Wealth of nations pdf download

Need an account? Click here to sign up. Download Free PDF. Shahibul Islam. A short summary of this paper. We are in a huge global economy where something that happens in one area can have knock on effects worldwide. This process is called globalisation. What is globalisation? Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation has increased the production of goods and services.

The biggest companies are no longer national firms but multinational corporations with subsidiaries in many countries. Globalisation has been taking place for hundreds of years, but has speeded up enormously over the last half-century. Globalization is term used to describe the trend towards countries joining together economically, through politics, and education. Countries joining together economically view their own selves not just through their national identities, but as part of the world as a whole.

Globalization has many benefits and disadvantages and they are here to stay. Basically, the First World or Global North countries are those that will benefit from globalization. Local businesses and brands in developing nations can go bankrupt as huge corporations in developed nations can dominate the economy of their country. Local traditions and cultures may change. People in poor counties may no longer wear their cultural costumes as they would want to look like the stars in Hollywood. Also, globalization has made it possible for non-English speaking countries to learn speaking English.

More and more schools in developing nations are teaching their students how to speak this global language. Advantages of Globalisation 1. The answer: not by much, if we count all of the taxes that people pay, from sales taxes to property taxes to payroll taxes in other words, not just income taxes. These findings are discussed in detail near the end of this document.

In the United States, wealth is highly concentrated in relatively few hands. Table 2 and Figure 1 present further details, drawn from the careful work of economist Edward N. Wolff at New York University Total assets are defined as the sum of: 1 the gross value of owner-occupied housing; 2 other real estate owned by the household; 3 cash and demand deposits; 4 time and savings deposits, certificates of deposit, and money market accounts; 5 government bonds, corporate bonds, foreign bonds, and other financial securities; 6 the cash surrender value of life insurance plans; 7 the cash surrender value of pension plans, including IRAs, Keogh, and k plans; 8 corporate stock and mutual funds; 9 net equity in unincorporated businesses; and 10 equity in trust funds.

Total liabilities are the sum of: 1 mortgage debt; 2 consumer debt, including auto loans; and 3 other debt. From Wolff In terms of types of financial wealth, in the top one percent of households had The only category which is not skewed severely toward the upper class is debt. There is a perception that a large number of Americans own stock -- through mutual funds, trusts, pensions, or direct purchase of shares. Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.

Another 1. On the other hand, Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P. It is noteworthy that some of the richest people in the country oppose this ultra-conservative initiative, suggesting that this effort is driven by anti-government ideology. In other words, few of the ultra-conservative and libertarian activists behind the effort will benefit from it in any material way.

However, a study Kenny et al. For more infomation, including the names of the major donors, download the article from United For a Fair Economy's Web site.

Actually, ultra-conservatives and their wealthy financial backers may not have to bother to eliminate what remains of inheritance taxes at the federal level. The rich already have a new way to avoid inheritance taxes forever -- for generations and generations -- thanks to bankers. After Congress passed a reform in making it impossible for a "trust" to skip a generation before paying inheritance taxes, bankers convinced legislatures in many states to eliminate their "rules against perpetuities," which means that trust funds set up in those states can exist in perpetuity, thereby allowing the trust funds to own new businesses, houses, and much else for descendants of rich people, and even to allow the beneficiaries to avoid payments to creditors when in personal debt or sued for causing accidents and injuries.

You can read the details on these "dynasty trusts" which could be the basis for an even more solidified "American aristocracy" in a New York Times opinion piece published in July by Boston College law professor Ray Madoff, who also has a book on this and other new tricks: Immortality and the Law: The Rising Power of the American Dead Yale University Press, For the vast majority of Americans, their homes are by far the most significant wealth they possess. Figure 3 comes from the Federal Reserve Board's Survey of Consumer Finances via Wolff, and compares the median income, total wealth net worth, which is marketable assets minus debt , and non-home wealth which earlier we called financial wealth of White, Black, and Hispanic households in the U.

Besides illustrating the significance of home ownership as a source of wealth, the graph also shows that Black and Latino households are faring significantly worse overall, whether we are talking about income or net worth.

In , the average white household had more than 15 times as much total wealth as the average African-American or Latino household. If we exclude home equity from the calculations and consider only financial wealth, the ratios are more than And for all Americans, things got worse during the "Great Recession": comparing the numbers to the numbers, we can see a huge loss in wealth -- both housing and financial -- for most families, making the gap between the rich and the rest of America even greater, and increasing the number of households with no marketable assets from It's a number I haven't even mentioned so far, and it's shocking: the lowest two quintiles hold just 0.

