The economics of poverty: why most of the world's population will not be able to get rich
Half of all wealth in the modern world belongs to only 1% of the population. Probably many have heard about this.
But how many people wonder why this happens?
If we talk about the poorest countries in Africa - former European colonies, then everything is clear here. In general, despite the collapse of colonialism, it, in fact, has not gone away, but has only taken on a different form. In particular, the natural resources and human labor of third world countries are bought for mere pennies by more developed countries.
But why then are there so many poor people in the same “advanced” Europe?
However, this concept here is not comparable with that in the starving countries of Africa. Meanwhile, not many residents of Germany, France or the UK can afford to have two cars per family or housing for which they do not have to pay a mortgage for years.
It's all about distribution. After all, if we look at statistics, then from the beginning of the 2000s economics developed countries have gained a lot, but most ordinary citizens have not become richer.
So, the point is that the same 1% of the population increases their wealth by increasing their assets, mainly financial ones. At the same time, these people have all their basic needs covered, so they reinvest the resulting increase in assets and further increase their wealth in the future. Profit in this case is measured in truly cosmic amounts.
An ordinary person, receiving an increase to his small salary, immediately spends it, trying to cover current needs, which, thanks to the era of consumption and the skillful work of marketers, are growing every year. By the way, it is precisely because of this that the above-mentioned 1% of the population is getting rich.
Have the authorities of some states tried to overcome inequality? Yes, of course we tried.
For example, through a tax on the rich. Thus, its maximum level in the UK at one time reached an unimaginable 95%. Naturally, owners of large assets tried in every possible way to hide their profits, hiding them in offshore companies, as well as inventing various gray and black schemes.
As a result, the authorities had to lower the tax rate for the rich to 40%, but raise the consumption tax. It is obvious that this measure hit the already not very prosperous ordinary citizens, only exacerbating inequality.
However, that's not all. In order to continue to receive the lion's share of resources, the same 1% of the “selected people” are engaged in lobbying laws that are convenient for them, which almost completely closes the path to the “top of the pyramid” for everyone else.