Montreal, January 18, 2017 – For a fourth year in a row, Oxfam is denouncing the concentration of wealth among the most fortunate 1% on the planet. The problem is that its report, An Economy for the 99%, is once again as dishonest as it is mistaken.
To be precise, the report’s statement that “eight men own the same wealth as the poorest half of the world” is based on accurate data, but on misleading calculations. To obtain these results, the authors of the report subtract debts from assets, like mortgages signed for house purchases. This measure of wealth is unreliable, and render the report’s conclusions meaningless.
“Based on Oxfam’s analysis, a graduate of a major university who, like many of the future ‘rich,’ is in debt, is poorer than a debt-free farmer in an impoverished country,” notes Youri Chassin, Research Director at the MEI, adding that this conception of poverty and wealth is “completely surreal.” According to this same flawed analysis, the United States has a greater share of the world’s poorest people than China does!
In order to belong to the wealthiest 1% in the world, all that is needed is a net income of around $42,000 (according to Care International). In Quebec, a person with a gross income of $55,000 would therefore be a part of this select club. “Even if the methodology used by Oxfam made sense, there is no explanation of why, for example, it is bad to earn $55,000 a year, or how it harms the planet’s poorest,” observes Mr. Chassin.
Oxfam’s policy recommendations focus so much on the rich and on the accumulation of wealth that they forget the plight of the poor. Yet the great battle against poverty is largely being won. Market economics is leading to increased prosperity in developing countries at an unprecedented pace. The World Bank announced in 2015 that the global poverty rate was set to fall below 10% for the first time in the history of humanity.
“If Oxfam were really concerned about the poor, it would celebrate the liberalization of markets and of global capitalism, and denounce impediments to their expansion in developing countries. It decided instead to disparage their benefits and encourage envy rather than economic well-being. By attacking the rich, Oxfam is once again forgetting the poor,” concludes Mr. Chassin.
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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.
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