From top to bottom: German net private wealth; wealth of top 10% (who own 63% of all wealth); wealth of poorest 10%
A group of German trades unions, academics, and militants have attempted to seize back the clock as a powerful mode of political expression with their “Wealth Clock” (“Reichtumsuhr“). It seems to be a direct response to the relative success of the US’s National Debt Clock, instituted in the late 80s by property developer Seymour Durst, in impressing into the public consciousness the claimed urgency of dealing with the US national debt, as a route to neoliberal austerity measures. Leaving aside the many arguments that can be levelled against Durst’s fears, the image of a constant up-ticking of a national debt has had its echoes in European states, not least Britain and Germany as flag-bearers for austerity.
Of course, the National Debt Clock is only a genuine quality-assured rip-off; the original is the Doomsday Clock which helped express the fear of Mutually Assured Destruction during the Cold War (and still operates today). One wonders whether the fear that accompanied movements towards midnight in this earlier analog clock to some extent invests itself in the boundless growth of its digital debt-oriented cousin. It is also quite interesting that the Doomsday Clock, with its regard for the tensions of international state blocks, should have taken of the form of determinate finitude (midnight was the end), whereas the capitalist originated debt clock should place as its horizon infinitude itself — though to be fair the National Debt Clock had to be replaced, in 2004, by a bigger clock as the Fed wallowed in its role as printer of the global reserve currency.
These are the precursors, but the Wealth Clock itself discloses a dialectical motion which sets over against the boundless growth of Germany’s private wealth amongst its richest 10%, the likewise “boundless” impoverishment of its poorest 10%. Two differences united in their difference by an underlying notion. The implicit argument of the Wealth Clock is that it is in the reciprocal unification of these divergent series at a higher level, that of the capitalist process, that the relevant political transition boundaries can be located. For the unions promoting the clock, it is the spectre of such a transition which should spur Merkel’s government to institute a 1% wealth tax on personal wealth starting at 500,000 euros.
The German unions DGB Hesse and Ver.di explain the inputs for the Wealth Clock broadly as follows1:
The clock is based on the wealth distribution of the individual net worth (assets of persons aged 17 and over) in Germany in 2002 and 2007. The amount of the total assets in Germany and its distribution has been determined by researchers at the German Institute for Economic Research on behalf of the Hans Böckler Foundation. The net assets consists of the following components:
- own use and other real estate owned (including vacant land, vacation, or Weekend apartments)? Financial assets (savings, savings or Debentures, stocks or investment funds);
- assets from private insurance (life or private pensions, savings contracts);
- business assets (ownership or involvement in a company, business or operation);
- tangible assets in the form of valuable collections such as gold, jewelry, coins or art objects;
- debt (primarily consumer or mortgages).
Household goods and cars are not included, since for them an adequate market value is difficult to determine. Thus, the value of the assets is underestimated.
In 2007 onward all people in Germany who were 17 or older, have net assets of 6.6 trillion euros (gross assets: 8 trillion euros, liabilities: € 1.4 trillion). Thus within five years there can be discerned an increase of 900 billion euros — in 2002, net assets amounted to 5.7 trillion euros. Assets in Germany are extremely unequally distributed, and this inequality has increased sharply from 2002 to 2007. The poorest ten per cent. of the population were in debt in 2007; about two-thirds of all adults have no or only a very low individual net worth. By contrast, the richest ten percent have more than 60 per cent. of the wealth and the richest one per cent. own about 23 per cent..
Causes of personal wealth include inheritances and gifts, but there is also a clear (positive) correlation between the level of income and wealth: those that earn a lot usually also have a high capital wealth. Here, increases in income and asset growth affect each other: high incomes allow savings and so a corresponding wealth creation, and rising asset values generate increased interest income.
DGB Hesse’s Wealth Clock is a continuation of the 2002–2007 private net worth dynamic. According to the union, it assumes that the current increases are similar to that between the years 2002 and 2007. The distribution for 2007 is assumed to be constant.
The figures are showing, however, that income since 2007 has been evolving differently. Therefore, it is likely that distribution of wealth in the future will continue to diverge, and thereby the gap of great wealth and extreme poverty will increase.
The Wealth Clock sees itself explicitly as a political counter-proposal to the notion of taxpayers’ Federal Debt. It wants to show how great wealth is in Germany. DGB Hesse conclude that what can be easily seen from these figures is that the public give away money by waiving appropriate taxation of high asset and income levels — money that is not then available for reducing debt and for important tasks, for example in education and training.
The Wealth Clock certainly is striking as a concept, and perhaps with modification could be used by activists elsewhere. For example, the clock could show 99%/1% divergence, or, rather than using almost meaninglessly large figures, show divergence per capita or per household.
Ida Ince is an independent researcher in critical legal finance and has previously worked for many years in international finance.