December 27, 2017 at 12:09 PM
The world's richest people got a whopping $1 trillion richer in 2017, according to a new report from Bloomberg News. That's about four times the gains they made last year.
That data comes courtesy of the Bloomberg Billionaires Index, which tracks and ranks the world’s 500 richest people. It attributes much of the economic growth to the stock market's record-high year. (The MSCI World and Standard & Poor’s 500 indexes grew about 20 percent this year.)
Jeffrey P. Bezos, founder of Amazon, clocked in as the world's richest person, gaining $34.2 billion in wealth. (Bezos owns The Washington Post.) Microsoft co-founder Bill Gates came in at No. 2. Bezos is worth about $99.6 billion, according to Bloomberg. Gates is valued at $91.3 billion.
China's 1 percent did particularly well. There are 38 Chinese billionaires on the Bloomberg index, and they gained a combined $177 billion this year. That 65 percent jump was the largest for any of the 49 countries represented. Hui Ka Yan, founder of China Evergrande Group, a property developer, saw his personal bank accounts swell by $25.9 billion, a 350 percent jump from last year.
Ma Huateng, co-founder of Tencent Holdings, a Chinese technology investment firm, saw his fortune double to $41 billion, making him the second-richest person in Asia. The number of billionaires in Asia has surpassed the number in the United States for the first time, according to a recent UBS Group and PricewaterhouseCoopers report.
Russia's 27 richest residents did well, too, adding $29 billion to grow to $275 billion, despite the international economic sanctions imposed after President Vladimir Putin annexed Crimea in 2014.
Global losers included Alwaleed bin Talal, the richest person in Saudi Arabia, whose fortune dropped $1.9 billion to $17.8 billion after he was arrested as part of a corruption crackdown by Crown Prince Mohammed bin Salman. Several other Saudi royals, government officials and business leaders were scooped up, as well.
Bloomberg's findings are yet another indication that massive accumulation of wealth at the top of the economic ladder is leading to spiraling inequality.
The 2017 “World Inequality Report” (compiled by economists such as Thomas Piketty and Emmanuel Saez) found that the 1 percent reaped 27 percent of the world’s income between 1980 and 2016. The bottom 50 percent, by contrast, got just 12 percent of the pie.
In China, the 1 percent has accumulated 15 percent of all income growth since 1980. (About 13 percent flowed to the bottom 50 percent.) In the United States, the bottom half of Americans has captured just 3 percent of growth since 1980. In Russia, the economic assets of the bottom half of the country have shrunk since 1980. Even Europe saw its top 1 percent accumulate 18 percent of growth, while the bottom half gained 14 percent.
Economists say economic inequality isn't inevitable. Aggressive income tax and a strong social safety net matter, as do equal access to education. In fast-growing China and in some developing nations, massive investments in infrastructure and a deepening base of manufacturing jobs have helped.
Unfortunately, few countries have aggressively pursued such policies.
Of course, it's not just the poor who are suffering. As Bloomberg put it, it's hard out there for a billionaire:
With wealth surging to new highs, billionaires may quickly learn that a billion dollars doesn’t buy what it used to. The price of housing has topped $300 million, the cost of divorce has hit $1 billion and a rediscovered painting by Leonardo da Vinci sold for $450.3 million at a Christie’s auction in November, the most expensive work sold to date.
“Would you believe it?” Eli Broad, who has a $7.4 billion fortune and his own museum in Los Angeles, said after the sale. “It’s wild.”