Inequality ‘far worse’ than thought

Inequality has reached extreme proportions in many countries - but, according to campaigners, the problem is far worse than anyone has understood it until now. This is because all studies exploring economic inequality have systematically underestimated the wealth and income enjoyed by the world's wealthiest individuals.

Eight of the world's most respected economists specialising in economic inequality were interviewed for the study. They all confirmed a huge under-reporting problem in this area.

Key points

  • The basic problem is that if an asset is hidden in an offshore bank account, trust or company, and the ultimate beneficiary of it cannot therefore be identified, this asset and the income it produces cannot be counted in inequality statistics.
  • Although some inequality studies try to compensate for the missing offshore assets, all the experts interviewed agree that no study comes even close to compensating sufficiently.
  • One piece of research puts the total of 'hidden' wealth at 'well in excess of $21 trillion', on a conservative basis.
  • Although these survey problems affect the lowest-income groups too, the sums involved are 'small beer' compared with the upper income brackets.

Source: Nicholas Shaxson, John Christensen and Nick Mathiason, Inequality: You Don't Know the Half of It (or Why Inequality Is Worse than We Thought), Tax Justice Network
Links: Report | TJN press release