Oxfam’s new inequality report, which found that just 8 men own the same wealth as half the world, is making headlines around the globe. Since we launched the report have been inundated with questions from people who want to know a bit more. Our response to the seven most frequently asked questions are outlined below.
1. Why is Oxfam making such a fuss about the super-rich? It’s the numbers of people living in poverty that matter and poverty is on the decline.
Oxfam is not anti-wealth but we are anti-poverty. Extreme inequality is trapping millions of people in poverty because the same economic rules that allow extreme wealth also cause poverty – think of tax dodging or companies choosing profits over wages. In fact, 700 million fewer people would have been living in poverty at the end of the last decade, if action had been taken to reduce the gap between rich and poor.
If we don’t end neoliberalism we’ll see more of what happened in the last 25 years, warns Oxfam. pic.twitter.com/i1CH3dswFY
— Johan Norberg (@johanknorberg) January 17, 2017
It is true that there has been great progress in reducing poverty in recent years – which is great news – but now experts like the World Bank are warning that this progress is under threat because of extreme inequality. The World Bank stated quite clearly in their most recent report that we can’t end poverty if we don’t end the inequality crisis.
2. Why is Oxfam criticising people like Bill Gates who give away huge amounts of money to charity?
Oxfam isn’t criticising these men. We are simply pointing out that our broken economies have created such extreme levels of inequality that just 8 men own the same amount of wealth as 3.6 billion people.
Many big corporations and super-rich individuals are helping to fuel this inequality crisis – by dodging taxes, or using their money and connections to ensure government policy works for them at any cost. Big corporations, keen to maximise profits for their wealthy shareholders, are also driving down wages and the prices paid to their producers and failing to invest properly in the future of their businesses.
Wealthy individuals who use their money to help others should be congratulated. But charitable giving does not replace a company or individual’s responsibility to pay their fair share of tax or ensure their workers are paid a decent wage. Billionaire Bill Gates agrees – he says the first responsibility of the super-rich is to pay their taxes.
3. Oxfam’s inequality stats are hugely exaggerated. Many of the people in the ‘bottom half of humanity’ are not poor – they are graduates with student debts.
This is the case for a tiny fraction of people. The vast majority of people in the bottom half of humanity are very poor people, who are struggling to get by. People like Oanh in Vietnam who is trapped in a cycle of debt because her health insurance doesn’t cover the cost of her medical bills.
Even if you recalculate the wealth of the bottom half to exclude everyone in net debt their combined wealth is equal to that of just 56 billionaires – this is still a huge and shocking disparity.
4. Oxfam talks about inequality but you pay your bosses’ fat-cat salaries – isn’t that hypocritical?
Oxfam is a confederation of 19 member organisations . The salary that each Oxfam pays to its own Executive Director differs – reflecting the size of the organisation as well as national market realities. In each case, the salary paid is entirely consistent with the individuals’ responsibility for running an organisation that is part of a major international humanitarian and development campaigning NGO.
5. Oxfam is anti-capitalism
This is not about ideology – it’s about common sense. A healthy market economy is key to tackling poverty and inequality but we don’t have that today. We have an extreme form of capitalism that only works for those at the top. That is why Oxfam is calling for governments to manage our economies so that they work for everyone and not just the fortunate few.
— Oxfam International (@Oxfam) January 16, 2017
6. Would the poor benefit if a few tycoons were less rich?
Yes – in a more human economy they would.
In a more human economy, the richer you are, the more tax you would pay – and this money would be spent on strengthening health care and education, infrastructure and investments in technology and medicines that can dramatically improve all our lives – and particularly the poorest.
In a more human economy, the tycoons would have a little less cash because they would have to pay their employees a decent wage – whether that’s the people who work in their factories, or the people who clean their homes.
In a more human economy, big business and the super-rich would not be able to accumulate such vast fortunes because they would not be able to use their money and connections to ensure the rules work in their favor no matter the cost to others.
7. Many commentators have highlighted how free market capitalism has lifted millions of people out of poverty – particularly in countries such as India and China. Isn’t capitalism working for the poor?
Describing free market capitalism as the magic medicine behind the decline in poverty over recent years is naïve and ignores the crucial role played by governments to improve health, education and jobs in these countries – which are key for lifting people out of poverty. For example, China introduced a minimum wage in 2004 and India has a hugely ambitious social security program that aims to guarantee at least 100 days of work a year to every household.
We celebrate the progress that has been made in lifting hundreds of millions of people out of poverty but we also recognize that there have been many missed opportunities along the way. If action had been taken to ensure that all sections of society benefited from economic growth, 700 million fewer people would have been living in poverty at the end of the last decade. The World Bank agrees – it has says we will not eliminate extreme poverty unless countries begin to close the gap between the richest and the rest by tackling inequality.
Oxfam is not the only one to recognize that a different approach is needed. An increasing number of voices from the World Bank, the International Monetary Fund, and the World Economic Forum, as well as many leading economists agree that we need a better way of managing our economies.
Oxfam’s vision for a human economy lays down some of the principles of an economy that works for everyone and not just a fortunate few.
Keep the questions coming! Follow us at @oxfamnz.