Saturday, December 22, 2007
One 1995 survey showed that the top quintile of wealth holders owned almost 85% of total household wealth, and Gini co-efficients tend to demonstrate much greater gaps in ownership than in income. Another set of statistics produces the following results for wealth distribution from 1962-1995 (click to enlarge):
Aside from the very broad continuity of these patterns, what is striking is that the long-term changes that have been effected have not merely been at the expense of the almost propertyless majority, but also the 2nd 20%, who I suppose in American parlance would be 'upper-middle-class'. The bottom 80% saw a 2% reduction in wealth from 1983 to 1989. Take another look at the chart - suppose a roughly socialist egalitarian society persisted in the United States. Each 20th percent would have roughly 20% of the wealth, with minor fluctuations here and there. On this criterion alone, a very crude one I admit, the so-called 'upper-middle-class' is ripped off along with everyone else. The vast majority of Americans, in short are close to propertyless, possessing only a few insecure items such as cars and houses (especially those on dodgy loans or subprime mortgages). Now, even that massive accumulation of wealth at the top 1% contains massive internal differentiation, as:
the share of the top 0.5% of wealth owners rose 5% during this period, from 26.2% of total household sector wealth in 1983 to 31.4% in 1989. The wealth of the next half percent remained relatively constant at about 7.5% of total household wealth, but the share of the next 9% decreased from 34.4% in 1983 to 33.4% in 1989.
Of course, even these statistics occlude much. The super-rich stay well out of sight, unlike the ostentatious celebs and public personalities - you don't see these guys queuing up to appear on The Simple Life; they successfully conceal much of their wealth and use loopholes to avoid paying taxes - especially the estate tax, records of which provide much of the source data for studies; they don't respond very well to surveys inquiring about their wealth; and they certainly tend not to participate in long-term studies of their social movements. That is, they are an extremely secretive bunch, and sociologists have been obliged to devise statistical innovations to compensate for this and produce adequate data, with only partial success. This is something of a problem, because the bulk of research that has been conducted on this matter find that inheritance (whether at death or, as in most cases, 'inter-vivo') accounts for between 50% and 80% of the net worth of US families. It is clearly an area that is crying out for further study and enlightenment, yet it is shrouded in a heart of darkess. "We know very little about how much wealth is actually inherited," Keister and Moller point out, "because data on inheritance is virtually nonexistent." I suspect that if the US government, for all of its informational prowess and its willingness to spy on your phone calls and e-mails, were to initiate any attempt to discover the full extent of concealed wealth, the hysterical cry of 'communism' would shortly be raised. The irony is that you might well have to raise the banner of communist revolution merely to find out exactly how much accumulated wealth there is.
*I'm relying on fairly old statistics for the purposes of making a broader point about the structure of wealth distribution and transmission. For what it's worth, the latest statistics on wealth, produced in the latest edition of a standard text-book on the matter by Charles Hurst in 2007, suggest that the top 10% of US possess 80% of all financial assets, while the bottom 90% hold 73% of all debt. And debt, as any fool knows, is negative net worth for everyone but the propertied minority.