As The Guardian noted last night:
The richest 500 individuals in the world added a record $2.2tn to their wealth in 2025, according to the Bloomberg Billionaires Index, with just eight billionaires accounting for a quarter of the gains.
The gains increased their collective net worth to $11.9tn, bolstered by billionaire Donald Trump's 2024 election victory and booming markets in cryptocurrencies, equities and metals.
They then noted:
According to OxFam, a global confederation of non-government organizations, the $2.2tn growth in net worth for the world's wealthiest 500 individuals would have been enough to lift 3.8 billion people out of poverty.
“Inequality is a deliberate policy choice. Despite record wealth at the top, public wealth is stagnating, even declining, and debt distress is growing,” said Oxfam's international executive director, Amitabh Behar, in a statement.
That last claim is, in my opinion, a textbook example of the kind of economic misunderstanding that has become commonplace among NGOs campaigning on economic justice. It is well-intentioned. It is rhetorically powerful. And it is fundamentally wrong.
The confusion is not subtle. The $2.2 trillion increase recorded in 2025 is a measure of financial capital. It is not cash. It is not spending power. It is not “money available to solve problems”. It is a snapshot valuation of assets at a point in time, produced by financial markets using discounting models that estimate the present value of expected future income streams.
In other words, this figure does not tell us what billionaires have available to spend today. It tells us what markets currently believe the businesses they own might generate in income in the future, discounted back to the present using assumptions about growth, risk, continuing monopoly power, political influence, and ongoing ecological exploitation.
What the comment ignores is this basis of valutaion. What it also ignores is the fact that people cannot eat market valuations. They cannot live on discounted cash-flows. And they cannot be lifted out of poverty by numbers that exist only as outputs of financial mathematics.
Even if, and this is a heroic assumption, that $2.2 trillion could somehow be liquidated today, there is still no guarantee that the real resources required to lift 3.8 billion people out of poverty even exist in the form required right now. Poverty is not solved by money alone. It is solved by systems that deliver food, housing, healthcare, education, sanitation, energy, transport, and care, all of which must be planned, built, staffed, coordinated, and maintained over time, alongside systems of government, governnace and accountability, all of which are rquired to make them function. Simply creating those systems will, of course help relieve poverty in itself, a point that is easy to forget, but to presume that a simple transfer of cash will by itself do so is not enough, and is just wrong, and yet it is implicit in what Oxfam had to say, without them ever explaining over that time period they were also making the claim.
Understanding this matters. In particular, this is where an understanding of time matters. Time is the essential missing dimension in Oxfam's claim. The wealth being described is itself a temporal construct: it is a valuation of future income streams. Treating it as if it were a pile of cash waiting to be redistributed today is to misunderstand what wealth actually is in a financialised economy.
This is also precisely why crude arguments for wealth taxation also so often miss the mark. They rest on the same confusion: the belief that society can live off money alone. It cannot. What matters is command over real resources across time and not symbolic redistributions of current paper claims.
If we want to use the wealth that markets are currently valuing so generously, the correct object of taxation should not be the stock of wealth itself, but the income streams and gains that give rise to those valuations and the systems that permit their existence. Tax the flows, and not the fantastic valuations, in other words. That is precisely why taxing income from wealth, capital gains, excess returns, monopoly rents, and unearned windfalls reflects economic reality in a way that annual wealth taxes often do not. That is the logic underpinning my Taxing Wealth Report.
There is, however, an even deeper failure embedded in the Oxfam comment, and it matters at least as much.
It assumes that the problem is simply that too much wealth exists at the top, rather than asking why society allowed that wealth to accumulate in the first place, with all the consequences that follow. Extreme concentrations of wealth distort power, corrupt democracy, hollow out public institutions, misallocate resources, and accelerate environmental destruction. Poverty is not an accident occurring alongside this process. It is one of its outcomes.
Redistribution alone cannot solve a systemic problem. In particular, redistribution of financial wealth without redistribution of control over production, investment, and resource use may be symbolically satisfying, but it does not deliver well-being. Poverty is reproduced structurally, not arithmetically.
