Perspectives on Wealth and Development Statistics

Chris Marlow quoted some statistics on the distribution of wealth:

# The top 2% own 50% of global household wealth
# The bottom 50% own just 1% of global wealth

I’m wondering what is meant by “household wealth” here.

A tremendous amount of the wealth of humanity exists as publicly owned assets – our roads, schools, hospitals, libraries, universities to name a few.

In fact our true wealth lies as much in our knowledge, our culture, our relationships, our natural environment as in the usually measured assets. Economists sometimes call those things “human capital”, “social capital”, “intellectual capital” and so forth.

Again many of these, in so far as they can be said to be owned at all, are not privately owned.

A person with apparently “no personal wealth” whatever can actually be living a very decent life, at least in the developed world.

At the extreme, plenty of young professionals with outstanding student loan debt are going to have a negative net worth, and could accurately be said to have less than zero wealth. Which although accurate, is at the same time liable to be severely misleading to the casual observer.

Of course, the basic point that there are great disparities in wealth in the world is extremely valid. And we should certainly all wake up to this.

But we also need to be alert to the fact that statistics are rarely used in a neutral or rigorous way. In development, you often find situations where depending on how someone prefers to see things, they either say:

  • ” Look how many people are hungry / illiterate / sick” OR
  • “Look at the enormous progress has been made in reducing hunger / raising literacy / increasing life expectancy”

Both sets of statistics are equally true, but the impression they leave on the casual reader is very different.

And most people in this world are content to be casual readers.

Or worse, they are only interested in seeking out information which reinforces and justifies their existing points-of-view, and happily seize on whatever suits that end.

A true commitment to making a difference requires much more work than this.

Which in part explains why so many well meaning people have thus far made so little difference.

This entry was posted in economics, international development, poverty. Bookmark the permalink.

One Response to Perspectives on Wealth and Development Statistics

  1. Pingback: Perspectives on Wealth - Follow Up on Student Debt « Torchwolf

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