In 1980, 40 per cent of the world’s population lived in abject poverty, surviving on less than $2 a day. Today, only 8 per cent do. The past 40 years have seen the most dramatic reduction in poverty in the history of mankind. Wild cheering and cries of “more of the same!” are what you might expect from anti-poverty campaigners.
You would expect wrong. Oxfam is a prominent anti-poverty charity. In late January every year, it calls for less of the same. It denounces the neoliberal or Washington Consensus economic model that has prevailed since the early 1980s.
The coincidence of neoliberalism and rapidly declining poverty is not a mere coincidence. Consider China, the most dramatic example of economic progress and poverty reduction. It was achieved by a move towards capitalism within China, combined with its opening up to international trade.
Nevertheless, Oxfam opposes neoliberalism and the globalisation that it promotes. It may have lifted billions from poverty, but it has also had an effect that Oxfam deems so terrible as to outweigh this gain. It has allowed some people to become multibillionaires. Oxfam issues its denunciation in late January every year because that is when some rich people assemble to chat in Davos.
To see the perversity of Oxfam’s complaint, suppose I told you that I know a magic spell that will all but eliminate poverty over a 50-year period. You ask if it will affect the incomes of anyone else. Yes, I answer, it will also increase the number of billionaires.
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You should like my spell even more, since even more people benefit from it. But, given its objection to neoliberalism, Oxfam would only see this as a defect in my spell. Don’t cast it! Don’t lift billions from poverty!
How does it arrive at this strange position? The answer is that Oxfam objects to inequality. Its Davos-dated report does not complain about worsening living conditions of the world’s poor. How could it when the incomes of the poor are increasing so rapidly? Instead, it complains about a small number of billionaires — 42 this year — having the same combined wealth as the poorest half of the world’s population.
By Oxfam’s reckoning, the world would be improved if the wealth of these 42 billionaires was simply destroyed. The poor would be no better off but the distribution of wealth would be more to the taste of those who work at Oxfam.
By prioritising statistical ratios, Oxfam has become the enemy of real flesh-and-blood people — especially the poor, who have benefited so much from the economic policies Oxfam opposes.
Jamie Whyte is research director of the Institute of Economic Affairs