Economists slam Oxfam report on billionaires vs the world’s poorest people
Economic think tanks have once again rounded on the annual global wealth distribution findings from charity Oxfam.
Ahead of Davos 2017, which kicks off tomorrow, Oxfam released a report claiming that eight billionaires own the same wealth as the 3.6bn people who make up the poorest half of the world's population.
The Institute of Economic Affairs (IEA) slammed the findings, and accused Oxfam of demonising capitalism and "conveniently skimming over the fact that free markets have helped over 100 million people rise out of poverty in the last year alone".
Methodology problems
The IEA's director general, Mark Littlewood, pointed out problems with Oxfam's methodology in arriving at its conclusions – the charity adds assets and subtracts wealth to make 'net wealth', which "implies that some of the 'poorest' in the world are those with high debts", he noted.
"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," said Littlewood.
“Aggregating net wealth figures is largely meaningless headline fodder. Unfortunately there are some corrupt countries where wealth is accumulated at the expense of the poor but this is a case for tackling big government, not bashing free markets."
Misleading
Meanwhile, the Adam Smith Institute (ASI) also blasted Oxfam for its misleading statistics – in a similar vein to last year, when the think tank accused the charity of publishing "meaningless" findings.
While the data itself is fine, the ASI's Ben Southwood said, the interpretation is not. "It is not the wealth of the world's rich that matters, but the welfare of the world's poor, and this is improving every year," he said.
"The consumption of the world's poor continues to rise, as does their education, healthcare, and height. And remember, the global one per cent includes around five million Brits – most of those with a London house – not just oligarchs and plutocrats." He pointed to the fact that the fraction of the world's people surviving on less than $2/day has fallen from 69.6 per cent in 1981 to 43 per cent in 2008, and even lower now
"Oxfam use Vietnam as a case study, bizarrely failing to mention that economy's incredible growth: income has gone up from around $100 per capita before the 1986 neoliberal reforms to around $2,000 today," Southwood added.
"Inequality is a side-effect of stability, peace, and growth; clamping down on it through foolish wealth taxes risks everybody's living standards."