Rodney Hide: Robbing rich makes world poor

Photo / Supplied
Photo / Supplied

Last week Oxfam released a briefing paper titled An economy for the 1%. It's a travesty. It provides a fixed-pie look at the world that assumes the poor are poor because the rich are rich. Oxfam's solution is to take from the rich to give to the poor. There, says Oxfam, problem fixed.

That countries aren't soaking the rich to prosper the poor proves for Oxfam that the rich control the world.

Oxfam provides no evidence or analysis. The paper, instead, is peppered with media-packaged statistics and the old Marxist chestnut that capitalists get rich at the expense of workers.

The problem for Oxfam is that trade and capitalism are reducing poverty at an unimagined rate. Oxfam provides just a nodding sentence to what is fabulously happening: the number of people living below the extreme poverty line halved between 1990 and 2010. The charity offers no explanation how this is happening or what to do to ensure poverty reduction continues.

Instead, it observes 62 people (most of them men, to Oxfam's horror) have in total the same wealth as the bottom half of humanity.

"Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate," the report says. To Oxfam, that's deliberate policy: "Our leaders [are] listening to the 1 per cent and their supporters rather than acting in the interests of the majority. Our world is not short of wealth."

Oxfam's irresponsible political pamphlet legitimises resentment and envy and is economically suicidal in recommending large progressive income and wealth taxes.

Oxfam takes its 62 rich people from Forbes' ranking of billionaires. Top of the list is Bill Gates at $125 billion. That's double the New Zealand Government's annual tax take.

Gee. So much money. He can't spend it all. If government had it we could end poverty. Fix education. Cure cancer.

Gates perfectly illustrates Oxfam's wonky thinking. He didn't get rich making the poor, poor. He got rich making the world rich. It's hard to imagine life without his company's products and the world would be dramatically poorer without Microsoft. His wealth is a pittance to the wealth he has made for the world.

Sadly, there are poor people and poor countries but that's despite Gates not because of him.

And here's where Oxfam's prescription is so disastrously wrong. Gates' wealth is not sitting in an overstuffed mattress. It is invested in Microsoft and other companies. His money produces much more for us than it earns Gates.

Taking Gates' money would be impoverishing not enriching. Robbing the rich to prosper the poor has been tried over and over again with always the same result: impoverished people and tyrannical government.

- Herald on Sunday

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Rodney Hide

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