In their attempt to shame the rich and powerful into mouthing some platitudes on behalf of the poor at the upcoming Davos meeting, Oxfam announced last week that the 60 richest men in the world have as much wealth as the bottom 50 percent of the world’s denizens.
A shocking statistic, perhaps, but as memes go it’s overdone: Last year, Oxfam did the same exercise and used the 85 richest men as their cutoff, with the shrinkage presumably meant to help us infer that before too long there will just be a handful of men who own everything and who divvy out scraps to the rest of us.
The reality is that this is a bogus theme that reflects the fact that a goodly portion of people across the planet in fact have no wealth to speak of. This dearth has nothing to do with the Koch brothers and everything to do with the fact that many, many people live in places with no functioning market economy. The one third of Chinese citizens who live as subsistence farmers in their country’s hinterlands, 99 percent of the residents of North Korea, the vast majority of people who reside in Sub-Saharan Africa or the Middle East, and a few hundred million residents of Latin America have virtually no wealth to speak of. My daughter, with her $5,000 college savings account, has more wealth than the bottom 3 billion people; let’s take her money and give it to the poor while we’re at it.
These P.R. campaigns dressed up as “studies” do more harm than good to the quest to reduce global poverty because they leave readers the impression that if we simply figure out a way to get more money from the rich and hand it to the poor we can alleviate poverty.
Nothing could be further from the truth. What we really need is to figure out a way to address the various failed states that have left their citizens bereft. It’s facile to suggest that we merely need more market capitalism when so many of these people live in war zones, or kleptocracies, or places where a functioning society has to somehow be created before we dare hope to address the endemic poverty these people suffer. But in places that have avoided these curses, market capitalism has done a decent job bringing people out of poverty: What else can we attribute the half-billion Chinese or 200 million Indians who enjoy something approaching a middle class lifestyle today when such a thing was unheard of in their country a generation or two ago? Had it been anything other than capitalism that achieved this, it would be heralded as the most important innovation of all time, of course.
What Oxfam clearly implies–but can’t be bothered to explain–is that the growth of income at the top harms those at the bottom. They conclude that the wealthy are getting wealthier because of tax havens and that if this money were taxed we’d have enough to pull everyone out of poverty. It’s a pretty tenuous and incomplete argument and even if there were $7.6 trillion in ill-gotten gains sitting in tax havens that governments could confiscate to distribute to the poor, it wouldn’t come close to permanently solving the problem.
In short, the Oxfam statoid is bogus, it’s based on a premise that’s nonsensical, and its proposed solution to address rising inequality is wrong. The media should treat it with the disdain it deserves.
Ike Brannon is president of Capital Policy Analytics, a consulting firm in Washington.
