Your average milkman has more wealth than the world's poorest 100 million people. Doesn’t that show how unfair the world is? Or given that the poorest 100 million will have negative assets, doesn’t it just show how easily statistics can be manipulated for Oxfam press releases? They’re at it again today: the same story, every January. “Almost half of the world's wealth is owned by just 1% of the world's population” it said in 2014. It has done variants on that theme ever year, each time selling it as a new "big" story. All the time peddling the impression that inequality is getting worse, that the rich are engorging themselves at the expense of the poorest.
This narrative (which is as discredited as it is old) suits Oxfam’s fundraisers. (Rich dudes hoard power! “Even it up” by giving Oxfam money! Oh, and BBC, can you please pretend that this is new and give us Monday morning headlines?) The statistical trick is to look at net wealth, not gross wealth. So China has no people in the poorest 10pc but America has lots - why? Because Americans take on a lot more debt. As Felix Salmon points out, Oxfam is asking us to believe that a Harvard law student is poorer - far, far poorer - than a penniless Chinese peasant. An Oxfam intern would have more wealth than the poorest 200 million people. This would be laughed off as a piece of economic analysis, but its objective is to spin the newspapers, who are not in a position to see through it.
But the real picture is rather different. It looks like this:-
Global capitalism is lifting people out of poverty at the fastest rate in human history. Global inequality is narrowing, fast. Oxfam will not, and cannot, dispute such things - but this doesn't suit its new anticapitalist agenda. So it talks about rich people and tax havens instead.
Oxfam identifies Bill Gates as one particularly rich dude. They go as far as to put use his picture this time. But Gates gets rich because millions upon millions of people think their lives are better by using his software. And with this money he has created the Bill & Melinda Gates Foundation which has poured huge amounts into addressing global poverty. Gates has perhaps, donated more to the cause of third world development than any man alive. Or dead.
Government aid is not the main cause of falling poverty; capitalism is. The below figures show, for example, money flowing into the third world – private disbursements are just massive.
When Oxfam perpetuates the damaging stereotypes about Africa, and then – bizarrely – makes a segue into tax havens it loses a chance to talk about the real nature of capitalism and global poverty.
Which is a shame, because it’s one of the greatest stories of our age.
PS: Given that this blog is a repeat, and Oxfam's press release is a repeat, it's worth repeating this observation from Ben Southwood of the Adam Smith Institute makes the following observation:
Oxfam is once again misleading everyone with its punchy wealth inequality stats By Oxfam's measures, the poorest people in the world are recent Harvard graduates with student debt piles. The bottom 2bn don't have zero wealth, but rather about $500bn of negative wealth. The poorest person in the world is richer than the next 30pc put together. Having negative wealth may actually be a sign of prosperity, since only people with prospects can secure loans. But there is a bigger issue with the narrative: more meaningful measures show greater equality. Those in the middle and bottom of the world income distribution have all got pay rises of around 40% between 1988-2008. Global inequality of life expectancy and height are narrowing too – showing better nutrition and better healthcare where it matters most. What we should care about is the welfare of the poor, not the wealth of the rich.