Posted by - A new Oxfam report released on 16 January 2017 says:
New estimates show that just eight men own the same wealth as the poorest half of the world. As growth benefits the richest, the rest of society – especially the poorest – suffers. The very design of our economies and the principles of our economics have taken us to this extreme, unsustainable and unjust point. Our economy must stop excessively rewarding those at the top and start working for all people.
There is very little in this alarmist report that is new other than to rehash dead socialist arguments by peppering in a few headline grabbing statistics that tell us the world is not only unfair but it’s becoming increasingly unfair. There is also a subtle fact in what Oxfam published that nobody ever picks up on that I will discuss later (hint: it has to do with the make-up of the eight richest people list, and no it’s not the fact that all eight are white men either)
Today’s socialists know that communism has been tried ad nauseum in many places over the past century and has failed miserably. We all know the end result of the socialist system is that everyone ends up being equal but equally poor. That is why modern day liberals try to couch their propaganda in nicer terms like “our economy must stop excessively rewarding those at the top and start working for all people”. I’m sure if Karl Marx wrote Das Kapital today, he would use those same words; Oxfam should re-title the report, The Communist Manifesto 2017 edition.
I will briefly digress on the subject of Oxfam itself. The name comes from the Oxford Committee for Famine Relief founded in Britain in 1942. Its mandate was narrow and simple; lobby for humanitarian food supplies to be shipped to starving women and children in Nazi-occupied Greece. Oxfam is a great example of mission creep in any organisation and especially NGO’s. What it does now has only the most tenuous connection with feeding the poor and starving in the third world. Oxfam has grown and expanded into a “global movement, campaigning with others, for instance, to end unfair trade rules, demand better health and education services for all, and to combat climate change”. I think that last bit has been tacked on fairly recently as the stretched pseudo-intellectual argument connecting starvation and global warming has gained traction. Heck, I’ve even seen convincing infotainment videos connecting the civil war in Syria to climate change.
The world is not fair is the mantra of Oxfam and the socialists. True. It’s not equal as well. Never has been. Probably never will be. That is the core problem with communism; it makes the wrong assumption about human nature and behavior. It is a world view built around the erroneous belief that people can and are motivated by equality. Sometimes humans can be generous and altruistic. More often, they are greedy and selfish. It is also probably an axiom that the better off you are, the more magnanimous you can afford to be. It’s not a far leap of the imagination to figure out that once you’ve satisfied all your basic needs (à la Maslow’s Hierarchy), you can then move on to more charitable endeavours and self-actualisation.
Maybe it’s repressed guilt from being born with so much, but it cannot be a coincidence that most socialists and communists come from a relatively prosperous background and tend to be well educated. Karl Marx was born into a middle-class German family, his father was a lawyer and he went to Bonn and Berlin University. His co-conspirator in Communism, Friedrich Engels as born into a wealthy textile manufacturing family. Vladimir Lenin was born into a wealthy middle-class family, was kicked out of Kazan university for protesting but eventually finished his law degree. Mao Zedong was born the son of a wealthy farmer in Hunan and worked at the prestigious Peking University. Fidel Castro was born as the son of a wealthy Spanish landowner in Cuba and went to Havana University. Ernesto “Che” Guevara was born into a wealthy middle-class Argentinian family and met Castro while he was a medical student after his stint at the University of Buenos Aires. Starting to spot a trend? Also, keep in mind that a university education in the past was not nearly as common as it is today. These men were all part of a very small intellectual elite.
According to Oxfam, inequality is increasing. I guess that depends on how you measure it. Inequality of the rich world versus the poor has probably decreased as China and other third world countries have developed more rapidly over the past three decades since the collapse of the Soviet Union. But inequality within countries has undoubtedly risen as measured by the Gini coefficient. And planet-wide, the gap between the richest people and the poorest has generally risen as globalisation probably does increase the disparity between rich and poor. The wealth gap has historically been the largest in third world countries (not surprising as these places are typified by a small number of really rich people and a whole lot of poor people). Latin America has always been particularly egregious. The gap is lowest in industrialised wealthy country’s; especially those with a socialist bent like Europe, Canada and Japan.
