Wealth Concentration
How the richest 1% came to own more than the rest of the world combined, and why wealth inequality outpaces income inequality.
Wealth vs. Income Inequality
Wealth inequality is far more extreme than income inequality. The richest 1% of the world's population owns roughly 46% of global wealth, while the bottom 50% owns barely 1%. In the United States, the top 0.1% holds nearly as much wealth as the bottom 90%. This disparity is often invisible in daily life -- two neighbors earning similar salaries may have vastly different wealth depending on inheritance, home equity, and investment portfolios.
Wealth compounds in ways income does not. A dollar invested grows through returns on capital, and the wealthy have access to investment opportunities -- private equity, venture capital, tax-advantaged trusts -- that are unavailable to ordinary savers. Thomas Piketty's central finding in 'Capital in the Twenty-First Century' was that when the rate of return on capital (r) exceeds the rate of economic growth (g), wealth concentrates inexorably at the top. This condition (r > g) has held for most of human history.
