Mark Goldring, Oxfam’s chief executive, has been denouncing “an economy for the one per cent” today. He feels this “extreme inequality must be stopped”. Well he could start by taking a pay cut. According to Oxfam’s accounts he banks a salary of between £120,000 ($144,000) and £130,000 ($156,000) per year.
But then he might think he gets onto safer ground with a focus on the “grotesque” wealth of eight billionaires that he claims own half the wealth on the planet.
It so happens this claim is rubbish. As Mark Littlewood, Director General at the Institute of Economic Affairs, says: “Their claim that eight people own the same wealth as half the world is as spurious as their methodology. Adding assets and subtracting wealth to make ‘net wealth’ implies that some of the ‘poorest’ in the world are those with high debts. It is misleading at best to label the average university graduate who has accumulated £50,000 of debt among the world’s poorest, without any consideration of their future earning potential.”
It could be that Oxfam has blundered by failing to grasp this huge flaw in the calculations. Or it could be that the charity is deliberately seeking to mislead for the sake of a headline – a “half” sounds so much better than a quarter or a tenth or a twentieth or whatever the true figure is.
In any case the figure is irrelevant. The focus should be on defeating poverty, not inequality. No thanks to Oxfam, there has been a huge fall in poverty in recent years. In countries where there has been the most dramatic progress – such as India – this has gone hand in hand with a growth in inequality. Would Oxfam really prefer India to be a more equal country where more people went hungry?
Across the globe 100 million people have risen out of poverty in the last year alone. Speeding up that progress must mean allowing the conditions for more economic growth. That will include freer trade. That was part of the moral case for Brexit as the UK will be able to agree free trade deal with developing countries. It also means working for an institutional framework in all countries where business can be
set up and expanded with confidence. Who would feel safe investing in
Zimbabwe at the moment?
But instead of Robert Mugabe, the real villain in the eyes of Oxfam is Bill Gates, who is worth a reputed $75 billion. The charity implies that if he hadn’t made all that money there would be $75 billion more for the rest of us – or that somehow if people are starving in Burundi it wouldn’t matter as much if there were no billionaires on the planet because at least there would be more equality.
Given that Gates has agreed to give away 95 per cent of his money via the Bill and Melinda Gates Foundation, the attack is particularly odd. But even if he hadn’t given a cent to charity he – and the other vastly wealthy innovators and entrepreneurs – are part of the solution not part of the problem.
Still more absurd than Oxfam is the call for greater equality from World Economic Forum – the pampered global elite converging on Davos in Switzerland. It’s a corporatist gathering of businessmen and politicians who love to schmooze with each other. All the lobbyists come crowding in too. I don’t think the rest of us are missing much. Lots of smug groupthink – naturally accompanied by the issuing of
platitudes about the importance of more equality. Far from being about supporting the free market it is about how to frustrate it – how to block off competition and maintain regulations and subsidies from such failing outfits as the European Union.
Notionally, Oxfam is protesting against Davos – but really they are on the same hypocritical team. By contrast those who actually want to help the poor do not obsess about how many billions Jeff Bezos, Mark Zuckerberg of Michael Bloomberg happen to have this year. We want free trade and open markets so that the triumphant progress of capitalism in reducing poverty is able to continue.
