris” turn more than half the population into refugees and force millions of them into neighbouring countries.

        What is odd is for people favouring such policies to claim to be on the left.

      3. Arthur’s position is akin to that of Engels endorsing the US in the war with Mexico– a so-called progressive bourgeoisie bringing a so-called dynamic capitalism to a bunch of “lazy” Mexicans.

        You don’t get to cherry pick with capitalism. When you are endorsing “globalization” you are endorsing the destruction of the former Soviet Union; you are endorsing the proliferation of maquilladoras; you are endorsing the super-exploitation of migrant labor; you are endorsing the destruction of Libya; likewise when you are endorsing the EU, you are endorsing its actions in Ireland, Spain, Portugal, and Greece, as well as its hideous policy towards refugees from wars in Syria, Iraq, etc.

        Arthur mentions Syria, but avoids answering the question re Iraq: did he support the US invasion of Iraq, “globalism” in all its glory.

      4. sartesian,

        As I said, simply repeating the claim that policies against globalism are “anti-capitalist” and “anti-imperialist” won’t work when one has to do it side by side with Donald Trump, Nigel Farage and Marine Le Pen.

        I am sure it would be easier for you to do that on Iraq, but you also offered Syria which is a real current issue, and I took you up on that offer.

        We could also discuss Engels (and Marx) on the US war with Mexico, the destruction of the former Soviet Union and Libya. Not sure what we could discuss about EU “actions” in its members Ireland, Spain, Portugal and Greece. But certainly its hideous policy towards refugees both from wars in Syria and Iraq and the even larger numbers fleeing third world conditions and being excluded from developed countries is directly relevant.

        I had to lookup “maquilladoras” but that too is directly relevant:

        So, if you actually have some arguments, please present them.
        How do the campaigns against NAFTA, the EU and globalism assist to advance the international working class. Why is the narrowing gap between workers in the poorest countries and the most advanced countries a bad thing? Why is the polarization of the world along class rather than national lines a bad thing? Why the gloom?

        Do you think Brexit was some sort of protest against EU rejection of immigrants? Neither of us lives in the UK but I doubt anyone who does would be unaware that the people campaigning against the EU were campaigning against immigrants arriving in the UK under EU rules for free movement.

        What do you want to do about the “super exploitation of migrant labor” and maquilladoras? The left program is for solidarity and organization. The anti-globalism program is for shutting out the “competition”. What else do the anti-globalists mean but precisely the right-wing program?

        Its your choice. You are stuck with “One Bedroom” ranting in the background, but I won’t assume that you also have no actual arguments relevant to this thread. But it is up to you to actually present some arguments that make clear what precisely is the difference between your views and those of other anti-globalists. So far you have not attempted to do so.

        Virgens VK, I will take that as a preliminary throat clearing. We agree that the left has a global agenda called internationalism.
        Why then are people explicitly presenting malthusian arguments that there aren’t enough resources for poor countries to develop and who are hostile to migration and globalism seen as part of the left? Even your average European bourgeois social democrat is not as virulently hostile to global progress as these “Socialists”.

      5. “The pseudoleft got away with this explicitly reactionary hostility to “foreigners” for a long time by posing as “anti-capitalist” and “anti-imperialist”. “

        You name me any anti imperialist who is hostile to foreigners, you pro imperialist scumbag.

        It is pro imperialist scumbags like you who have been whipping up hatred against foreigners. The imperialist wars abroad were always going to end up being a war at home, as we see with the erection of the NSA and other security structures and the narrative of the clash of civilisations played out daily. I mean how much does the US, UK and France has to screw up an entire region before scumbags like you say enough is enough? I guess for you seeing dead Libyans floating in the med is a wonderful sign of the liberation of Libya from an evil tyrant. Incidentally dead Libyans in the med is one reason for the rise of the likes of Farage and other far right nationalists. The wars you cheer-lead are leading directly to right wing nationalist politics.

        “It is NOT “anti-working class” for the largest growth in working class incomes to have occurred in the poorest countries”

        This is lies damn lies and statistics, even if there is some degree of convergence. The actual energy consumption figures tell us more than your phony ones. But before you cream your pants at the wonderful developments going on and imagine a global international workers movement is just around the corner consider the following at least:

        Nearly 1/2 of the world’s population — more than 3 billion people — live on less than $2.50 a day. More than 1.3 billion live in extreme poverty — less than $1.25 a day.