That is why I find this style of campaigning so troubling. It produces striking numbers that feel morally compelling but are economically meaningless. Worse, they mislead well-intentioned audiences into believing that the problem is one of either insufficient generosity or the absence of a particular tax rather than institutional failure, power imbalance, and the abandonment of planning, care, and maintenance as core economic functions.
I wrote earlier today about the difference between being able to perform calculations and understanding what they mean. This is another example. A calculation is never enough. Understanding is always required.
If those campaigning for a better world want to succeed, they must engage seriously with economic reality. They must stop singing songs that are catchy but wrong, and start learning how the system they oppose actually works in time, in power, and in material constraint, and then write better songs to sing.
Unless they do, we will continue to mistake numbers for solutions, simople redistribution for justice when systemic reform is required, and rhetoric for progress. And that is not how we get to the world we say we want.
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“Extreme concentrations of wealth distort power, corrupt democracy, hollow out public institutions, misallocate resources, and accelerate environmental destruction.”
Insanely, however, many people in the UK hold the view that only a few private sector bankers can create the money that allows the nation to buy the treasury bonds necessary to fund government spending. Furthermore they believe it’s morally right these few individuals should be able to hold the country to ransom over how much and on what the government can spend. This is the very antithesis of democracy and indicative of a nation in decline. Most of all it fails to ask the question why such individuals would not attempt to run rampant with such power!
Much to agree with
And happy new year
And Happy New Year to you Richard. I hope you remain fit and healthy throughout the year to continue to deliver this remarkable blog!
Might the comment quoted be yet another example of a theoretical universal which misleads because it is detached from the realities of practical, indivual applications?
Yet again, again, “In theory, theory and practice are the same. In practice, they are not.” (Yogi Berra?)
Apparently not Yogi Berra. It is apparently most likely attributable to a computer scientist, Jan van de Snepscheut
https://www.snopes.com/fact-check/practice-and-theory/
From his obituary, it seems he was focused on finding elegant solutions to practical problems.
Excellent calrity – with typos! This is the furst thig I have red in the New Year and it is a very salutary flag on a lamp post for me! I am one of those wafty do-gooders, living in a small, run down town in the North of England, who struggles to persuade his comrades of the need to reform our governing ways. With a small ‘r’ for rational, reasonable and respectful approaches to necessary change. But the big R for rage and revenge is already walking these neglected streets – and flying the flags. We’d better buckle up. With Best New Year Wishes to YOU and all your Readers!
Oh dear….mea culpa. Now corrected, I hope.
And thanks
In a world that aims to extract more from everyone than is either maintainable or even possible there is an understandable need for simple ideas that appear to meet the issues of injustice that are so much clearer now than previously. While I count myself averagely intelligent (whatever that means!) and, probably more importantly, financially stable, it was only after retiring that my natural curiosity led me to delve deeper into these realms and I regularly read your blog and watch your videos for your nuanced understanding of the systems that have been deliberately complicated, as you describe in your financial engineering entry.
Complexity and structural questioning are generally not areas that those dependent or, at least, feeling dependent on such structures are able or willing to dive into. This issue has become a bit of struggle for me as it is too easy – and to my mind fatal to any enterprise with universal social care in mind – to form an intellectual elite that claims to speak for everyone and the perennial question is how do you democratise this understanding without being overly simplistic and in doing so miscast the problem and potential solutions.
And the sooner that politicians are forced to get their snouts out of the trough, the better.
“The opposite of poverty is not wealth. In too many places, the opposite of poverty is justice.” ― Bryan Stevenson
https://www.youtube.com/watch?v=v0aVMBdD-IQ
$2.2tn can lift 3.8billion out of poverty.
So for $60 I can lift someone out of poverty. For how long OxFam – if it’s for a lifetime then give me some names.
You will note, that is exactly the point I was making.
Decimal points matter. You are out by a factor of ten.
$2.2 trillion is $2.2 x 10^12, or $2,200 x10^9.
3.8 billion is 3.8 x 10^9.
The former divided by the latter is about $600.
The point stands.
Does Oxfam really believe that one-off gifts of $600 given to billions of people, with no other changes, would be sufficient to lift all of them out of poverty permanently?
