We've heard about "teachable moments." What about "teachable objects"? Enter the BAL'N Vending Machine.
While reading Piketty (2013), I have been struck by how little I understood about the level of income inequality in the world today. In fact, I'm still trying to get my head around it. To help others understand current levels of inequality, we at the Billionaire Action Lab Network have created a VENDING MACHINE (special thanks to local artist Gary Halliwell!). The machine was unveiled May 14, and will be available for viewing outside Room 14N-305, GSL headquarters, starting May 20.
The prices are set as a multiple that reflects the global inequality of wealth. The vending machine indicates the relationship between the average wealth of the 99% ($40,000), who would pay "cost," and the average wealth of the top thousandth, or 0.1%, which is about $13 million, who would pay "YOUR PRICE." These figures are adapted from Piketty (2013, p. 438).
Here's what we sell and the prices:
99% sticker (cost $1.50) YOUR PRICE: $500
99% car / fridge magnet (cost $5) YOUR PRICE: $1500
"H.O.P.E." coffee mug (cost $15) YOUR PRICE: $5000 (apologies to Ray Troll and Shepard Fairey)
"H.O.P.E." T-shirt (cost $40) YOUR PRICE: $15,000
Unique special item (cost $3000) YOUR PRICE: $1 million
The prices are outrageous, I know, but, as many readers understand, it's hard to raise money for grad students and research projects when government funding for the social sciences is increasingly getting the ax. It might work?
More importantly, it might help us have a conversation about inequality.
For those who want the full details, here's the relevant section from Piketty's (2013) "Capital in the 21st Century":
Piketty (2013), pp. 438-439
Concretely, the wealthiest 0.1% of people on the planet, some 4.5 million out of an adult population of 4.5 billion, apparently possess fortunes on the order of 10 million euros on average, or nearly 200 times average global wealth of 60,000 euros per adult, amounting in aggregate to 20% of global wealth. The wealthiest 1 percent – 45 million people out 4.5 billion – have about 3 million euros apiece on average (broadly speaking this group consists of those individuals whose personal fortunes exceed 1 million euros). This is about 50 times the size of the average global fortune, or 50 percent of total global wealth in aggregate. [Editor: I generated the wealth amount for the 99% using these figures.]
Bear in mind, these estimates are highly uncertain . . . these numbers should be taken simply as orders of magnitude, useful only for focusing one’s thoughts.
. . . it is by no means certain that inequalities of wealth are actually increasing at the global level: as poorer countries catch up with richer ones . . . [BUT]
The information at our disposal suggests, however, that the forces of divergence at the top of the global wealth hierarchy are already very powerful. . . . not only for the billion dollar fortunes . . . but probably also for smaller fortunes of 10-100 million euros (the top 1000th). (p. 438)
[EDITOR NOTE: The inequality is likely to get worse because the rate of return on capital (around 5%) is greater than the growth rate (around 2%); here's Piketty]
For example, if the top thousandth enjoy a 6 percent rate of return on their wealth, while average global wealth grows at only 2 percent a year, then after thirty years the top thousandth’s share of global capital will have more than tripled . . .to 60% of global wealth.
Even at 4% return, the top thousandth's share of global wealth would still practically double in thirty years to 40%.
Once again, the force for divergence at the top of the wealth hierarchy would win out over the global forces of catch-up and convergence, so that the shares of the top decile [top thousandth] and centile would increase significantly, with a large upward redistribution from the middle and upper-middle classes to the very rich.
Such an impoverishment of the middle class would very likely trigger a violent political reaction. It is of course impossible at this stage to be certain that such a scenario is about to unfold. But it is important to realize that the inequality r > g, amplified by inequality in the returns on capital as a function of initial portfolio size, can potentially give rise to a global dynamic of accumulation and distribution of wealth characterized by explosive trajectories and uncontrolled inegalitarian spirals. As we will see, only a progressive tax on capital can effectively impede such a dynamic. (p. 439)
END PIKETTY QUOTATION
The point of the vending machine, and the other information about inequality, is to highlight the need to explore how the upper reaches of the income hierarchy are so out of line with our everyday experience of wealth, and moreover, how, if Piketty is correct, we need drastic action to slow down the redistribution of wealth from the middle class and the poor to the very, very rich.