Filthy Lucre

In his six-part documentary series, The Ascent of Money (currently available entirely online), Niall Ferguson narrates, “Banks financed the Renaissance, while the bond market decided wars. Stock markets built empires and monetary meltdowns made revolutions. From ancient Mesopotamia right down to present-day London, the ascent of money has been an indispensable part of the ascent of man.” If, as they say, money talks, then surely in a generation that talk has crescendoed from a hubbub to a shout. But is life getting more or less financially unfair?

Economists often try to measure the gap between rich and poor to gauge how equitably wealth is being distributed. Although the statistical methods vary from one country to the next, a new website - the World Top Incomes Database - lets users chart the distribution of income across time, and even allows comparisons between countries. In the graph below we see that when Australia is compared with similar economies - New Zealand, Canada, the UK and the US - the proportion of wealth owned by the richest 10% was lowest here and highest - by far - in the US. This shouldn’t come as a surprise - this list of countries with the most millionaire households has the US in top spot, with 5,220,000 millionaire households out of a total of 112,611,029 households - roughly one in 20. That said, there was an upward trend in all economies, meaning that the wealthy were becoming relatively wealthier in all five countries.

Folk wisdom has it that money can’t buy happiness, although the evidence is mixed. But a recent report on the happiest countries in the world listed Australia at number four, after Denmark, Canada and Norway. The list was compiled using the OECD’s Better Life Index, based on 11 measurements of quality of life that include housing, income, employment, community, education, environment, health, work-life balance and life satisfaction. So is there a link between money and happiness? It seems so: “The ten nations on this list are rich in natural resources or highly developed service sectors. These are assets which are in short supply worldwide, and that bolsters the foundations of the economies in these countries. Money alone doesn’t buy happiness, but it sure helps.”

Recently at the Wheeler Centre, Stuart McIntyre, Monica Dux, David Manne and Melissa Lucashenko discussed the ‘fair go’ in contemporary Australia. Damien Carrick chaired the event, which was presented in conjunction with Radio National.

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