Thanks
I should have checked
I assume it would have to be an annual gift, but that matches up pretty closely to the old World Bank threshold for absolute poverty:
$2.15 per day is $765 per year.
They also compare this to a net wealth growth, meaning that they would presumably expect the wealthy to liquidate their holdings in stages to keep their wealth at the same nominal value, in return for providing a minimum income scheme to the world’s poorest at about enough to take them out of the most extreme poverty.
Or in other words, they propose that if the wealthy redistributed their wealth in order to cause the expected discounted future income from their assets to decline with inflation, they could use that to supply the world’s poorest sufficient income to meet their “minimum nutritional, clothing, and shelter needs”, according to this page (which also says the absolute poverty threshold has been updated to $3 making that calculation a little out of date):
https://www.worldbank.org/en/news/factsheet/2025/06/05/june-2025-update-to-global-poverty-lines
And that’s if we’re assuming that their income from other sources is zero of course, and this just kicks in immediately to take them over that threshold, but by applying it more broadly in a way that tapers off, with more people being able to meet basic needs and so devote income to improving their own asset position, and stimulating economic demand by having more purchasing power for serving those needs, you may actually see better outcomes than the simple first-order effect of reallocating global resources to making sure that the world’s poorest have the capacity to purchase sufficient for their basic needs.
You’d of course also loose a good chunk of that to administration too, and they’d have to pay capital gains taxes along the way first, but it appears to be about the right size. So if you want to take the statistically average person unable to meet basic needs for income reasons out of it by sponsoring them for say £800 a year, it’s probably possible.
But there aren’t anything like the number Oxfam said would benefit living on $2.15 a day.
And if you really think that defines relief of poverty you are seriously mistaken, even at purchasing power parity.
All I see is the means by which Pleonexia is enabled – fantastical claims of wealth – from the same people no doubt who could not value anything properly anyway in all the market crashes we’ve had since so long ago, culminating in 2008 and all that.
And where does the value of the valuation come from – well it seems from future income – brought forward – a lot of that goes on does it not? The sun will always rise – forever, apparently.
And to think: your average billionaire pours millions into the political system to ensure that none of it is to be taken away and yet, we don’t really need it! All we need to do is get his/her snout out of public services and for the government to print the money those services need instead, and keep working with the private sector on other stuff like infrastructure and housing.
As for the Taxing Wealth Report – which from reading I likened the tax system to be more like a club card for the rich – I fully endorse it because it unpicks the faulty architecture of knowledge that we the people are the rich man’s burden. The state needs to stop giving money to the rich. If the rich want assets in our streets and countryside in our realm they need to pay their way. If they don’t like that, then have a few less yachts, homes and jets.
But for the rest, you are right – making out that the rich are the biggest contributors is pure bull – it is not the money, it is the accountable control, administration, sustainability and commitment of what there is that matters.
Thanks, PSR
I really like the idea the UK taxation system is rigged to be a “club card” for the rich. The only thing lacking is a name for the card Parliament issues. “Pardon Me” has the right ironic tone I’d suggest!
‘And where does the value of the valuation come from – well it seems from future income – brought forward – a lot of that goes on does it not? The sun will always rise – forever, apparently.”
No, that is why future earnings are discounted to allow for uncertainty as well as the time value of money.
I’ve no idea what your job in public sector actually involves, but I hope it’s nothing where finances are concerned, as you frequently demonstrate zero understanding.
I guess while you continue to provide everything that Richard posts, regardless of its accuracy or consistency then you’ll be most welcome on here!
Apart from the fact that you are offensively and wholly unnecessarily rude, you also, most amusingly, prove the whole point I am making this morning. You might be possessed of a little knowledge (but I suspect little more than that) but you most definitely do not have anny understanding at all. PSR has both, which is why your comment is so amusingly laughable for so spectacularly failing to hit its target.
Thank you Richard.
Now do come on Shelley – I use discounted cash flows in business appraisals for housing development schemes. All you are doing really is trying to anticipate financial scenarios in the future to think about the impact of a decision made today on that future and are making sure that the publicly accountable authority Treasury knows that you have thought about it (we’re talking about 60 year payback periods on these schemes) and includes my work in its future liabilities and assets. So for example, in my line of work we want to know how paying back a loan in the housing revenue account for a new scheme might compete with other calls on that budget into the future, so we try to ascertain what we will be spending in the future by bringing forward interest rates (costs of the loan) and even rent rises (income to pay the loan) for example.
