Oxfam annual report on global wealth and inequality was out this week, and as has been the case in previous years, it garnered significant media interest, due to its warning of extreme inequality and its effect on the poorest people on the planet.
A highlight of the report is how much of the worlds income goes to a tiny elite at the very top of the income rankings. In what can only be described as an amazing feat of data collection, Oxfam has determined that 82% of all money made last year went to the richest 1% of the global population. Amazing not just because of the specificity of the number – 82% – but also because they are able to publish the data just three weeks into the new year. If one was a cynic, it would be tempting to think it has been made up. Another key piece of data in the report is the claim that 42 people own as much wealth as the poorest 50% of the global population. This is down from 2017, where it according to this year’s report was 61 people. Never mind that the 2017 report said it was eight – overall, the report gives an impression of a world where a select few enjoy all the privileges. But Oxfam’s methodology of netting assets and debt means that many of the world’s “poorest” are living in the western world, they just have high debts. Anyone living in the west who isn’t in net debt, on the other hand, would seem to be quite well off – if you own just $250 you are richer than the bottom 20% of the global population. Oxfam conveniently doesn’t mention that.
Of course, the implicit claim in Oxfam’s report is that the wealth of some leads to the poverty of others – if not, what is the problem with inequality? But it is a claim with little scientific backing: the most commonly used income inequality measure, the Gini coefficient – where zero denotes perfect equality (where everyone enjoys the same income) and one is complete inequality (where one person or household receives the entire income in the area in question) – has been proven to have no predictive power with respect to the income of the middle class, and there is no evidence that it affects the poorest in society either. It seems Oxfam has narrative to push – and it is the usual left wing one of winners producing losers. They seemingly have less interest in what really matters: that global poverty is declining, consistently and by every measure.
A picture starts to emerge of a political organisation with a hard-left agenda, rather than a just a charity. It is an impression which solidifies when Oxfam identifies six “false assumptions” which they claim drives inequality and wealth concentration in the top 1% of the global population: the market is always right; corporations need to maximize profits; extreme individual wealth is benign; GDP growth should be the goal of policy making; the west’s economic model is gender-neutral and the planet’s resources are limitless. It reads like a Corbynista manifesto, not a game plan for distributing aid raised by voluntary contributions from the public. And if there was any doubt left, Oxfam erased it on Twitter:
Oxfam does admirable work in charity, and they are openly “rights-based”, meaning it is no surprise they stray into areas such as gender justice and women’s rights – which is fine, many countries have deeply rooted problems in these areas. But there are many charities which do good work, without undermining the free market in the process. When you give clothes or old books to Oxfam, you help fund an openly anti-capitalist organisation which will spend your money advocating increased government intervention in the economy. Those who believe in free markets should not indulge them – boycott Oxfam and find other charities to bequest with your hard-earned cash.
We like Opportunity International (https://opportunity.org.uk/), a charity which provides microfinance loans for millions of enterprising people around the world who want to start their own business.