        1 billion children worldwide are living in poverty. According to UNICEF, 22,000 children die each day due to poverty

        “It is NOT “cementing and extending the bourgeoisie’s power” that the world is increasingly becoming more polarized on class lines and less on national lines.”

        There is no actual proof of this you will admit, this is simply a statement from you without foundation. Or if you do have evidence for this, please provide it.

        “It is equally natural that they follow an isolationist policy refusing solidarity with democratic revolution in Syria and standing by while a fascist regime and fascist “Takfiris” turn more than half the population into refugees and force millions of them into neighbouring countries.”

        You obviously haven’t noticed that these ‘isolationists’ have been queuing up to bomb Syria on a daily and hourly basis for well over a year now (if that for you is isolationism I dread to think what insanity you are actually calling for), and funding to the tune of millions every and any rebel force in Syria, no matter what their politics. In the midst of all this carnage unleashed by the imperialist hordes more than half of the Syrian people voted for the regime you claim are turning them into refugees. Did you know that following the war in Iraq over one and a half million refugees fled in Syria? That is your imperialism for you, an imperialism you are a cheerleader for.

        You are a pseudo left scumbag Arthur.

      6. Correction: I said that sartesian offered both Syria and Iraq. Just noticed that isn’t correct. Confirm that I prefer to talk about current disasterous results of isolationism in Syria and was avoiding actual question on Iraq (which I do indeed hold opposite views to everyone else here on, if that in some way helps refute my opinions on anti-globalism).

      7. “I prefer to talk about current disasterous results of isolationism in Syria and was avoiding actual question on Iraq (which I do indeed hold opposite views to everyone else here on, if that in some way helps refute my opinions on anti-globalism).”

        Arthur’s version of the love that dare not speak its name– is the love of capitalism, and his endorsement of the US invasion of Iraq.

        Michael, you have a problem here. You have an explicit endorser of capitalism’s attack on Iraq as a participant on your blog.

        You can let him continue to post– but that will reflect poorly on you. Or you can get rid of him. I strongly recommend the latter. I have no interest in debating with a man who defends capitalism and its wars in the service of profit.

      8. Wow! I really was hoping for an argument to refute rather than confirmation that sartesian has no more capacity for that than “One Bedroom”. But certainly this frank early admission of utter impotence is better than wasting time.

      9. You don’t agree… like it’s a question of polite argument?

        So supporting the bourgeoisie in its military assaults is OK with you? Is not grounds for exclusion, or shunning. And if someone supports the UK military excursions into the Malvinas or Northern Ireland, that’s OK with you?

        Got it. I understand. and I’m out. Shows you exactly why there is no such thing as “Marxist economics,” why a Marxist economist is but an appendage to the bourgeoisie, and why Marx made it very clear that he was not a Marxist.

        Good-bye and good riddance.

      10. I have to agree with you sartesian. Arthur asks us to just accept his ‘view’ and move on. imagine if someone were to say that they held the view the holocaust was one of Hitlers better ideas, lets just agree to disagree. Now tell me your opinion of the gold standard!

        I don’t see how Arthur’s support for such things is compatible with a socialist agenda. personally i would never join an organisation of be part of a movement that accepted such positions.

    2. You don’t need to embrace the devil in order to repeal the demon: socialism traditional already has a global agenda, which is called internationalism.

      No need to serve as an auxiliary line of Western (neo)liberalism to advance a global cause.

      1. I dont agree with Arthur on Iraq, it should go without saying. But only one person has ever been banned on my blog and that was for outright racist and anti-semitic remarks. Nobody else qualifies so far. Swearing and other outright personal attacks should be avoided.

      2. So bombing an entire nation into oblivion, no ban, making an indecent remark ban.

        Welcome to West!

