by Jim Rose in applied welfare economics, economic history, Marxist economics, politics - New Zealand Tags: top 1%, Twitter left

The latest research of Max Rashbrooke on trends in wealth was in the Dominion Post today. The breathless reporter used it to say that:

The elite and high-income earners of New Zealand have increased their wealth by almost $200 billion while debt among the poorest has climbed to $7b…

The net wealth of the top 10 per cent has increased dramatically while the bottom 10 per cent of Kiwis face increasing levels of debt in the billions of dollar…

The data in the Dominion Post today consisted of a time series of the top 10% and the bottom 10% share of net wealth and an interactive pie chart showing the distribution of wealth.

When you chart the data published by Max Rashbrooke as a time series rather than an interactive pie chart, today is not quite the day for the down-trodden proletariat to kick in the rotten door of neoliberal capitalism to start the permanent revolution.

It is not much of a call to the barricades to say that just about every section of New Zealand society became much richer in a short six-year period – their wealth increased by between 60-80% between 2004 and 2010 as shown in the chart below. The middle class has been doing just swimmingly between 2004 and 2010: up from $194 billion to $348 billion in a short six years. This is an increase of 80% in six years. So rapid an increase that the sceptics among you might start to doubt the accuracy of the data either at the beginning or by the end.

Source: Geoff Rashbrooke, Max Rashbrooke and Wilma Molano, Wealth Disparities in NZ Institute for Governance and Policy Studies (November 2015).



Furthermore, no section of society noticeably increased their share of wealth as shown in the chart below. Further evidence of how lazy is the top 1% is in New Zealand. Their wealth increased only by 56% between 2004 and 2010. Having the wealth of the top 1% increase by less than every group in society bar the bottom 10% qualifies as a dramatic increase in inequality by the journalistic standards of the Dominion Post. The wealth of the top 10% increased between 2004 and 2010 by 68% – no more than any other group in society bar the top bottom 10%. That too is a dramatic increase in inequality by Dominion Post standards.

Source: Geoff Rashbrooke, Max Rashbrooke and Wilma Molano, Wealth Disparities in NZ Institute for Governance and Policy Studies (November 2015) via The richest 10 per cent own $436 billion of New Zealand’s wealth: research | Stuff.co.nz.



Joan Robinson in the 1940s was on to this failure of capitalism to impoverish the proletarian when she said the battle cry of Marxists would have to change from the 1848 version “rise up ye workers, rise up for you have nothing to lose but your chains” to “rise up ye workers, rise up for you have nothing to lose but the prospect of a suburban home and a motorcar”.







Today that battle cry of the Marxist revolution would have to be “rise up ye workers rise up for you have nothing to lose but your iPhone and your air points”. As Joan Robinson observed in the 1940s, that’s not much of a basis for a revolutionary movement.



The Twitter Left are grumpy buggers because a rapid increase in wealth that is broad-based across New Zealand society – lifting up 90% of New Zealand society – for them is only another reason to complain.