[srgseg]

I feel the serious point Oxfam are looking to make is let down by a definition of wealth that is very distorted.

Their headline is based on a report by Credit Suisse [1] which defines net worth as: "the marketable value of financial assets plus non-financial assets (principally housing and land) less debts."

Consider two people who will earn exactly the same amount of money at every stage of their lives. But one is 18 and has just started working, the other is 65 and has just retired. Is the 65 year old really 1000x richer than the 18 year old, because the 18 year old has saved $100 so far and the 65 year old has had time to save $100,000? Is this really 1000x inequality? For the purposes of determining inequality, these people should be considered equal, because it's simply the case that one person is older and has had more time to save.

A fair assessment of a person's wealth, at least when determining fairness and inequality, should include more than this. It should include an estimate of their future earnings potential plus the social security/welfare state entitlements and state pensions that they are entitled to.

Otherwise you have hundreds of millions of people in the West with negative "wealth" who in reality will enjoy a far wealthier life than someone in the developing world with small positive financial assets and no debt.

Someone with $100 in assets and no debt does not get to claim that they are single handedly "richer" than the combined net worth of tens of millions of university graduates that each have a total career earnings potential of millions of dollars, but who each still have outstanding student debt and thus negative net worth.

Also see this article on the "the wealthy living paycheck to paycheck" [2] which points out that people that will enjoy very wealthy lifestyles are spending rather than saving their income, and therefore really are rich yet will be written off as being far "poorer" than others in terms of financial assets.

[1] http://publications.credit-suisse.com/tasks/render/file/inde... [2] http://www.theguardian.com/business/2015/dec/25/wealthy-amer...

[netcan]

Any simple definition is distorted, inevitably.

Income, consumption or utility have a case. That said, wealth by this definition is most relevant in certain contexts. If you're worried about political consequences, for example. When the majority of property-wealth belongs to a small minority the majority have less reason to preserve property rights, for example.

[srgseg]

The availability of credit will allow those that are asset poor but with reasonable earnings potential to compete for resources fairly.

There are of course very serious implications when, for example, asset bubbles and unfunded state liabilities will create unfairness between generations. That's an example of real inequality. There are many other forms of real inequality. Fake inequality is when two people with comparable earnings and abilities to purchase assets are treated as not equal simply because one is older and has had longer to save.

[netcan]

I agree that income and (current) wealth are often fungible. The main reason I think wealth is usually reported because real income figures are hard to come by. If we want to look at the extreme end, current property and not income is the only option.

But, I think wealth (above definition) may be important as a stand alone. Many of the political implications of wealth disparity have more to do with current wealth than income, for example.

I do think you have a point though, as I said. Some wealth disparity is a matter of age, for example. But the disparities we have and those we project are very large. They may overstate disparities in income and consumption taken alone, but I don't think it's more clear headed to dismiss them outright. They do indicate a real and growing disparity.

[djhn]

On the other hand consider those depicted as the "poor" stereotype: Many young people in Asian cities will have low incomes and little to no savings, however many/most will have security and ability to self-sustain: a rural family/clan home, subsistence farming options, livestock.

Compare that to urban low-income families in middle-to-highly developed countries. No roof or food unless you pay for it, paycheck-to-paycheck. Few opportunities to accumulate wealth. No clan/community to help out.

While the first will do an order of magnitude worse on income studies, I'm not sure the latter are overall in a better position, economically.

[danmaz74]

Any definition of wealth is "distorted", but you can still use them to measure trends. What is really worrying is how fast inequality is growing.

[srgseg]

If governments made loans for university education available to a billion more people, that would dramatically increase their future earnings potential and quality of life. Yet this would be flagged as a "worrying increase in inequality" if you count their debt against them but don't count their newly increased earnings potential in their favor.

Similarly, increasing access to healthcare would extend people's working lives. This is a fantastic outcome. But this would increase the number of years that people would be able to save over, and so this again would be flagged as rising inequality because some people will have been able to save for longer. Instead of people retiring at 50 with far greater savings than 18 year olds, you'd have people retiring at 60 with even greater still savings than 18 year olds. Yet those 18 year olds will when they are 60 achieve the same "wealth", so those 18 year olds are not being "wronged" by this inequality.

The primary adjustment that needs to be made is simply to start counting earnings potential as an asset, instead of ignoring it and claiming as a result that people are worse off than they really are.