  3. On Feb 9, 2018, at 3:58 AM, Michael Roberts Blog wrote:
    more migration from poor countries to rich ones..[is].. impossible while the capitalist mode of production survives

    Inasmuch as the capitalist mode of production (and Marxists ought at least minimally to understand this crucial category of Marxist thought) has as a crucial feature THE FREE MARKET FOR LABOR POWER,”more migration” from”poor” to “rich” countries is not “impossible” but INEVITABLE whilst that mode of production endures. (and, by the way, in the face of capitalist planetary destruction it really is absurd to waste time on a ridiculous attempt to measure the unmeasureable.)

    Respond to this post by replying above this line

    1. You are right to point out that if there was balanced and equitable growth in living standards, education health and other necessities, migration would be unnecessary. Indeed, migration as a solution under capitalism will denude the poorer countries and overstretch the richer. Migration would also fall if the wars bred by capitalism ended.

      1. Free movement will ACCELERATE when we get rid of capitalism.

        Migration is a major factor breaking down national barriers and uniting an international proletariat.

        Certainly the Trumpist and Brexit reactions demonstrate that there is a strong counter current still able to mobilize nationalist hostility to foreigners.

        But apologetics claiming migration will “denude the poorer countries” and “overstretch the richer” won’t obliterate the stench emanating from the anti-migration camp.

  4. The Gini Coefficient of income inequality in China went from 0.39 in 2001 to 0.46 today. For comparison, the U.S. is about 0.48.

  5. Marx certainly believed migration would reduce once capitalism was overthrown. He described the mass migration we see, due, among other things, to the endless imperialist wars Arthur is a cheerleader for, as social dumping and observed all the deleterious effects of this capitalist social dumping.

    Where their is bourgeois interest there is always some pseudo leftist like Arthur to dress it up as liberation. These pro imperialist scumbags make my poor boil.

    Personally I was against Brexit and still am because I think more nations accelerates a race to the bottom capitalism, where capitalists can play one nation against another to avoid paying tax and the like. On that score surely the invasion and occupation of Switzerland is long overdue, right Arthur?

    The trade unions were certainly against Brexit for similar reasons.

    Funnily enough I was speaking to a far right racist not so long ago who was both pro Brexit and probably the imperialist wars that Arthur supports.

    I have consistently said that the constant Muslim bashing and warmongering promoted by pseudo leftists like Arthur would lead to reactionary politics and I think Brexit is an example of this. I blame pro imperialists like Arthur for brexit.

    And I warn now that the pseudo lefts constant Russia bashing will result in equally ugly politics.

    1. Unfortunately only text is translated by browsers. English versions of descriptions within the graphics themselves would help.

      1. The first graph uses the same data as the Global Wealth Pyramid 2017, only in a true scale representation.

        The second graph shows the regional distribution of wealth (2016) in decils of wealth (the Poor on the left, the Rich on the right)

        the third graph shows in the red and the orange field the top rich 1% of earners in Germany from 1870 to 2013.
        Since 1960 it shows also the percentage of weathls of the top 10% (orange+yellow), the middle 40% (green) and the botton 50% of earners.

        If you have questions or comments please post them below the graphs as commentary.


      2. The first graph uses the same data as the Global Wealth Pyramid 2017, only in a true scale representation.

        The second graph shows the regional distribution of wealth (2016) in decils of wealth (the Poor on the left, the Rich on the right)

        the third graph shows in the red and the orange field the top rich 1% of earners in Germany from 1870 to 2013.
        Since 1960 it shows also the percentage of weathls of the top 10% (orange+yellow), the middle 40% (green) and the botton 50% of earners.

        If you have questions or comments please post them below the graphs as commentary.


      3. Thanks!
        So if I understand correctly:

        1. First shows that bottom 3.5 billion own less than 3% of global wealth. top 36 million own 46%?
        I recall using Credit Suisse data at time of Occupy movement to very conservatively estimate that top 1000 billionaires owned more than bottom half. More recently Oxfam has come up with figures more like top 80 billionaires own more than bottom half (and top 3 in US more than bottom half of USA).
        These are of course ALL underestimates of top since assets are concealed. But more than confirm Marx’s picture of propertyless minority and tiny minority of owners.

        2. Unable to summarize second.

        3. Third shows income, not wealth for Germany. Top 1% fairly steady 16% to 18% of total from 1870 to recent. Bottom 90% falling from from 65% to 60% for united Germany from 1990 to recent. This suggests growing middle layers? Not my impression generally?

