Monday, January 21, 2013

Oxfam: Confusing Inequality with Poverty

Oxfam makes the claim the rise in wealth by some billionaires is not only making the poorest, even poorer, and by inference they make the claim that the cause of poverty is the lack of resources:

An explosion in extreme wealth is exacerbating inequality and hindering the world's ability to tackle poverty, Oxfam warned today in a briefing published ahead of the World Economic Forum in Davos next week.

The $240 billion (£150bn) net income in 2012 of the richest 100 billionaires would be enough to make extreme poverty history four times over, according to 'The cost of inequality: how wealth and income extremes hurt us all'. The agency is calling on world leaders to curb today's income extremes and commit to reducing inequality to at least 1990 levels.

The richest one per cent has increased its income by 60 per cent in the last 20 years with the financial crisis accelerating rather than slowing the process.

Oxfam warned that extreme wealth is economically inefficient, politically corrosive, socially divisive and environmentally destructive.
One wonders if Ms. Stocking, the CEO of Oxfam, is referring to absolute versus relative poverty. Absolute poverty, in fact, has been falling dramatically (Economist):
The past four years have seen the worst economic crisis since the 1930s and the biggest food-price increases since the 1970s. That must surely have swollen the ranks of the poor.

Wrong. The best estimates for global poverty come from the World Bank's Development Research Group, which has just updated from 2005 its figures for those living in absolute poverty (not be confused with the relative measure commonly used in rich countries). The new estimates show that in 2008, the first year of the finance-and-food crisis, both the number and share of the population living on less than $1.25 a day (at 2005 prices, the most commonly accepted poverty line) was falling in every part of the world. This was the first instance of declines across the board since the bank started collecting the figures in 1981
It's sadly predictable that Ms Stocking's solution for this manufactured crisis is to bring others down than to seeking to bring the poor up. Instead of speaking truth to the power that exists in the often despotic countries Oxfam attempts to "help" - denouncing the autocratic policies that benefit the local elite, Ms. Stocking snipes at the low hanging fruit and the politics of greed and envy in sniping at the economic success of others.

Certainly, some of these billionaires have built their fortunes through the taking of wealth - but the large majority have not, and indeed have created many of the technologies, products and services that have allowed the hundreds of millions to emerge from absolute poverty in the last few decades. Ms. Stocking makes no distinction as a result of craven politics or sheer ignorance (Reason).

It is because of attitudes and beliefs of leaders like her that the poor are often worse off despite the billions spent by organizations like hers - and a reminder that poverty truly is an industry - and if Ms Stocking is looking for those who benefit most from keeping others poor, she should perhaps "invest" in a mirror.

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