If you’re like me, you’re someone who has seen that viral wealth inequality in America video and responded to it with a cringe. Not because I’m a fan of inequality in any stripe necessarily, but because the implied premise of the video (that wealth inequality is uniquely severe in the U.S.) is at least somewhat of a stretch.
In order to get a better grasp of wealth inequality around the world, I examined a 2014 report from Credit Suisse titled Global Wealth Report 2014. The document is data rich and contains a lot of interesting insights, but for our purposes here I’m focusing in on Table 2 on page 33, which shows the percentage of national wealth owned by the top 10 percent in 46 different nations. I was very surprised by some of the numbers.
Firstly, the top 10 percent of U.S. citizens own 74.6 percent of the nation’s wealth. The table also shows numbers from 2000 & 2007. They are unchanged. In fact, in 2000 the top 10 percent of U.S. citizens owned the same 74.6 percent exactly. In 2007 it was 74.8 percent, a near meaningless difference. Wealth inequality, at least for the time being, seems to be fairly stable in the U.S. even as people wave their hands over growing “income inequality”.
But what was really shocking was just how large wealth inequality is in the political left’s model nations. The top 10 percent in Sweden owned 68.6 percent in 2014, down only one percent since 2000. Not much better than the United States. Also, Norway’s top 10 percent had 65.8, Denmark’s 67.5, Germany’s 61.7 percent.
I then decided to look at which countries had the most economic freedom. The pro-free market Heritage foundation ranks countries in their 2015 Index of Economic Freedom. So how unequal are the nations that free-marketers hold up as models? Are they more or less unequal than the left’s favorite economic models? Well at least when it comes to the top 10 percent, many are surprisingly more equal than Sweden, Norway, and Denmark.
Singapore, which is ranked second in the world by Heritage has a top 10 percent at 59.6 percent. New Zealand is ranked third in the world, and has a top 10 percent with 57 percent. Australia is ranked fourth and is at 51.1 percent. Canada is sixth and is at 57 percent. Ireland is ninth and at 58.5 percent.
Of course, the opposite is also true. Hong Kong for example is number one by economic freedom and has more inequality by the metric we are using than the U.S. However, the U.S., which is ranked twelfth in the world by Heritage is still more unequal than many before it on the list. Sweden ranks twenty-third, and other countries with less inequality such as the United Kingdom, the Netherlands, Japan, and more have more freedom than Sweden.
I’m not trying to argue that economic freedom leads to less inequality. Primarily, I’m saying that the opposite, which is conventional wisdom for many, is not true. More regulations, taxation, intrusion in the market by government is not going to get you a more equitable society by definition. Smart policies will, and neither the right nor the left has a monopoly on those.