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New Internationalist Issue281


[image, unknown] New Internationalist Issue 281

CLASS - The Facts

Class divisions are about more than money and material wealth - they're about power, ownership and control as well. As free-market capitalism spreads wider and deeper, so does class division.


It's not just how much you earn, but what you own - the power and privilege that ownership conveys - that matters. Wealth accumulates for the wealthy. The disparities of ownership are even greater than those of income:
  • In 1983, two-thirds of all individual wealth in the US was owned by the top 10% of the population.
  • By 1989 the richest 0.5% of US households (some 419,000 families) had increased their share of total private wealth in the US from 24% to 29% - they could have paid off the entire national debt in 1989 and still have been left with about 10% more net worth than they had in 1983.
  • Then, between 1989 and 1995, the valuation of the Dow Jones Industrial Average of shares doubled, and with it the value of the 80% of all US financial assets that are held by the top 10% of American households, hugely increasing the value of their assets.
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Recent and definitive academic research has revealed that a 'bedrock' of class inequality operates similarly in all industrial societies - and has changed little this century. So, for example, women from top 'salariat' homes in the US are 2.98 times more likely to achieve salariat employment (and avoid working-class jobs or unemployment) than women from working-class backgrounds - in Russia 2.78 times. Supposedly 'open' societies like the former West Germany or the US do not have significantly greater class mobility than 'class-ridden' Britain.
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The countries of the South now account for 80 per cent of the world's 'working class', its industrial workforce. In the North more people now work in service industries than in factories, though in the world as a whole more people still work in agriculture than in any other single category.
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All countries (1990) % income-adjusted reduction in HDI 3
Nepal -23.20
Brazil -16.38
Côte d'Ivoire -16.07
Jamaica -14.37
Panama -12.91
Honduras -12.84
Turkey -10.34
Industrial countries  
Portugal -6.30
Aotearoa/NZ -4.11
Australia -4.04
Canada -3.68
France -3.53
Italy -3.51
United States -3.44

The World's Worst

Every year the UN calculates a 'Human Development Index' (HDI) for all the countries of the world, from which points are deducted for high levels of inequality. Brazil has one of the most unequal distributions of income in the world, with the richest 20% of Brazilians receiving 26 times the income of the bottom 20%.

This results in a 16.38% reduction in its HDI score. Some industrial countries once thought of as more 'egalitarian' than others - like Aotearoa/New Zealand - which have implemented 'free-market' reforms, are now among the most divided. The worst of the 53 countries for which this information is available feature in this table.

Widening gaps between rich and poor 3
Percentage of global economic activity, selected categories.
INCOME 1960/70 1989
Richest 20% 70.2 82.7
Poorest 20% 2.3 1.4
Ratio richest to poorest 30 to 1 59 to 1
Richest 20% 80.8 81.2
Poorest 20% 1.3 1.0
Ratio richest to poorest 62 to 1 86 to 1
Richest 20% 72.3 94.6
Poorest 20% 0.3 0.2
Ratio richest to poorest 326 to 1 485 to 1


The gap between rich and poor is getting wider everywhere. But it is wider in some areas of activity than in others.
  • The richest 20% of the world's people now have a virtual monopoly of access to commercial bank lending - an astonishing 485 times more than the poorest 20%, who in effect have no access at all.
  • The main reason for this is that the richest 20% own assets which they can use as 'collateral' for loans, whereas the poorest 20% own virtually nothing.

  1. Gordon Marshall and Adam Swift, 'Social mobility - plus ça change', in Prospect Magazine, November 1995.
  2. World Development Report 1995, World Bank, OUP.
  3. Human Development Report 1992, UNDP.
  4. Democratic Policy Committee Staff Report, Who is downsizing the American Dream? Washington, 11 March 1996: figures based on regular surveys by the US Federal Reserve Board.

©Copyright: New Internationalist 1996 [image, unknown] NI Home Page [image, unknown] Issue 281 Contents

New Internationalist issue 281 magazine cover This article is from the July 1996 issue of New Internationalist.
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