Oxfam, a rich charity based in London, must surely qualify as the biggest hypocrite on Earth and, worse, offers only policies that will harm the poor.
Every year, just before the Davos meeting of wealthy leaders, Oxfam produces a report on “inequality” in the world. It is dishonest nonsense. Oxfam, whose worthy aim is to reduce hunger, attacks capitalism, which has done just that with spectacular success, and supports socialism, which has produced starvation. An Oxfam spokesperson in South Africa declared capitalism a “crime against humanity”.
If we are going to analyse inequality seriously, surely the obvious place to start is, by all evidence, the most unequal society on Earth – the socialist republic of North Korea. (Communism is the purist version of socialism). Here a ruling socialist dynasty, now led by Kim Jong-un, lives in absolute luxury, splendour, privilege and power while the people starve. The Cubans, Che Guevara and Raul Castro, thought North Korea represented perfect socialism.
Why does Oxfam never mention North Korea in its lamentations on inequality or ever give her Gini Coefficient?
Oxfam gives a narrow measure of inequality, namely, declared income. It ignores all the wealth, vitally important to the poor, in undeclared income, informal capital, government grants and services, and a vast variety of cheap capitalist goods. By important measures of inequality, it continues to decline under capitalism.
Formal income inequality doesn’t matter. I don’t care that some rich person has a formal income a thousand times greater than mine. I only care that I have got enough to eat and that some poor people haven’t. It is poverty that matters; not income inequality. One inequality that does matter is the inequality between those who do have a job, any job, and those who don’t. Oxfam wants to increase this inequality by ordering minimum wages, where the rich elite shut poor people out of the economy by forbidding poor employers from offering the only wages they can afford and poor employees from accepting wages they would prefer to earn rather than nothing. It is morally better, Oxfam suggests, for poor people to starve to death than earn a wage rich people don’t approve of.
By most accounts, the richest man who ever lived was Mansa Musa, a 14th Century African who ruled in Mali. His wealth lay in huge amounts of gold. By contrast, the richest man today (not as rich as Musa) is usually said to be Bill Gates, a capitalist whose wealth was won by expanding and making cheap the wonderful possibilities of information technology, so benefitting poor people in a way unprecedented in history.
It is the same with most of today’s capitalist billionaires disparaged by Oxfam. They became rich by helping lift billions of people out of poverty by providing them with wonderful, cheap goods and services. In any black township in South Africa today you will find poor people with far better communications (cellphones) than was ever known to Julius Caesar, thanks to IT billionaires. Capitalist shops provide poor black people in South Africa with a range of foodstuffs unknown to Mansa Musa. (Some big capitalist retailers are criticised for providing cheap food to the poor, so putting little shopkeepers at a disadvantage.)
Under capitalism, world food crops keep growing and growing, and food gets cheaper and cheaper. Socialism produces famine. When Lenin took over Russia in 1917, he established the Union of Soviet Socialist Republics and enforced socialist agriculture. A famine followed. Panicking, he returned some capitalism to farming in his New Economic Policy in 1922. Crops improved. Then Stalin imposed even more radical socialism. This produced the famine of the 1930s that killed millions of people. In China, the Communist Mao Tse-Tung produced the worst famine in history, killing about 50 million people. In Ethiopia, with Cuban help, Communists under Mengistu Haile Marian seized power and produced the famine of 1984.
Capitalist USA has just produced another record maize crop.The greatest fallacy in economics is that wealth is finite (“zero sum”) and depends on limited resources. If one man gets richer, another must get poorer. This is nonsense. Wealth can expand indefinitely without any increase in resources at all. In the last ten thousand years the average human has become 20 times wealthier and the population has increased 500-fold without adding one atom of iron or one square metre of Earth’s surface. Capitalism increases wealth, as Karl Marx so eloquently explained.
What about Oxfam itself? There is considerable secrecy here but the latest information I have is that in 2012/13 the CEO of Oxfam earned £119,560 a year. This is wealth beyond the imagination of the poorest people on Earth. It is over R2 million a year, 14 times my income, 60 times that of most Africans and 400 times that of the poor Bangladesh textile workers Oxfam likes to cite. Asked to justify this enormous inequality, Oxfam compares its CEO not with poor people but with other very rich people. By this sophistry, almost any super-rich person could say, “Bill Gates earns more than me”.
Does Oxfam think that the Bangladesh workers are so poor because its CEO is so rich? This would be an absurd argument. But it seems to be the argument it uses against other rich people, especially capitalists providing goods and services to the poor.
1. Che Guevara, then a Cuban government minister, visited North Korea in 1960 and proclaimed it a model for Cuba to follow. In 1968, Raúl Castro stated their views were “completely identical on everything”. Cuban leader Fidel Castro visited in 1986.
Cumings, Bruce (1997). Korea’s Place in the Sun: A Modern History. New York: W Norton & Company. p. 394.
Ramani, Samuel (7 June 2016). “The North Korea-Cuba Connection”. The Diplomat.
Young, Benjamin R (28 August 2016). “Revolutionary Solidarity: Castro’s cozy relationship with North Korea”. NK News.
2. Mansa Musa lived approximately 1280 to 1337 AD. His estimated wealth in today’s money is $400 billion. Below is Musa depicted holding a gold coin from the 1375 Catalan Atlas.
3. Communist famines listed in “The Black Book of Communism” by Stephane Courtois et al.
4. In the Communist Manifesto, Marx gives a vivid account of the spectacular productive energy of capitalism.
5. In a statement, Oxfam said Lady Stocking was due to paid £119,560 in 2012/13 - which means that her pay increased by 19 per cent from £100,008 in 2009/10 “which is in the lower quartile of what other large charities paid for their chief executives”. Daily Telegraph. Aug 6, 2013.
Author Andrew Kenny is a professional engineer and a freelance journalist. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.