Blog: Lottery winners who don’t feel rich

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13/06/2012
There is an irony in the nature of the Western “Occupy” movements. In real terms, most of the protesters remain in the top 1% earners in the world.
Blog: Lottery winners who don’t feel rich

There is an irony in the nature of the Western “Occupy” movements. In real terms, most of the protesters remain in the top 1% earners in the world.

In his book of last year, the Haves and the Have- Nots, World Bank economist Branko Milanovic states that to be in the top 50% of earners on the planet, you need to earn just $1,225 a year. To be included in the top 0.1% requires an annual income of $70,000.

We Western Europeans should discount our dollar-denominated incomes by 10%-20% to allow for differences in purchasing power but even so most of us are doing very nicely. If it were really about the evils of capitalism then we should be protesting against ourselves.

According to the U.N. nearly half the world’s population, just under 3 billion people, earn less than $2 a day and the World Bank say 95% of those living in the developing world earn less than $10 a day. So it appears that many westerners we consider poor are among some of the world’s most well-off.

The Occupy movements are about trust. It is as deep rooted as instincts get. As a species, we often prefer to see those who breach trust punished – even if we all consequently suffer for it.

Co-operation has underpinned our success from the earliest times – from the earliest harvesting to the first basic rules of society. Commonality of purpose and neighbourly behaviour enable us to achieve bigger things. All the big scandals are about breaches of trust – MP’s expenses, phone hacking, and even the credit crunch (no-one could trust the dodgy mortgage assets they had been sold).

But globalisation is redefining how physical communities experience trust (or a lack of it). The nation state might not have a fully fledged mechanism to manage the global super rich at the moment but it has served many of us very well.

As Milanovic notes, “One’s income … crucially depends on citizenship, which in turn … means place of birth. All people born in rich countries thus receive a location premium … all those born in poor countries get a location penalty. It is easy to see that in such a world, most of one’s lifetime income will be determined at birth.” If you are born in the West at any level you can be said to have gained a significant advantage.

Cecil Rhodes wasn’t far off the mark when he said, “Remember that you are an Englishman, and have consequently won first prize in the lottery of life.”

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