“Inequality kills,” says the aid organization Oxfam. She equates extreme wealth with economic violence and accuses the West of vaccination apartheid. The most dangerous thing about it: The polemics lead to the wrong recipes for fighting poverty.
This is how one imagines the cliché of wealth to be found in St. Moritz in winter. Oxfam wants a world where billionaires’ children only read history books.
If the World Economic Forum (WEF) didn’t exist, it would have to be invented. At least that’s what the large non-governmental organization Oxfam might think, which for several years has been targeting the richest at the beginning of the economic meeting, which will take place virtually from Monday, and blaming inequality for all the misery in the world. In order to be noticed, she has to provoke with ever sharper theses. This time the report is simply called “Inequality kills”. Because Oxfam gets a lot of attention with it, four core statements are briefly classified.
1. The ten richest own more wealth than the bottom 40 percent of the world’s population.
According to Forbes magazine, the top 10 wealthiest were worth $1.5 trillion at the end of November, while 3.1 billion people together had just $244 billion. However, the latter is hardly surprising because, according to the World Bank, about as many people have to get by on less than 5.50 dollars a day and can therefore hardly save anything. So the problem is not the billionaires, but that so many people have so little at their disposal.
The solution for Oxfam is to tax the rich very heavily. There are even raves about a world where children would only read history books written by billionaires.
But assuming that the 1.5 trillion were taken away from the ten richest people and distributed to the poorer 40 percent of the people: Everyone would then receive a one-time payment of almost 500 dollars – that would be a temporary bonus, but ultimately nothing would change in the lot of these people. This requires something else: the freedom to exchange and secure property rights. In any case, this has led to a gigantic increase in prosperity in western societies of 3000 percent within 200 years – from real 3 dollars to 100 dollars a day.
2. There is a new billionaire every 26 hours, while inequality contributes to the deaths of at least 21,000 people a day.
This insinuates that the wealth of a few is the cause of the poverty and even the death of many. During the pandemic, companies like Amazon would certainly rely on strategies that would have led to 40 percent of Americans living in precarious conditions, according to one accusation.
However, Amazon pays the poorly qualified comparatively well and recently has the entry-level wage in the USA to $18 an hour elevated. Thanks to the online retailer, supplies were secured during the crisis when many shops were closed. Many millions of consumers around the world benefit greatly from Amazon’s business model, as is the case with Tesla or Microsoft, for example. This, in turn, makes the owners of these companies rich. Oxfam, on the other hand, insists on crude zero-sum rhetoric: What the rich gain comes at the expense of the poor, so all you have to do is take enough money from the rich — and put them in the history books.
3. Instead of vaccinating billions of people in developing countries, we have created vaccine billionaires.
Oxfam speaks of a vaccine apartheid: a few powerful Western companies would monopolize the production of vaccines in the pandemic. This is “economic violence” with deadly consequences. The recipe for this is obvious to the non-governmental organization: patent rights for Covid-19 vaccinations and treatments should be revoked so that developing countries can also produce them.
Companies like Moderna and Pfizer/Biontech are quite willing to license, but the production requires a lot of know-how, various raw materials and preliminary products are scarce. The start of a production therefore takes time. After all, both companies that developed the new mRNA vaccine recently announced that they also want to produce in Africa: Pfizer/Biontech wants to start building a production facility in Rwanda in mid-2022. Moderna has announced plans to invest $500 million in a facility, but where in Africa is yet to be seen.
So things are in flux, which is why the accusation of vaccination apartheid, which also has a racist connotation, is cheap. Without the willingness to take risks on the part of entrepreneurs and investors in the formerly small biotech companies, the mRNA vaccines would not exist at all. Honesty also means that there are sometimes problems with distribution in poorer countries, as is shown in the case of South Africa. There, too, there are many vaccine skeptics, and in general the cold chains that are necessary for mRNA vaccines are more difficult to maintain in poorer countries.
If you want to denounce something, then the fact that the industrialized countries are not keeping their funding commitments for the international vaccination campaign Covax. Covax actually wanted to have given around 2 billion vaccinations to developing and emerging countries by the end of 2021, but at the moment they are only halfway – with a recent strong upward trend. Incidentally, India is also responsible for the delay, which had temporarily banned the export of Covid 19 drugs.
4. The economic violence is the result of 40 years of neoliberalism in which rich and corrupt elites have hijacked economic policy.
the neoliberalism, as its namesake understood it in the 1930s, is aimed specifically at companies with significant market power and stands for effective (but not encroaching) competition policy. Ordoliberals like the economist Walter Eucken have therefore described the competition as an “ingenious instrument of disempowerment”.
The history of the last 40 years is the opposite of impoverishment under the thumb of “neoliberalism”: According to the World Bank, extreme poverty (less than $1.90 a day) affected 43 percent of the world’s population in 1977, in 2017 (and thus before the most recent crisis). it less than one in ten. In China, meanwhile, per capita income has multiplied from $300 to $7,300 per year.
are in crisis 163 million people fell back into poverty, Oxfam quotes a World Bank statistic. Previously, 3.2 billion people fell into this category on less than $5.50 a day. However, this step backwards underscores the importance of quickly overcoming the protectionism that ramped up during the crisis so that the fight against poverty can continue.
Oxfam says the market should not prevail over people’s right to life. A false contrast is constructed here. Without open markets and exchanges, the decline in poverty would have been unthinkable. Freedom (which is lacking in authoritarian regimes) and open markets are the crucial ingredients for economic advancement.
Instead, the aid organization is building up the billionaires as straw men and women who are supposed to be at the root of the problem. This goes so far that taxation is seen as legitimate simply because it reduces the number of billionaires.
This is dangerous. The focus should not be on the 2755 billionaires worldwide, but on the billions of people who live in poor or poor conditions. This has nothing to do with Jeff Bezos or Elon Musk, but has a lot to do with wrong policies that deny the poor freedom, market access and property rights. Oxfam’s recommendation of higher taxes and more government is a bogus solution. The annual number acrobatics at the beginning of the WEF is therefore a ritual that has worn out.