Within these big trends are smaller ones that don’t generally get airtime but are also very relevant. While globalisation has helped large numbers of extremely poor in the third world (especially in China) escape abject poverty, the impact on their working class counterparts in the west have been near catastrophic. This is where Trump and his contemporaries have a point. Factories and low paying manufacturing jobs have shifted to places like China and Mexico en masse. Those that remain are under huge competitive pressure and thus even if they stay open, wages have to adjust to this reality. This is why gini coefficients are rising in places like America. Back in the “Leave it to Beaver” age, if you were an uneducated white male living in the rust belt, you could still get a relatively decent paying job in the factory or mine even though your skills were minimal. Not any more. However, if you are well educated and employed in the high paying knowledge industries like technology and bio-sciences, globalisation has been a boon. Globalisation is great for efficiency for the planet as a whole; not so much for specific local areas and certain groups of people.
The real underlying question that Oxfam raises and needs to be addressed is are we really at a tipping point where the world is so unfair that the whole global system is unstable. This is straight out of Karl Marx’s communist dialectic materialism and the crisis theory of capitalism. Communist theory asserts that societies (and capitalism) have boom/bust cycles and each new cycle becomes larger and deeper than the last eventually resulting in a complete collapse and revolution. Communism is supposed to be the fifth and final system (going from primitive communism, slave society, feudalism, capitalism, to socialism); the pinnacle of human societal evolution.
Capital accumulation over time leads to increased inequality. Additionally, since capital demands a return, it also leads to increased returns coming from those without capital—the working class… the struggles of the working class against the attacks of the capitalist class lead the working class to establish its own collective control over production—the basis of socialist society.
Of course, this crisis of capitalism seems more relevant today than in the past given that the scars of the 2007 sub-prime crisis and the European financial crisis are still fresh. I tend to agree that the system as it stands is unlikely to be sustainable given the huge amounts of public sector debt that has been accumulating in the west and the massive amounts of unfunded liabilities in the form of pensions and medical care that pretty much every developed country faces. Most people don’t know that even the U.S. federal government has amassed $76.4 trillion in debts, liabilities, and unfunded Social Security and Medicare obligations. This amounts to $614,000 for every household in the U.S., a burden that equals 90% of the nation’s private wealth or about 450% of GDP. However, I strongly disagree that the source of this problem is capitalism; the root of the problem is socialism because the debt is principally from the government’s unfunded liabilities for all the social programs they run.
Thus, we have a paradox. If the Marxists are right in believing that social programs and unions have delayed the inevitable revolution of the proletariat, the self-same programs must be heavily cut in order to save the western economies from collapse. I don’t have an answer for this or even a prediction as to what emerges from the ashes of this. The obvious solution is also the most likely one if history repeats itself. It is also the most unthinkable. War on a massive scale has always served to completely reset the scales, stimulate economies, write-off debt and eliminate surplus factors of production (capital and people). Lets hope it doesn’t come to that.
That was a little too dark and gloomy, let’s move on to other subjects. Let’s look at what Oxfam proposes as “an economy for the 99%”:
1. Governments will work for the 99%. Accountable government is the greatest weapon against extreme inequality and the key to a human economy. Governments must listen to all, not a wealthy minority and their lobbyists. We need to see a reinvigoration of civic space, especially for the voices of women and marginalized groups. The more accountable our governments are, the fairer our societies will be.
Sounds good, but what does that mean in practice? Democracy is, by definition, a dictatorship of the majority which means that the voices of marginalized groups (which tend to be minorities) can only be heard if the majority acquiesce. We attempt to moderate this in practice through our legal system and constitutions which guarantee basic rights to minorities; to attempt to ameliorate the worst excesses of the tyranny of the majority. It is impossible for governments to listen to all because there is pretty much never a consensus where all can agree. Politics and negotiations is the art of coming to an agreement where everyone is unhappy.
2. Governments will cooperate, not just compete. Globalization cannot continue to mean a relentless race to the bottom on tax and labour rights which benefits no one but those at the top. We must end the era of tax havens once and for all. Countries must cooperate, on an equal basis, to build a new global consensus and a virtuous cycle to ensure corporations and rich people pay fair taxes, the environment is protected, and workers are paid well.
