Growing inequality in the distribution of wealth and poverty are the principal social problems affecting the economic development of the contemporary world. The world economy is in a new cycle of expansion, generally recognized as a new wave of "globalization" of the economy. This process of expansion is rapidly transforming all societies, both developed and underdeveloped, reordering the markets for labour, goods and services, affecting mass consumption and the customs and daily lives of millions of human beings. Production activities are tending to be moved, or "delocated", as a consequence of the pursuit of greater levels of gains. Enterprises are downsizing, and work of good quality is being replaced by work in service sectors which produces neither sufficient income nor job satisfaction for those who do it. In this process of globalization many people perceive that new and growing inequities are being produced within countries and between the countries and regions of the world. There is growing realization of this and very little capacity to respond or find alternative ways to reorient these increasingly pronounced trends. Paradoxically, the end of the century will be characterized by an expansion in the goods at the disposal of the economy and a growing degree of dissatisfaction with the use that is being made of these goods.
In the 1990s a growing interest was perceived, among economists as well as social leaders and politicians, in understanding the effects and impacts of economic measures on social life, on politics, and especially on culture, human beings and their values. There is a growing perception that the way in which wealth (and poverty) are distributed within a society, or between different societies, fundamentally affects the values, social coexistence and life in common among people. Income distribution has effects in the first place on the economy and economic growth, but at the same time, in a deeper way, has moral, social and ethical implications. Societies are being deeply moved by the maldistribution of income. Internal rifts are occurring within them and forming seeds of violence, hatred and rancour.
The unequal ownership of wealth – houses, real estate, stocks, bonds and personal possessions – remains marked, in spite of relaxation of traditional class and cultural barriers. Inherited wealth and social position play a part. Distinct differences in income and income surplus also result from several factors, including sex, age and nationality. In industrialized market economies, wage decisions determine the extent of inequalities between various categories of workers. In both developed and developing countries, income distinctions are affected by the policy decisions of employers, trade unions and governments. Conservatives, liberals and individuals with different ethno-religious identities make up the super elite. However, the extreme maldistribution of wealth at both national and global levels has serious implications for the survival of people and global peace and stability.
The latter 18th and most of the 19th centuries witnessed the flourishing of ideas that advocated no significant interference in the process of production and income distribution. In their extreme, these ideas even favoured the existence of poverty on the grounds that it was a necessary condition for ensuring incentives to work. 20th century thought and policy have tended to reject extremes of equality and inequality of incomes. Most 'egalitarian' thinkers, for example, do not advocate complete equality of incomes as an immediate aim of policy. Marx and the Marxist philosophers deferred the idea, 'from each according to his ability, to each according to his need', to a later and higher phase of socialism.
The discrepancy in income between the wealthy and the poor is worsening. Although world income measured in real terms has increased by 700 percent since the Second World War, the wealthiest people have absorbed most of the gains. Since 1960 the richest fifth of the world's people have seen their share of the world's income increase from 70 to 85 percent. Thus one fifth of the world's population possesses much more than four fifths of the world's wealth, while the share held by all others has correspondingly fallen; that of the world's poorest 20 percent has declined from 2.3 to 1.4 percent.
In 1999, the wealth of the world's three richest people was greater than the combined GNP of the 48 least developed countries, which have 600 million inhabitants.
In 1998, the USA had the sharpest wealth disparity of any western nation. The wealth of the top one percent is greater than that of the bottom ninety percent of Americans. In 1998, the Chairman and CEO of Microsoft had a net wealth of $51 billion -- greater than the combined net worth of the poorest 40 percent of Americans (106 million people). On a worldwide plane, wealth disparities are staggering. According to the United Nations Development Program, the assets of the world's 358 billionaires were greater than the combined incomes of countries with 45 percent of the world's people (about 3 billion human beings).
The Swiss bank Credit Suisse revealed in 2017 that the richest 1% have accumulated more wealth than the rest of the world put together.