This year’s global wealth report by UBS confirms what is self-evident, but rarely confronted: while riches are accumulating, their distribution remains starkly unbalanced. In the 56 countries and economic areas surveyed, the report said global personal wealth grew 4.6 percent last year. However, not all boats have been lifted by this tide. The gap is growing between those who hold assets and those who do not.
The figures are shocking: just 60 million of the world’s adults — 1.6 percent of the population — have net personal wealth of US$226 trillion, or 48.1 percent of all the world’s riches. At the other extreme, four in 10 adults — 1.57 billion people — have only US$2.7 trillion, or just 0.6 percent of all the world’s personal wealth.
Economists now say that inequality is no longer a by-product of growth, but a condition of it.
In the US, soaring bond markets and technology stocks have benefited the ultra-rich and deepened inequality.
Nine households control 15 percent of wealth in Silicon Valley, the report said.
By contrast, British median wealth rose, while average wealth fell, UBS said.
This is a rare divergence, probably caused by prosperous households in London taking a hit from interest rate hikes, as house prices dropped and debt costs rose. This was not a sign of shared prosperity, but of paper losses at the top, while ordinary workers held steady.
Unlike wages, wealth reflects not just income, but also access to assets, favorable institutional conditions — such as low interest rates — and public policies such as low taxes and housing shortages. In other words, wealth depends on political choices in ways that income does not. It is not just inequality itself that is the issue, but also the erosion of mechanisms that once constrained it.
Wealth and income inequality are linked, the report said. However, where wages have stagnated and collective bargaining has weakened, capital income — derived from profits, rents and interest — has been boosted by design. Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth.
Taxes on wealth are necessary to make societies more equal. Unfairness is aiding far-right autocrats whose rise brings the risk of democratic collapse.
Seven Nobel laureates this month issued a powerful call for a minimum tax on the ultra-rich. Brazil, Spain and South Africa have demanded a global tax on the super-rich, placing the issue on the G20 agenda. Pioneering work by economists such as Gabriel Zucman and Emmanuel Saez led to the French national assembly passing a law this year for a 2 percent minimum tax on wealth more than 100 million euros. The legislation, regrettably, has not proceeded past the senate.
Progressive taxation is necessary, but it does not address a core problem in many economies: When capital income outpaces labor income, redistribution might ease the symptoms of neoliberalism, but it leaves the underlying condition untreated. High inequality suppresses consumption, deters investment and slows growth.
The gap between rich and poor is not just unfair — it is economically unsustainable. Without strong domestic demand, economies increasingly rely on debt, speculation and asset bubbles to fuel growth.
Changing this would take more than fiscal transfers. It would require policies that boost wages: full employment, stronger labour unions and public investment. Private ownership itself might need to be reconceived — less perhaps in the sense of expropriation, and more in terms of widening access to productive assets and social wealth.
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