This makes even less sense because consensus amongst countries is even less likely than within a country. We also have many different countries with vastly different political, economic and social systems and agendas. If you believe that the United States, Russia, or China would cooperate on an equal basis with Costa Rica, Lichtenstein, and Papua New Guinea; that Iran and North Korea will play by the rules, then I want to get my hands on whatever they are smoking at Oxfam because it’s obviously potent.
3. Companies will work for the benefit of everyone. Governments should support business models that clearly drive the kind of capitalism that benefits all and underpins a sustainable future. The proceeds of business activity should go to those who enabled and created them – society, workers, and local communities. Lobbying by corporates and the purchase of democracy should be brought to an end. Governments must ensure corporations pay fair wages and fair taxes and take responsibility for their impact on the planet.
Here’s how socialists twist things so well that they put all-time best Olympic gymnast Larisa Latynina to shame. As I said earlier, socialists know that communism is a bad word and the minute they say it, everyone knows it doesn’t work. China gets around this by calling it “socialism with Chinese characteristics” which is just a code for they’re allowing capitalism and private ownership. In this statement, Oxfam has added the word capitalism to gain legitimacy but every last one of the statements is straight out of the Communist Manifesto. Companies that work for everyone and governments supporting businesses that benefits all? This isn’t much different than Karl Marx’s favourite saying, “from each according to his ability, to each according to his need”. If you’re going to be a communist, be a communist; don’t try to hide behind newspeak and fancy wording while pretending that capitalism has any role in what you’re selling.
4. Ending the extreme concentration of wealth to end extreme poverty. Today’s gilded age is undermining our future, and needs to be ended. The richest should be made to contribute to society fairly and not be allowed to get away with unfair privileges. To do this we need to see the rich pay their fair share of tax: we must increase taxes on both wealth and high incomes to ensure a more level playing field, and clamp down on tax dodging by the super-rich.
What does Oxfam mean by the richest should be made to contribute to society fairly and not get away with unfair privileges? Other than spoiled trust fund brats with inherited wealth like Canada’s prime minister Justine Trudeau (see, I told you all socialists are born into money); those that have created their own wealth and business empires have generally already contributed greatly to society or else they wouldn’t be rich. And vague statements such as fair and unfair don’t mean squat. What exactly is fair and unfair? Is it fair that I can sit at the front of the airplane (or even worse, have a private jet) while everyone else is suffering from deep vein thrombosis in cattle class just because I can afford it? Is it fair that we were born in a developed country and have a better living environment and opportunities than someone born in a war-torn third world country?
The concept of taxing the rich more and the belief that they are all tax evaders paying nothing is a constant lie in socialist propaganda that needs to be debunked. Despite the occasional headline about Warren Buffett paying less tax than his secretary, even in the United States, tax rates are progressive. To borrow a slogan from the “occupy movement”, in 2014 the top 1% accounted for nearly half of all federal income taxes (46%). The bottom 80% by contrast contributed about 15% of the total. To put it into individual terms, the top 1% pay an effective rate of just under 40% of income while the bottom 20% have a negative effective rate (ie, they get more out than they pay into the system). I then have to ask, what exactly does Oxfam mean when they say the rich should pay their fair share of taxes? Do they mean that the top 1% should pay 99% of all taxes? How is that fair?
5. A human economy will work equally for men and women. Gender equality will be at the heart of the human economy, ensuring that both halves of humanity have an equal chance in life and are able to live fulfilled lives. Barriers to women’s progress, which include access to education and healthcare, will end for good. Social norms will no longer determine a woman’s role in society and, in particular, unpaid care work will be recognized, reduced and redistributed.
I’m not even going to touch this one (well not in this piece anyway because it is far too deep and complex to comment on in one paragraph). I hope it refers to Oxfam’s traditional focus on third world countries because last time I checked, there were a lot more females graduating university in the United States than men (and that’s probably true in most western countries).
6. Technology will be harnessed for the interests of the 99%. New technology has huge potential to transform our lives for the better. This will only happen with active government intervention, especially in the control of technology. Government research is already behind some of the greatest innovations in recent times, including the smart phone. Governments must intervene to ensure that technology contributes to reducing inequality, not increases it.
