According to Oxfam, the five richest people in the world were together worth $405 billion in 2020. Today, their fortune stands at $869 billion. Over the same period, billionaires around the world became $3.3 trillion richer. The 5 billion “poorest” people in the world have lost 20 billion dollars in wealth. So much for Oxfam.
Of course, the NGO selected the data that corresponds to its thesis. The year 2020 was therefore deliberately chosen as the comparison year, because global stock markets experienced a massive collapse at that time due to Covid-19. Which makes the subsequent gains of the super-rich all the higher in comparison. And as the number of people living in extreme poverty fell last year (which does not correspond to its thesis), Oxfam suddenly used another data, that of the 5 billion “poorest” . The organization suggests a correlation between this surplus wealth and this growing poverty. Which makes sense to the significant number of people who subscribe to the zero-sum bias.
The communist poet Bertolt Brecht summed up this misconception in his poem Alphabet :
“And the poor man said palely/If I weren’t poor, you wouldn’t be rich.”
But these beliefs are false. According to the World Bank, 28% of the world’s population lived in extreme poverty in 2000, compared to 8.5% today. Over the same period, the number of billionaires increased from 470 to 2,640, and only a small part of this increase is due to inflation.
Even Sweden
The countries where poverty has fallen the most are also those where the number of billionaires has increased the most. In 1981, 88% of Chinese people lived in extreme poverty: today, there are less than 1%. During the same period, the number of Chinese billionaires exploded more than anywhere else in the world, going from 0 to 562. Only the United States hosts more billionaires than China (a few years ago, China had even exceeded United States). The reason for the increase in the number of billionaires and the fall in poverty is the same: economic growth, the result of greater economic freedom.
Those who dream of countries without billionaires do not need to wait until they are all expropriated. There are countries without billionaires in certain parts of Africa. There is also Cuba or North Korea. Switzerland and Singapore are among the countries with a significant proportion of billionaires. Even in Sweden, whose model is often praised, the proportion of billionaires (compared to the entire population) is 60% higher than in the United States. Although Sweden has high income taxes, it has removed taxes on inheritance, gifts and wealth. According to the Economic Freedom Index, Sweden is now the 10th most economically free (i.e. capitalist) country in the world, while the United States is only in 25th place.
Every year, Oxfam publishes “studies” which automatically lead to the demand that the rich be taxed more. These studies are very questionable methodologically. And yet, the media fall into the same trap every year, as I showed in my book The Rich in Public Opinion. It can seem like the media doesn’t even want to look at the real data: this kind of report seems credible to them because it fits their anti-rich resentment, according to which the rich are the scapegoats for all the world’s ills.
* German sociologist and historian, Rainer Zitelmann is notably the author of the essay In Defense of Capitalism.
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