Why The Internet Loves And Hates Oxfam’s Global Inequality Report

January 24, 2018

President Trump will join other world leaders later this week in Davos, Switzerland, for the World Economic Forum. It is a decades-old event that is roundly mocked for hosting the world’s richest and most powerful people in fancy chalets while they talk about the problems that affect the world’s poor.

It may best be summed up by the sign at this year’s event that directs people toward a refugee exhibit and the location of private car pickups.

Oxfam has seized on this disconnect by publishing an annual report on global inequality to coincide with the meeting. It hopes to pressure the attendees to take actions that will create a global economy that benefits everyone.

The report has managed to stir up a bit of controversy with each release since it was launched in 2013. This edition is no different.

Last year, 82 percent of the wealth created went to the top 1 percent, says the report.

People took to Twitter and social media to air their support and grievances. Some say the report is an attempt to undermine capitalism, while others see it as little more than a shiny headline that does not help fix the problem of global inequality. For others, the report is mired with data problems, although some say that Oxfam fixed some of the mistakes in its prior editions.

Here are some of the top conversations around this year’s report, from both the fans and critics.

The good news is buried

If you read other news stories about the report, you may not know about one of its most important findings. Buried in the text is a significant data change that reveals the bottom 50 percent are doing better than previously thought.

Last year, the report said that just eight people had the same amount of wealth as the poorest half of humanity. That turned out to be wrong. It is actually 61 people.

Here’s why.

The new data for this year’s report, provided by Credit Suisse, uncovered $8 trillion in wealth that was previously not counted. More than $1 trillion belongs to the bottom 50 percent. It is a significant finding given that last year’s report said the group had $409 billion in total wealth. Most of the discovered wealth came from India, China and Russia — countries with large populations and economies where it is often hard to get high quality data.

The slight adjustment is great news, argues journalist Felix Salmon. Poverty and inequality are still significant problems, but the world’s poorest people are slightly better off than we realized.

“That’s a huge increase. Divided between 3.7 billion people, average net wealth for the bottom 50 percent is no longer $110 per person, as we thought last year, but rather $427 per person. That’s a really big difference,” he wrote in Cause and Effect.

But the news is not at the top of Oxfam’s report or press release. Rather it is included at the end as a sort of correction for last year’s edition. Fortunately, some people like Salmon caught it.

“Let’s pause for a minute, then,” he concludes, “to celebrate the fact that the poorer half of the planet turns out to be not nearly as poor as we thought it was.”

Anti-capitalist agenda

Some critics see the report as an attempt to prove that capitalism has failed and a new economic model is needed. In a series of responses timed to the release of the report, a London-based think tank, the Institute for Economic Affairs (IEA), argued this point.

“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,” Mark Littlewood, director general at IEA, says in a press release. “Demonizing 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.”

Littlewood used a pie metaphor to illustrate his disagreement with Oxfam in an op-ed for City A.M. Oxfam, he says, wants to cut the pie into equal slices for everyone to share. Littlewood wants the overall size of the pie to grow. Not everyone will have an equal amount, he says, but a bigger pie means more for everyone.

The IEA says that it is not possible to deal with both reducing inequality and eliminating poverty. It released a video the same day as the Oxfam report that argues “the best way to help the poor is to introduce policies that encourage free markets.” As evidence, it points to the fact that the global rate of extreme poverty has been halved since 1990. To them, the achievement is a capitalism success story.

Oxfam partially agrees.

“We’re not anti-markets and anti-wealth but we are the against the destruction of markets that allow poor people to lift themselves from poverty through hard work,” Paul O’Brien, Oxfam’s vice president for policy and advocacy, explains to NPR.

Flimsy path forward

Finally, there are the people who generally agree with Oxfam and the report but are concerned with its implications. Researcher Max Roser tweeted that the solution to global inequality is not as simple as Oxfam may lead people to believe — transferring the wealth from the 1 percent to the bottom 50 percent.

It is not an explicit argument made by Oxfam, but Roser says that it is suggested by the way the data is presented to the public. He takes issues with facts like this that appear in the report’s press release:

“It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.”

Meanwhile, others do not think the report can succeed in doing much more than garnering a few headlines. Researcher Alice Evans sent out a series of tweets saying that there is little evidence to show that publishing data will lead to reforms in economic policy that will benefit the poor, which is what Oxfam hopes to do.

Tom Murphy is a journalist focused on foreign aid and development. His work has appeared in Foreign Policy, GlobalPost, Humanosphere and the Guardian. Tweet him @viewfromthecave.

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