        Anyway, thanks again.

  6. The original post is poorly-titled. The measures cited (such as GDP, HDI, etc.) are not consistent measures of wealth. At best, HDI might be an objective measure of a basket of things that tend to factor into individuals’ subjective perceptions of their *well-being.* Real GDP might at best be considered as an attempt to measure the accumulation of a basket of use-values. If that’s what we mean by “wealth,” then fine. But most readers will probably come away with the mistaken assumption that we are talking about measurements of social-power i.e. *value*.

    If you want to measure the value of the world economy across time, you must use a form of value that is both visible and that is consistent across time. Abstract socially-necessary labor is consistent, but not visible. Nominal dollars are visible, but not consistent. (Real, inflation-adjusted dollars are neither directly visible, nor are they necessarily consistent; the decision regarding which basket of use-values to measure the dollar against, and in with what weights, is necessarily subjective and arbitrary).

    The measure of value of the world economy that achieves the best combination of visibility and consistency across time is to measure world GDP in terms of the golden prices of the world’s products.

    1. Why not an averaged global basket of socially necessary goods measured by the [averaged?] price of a barrel of oil in US dollars?Might it be possible to achieve a global value of labor while integrating the fact that the major proportion of those socially necessary goods are produced in the global south (or by migrant labor from those low wage regions)?

  7. How do you define what is a “socially-necessary” good? The definition of a “socially-necessary” good under capitalism is one that, when purchased on the market, obtains for its owner an average rate of profit (which will also tend to correspond to the commodity’s value, except if the organic composition of capital for that commodity’s production diverges from the average organic composition).

    This rate of profit must be measured in what a capitalist outlays at the beginning of the circuit of capital—i.e. money. Not barrels of oil. Not any other commodity. Money.

    If a capitalist invests 100 gold oz. and obtains 1 barrel of oil at the end of it, has he made a profit? You can only tell by looking at the sale price of that oil in gold ounces (so that you can compare like with like—the outlay of gold ounces with the return of gold ounces). And it is not really honest to count that oil as profit until it is actually sold—there is always the possibility of a crisis tomorrow in which it turns out that the oil cannot, after all, be sold for the imagined amount of gold it was “worth.” Saying that you outlaid 100 ounces of gold and now possess oil “said to be worth 120 ounces of gold” is a cheap cop-out, and part of the germ for every financial crisis, where commodities are treated as if they are already just as good as money until everyone realizes that they were taking the realization of value for granted, and in fact commodities are not already as good as money, until suddenly “every soul pants after money like a man in a desert.”

    And why does it make sense to use gold as our monetary measuring stick, rather than nominal dollars or some other nominal currency? (I’ve already explained why “real” currency adjustments are a joke as far as value is concerned). Well, you have to read Sam Williams’s Critique of Crisis Theory of blog. He explains it very well in many places why the world economy still revolves around gold.

    1. My question about oil was not about oil serving as commodity money, like gold or silver, but about oil (which is priced in dollars) as serving to “stabilize” the US dollar in its role as the global fiat currency, which is based on the power of the the US state as the hegemonic military/financial imperial power. I was wondering if the relationship between the dollar, the price of oil, and the imperial division of labor might be calculated together to arrive at a realistic average of the price of global labor. Given the fact that most of the wage goods at the imperial center are produced by labor in the “global south,” a comparison of this average global price of labor with an averaged price of labor in the global south should show the degree to which the low wage sector of the militarily enforced imperial system subsidizes its (problematic) reproduction.

  8. My understanding is that the gold ceased to actually circulate as world money several decades ago and since then fluctuations in gold prices make it impossible to say whether profit has been made by comparing the outlay of gold required for an investment to the amount of gold equivalent to the returns. Changes in gold prices from day to day would cause wild swings that have no direct relation to actual wealth.

    I don’t understand how the current monetary system works at all. But clearly it isn’t based on gold, most of which is held out of circulation.

    No doubt those gold reserves will become important when the current monetary system collapses. But that future event does not help provide any sort of yardstick for measuring anything under whatever the current system might be.

    I gather Anwar Sheikh attaches some importance to gold prices and intend to study what he says. Meanwhile if there is some short explanation at Sam William’s blog, please provide links to the specific items.

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