Americans from all walks of life were also united in their vision of what the "ideal" wealth distribution would be, which may come as an even bigger surprise than their shared misinformation on the actual wealth distribution. In fact, there's no country in the world that has a wealth distribution close to what Americans think is ideal when it comes to fairness. So maybe Americans are much more egalitarian than most of them realize about each other, at least in principle and before the rat race begins.

NOTE: In the "Actual" line, the bottom two quintiles are not visible because the lowest quintile owns just 0. But it wasn't as bad in the 18th and 19th centuries as it is now, as summarized in a article in The Atlantic.

The wealth distribution was fairly stable over the course of the 20th century, although there were small declines in the aftermath of the New Deal and World II, when most people were working and could save a little money.

There were progressive income tax rates, too, which took some money from the rich to help with government services. Then there was a further decline, or flattening, in the s, but this time in good part due to a fall in stock prices, meaning that the rich lost some of the value in their stocks.

It has continued to edge up since that time, with a slight decline from to , before the economy crashed in the late s and little people got pushed down again. Table 4 and Figure 5 present the details from through Thanks to a study by the World Institute for Development Economics Research -- using statistics for the year -- we now have information on the wealth distribution for the world as a whole, which can be compared to the United States and other well-off countries.

The authors of the report admit that the quality of the information available on many countries is very spotty and probably off by several percentage points, but they compensate for this problem with very sophisticated statistical methods and the use of different sets of data.

That compares with a figure of For the figures for several other Northern European countries and Canada, all of which are based on high-quality data, see Table 5. What's the relationship between wealth and power? To avoid confusion, let's be sure we understand they are two different issues. Wealth, as I've said, refers to the value of everything people own, minus what they owe, but the focus is on "marketable assets" for purposes of economic and power studies.

Power, as explained elsewhere on this site , has to do with the ability or call it capacity to realize wishes, or reach goals, which amounts to the same thing, even in the face of opposition Russell, ; Wrong, Some definitions refine this point to say that power involves Person A or Group A affecting Person B or Group B "in a manner contrary to B's interests," which then necessitates a discussion of "interests," and quickly leads into the realm of philosophy Lukes, , p.

Leaving those discussions for the philosophers, at least for now, how do the concepts of wealth and power relate? First, wealth can be seen as a "resource" that is very useful in exercising power. That's obvious when we think of donations to political parties, payments to lobbyists, and grants to experts who are employed to think up new policies beneficial to the wealthy.

Wealth also can be useful in shaping the general social environment to the benefit of the wealthy, whether through hiring public relations firms or donating money for universities, museums, music halls, and art galleries. Second, certain kinds of wealth, such as stock ownership, can be used to control corporations, which of course have a major impact on how the society functions. Tables 6a and 6b show what the distribution of stock ownership looks like. Note how the top one percent's share of stock equity increased and the bottom 80 percent's share decreased between and Third, just as wealth can lead to power, so too can power lead to wealth.

Those who control a government can use their position to feather their own nests, whether that means a favorable land deal for relatives at the local level or a huge federal government contract for a new corporation run by friends who will hire you when you leave government. If we take a larger historical sweep and look cross-nationally, we are well aware that the leaders of conquering armies often grab enormous wealth, and that some religious leaders use their positions to acquire wealth.

There's a fourth way that wealth and power relate. For research purposes, the wealth distribution can be seen as the main "value distribution" within the general power indicator I call "who benefits. And philosophical discussions don't even mention wealth or other power indicators Lukes, If you have heard it all before, or can do without it, feel free to skip ahead to the last paragraph of this section.

Here's the argument: if we assume that most people would like to have as great a share as possible of the things that are valued in the society, then we can infer that those who have the most goodies are the most powerful. Although some value distributions may be unintended outcomes that do not really reflect power, as pluralists are quick to tell us, the general distribution of valued experiences and objects within a society still can be viewed as the most publicly visible and stable outcome of the operation of power.

In American society, for example, wealth and well-being are highly valued. People seek to own property, to have high incomes, to have interesting and safe jobs, to enjoy the finest in travel and leisure, and to live long and healthy lives. All of these "values" are unequally distributed, and all may be utilized as power indicators.