This doesn’t even begin to make sense. Technology has actually hugely contributed to inequality because it has created a massive digital divide stretching not just between countries but also within countries. It gets back to the problem of the uneducated, computer illiterate, unemployed factory worker in the rust belt versus the overpaid software programmer with stock options in Silicon Valley. Technology is agnostic; it is neither good or bad on its own. How government is better suited to pick and choose and intervene and control technology is beyond me. Is Oxfam saying that government should police the internet? Stop the roll out of new iPhones every year? Given that smartphone penetration in the United States is now over 80% (and even much higher in some developed countries), one could argue that it is the most egalitarian technology for the 99% and most diffuse. Others may argue that smartphones have not transformed our lives for the better citing everything from distracted driving to kids unable to communicate in person face-to-face.
7. A human economy will be powered by sustainable renewable energy. Fossil fuels have driven economic growth since the era of industrialization, but they are incompatible with an economy that puts the needs of the many first. Air pollution from burning coal leads to millions of premature deaths worldwide, while the devastation caused by climate change hits the poorest and most vulnerable hardest. Sustainable renewable energy can deliver universal energy access and power growth that respects our planetary boundaries.
Actually, fossil fuels are exactly compatible with an economy that puts the needs of the many first. Because the rich can afford expensive energy; the poor cannot. China could not have developed nearly as fast if it didn’t rely on cheap coal to fuel its industrialisation drive, just as Britain did two centuries earlier. Denying jobs and electricity to the poorest and most vulnerable (ie, in the third world) is exactly what increasing the cost of power generation would do. Fossil fuels are a non-renewable resource. We eventually will have to phase their use out. The argument really is during what time frame. I for one am with the 60,000 Ontarians who had their power cut last year and can’t afford to pay their electricity bills because they have tripled due to the ill-though out green power plans of their provincial government. If relatively rich Canadians can’t afford to move to “sustainable renewable energy” overnight, what do you think the impact of such a policy would be on the third world if you could actually implement it?
8. Valuing and measuring what really matters. Moving beyond GDP, we need to measure human progress using the many alternative measures available. These new measures should fully account for the unpaid work of women worldwide. They must reflect not just the scale of economic activity, but how income and wealth are distributed. They must be closely linked to sustainability, helping to build a better world today and for future generations. This will enable us to measure the true progress of our societies.
And what does this mean? More liberal speak like my kids report card which “moves beyond” percentages and A-F grades with pithy phrases like “generally meets requirements appropriate to age group”. I have no idea what that means. I do know what an A and 90% means. Maybe Oxfam means we should adopt Gross National Happiness like what the Kingdom of Bhutan uses. I can tell you the problem right now. Happiness is a relative and subjective state. You want everyone to be happy? Lets go back to being hunter-gatherers in little African tribes because study after study shows that happiness is always reported to be higher in these societies than anywhere in the West.
I have learned one thing. That Oxfam is essentially a communist organisation operating under a facade of being a humanitarian aid group. Recognising that communism doesn’t fly with most people today, they have repackaged their propaganda into one chock full of politically correct buzzwords like climate change and the 99%. It doesn’t change the fact that what they propose is full of unicorns farting rainbows (like seriously who actually argues in favour of climate change and letting people starve) but is short of actual concrete ideas on how this is to be achieved. Even Deng Xiaoping (a rare communist because he was actually born a poor peasant even though he studied in France) was forced to abandon a lifetime of socialist beliefs and reform China for its own good. Equality for all? Deng Xiaoping will probably not be remembered for his participation in the Long March but for his more iconic statement. 让一部分人先富起来 (ràng yī bù fèn rén xiān fù qǐ lái). To get rich is glorious, “let some people get rich first.”
The problem with socialists and liberals today is their myopic focus on concepts like equality and fairness which are, by definition, relative terms. It must be disheartening for liberals who, after wandering aimlessly through the Himalayas for decades searching for their mythical utopian Shangri-La, discover that the capitalists have beaten them to it as Zhongdian county renamed itself Shangri-La (香格里拉) in 2001 in an attempt to attract tourists. I take umbrage though when the liberals downplay or completely ignore how much capitalism has actually helped to improve the human condition for everyone, not just the rich.
The picture below is from the The Tower, a monthly publication of a gated community in Florida that continues to make the rounds on the internet. Unfortunately, the picture circulating on the internet is a very poor photo at a bad angle of the ripped out page (the readers of The Tower might actually have been alive in 1915 so you will have to forgive their lack of tech savvy). Fortunately, it is still on the website in PDF format so I have copied a nicer looking screen capture for you. Fact checking suggests this article is generally correct although it may just be a reprint from an earlier version at the change of the millennium (1900 versus 2000) that hasn’t been updated properly. Regardless of some minor errors, the basic premise and conclusions are still the same.
