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What's wrong with being rich?

24 January 2018

Our new inequality report raises questions. Some people think we are 'anti-wealth' and wonder why we blame the billionaires. Here are our answers to some of the most common questions we received.

Poverty in the world is decreasing and people are living longer. Why should we care if a few people become very rich at the same time?

It is absolutely true, and amazing, that extreme poverty has been halved in the last 25 years. But at the same time, inequality has increased in most countries. There is evidence that inequality has negative social, political and economic effects. It also stands in the way of the fight against poverty. If inequality had decreased over the last decade, hundreds of millions more people could have been lifted out of poverty.

There are also people living above the extreme poverty line, working long days in demanding and risky jobs, but not earning enough to have a decent life.

Oxfam is a charity, why are you talking politics?

We exist for one reason: we want to see an end to extreme poverty. But to achieve that goal, we need to tackle the big, structural problems that cause poverty. For example, we are working on major challenges such as economic inequality, gender discrimination and climate change. And these problems are fundamentally about power.

We look at who makes the big decisions, whose interests they take into account and whose voices they exclude. We also look at who has the power to make things right, which very often means calling on governments to make better decisions.

Why do you criticize businesses all the time? Are you against entrepreneurship?

No, we are not. A large part of our work is about supporting and developing businesses. We have partnerships with several companies, both large and small.

What we are against is the business model that makes profits from paying poor wages, endangering its workers, destroying the planet or avoiding paying taxes. We are happy to be considered against this type of entrepreneurship.

Last year you said that 8 billionaires owned as much as half the world's population. Now you say it's 42. So it sounds like inequality is getting better, not worse?

We base those statistics on the Forbes Rich List and the Credit Suisse Global Wealth Report. Credit Suisse is the most reliable source of data on how the global economy is divided up, including information on the value of stocks and funds, real estate, livestock, etc. Of course, it's very complicated to calculate, which means they update and improve their figures periodically. Therefore, this year's figures are unfortunately not directly comparable to last year's.

To see how inequality changes over time, we need to recalculate previous years' statistics using the latest figures. When we did this, we found that 61 people owned as much as half the world's population in 2016. Those 61 are now 42, showing that inequality has increased.

What matters is not whether there are 8 or 42 or 100 people, but that a group of billionaires - mostly men - are hysterically rich, while 3.7 billion people have less than 1% of the world's wealth to share.

It sounds like Oxfam thinks that the economy can't grow, that you just have to share what you have more equally. But this is not true. If the economy grows, there will be more for everyone. And billionaires are the ones who really create the profits that lead to economic growth, so why shouldn't they benefit?

Of course, there are benefits to economic growth, but as it stands, those benefits go mainly to the richest. 82% of wealth growth went to the richest one percent last year. We believe that it must go much more to the poorest.

Economic growth is not created by a few entrepreneurs, but by the labor of millions of ordinary people who are all entitled to a share of that growth.

The IMF has shown that a good way to tackle inequality is to collect higher taxes from the rich and use that money for social services that everyone in society can access, which does not have a negative effect on economic growth.