Thursday, May 11, 2017

Criticism of Oxfam's approach to wealth inequality

The following brief article from the Acton blog is reproduced in full due to its substantial merit:

"If people of faith want to reduce global poverty, they must begin by accurately measuring the problem. But a well-publicized report on international poverty distorts the problem and promotes solutions that would leave the world’s poorest people worse off, according to two free market experts.

Every year, Oxfam releases a report on global wealth inequality to further the agenda of the World Economic Forum. This year’s entry, titled “An economy for the 99 percent,” was released with the headline: “Just 8 men own the same wealth as half the world.”

The group’s executive director, Winnie Byanyima, said, “It is obscene for so much wealth to be held in the hands of so few when one-in-10 people survive on less than $2 a day.” But Philip Booth and Ben Southwood of the Institute for Economic Affairs (IEA), based in London, point out that there are significant problems with the report.

First, its method of measuring wealth (not income) is misleading. “Those at the bottom of the net wealth distribution include, for example, recent Harvard graduates with high levels of student debt and yet huge earning potential: they are supposed to be amongst the poorest people in the world,” Booth and Southwood write. Not that long ago, that would have included the Obamas, no one’s idea of the dispossessed and powerless.

Second, the report does not take into account life’s natural fluctuations. “A lot of people in the world have little or no net wealth,” Booth and Southwood note.

People accumulate wealth over the course of their life cycle, and even the better-off in this country do not tend to accumulate significant net wealth before their 30s. So if you consider that the global median age is about 28 years, it is hardly surprising that a huge proportion of the world’s population does not own any wealth.

Their conclusions reiterate the findings of a recent report from Canada’s Fraser Institute, which details how different stages of life bring different average earnings. Assets usually increase throughout one’s working years, until they are drawn down during retirement.

Oxfam recommends that Davos attendees pursue the global redistribution of wealth. Byanyima encourages politicians to “stop obsessing with GDP” growth, and the report recommends governments “increase the amount of progressive tax.”

But crushing poverty has fallen, thanks in large part to the free market, Booth and Southwood write. “Globally, extreme poverty has fallen from 44 percent in 1980 to around 10 percent today.” One could call as the first witness Oxfam itself, which stated recently, “The growth generated by private actors has contributed to an unprecedented reduction in poverty around the world in recent decades.”

The IEA cites examples from South Korea and Kenya to India and China. In Vietnam, income per capita rose from $100 a year to $2,000 after the country took measures to liberalize its economy 31 years ago. China saw the same measure increase from $193 in 1980 to $6,807 in 2014. “This is not due to redistribution,” the authors write; “it is due to trade and the liberalisation of some markets.”

Growing global wealth produces innovative products and services that serve the world’s poorest. For instance, Frank McCoster notes at The Conservative Online that internet connectivity is transforming the way Africans access vital services like electricity.

And as French President-elect Emmanuel Macron, the former economy minister of a socialist administration, said, “We must first produce in order to be able to distribute.” The richest 0.003 percent of the world’s population, those with a net worth of at least $240 million, donates $25 million to charity during his life.

People of faith who care about feeding the world should embrace policies that stimulate the growth of wealth, the structures that allow flourishing in the developing world, and the religious and philanthropic worldviews that encourage us to become our brother’s keeper.

You can read Booth and Southwood’s article in the Spring 2017 issue of the IEA’s Economic Affairs."


Anonymous said...

Had some involvement with Oxfam years ago but gave it away when they went all preachy socialist. World Vision the same, and Salvation Army. Stick to Tear Fund nowadays, but did sponsor a nurse on a Mercy Ship once, because they just educate and offer a leg up - no ongoing welfare without accountability. True charity works, welfare doesn't. A mate's sponsor child got dumped by Tear Fund a couple of years ago - allegedly because he'd gone badly off the rails although no real detail was provided but I gather that's rare.


Mark Hubbard said...

Ditto 3.16 except stick to animal charities now.

Redbaiter said...

The real problem is the dependency culture.

Ask your grandmother. Years ago, it was an widely excepted truism of Western culture that you did not accept anything from govt unless absolutely essential and there was always a shame attached to its receipt.

Progressives have lobbied against this attitude for decades, and it now no longer exists in most western countries. Welfare is now an accepted right, even seen (so bizarrely) as the lubricating the road to adulthood and success.(its handy to observe the global pattern of these events, because when you see the same thing occurring everywhere, it should alert even the most obstinate non-believer that Cultural Marxism is a force.)

Culture change is the true driver. Take Venezuela as an example. Even when the destruction of their country was so clearly impending, they carried on as before. Electing socialists who further oiled the wheels of destruction. Greece is another example.

Once you allow big govt to mess with the minds of a people, especially by implanting left wing ideas, the game is over.

As it is in NZ, and everywhere else where govt dependency is deeply embedded in the culture.

Mark Wahlberg said...

While I dont officially support any of the recognised charities, I have been charitable to some individual basket cases over the years. These situations were not motivated by a lack of welfare available, but directed at people who did not ask for assistance, but knowing their circumstances I offered support. Not friends I might add.

Some years ago i offered to do some work for a local Advocacy Service. It wasnt long before I became disillusioned when I had to deal with people seeking help who were clearly looking to use my role as an advocate to gain some sort of credibility for their attempts to deceive others. usually in cases concerning unpaid bills and the like. After telling some people what I thought of their behaviour, it was suggested I wasnt suited for this kind of role.

As they say "Givers have to know their limits, because takers seldom do."

Lindsay Mitchell said...

As a community volunteer too often I found myself expected to collaborate with exploiters and support their efforts to milk the'system'. Only a minority were genuinely needy cases. (Definition of 'needy' is purely mine, like the time given).

That's a great adage mark. Never heard it before.