Some of the world’s top institutes favouring free market have got together to declare that well-known UK-based NGO Oxfam’s latest report “An Economy for the 99%”, which claims that eight richest men in the world, between them, have the same amount of wealth as the bottom 50% of the world’s population, is “misleading”.
Particularly objecting to the methodology adopted by Oxfam to calculate poverty, these institutes say that debt can be found everywhere in Oxfam’s wealth deciles, and if one eradicates all the debt, most of the people in those statistics would “magically become a lot richer.”
The institutes which have taken objection to the Oxfam report include Cato, a public policy research organization, claimed to be dedicated to the principle of “individual liberty, limited government, free markets and peace”, and the Institute of Economic Affairs (IEA), which itself to be “UK’s original free-market think-tank”.
The reactions come following an alleged media campaign citing Oxfam’s annual "shocking" statistic on wealth, which says, this year, "the richest 62 people have the same wealth as poorest 3.6 bn."
Significantly, Oxfam, which has donated to many NGOs in India, calculates that 500 people world over will hand over $2.1 trillion to their heirs – a sum larger than the GDP of India, a country of 1.3 billion people, pointing towards the type of equalities that exist in India.
Pointing towards inequalities in India, the NGO’s report gives the example of “the CEO of India’s top information firm, who earns 416 times the salary of a typical employee in his company”, even as pointing out, India’s richest 10% of the population” has seen its “share of income increase by more than 15%, while the poorest 10% have seen their share of income fall by more than 15%.”
Market analysts claim, Oxfam’s global poverty estimates simply go wrong, because they are a net concept, that is, it’s assets minus debts. Based on this calculation, by its very definition, there would be more poor people in either the US or Europe than there are in China.
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| Wealth levels of different sections of population allegedly based on Oxfam methodology |
What Oxfam is measuring here, after all, is saved and unspent money, these analysts say, adding, when Oxfam looks at net worth, it adds up your assets, and then subtracts your liabilities. And when your liabilities are bigger than your assets, that means, you have negative net worth.
If one uses this methodology, it is pointed out, 10 per cent of the world’s poorest reside in America and around 20 per cent of the world’s poorest reside in Europe, but virtually none of the world’s poorest live in China.
By this standard, it is suggested, a young investment banker with student debts is deemed one of the poorest persons in the world. However, a rural farmer in India with minimal savings is considered richer than the young investment banker.
Based on the Oxfam methodology, it is noted, a person with $75,000 and no debt is in the top 10% of the world’s wealth distribution, while the person with the college degree is in the bottom 10%.
“And yet there’s a right answer to the question: You’re much better off with $75,000 in debt and a college degree than you are with no debt at all”, comments the Cato analyst, adding, one should remember, everyone in US borrows to buy a car to drive to work, or to get a college degree, or give one’s family a safe and secure place to live.
“Car loans, student loans, mortgages, credit cards – debt is the grease that lubricates the wheels of capitalism, and it’s everywhere. And it’s not always a bad thing”, it concludes. Counterview's sought a reaction from Oxfam via email, but there was no reply.
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Click objections to Oxfam HERE, HERE and HERE. For Oxfam report, click HERE
If one uses this methodology, it is pointed out, 10 per cent of the world’s poorest reside in America and around 20 per cent of the world’s poorest reside in Europe, but virtually none of the world’s poorest live in China.
By this standard, it is suggested, a young investment banker with student debts is deemed one of the poorest persons in the world. However, a rural farmer in India with minimal savings is considered richer than the young investment banker.
Based on the Oxfam methodology, it is noted, a person with $75,000 and no debt is in the top 10% of the world’s wealth distribution, while the person with the college degree is in the bottom 10%.
“And yet there’s a right answer to the question: You’re much better off with $75,000 in debt and a college degree than you are with no debt at all”, comments the Cato analyst, adding, one should remember, everyone in US borrows to buy a car to drive to work, or to get a college degree, or give one’s family a safe and secure place to live.
“Car loans, student loans, mortgages, credit cards – debt is the grease that lubricates the wheels of capitalism, and it’s everywhere. And it’s not always a bad thing”, it concludes. Counterview's sought a reaction from Oxfam via email, but there was no reply.
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Click objections to Oxfam HERE, HERE and HERE. For Oxfam report, click HERE
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