Forbes, on the other hand, uses the concept of net worth, or rather “net assets”, ie real estate and financial assets minus debts, to calculate the wealth of billionaires. The first look is here. According to our economists, this indicator does not allow us to know who is rich or not.
“A person who borrows €300,000 to buy a house therefore owes €300,000. He has negative net assets of €300,000 that he has to pay each monthexplains Frthere isnchois Maniket who’sUCLouvain. SThe wealth is then minus 300,000 euros but heit does not mean that this person is poorand if he had been able to borrow that sum from a bank, the reason would certainly never be.“
And let the economist take the opposite example. “You have billions of people who can’t borrow $1.But WHO are considered to have positive net assets.”
In these net assets, Forbes also takes into account the stocks and various listed securities held by billionaires. Forbes shows in addition that this list “an image of wealth from stock market quotes and exchange rates“. But the transformation of stock value into wealth has been somewhat confusing some of them. And three economists were also interviewed.
“The value of your wealth when you put it in the stock market is not exogenous, but depends on interest rates. So if interest rates go up, the value of the stock will go down. Does this mean the rich are less rich? Absolutely not, because their ability to generate income from their assets has not changed at all“, François Manique explains.
Choosing net assets is the best option, even if it isn’t perfect, ideal
Xavier Dupret, economist at the Joseph Foundation Jacquemotte, confirms the words of his colleague. “Fconsider actions in aut inheritance? Yes, because there is no doubt that the action belongs to someone. On the other hand, the stock market is very volatile in terms of prices and the photo is imprecise, but this problem has existed since the invention of the stock market. oxfam, Pope or myself it’s not there it is in vain“.
In short, Forbes estimates of wealth are generally inaccurate due to the stock market Photo T and debt relief at once. However, Oxfam presumes to have chosen this indicator. “The way to calculate the net assets of the great fortunes is to take into account the cash award and the stock award. Elon Musk would never have bought Twitter for $44 billion dollarss, they were not in his bank account“Answer Quentin ParrinelloTax Fairness and Inequality Advocacy Manager at Oxfam.
Finally, for Xavier Dupret“choosing net assets is the best option, even if it is not perfect, ideal“.
The selection of the ranking of the largest fortunes established by Forbes raises another question about the methodology, Xavier recognizes Dupret. “It is true to say that Bernard Arnault is rich with his businesses because it is his business and he gets dividends from it, but above all they are businesses. It’s a company that was rich before Bernard Arnault was. But I understand why Oxfam plays it this way: it’s more effective To sum up an idea on Twitter in 280 characters.“
For the economist Etienne de Callataÿ, ranking of the greatest wealth not only a methodological problem, it’s just a bad indicator. “People chose the indicator: “What is Bill’s legacy? Gates, Elon Musk or Bernard Arnault?“, Actually it doesn’t change anything in our life. The wealth that was held by 200 people last year is now held by 20 people it does not change the inequalities suffered by the world’s poorest.“ “the leader economist” ofOrcadia would therefore prefer to use other inequality indicators such as the Gini index (see below).
Finally, Francois Maniket questions its relevance using the concept of wealth in this type of classification. For him, “etcIf we are interested in the standard of living, it is more interesting to look at income than wealth“.
It is with this in mind for Oxfam “wealth inequality is even greater than income inequality“, it is better to deal with wealth firsta fortiori, when”the rich can make money without lifting a finger“. Indeed, according to the NGOthe super-rich derive most of their income from financial flows from owning assets such as land, real estate, businesses and stocks.“.
Leetc three economists don’t ask questionsconfirmation Oxfam said the super-rich will be richer than last year. However, the choice to take this ranking as indicative of inequalities as a whole is debatable.