It’s a statistic that shocked the world, although perhaps not enough to elicit any action. Oxfam have revised last year’s horrifying stat about world inequality, and this year it’s almost ten times worse. It turns out people in India and China are much poorer than previously thought. And what that means, is that just eight solitary men control the same wealth as the world’s poorest 50%.
It doesn’t matter how shocking this figure becomes. Capitalists the world over lined up to tell us that actually, this is how things should be. Forbes described it as “the most miraculous economic event of our lifetime”, and accused Oxfam of cynically trying to undermine capitalism to avert the end of poverty and therefore their purpose as charity. Yes, really. Incredibly rich people make a lot of money which then trickles down to the rest of us, you see. Except it doesn’t. It’s a fiction. Even arch-capitalists at the IMF say so.
Maybe we won’t win over the ideologues. But over at the Independent, a spectacularly misguided article was telling us how Oxfam’s eight people statistic was misleading, and worse, that there really isn’t anything we can do about inequality anyway, so why bother. It claims, bizarrely that
if the implication is that it is high time all that dough was shared around, then it might not go that far. If the richest people in the world had all their assets appropriated by some agency of fairness, then it would yield a lump sum of a few hundred pounds when redistributed among the entire world’s population.
But let’s take a closer look at that for a second. A few hundred pounds doesn’t seem a lot, right? But there are several things wrong with this approach. Firstly, something the article both concedes and then strangely just ignores is that a “few hundred dollars” is a lot of money to any one of the world’s poorest 3 billion people. Eight countries in the world have an average household annual salary of less than $1000 per year. That’s not just the annual salary of one person, it’s the salary of an entire family. And that’s just an average; it takes into account the wealthiest in those countries as well. Imagine removing the top 1% of those countries and watching that average plummet. For an average family in the Democratic Republic of Congo, the few hundred pounds dismissed by the Independent could double an annual household income of just $421.86. And if the top 1% of earners shared their wealth equally among the world’s poorest 50%? They’d each get $14,233.33. Now that’s not to be sniffed at if your whole family makes less than $1000 a year.
The Independent article makes several other baffling irrelevant claims. First, they argue that a footballer earning $30m a year flying to China would dramatically change inequality in that country, and that the same person leaving again would “automatically deliver a dramatic-looking improvement in the economic equality of Chinese society”. But this makes no sense for several reasons. Firstly, Oxfam is talking about global inequality; unless Bill Gates et al. are planning on blasting off into space and taking their money with them, the Chinese football analogy is irrelevant. There is nowhere our footballer can hide in the world where he won’t be contributing to inequality.
Secondly, while $30m shared among every poor Chinese person might not make much of a difference individually, this is the kind of warped thinking that leaves people living on less than $1 a day stuck in destitution. It’s why relatively wealthy people in the West feel powerful to change global poverty, so just don’t both donating anything at all. Of course $30m can’t make a different to every poor person in the world’s life. But a $30m project to provide clean water to some Congolese villages? That could make an enormous difference to the lives of many people. As we’ve seen, less than $500 would double the household income of an average Congolese family.
Thirdly, $30m is actually nothing like the kind of wealth we’re talking about. Can you imagine if Oxfam told us the world’s 8 richest people each controlled $30m? That kind of inequality, while still maybe unfair in an idealised egalitarian society, is hardly enough to prompt some kind of moral panic. But even, in our amazing hypothetical world, if we generously left our eight billionaires $100m dollars each, that would still leave us with a pot worth $461,400,000,000. Just this, from the eight wealthiest, divided up among the poorest 3 billion would give our $421.86-a-year family in the Congo $153.80… each!
Of course, we don’t live in a communist utopia. Nobody has the power to simply redistribute the world’s wealth by waving a magic wand. But that doesn’t mean, as the Independent bluntly puts it, that “very little can be done about the statistics around the mega-rich”. The rich avoid tax by moving, ‘so what you gonna do?’ the Independent shrugs.
Well this is what we should do: give more. Raise taxes. No, not just income tax, but VAT on luxury items, capital gains tax, taxes on land ownership and property, and business rates. It may not raise $461,400,000,000 overnight, but some redistribution is better than none, unless you live in the bizarre all-or-nothing world of Independent economics. Why not crack down on tax havens, as many have suggested? And why not use these revenues to actually invest in the poor, and allow them to build businesses, educate their children, and grow their livelihoods? That sounds a lot more sensible than ploughing government revenue into business and fossil fuel subsidies or tax breaks for the wealthiest? And it’s not just the super-rich that can give. Just 1% of the average UK salary is $328.57. Think what that Congolese family could do with £22 of your money a month. Is that really money you can’t afford?
And don’t just give more, take less. Far more money leaves Africa than enters it. . It’s the businesses we buy from. It’s our political leaders, in our wealthy countries, that could change that. Make sure that they do.
Nobody is expecting global inequality to be reversed overnight. And nobody is expecting a communist utopia to emerge tomorrow – or ever, in fact. But merely by the fact that global inequality is worse than it’s ever been, it’s perfectly possible that it can go back to what it was, or even better. A shrug of ‘this is how it is’ is ridiculous when it’s certainly not how it was. So instead of abandoning all hope of improvement because we can’t just throw the money into the air and let if fall equally, doesn’t mean do nothing. Us rich folk, in our rich societies, in the 1% or just below it can do something. Give – and encourage others to as well. Demand your government takes taxes from you, and spends them on the people who have so much less than you do. There are three billion people at the bottom of the ladder who so little of your money could mean a year’s worth of wealth to.
Don’t be a naysayer who does nothing.