How much wealth do the wealthy have and what do they do with it?

According to Ed Doveton, the author of an article entitled “Who Owns the Wealth and How they Spend It”, a report published by United Nations in 2006 shows that the world's richest two percent own more than half the total global wealth while half the world's population own only one percent. The bleak economic trend that epitomizes contemporary society is that “the rich are getting richer; the mega rich are getting richer quicker than the rich; and the poor are getting even poorer”.
How rich are the rich around the globe? The concrete answer in the form of a figure is given in the World Wealth Report published in 2007. This report estimates the aggregate wealth of the rich around the world at $ 37.2 trillion. This calculation is based on individual investments. Therefore, it is not exact. "This [$37.2 trillion] is a staggering amount, and difficult to get your head around", observes Doveton. He further adds, " But think of it this way: the old Wembley Stadium football ground held 100,000 people; to reach just one trillion you would need 10 million stadiums" .
Doveton explains that the figure in question may be greater than $37.2 trillion. Some rich people keep their money in banks fronting their bank accounts. Switzerland was the first country setting up such banks enabling the mega rich to invest and hide their wealth. Now there are many other countries except Switzerland. Abu Dhabi is probably the most recent one. At the other end of scale, as the World Development Report states, 1.2 billion people, who form one fifth of humanity, are living in poverty.
There are two main areas in which the wealthy spend their wealth. They include financial investment and private consumption. Financial investment can be further split down into four categories-real estate investment, investment in equities (stocks and shares) and "investment in alternatives (e.g. hedge funds)". Of the 37.2 trillion of private investment in 2006, 52 percent went on equities (21 percents on bonds giving a fixed income and 31 percent on shares), 24 percent on real estates, and the remaining 10 percent on what is called "alternatives". Prima facie, the breakdown of financial investment of the wealthy might appear to mean little to us. But, if we go a little deeper, we find that the power of the wealthy to move their money around (i.e. from one area to another or from one country to another) does affect our lives. It “subjects economies to the whim of the gambling table” (Doveton).
Doveton describes another other use to which the wealthy put their money: private consumption. They consume super luxury goods and services (e.g. a plasma TV with a screen size of 142 inches, which retails at $87 500, the new Natalia SLS-2 motor car from Dimora, which costs $ 2 million etc.). The increase in the level of their consumption of such goods and services is evidenced by the exponential expansion of the market for such goods and services. Paraphrasing the finding of the survey conducted last year by the Wall Street Journal of 198 people who were worth more than $10 million, Doveton writes in his article that, "yacht rentals topped the bill at an average of $384,000 per annum followed by villa rentals at $106,000, and at the bottom of their shopping list was summer entertaining, which came in at a lowly $ 56,000".
The private consumption of the wealthy is not confined to consumption of luxury goods and services. It goes beyond it to include what may be called "political consumption" (that is, consumption of political power). They purchase political power from those who wield, or are more likely to wield in the immediate future, it to ensure that they remain unaffected by the possible political change. Many examples can be cited to substantiate their purchase of political power. Doveton gives two examples from the two countries of the world-UK and USA. 7 million was raised by Lord Levy from wealthy backers for Tony Blair's private office prior to the 1997 general election. Likewise, in the 2000 cycle of elections, the Democrats raised $219,343,172 in "soft money" (that is, outside the restrictions); Republicans collected $243,780,583 in unregulated funds.
Doveton elaborates on how the rich can influence those who wield political power by buying it at a very big (if not expensive for them given their total wealth) price. He writes, "In 2006, George Bush and the Republicans supported the repeal of the estate tax… this is a tax which only the very rich pay.” The rest of the population (about 99.7%) is not rich enough to be affected by it. Doveton goes on to describe “how” the super-rich used the media and the Republican Party to present the continuation of estate tax as a threat to small businesses and farms. The story of people having to sell the family farm to pay the tax was peddled in the media. It was then revealed by a report from a watchdog body, the Public Citizen and united for a Fair Economy, that more than eighteen wealthy families, including the Walton family of Wal-mart frame, had used their influence and spent millions of dollars to push for the repeal of the estate tax."
Before I conclude, let me say a few words. Because in this article I have talked about what the wealthy people do with their wealth, some readers, after their perusal, might form an opinion about me- the opinion that I am envious of the wealthy because they possess a surprisingly huge amount of wealth. In response to such an opinion, I would say that it was “mere opinion” rather than “factually warranted opinion”. Such an opinion would result from an inability to understand that talking about what the wealthy do with their wealth could mean one of at least two things-the first being that the person who talks about it is envious of the wealthy and the second being that the person who talks about it is worried about the gap between the rich and the poor. Putting it differently, their misconception is that the first factor is the only thing that talking implies. What is true in my case is that I am extremely worried about the existence of the binary division of the society we live in into the haves and have-nots.
I agree that there is nothing expressed in this article that substantiates that I am not envious of the wealthy. I may be said to have used logic to conceal my bad intention. I think that proving my concern would require that we go deeper into the realm of thinking. However, I do not want to drown in the pond of thinking. What I can say with logical certitude at the moment is that my having talked about what the wealthy do with their wealth reflects my concern over the bleak situation of income inequality, as opposed to my envy of the wealthy
ReferenceDoveton, Ed (2008): Who owns the wealth and how they spend it? In: In Defence of Marxism available at http://www.marxist.com/who-owns-wealth.htm