But to be honest we have very little control on that future, no matter how much we may manipulate or make assumptions. The government may continue to under fund local authority housing; it may control rent rises below what we need (it already has); it may make right to buy easier again and we lose more stock= less income to pay down loans in our business plan) and inflation in the construction industry (where costs have simple doubled) might rise (or fall even, but really?); it may wish to develop the private sector and fund that more (it has quite a lot). Who knows!
But the story that you seem to ignore is the one about who bends the government’s ear the most – local authorities or the financial sector looking after its big customers – the millionaires and billionaires. It seems to me that although concessions are made to local authorities, the private sector through its corruptive funding of politics dominates and ensures that it will be first in line if only to ensure that its income is ensured for the future to the cost of everyone else.
Now, no discounted cash flow process or spreadsheet ever reveals the reality of that bias, does it Shelley, the grip that private finance has on public finance? Hmmm? That’s what I am getting at, that is where the real problem lies. Wealth is claiming our future NOW.
Thanks
thanks PSR – stated with clarity – and thanks to Richard too – quod erat demonstrandum
Surely some of the increase in wealth enjoyed by the few is parked in cash/bond savings etc. by both individuals and corporations and not just in paper asset valuation?
Some. But the vast majority that value of their shareholdings.
As you have previously pointed out a lot of this is ‘hope value’
The super rich haven’t got ‘more stuff’ its just the book value of the stuff they have has gone up.
As you explain, wealthy people do not usually have a safe full of cash unless they are involved in serious crime. A lot of people think they do. Most people can also not read a balance sheet and some even believe turnover= profit. Against this background, promising to tax wealth may be a vote winner despite being a very bad idea for all the reasons you frequently state. In such circumstances, it would be advantageous(and dishonest) to dangle such taxes in front of a generally uncritical electorate, quietly dropping them in favour of more realistic ways to tax wealth.
This is very much the type of promising that has helped Reform to top the polls. It’s not their main thing; that’s the incompetence of Labour and the dismal record in gov of the Tories. I wouldn’t expect honest people to endorse this approach. But, it’s politics and why should the devil have all the sordid tricks? Obviously, the facts and truth are what we want, even if we cannot get a majority who recognise what they are.
I share Oxfam’s moral instinct completely: poverty is not an accident, it is the result of political choices. Austerity is the clearest modern example of how policy can deepen suffering, shorten lives, and hollow out communities. On that point, there is no disagreement.
But we need to be precise about what those policy choices have created.
Poverty is not the disease. Poverty is the symptom.
The disease is deprivation.
Deprivation is the long-term, systemic denial of the things people need to live stable, dignified lives: housing, education, healthcare, transport, security, time, and opportunity. You cannot cure deprivation with a one-off transfer of money any more than you can cure pneumonia with a warm blanket. It may ease the pain for a moment, but the underlying condition remains untouched.
This is where I think Oxfam’s framing — and much NGO campaigning — falls short.
It treats poverty as a numerical gap to be filled, rather than a structural condition to be dismantled.
The $2.2 trillion figure is rhetorically powerful, but it risks reinforcing the idea that inequality is simply a matter of insufficient generosity at the top. It isn’t. Inequality is the product of a system that concentrates power, extracts value, weakens public institutions, and leaves entire populations structurally deprived.
Redistribution alone cannot fix a system that is designed to reproduce deprivation.
If we want real change, we need to target the system itself:
the institutions that have been hollowed out
the public capacity that has been eroded
the planning that has been abandoned
the labour protections that have been dismantled
the democratic counterweights that have been weakened
This is why the world needs to move away from neoliberalism — not through a dramatic rupture, but through a careful, deliberate dismantling of the structures that create deprivation in the first place.
We need to rebuild systems that provide security, stability, and opportunity as a matter of course, not as an emergency intervention. That means investing in public goods, restoring institutional competence, and designing an economy that serves society rather than the other way around.