However, the primary focus with this type of power indicator is on the wealth distribution sketched out in the previous section. The argument for using the wealth distribution as a power indicator is strengthened by studies showing that such distributions vary historically and from country to country, depending upon the relative strength of rival political parties and trade unions, with the United States having the most highly concentrated wealth distribution of any Western democracy except Switzerland.

For example, in a study based on 18 Western democracies, strong trade unions and successful social democratic parties correlated with greater equality in the income distribution and a higher level of welfare spending Stephens, And now we have arrived at the point I want to make. And then we set out to see if the same set of households scores high on other power indicators it does. Next we study how that power operates, which is what most articles on this site are about.

The income distribution also can be used as a power indicator. That's up from This is further support for the inference that the power of the corporate community and the upper class have been increasing in recent decades. Most amazing of all, the top 0.

But the increase in what is going to the few at the top did not level off, even with all that. As of , income inequality in the United States was at an all-time high for the past 95 years, with the top 0. However, in an analysis of tax returns for the top 0. And the rate of increase is even higher for the very richest of the rich: the top income earners in the United States. According to another analysis by Johnston a , the average income of the top tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration.

How are these huge gains possible for the top ? It is widely believed that taxes are highly progressive and, furthermore, that the top several percent of income earners pay most of the taxes received by the federal government. But what matters in terms of a power analysis is what percentage of their income people at different income levels pay to all levels of government federal, state, and local in taxes. If the less-well-off majority is somehow able to wield power, we would expect that the high earners would pay a bigger percentage of their income in taxes, because the majority figures the well-to-do would still have plenty left after taxes to make new investments and lead the good life.

If the high earners have the most power, we'd expect them to pay about the same as everybody else, or less. Citizens for Tax Justice, a research group that's been studying tax issues from its offices in Washington since , provides the information we need.

So if we only examine these first two steps, the tax system looks like it is going to be progressive. You'll note that the progressivity is slowing down. We also can look at this information on income and taxes in another way by asking what percentage of all taxes various income levels pay. This is not the same as the previous question, which asked what percentage of their incomes went to taxes for people at various income levels. And the answer to this new question can be found in Figure 7.

So the best estimates that can be put together from official government numbers show a little bit of progressivity. But the details on those who earn millions of dollars each year are very hard to come by, because they can stash a large part of their wealth in off-shore tax havens in the Caribbean and little countries in Europe, starting with Switzerland.

And there are many loopholes and gimmicks they can use, as summarized with striking examples in Free Lunch and Perfectly Legal , the books by Johnston that were mentioned earlier. For example, Johnston explains the ways in which high earners can hide their money and delay on paying taxes, and then invest for a profit what normally would be paid in taxes. The degree of income inequality in the United States can be compared to that in other countries on the basis of the Gini coefficient, a mathematical ratio that allows economists to put all countries on a scale with values that range hypothetically from zero everyone in the country has the same income to one person in the country has all the income.

On this widely used measure, the United States ends up 95th out of the countries that have been studied -- that is, only 39 of the countries have worse income inequality. The U. In examining this table, remember that it does not measure the same thing as Table 5 earlier in this document, which was about the wealth distribution.

Here we are looking at the income distribution, so the two tables won't match up as far as rankings. So one thing that's distinctive about the U. Source: Central Intelligence Agency One of the most striking contrasts is between Sweden and the United States from to , as seen in Figure 8; and note that the differences between the two countries narrowed in the s and s, but after that went their separate ways, in rather dramatic fashion. Nor do various kinds of tax breaks and loopholes have much impact on the income distribution overall.

But it is sometimes said that income inequality is reduced significantly by government programs that matter very much in the lives of low-income Americans. These programs provide "transfer payments," which are a form of income for those in need.

COVID has added another layer of complexity to the lives of children on the move, exacerbating pre-existing insecurities in some dimensions and introducing new ones. Girls in particular are feeling many of these effects acutely, such as gender-based violence. This report presents a conceptual framework, a tool and an initial assessment at a global level — in order to help prioritize action for those most at risk. Browse more statistics. Towards Ending Child Marriage: Global trends and profiles of progress This report looks at historical trends, with a focus on selected countries that have recorded significant declines in child marriage prevalence.

Children and the Sustainable Development Goals Learn more. Every child has an equitable chance in life. Every child is protected from violence and exploitation. Every child lives in a clean and safe environment. Every child survives and thrives.