(alt: “The Hidden Danger in Wealth Gini: What History Tells Us About 0.8”)
🔹 1. What Does the Gini Coefficient Actually Tell Us?
The Gini coefficient is a number between 0 and 1 —
with 0 meaning perfect equality, and 1 meaning total inequality.
In South Korea, the reported Gini is around 0.3.
Many interpret this to mean:
“That’s not too bad. Korea isn’t an especially unequal country, right?”
But here’s what often gets missed:
👉 That number represents income-based Gini, not wealth.
In other words, it’s a number based on flowing money — salaries, pensions, interest, dividends.
But in today’s world, the real inequality comes from accumulated wealth.
🔹 2. The Real Gap Is in Wealth, Not Income
Even if people earn similar wages,
the difference between those who own assets — homes, stocks — and those who don’t
can create completely separate worlds.
That’s why economists now use a more revealing measure:
👉 Wealth Gini Coefficient
For context, I’ve explored how inequality grows like compound interest:
🔗 《How Inequality Compounds Over Time – The Exponential Curve of the Lorenz Curve》
🔹 3. Income vs. Wealth Gini – The Numbers We Rarely See
| Region / Era | Income Gini | Wealth Gini |
|---|---|---|
| South Korea (recent) | 0.30–0.34 | 0.66–0.71 |
| U.S. pre-Great Depression (1929) | — | 0.80–0.85 |
| U.S. post-New Deal (late 1930s) | — | ~0.65 |
Yes — you read that right.
South Korea’s wealth inequality today rivals pre-Depression America.
But it rarely makes headlines. Why?
Because wealth Gini isn’t part of the regular statistics.
We live in a world where the media shows income Gini — and leaves out the deeper story.
🔹 4. Did the Great Depression Happen Because Wealth Gini Got Too High?
The Great Depression wasn’t just a financial crisis —
it was the explosion of decades of extreme wealth concentration.
When Roosevelt came into power, he implemented:
- Higher progressive taxes
- Antitrust laws and corporate breakups
- Social security and welfare safety nets
These measures lowered wealth Gini from 0.85 to about 0.65.
It wasn’t just stimulus — it was structural reform.
🔹 5. Are We Using the Right Numbers?
If your only lens is income Gini at 0.3,
you might say, “We’re still a fair society.”
But behind that number, there’s:
- The top 10% owning over 50% of total wealth
- Young people entering adulthood with zero assets
- Intergenerational inheritance locking in inequality
The Gini doesn’t lie — but it doesn’t tell the whole truth either.
📉 The Collapse Threshold – Based on Wealth Gini History
| Wealth Gini | Historical Context |
|---|---|
| 0.80–0.85 | U.S. 1929 – Extreme wealth concentration, stock collapse, mass unemployment |
| ~0.65 | Post-New Deal U.S. – After redistribution measures |
🔎 A Tentative Threshold for Collapse:
✅ If wealth Gini approaches 0.8,
the risk of systemic collapse rises sharply.
🔺 Once it passes 0.75, warning lights flash.
🔻 Crossing 0.8? Collapse becomes a structural likelihood.
⚠️ Why Is Wealth Gini So Dangerous?
- Income Gini shows liquidity.
- Wealth Gini shows ossified class structure.
At 0.8, societies become:
- Stratified and immobile
- Economically fragile (consumption + investment concentrated)
- Politically unstable (democracy erodes)
✍️ Final Thought
“A society with a wealth Gini over 0.8 —
without institutional correction — is one step away from systemic collapse.”
Today, South Korea sits around 0.66–0.71.
That’s already at the doorstep.
Unless structural adjustments are made,
compound inequality will push us to 0.75, then 0.8 — as if by natural law.
These aren’t just numbers. They’re warnings.
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