Poverty relief is temporary.
Deprivation repair is transformative.
If we focus only on poverty, we will forever be treating symptoms.
If we focus on deprivation, we can finally cure the disease.
Thanks
Much to agree with
How do we tackle inequality if we don’t tax wealth as well as flows of money/wealth?
We need to tackle excess wealth through regulation to stop it accumulating in the first place. Then we tax the flows. Do both and you will address the issue much more effectively than by taxing wealth directly.
Is it not too late? The wealth has already accumulated. The world’s 500 richest people collectively hold more wealth than roughly half the world’s population. How do we get it back?
Regulation, or monopolies, markets and more.
I think Richard is pointing to something that often gets lost in debates about inequality: if we only focus on taxing wealth after it has accumulated, we’re already too late. Extreme wealth is not just a pile of money — it’s the outcome of a system that allows extraction, monopoly power, and institutional decay to run unchecked.
So yes, we should tax the flows — the capital gains, the rents, the windfalls, the excess returns — because those are real, liquid, and reflect actual economic power. But we also need to regulate the system so that extreme wealth doesn’t accumulate in the first place. That means stopping monopoly by acquisition, limiting rent‑seeking, strengthening labour, rebuilding public capacity, and ensuring that markets serve society rather than hollowing it out.
Where I would add something is this: inequality is not just about money. It’s about deprivation — the long-term erosion of security, stability, opportunity, and dignity. Poverty is the visible symptom. Deprivation is the underlying disease. And deprivation is produced structurally, not individually.
This is why simply “taxing the rich” or “redistributing cash” will never be enough. You can relieve poverty temporarily, but unless you repair the systems that produce deprivation — housing, education, healthcare, transport, care, community infrastructure — the underlying condition remains.
At the same time, I don’t think fairness requires us to punish innovation. If someone invents something genuinely new, they deserve to profit from it. That’s not the problem. The problem is when success mutates into dominance — when wealth is used to buy competitors, shape regulation, extract rents, or insulate oneself from the society that enabled that success.
That’s why I’m fond of the idea of encouraging the wealthy to use their wealth in a more patriotic way — not nationalism, but stewardship. If a society creates the conditions for wealth, then those who benefit most should reinvest in that society: in infrastructure, skills, research, public goods, and long-term national resilience. Not as charity, and not as punishment, but as responsibility.
So yes — regulate excessive accumulation, tax the flows, and rebuild the public realm. But also recognise that inequality is not just a fiscal issue. It is a structural one. And the real target is not poverty, but deprivation. If we fix that, the rest follows.
Thanks, Paul. Much to agree with.
Love this article Richard for its fusing together of expertise, explanation and heart. Points of resonance:
People cannot eat market valuations.
Poverty not solved by money alone.
The 5 “systems that deliver”.
The 5 -ves that make extreme concentration of wealth bad, very bad. You could describe as the 5 side to capital punishment.
Happy New Year and may it be a hope-ful one.
Thanks Happy New Year
That is one of the most illuminating blogposts on wealth accumulation that you have written. A powerful and transformative insight to the real world of antisocial structural dysfunction.
More light breaks onto the neoliberal dogma!
Thank you Richard, happy new year to you and the family.
Thanks Jack, and Happy New Year
Another example of wealth corrupting democracy in the news today: Nigel Farage says Reform is to spend £5 million on social media publicity in the run up to May’s local elections – all funded by the crypto billionaire and tax exile Christopher Harborne.
The government could easily stop this corruption and bribery through legislation – so why doesn’t it?
I wish I could answer that.
“the difference between being able to perform calculations and understanding what they mean. A calculation is never enough. Understanding is always required”
I work in Data and often see developers Google for a solution, find some code, and blindly copy it into their procedure. The code works, the procedure functions but the developer does not really understand it.
When it goes wrong, or fails test, or needs rework, the result is lost hours as the developer struggles to figure out a fix – the quick hack ends up costing more than was initially saved.
Ironically, in the Data world we call this ‘Technical Debt’
Technical Debt accumulated through compounding hacks, cheats, and shortcuts over time are a bane of my working life and I now realise are a neat metaphor for this topic.