Canadians can find a similar list here but it’s basically the same stuff
Many of the internet comments on this piece focus on how pointless it is to say the price of coffee was fifteen cents a pound because we all know there has been inflation. True but the real point is a dentist that made $2,500 in 1915 could buy 17,857 dozen eggs at $0.14/dozen. According to the BLS, dentists earned a median salary of $152,700 in 2015. According to the Bureau of Labor Statistics, the average price of a dozen Grade A large eggs in May 2016 was $1.68. Which means a dentist today could by 90,893 dozen eggs or five times as many as a dentist in 1915.
We have forgotten, that a mere one or two centuries ago, the condition of mankind was, in the words of Thomas Hobbes, “solitary, poore, nasty, brutish, and short.” Disease was rampant, poverty and starvation was the norm, and lifespans were under 40 years, even in the West. The socialists ignore the fact that industrialisation and capitalism have succeeded, more than any other form of human societal organisation in history, in lifting large portions of mankind out of the cesspool of poverty, starvation and early death in a very short period of time. It continues to do so on a massive scale in places like China and India. Not surprisingly, both of these countries began to claw their way out of abject poverty just about the same time that they gave up communism and socialism respectively. But no matter how nicely they repackage it using modern politically correct terms, Oxfam and its ilk are essentially advocating communism. Every statement that they make about equality, fairness and how crucial the government is to control everything is basically Das Kapital 2017, and the audience is clearly the over-educated, white, liberal, soy-latte drinking urban elite.
As I alluded to earlier, there is a hidden message in the make up of the richest eight people list that Oxfam used. Most liberals would automatically spot that this list is completely comprised of white males because capitalism is racist and misogynist (its not, capitalism is very agnostic). A deeper thinker may spot that two of them are Spanish (Mexico and Spain) and may conclude it reflects the high gini and inequality seen in Latin America. But that’s not what I’m getting at. Its the fact that HALF of this list is American tech tycoons (five out of eight if you consider Bloomberg to be tech which it kind of is). In other words, new and first generation wealth, not inherited. It is always a common pastime for Europeans and Canadians to bash America. It’s inequality, poverty, guns, race issues, death penalty, bad public education system, overpriced university education, and lack of healthcare for the poor are all issues that point to American exceptionalism that boggles the liberal and socialist minds across the Atlantic. But we forget and ignore the fact that America continues to be the heart of innovation and renewal for the entire world.
Name me a large and famous multinational, a Fortune 500 company so to speak, that has emerged in Germany over the last 50 years? Britain? France? Japan? Canada? There are a few but they are hard to think up because they really are a just a small handful. But in America, Oxfam’s list of eight barely scratches the surface as it ignores Apple, the world’s most valuable company. It ignores Hollywood and American popular culture that continues to dominate the world. It ignores, pharmaceutical companies and bio-sciences which create new drugs and medical treatments that are adopted around the world. We vilify the Americans but it is precisely their libertarian value system, their belief in allowing the 1% to flourish, that creates an environment where innovation and advancement can leave the ivory towers and enter the mainstream. While socialists may have a point about the rich when it is inherited and unearned (which is often the case in Europe); great wealth in America tends to be earned and be first generation.
When I was living in Asia, I was often asked what the difference was between the American and Asian education systems. In Asia, almost everyone graduates high school able to read the newspaper and make change at the restaurant. That’s great for a factory working and even engineers. But our conformist group think, our egalitarianism, does not foster and encourage creative thinking and innovation. The Japanese go so far as to having a saying that “the nail that sticks up gets hammered”. In America, a third of the students who bother to graduate high school are functionally illiterate and innumerate which is why they put “smart” cash registers in places like McDonald’s. But the crème de la crème at the top schools and ivy league universities; The brilliant entrepreneurs who find even liberal universities too stifling and start a tech company in their parent’s garage. They are the ones who change the world. They bring incalculable benefits and advances to the 99% and sometimes enrich themselves to a level that would make even Croesus blush. We denigrate and persecute these 1% at our own peril.