What I don’t see in this report is the role of women’s education, women’s property rights, women’s rights of inheritance, women’s human rights – all of that – in reducing poverty. They are mentioned as important things that need to be done, but they are not given the central role they deserve. Liberalization, global opening and female empowerment are where we know poverty reduction succeeds.
Harvard economics professor Greg Mankiw said, “I have noticed over the years that headline writers often try to make stories more sensational than they really are. This one at Yahoo News and Time, however, got me chuckling. The story tells us:
The gap between the super-rich and the poorest half of the global population is starker than previously
thought, with just eight men, including Bill Gates and Michael Bloomberg, owning as much wealth as 3.6 billion people.
That fact is not really surprising, as many people live hand-to-mouth with hardly any accumulated wealth at all. But the headline makes a stronger claim:
Half of the World’s Wealth Is In the Hands of Just Eight Men
Of course, this conclusion does not follow from the fact reported in the story and is not even close to being true.”
Inequality Since 1300, there have been two periods – only two – when income inequality in Europe significantly narrowed. The first was the Black Death, when the nobility’s wealth dropped by some 15-20%. The second was 1915-45, when war was the cause of devastation. In other words, the only historically recorded means of significantly narrowing the income gap is to destroy. (I can dig out a scholarly paper on exactly this, if it is needed.)
“As growth benefits the richest, the rest of society – especially the poorest – suffers.”
This is simply not true. Some people can become richer through hard work, good ideas or a lucky stumble over a nugget of gold. None of those require suffering by anyone else. To posit that all wealth is created by causing suffering among others is deliberately false.
Bill Gates & Co created a products that billions of people use every day. If it was not something useful, affordable and better than not having that product, he wouldn’t have made any money at all. It isn’t difficult to argue that what he created improved the lives of billions of people (freeing up time, reducing mistakes, whatever).
Was he overpaid? Who knows? How would we measure the benefits accruing to every user of his products, and what would be the responsible compensation to which he would be entitled in a more just society? Should we deduct the vast sums he has given to charity?
Apple minimizes material and labor to maximize its profits
Huh? Of course they do! While I am dumbfounded at the notion that minimizing material inputs is somehow evil, paying American wages and taxes to produce iPhones would make them prohibitively expensive for the mass market. Is the suggestion that such products should only be available to the uber-rich?
The slaughter of the straw men
False Assumption # 1: The market is always right …Aside from Ayn Rand, I can’t think of anyone who would subscribe to this. Straw man.
False Assumption #2: Corporations must maximize profits … at all costsEven the Mafia knows that turf wars are bad for business; they have no time for this straw man.
False Assumption # 4: GDP growth should be the overriding goal of policy making.Ask Janet Yellen what her priorities are, and she’ll say “a sound dollar – i.e., low inflation – and relatively full employment.” No country in the world would accept the notion that GDP growth is the most important goal.
False Assumption #6: The planet provides inexhaustible resources.I can’t even begin to think anyone, even climate change deniers, believe this.
The Oxfam report isn't [all] wrong, but it is very badly balanced
There are some important nuggets in the report, such as the vast unearned wealth that is passed on from generation to generation. While you are right to want to pass on some of your wealth to your family, so that their future is easier or more secure, it is very easy to argue for a cap on inheritance. Such a limitation might encourage people to give more money away, either before or after death.
The incomes of the poorest people on earth rise very slowly, but that masks the historic increase in standards of living, and the historic decline in absolute poverty, that has occurred over the past 30-40 years. By linking income inequality to poverty, this report suggests that the hundreds of millions of people brought out of poverty in China, through liberalization and opening up, do not offer an example of what other countries might do.
The section on workers’ bargaining power misses the point. Between 1990 and 2015, China, Russia, India and East Europe joined the international pool of labor. Prior to that, their workers did not compete in the global market place. Adding those billions to the global labor force must, by simple logic, change the relative value of labor vis-à-vis capital. Increasing supply of labor reduces the value of each worker. Giving those workers a chance to compete in a modern economy, instead of closed markets or agricultural labor, increases their standards of living. No, they don’t have the same advantages white, male, Protestant men had in America in the 1950s. That advantage was based on heavy discrimination that artificially reduced the labor pool. It wasn’t fair then, and it shouldn’t be an ideal state to aspire to today.