IEA reacts to Oxfam's latest report on inequality
“Oxfam have, again, come up with a gross misrepresentation of world poverty which fails to line up with everything else we know about human advancement and income improvements. Demonising capitalism may be fashionable in the affluent Western world but it ignores the millions of people who have risen out of poverty as a result of free markets.
“Eradicating absolute poverty is best done by ensuring the right institutional framework exists to enable economic growth. But instead, Oxfam is promoting a race to the bottom. Richer people are already highly taxed people – reducing their wealth beyond a certain point won’t lead to redistribution, it will destroy it to the benefit of no one. Higher minimum wages would also likely lead to disappearing jobs, harming the very people Oxfam intend to help.
“Oxfam also cite another distortionary statistic, which is that the top 1 per cent has a higher net wealth than the bottom half of the world’s population. But we know from the lifecycle of asset and debt accumulation that people do not tend to build up wealth until well into their working lives. Furthermore, many of the oldest people will live in the very rich countries, and are usually very asset-rich. It’s unsurprising that the global net wealth distribution is so skewed – demographics alone are vastly important.
“Oxfam – a development charity – seems obsessed with the rich rather than concerned with the poor. It should stick to its remit of poverty relief rather than obsessing over the wealthy. ”
Notes to editors:
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The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.
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