January 22, 2014

Oxfam report on inequality: 60 second summary

Poster by Oxfam UK
By J. Boyden,
Rebel Youth Magazine

This week the international charity Oxfam released a report which confirmed that almost half of the world’s wealth is now owned by just one percent of the population. The briefing paper, entitled Working for the few: Political capture and economic inequality was authored by researchers Ricardo Fuentes-Nieva and Nicholas Galasso.

We quote some of the statistics below in a 60 second summary.

To give an indication of the scale of wealth concentration, the combined wealth of Europe’s 10 richest people exceeds the total cost of stimulus measures implemented across the European Union (EU) between 2008 and 2010 (€217bn compared with €200bn). (pg. 5)

Even in more egalitarian countries such as Sweden and Norway, the share of income going to the richest one percent has increased by more than 50 percent [since the 1980s]. (pg. 6)

By some measure, the riches of billionaires are now unparalleled in history. The Mexican Carlos Slim, owner of large monopolies in Mexico and elsewhere, could pay the yearly wages of 440,000 Mexicans with income derived from his wealth. (pg. 9)

Oxfam’s own polling [reveals] an overwhelming sentiment that laws and regulations are designed to benefit the rich. A survey in six countries (Spain, Brazil, India, South Africa, the UK and the US) showed that a majority of people (8 out of 10 in Spain, for example) believe that laws are skewed in favor of the rich. Similarly, a majority of people agreed with the statement ‘The rich have too much influence over where this country is headed.’ (pg. 10)

In the last 30 years, a global network of tax havens has evolved that has far-reaching implications for increased economic inequality. Large amounts of wealth are hidden from view, and are largely untaxed, denying national treasuries vital resources that could be used to benefit society. (pg. 18)

In 2011, Zambia’s copper exports generated $10bn, while government revenues from copper were only $240m52– in a country where 69 percent of people live on less than $1.25 a day.(pg. 18)

It is estimated that between 2008 and 2010, sub-Saharan Africa lost on average $63.4bn dollars this way [ie. low tax rates] each year, or more than twice what it received in aid. (pg. 18)

Even in countries with strong social mobility such as Canada and Denmark, sons and daughters of rich parents are more likely to work for the same employer, which suggests that strong family connections rather than merit help young people get well-paid jobs. (pg. 20)

Between 1989 and 2005, union density (a measure of the membership of trade unions which represents union membership in relation to the total labor force) mostly declined in 51 countries for which data are available, and that union density is negatively correlated with income inequality. (pg. 21)

The case of Latin America gives us hope that the global trend of rising inequality can be reversed. Despite historically being the most unequal region in the world, it is the only region that has managed to reduce inequality during the past decade. In countries where inequality has declined, governments are increasing tax revenues and spending more on social protection and poverty reduction policies. (pg. 24)

* * * *

Oxfam was founded near the end of the Second World War as the Oxford Committee for Famine Relief. It became active coordinating charity activities in post-war Europe within the framework of the Marshall Plan, which poured millions of aid into rebuilding those parts of Europe not liberated by the USSR, with the goal of building an anti-Soviet bloc.

In the early 1960s Oxfam moved overseas, with its first international headquarters in Canada. The charity quickly won the support of voices like Lester Pearson (who, before become Prime Minister, among other things lead the Canadian delegation to NATO for over ten years).

Oxfam thus had its birth in early days of the Cold War and developed as part of the culture of what are now know as NGOs or Non-Governmental Organizations. These global charities played a role in the struggle between the imperialist countries, especially the US, and the emerging socialist states.

As US President Truman perhaps most colourfully outlined in his inaugural address, humanitarian aid development became a kind of charitable, pro-capitalist ideological alternative to the so-called "evils of communism" with the USSR and socialist states actively supporting decolonization and national liberation which rapidly gained speed in the 1950s and 60s.

Modern aid agencies have come a long way since then, adopting structural analysis, ecological and gender-based theories. Many, including Oxfam, insist they are oriented towards development rather than emergency relief. But by targeting symptoms, not fundamental causes, aid agencies still substitute generosity and pity for real justice and anti-imperialism.  Some aid groups have no qualms re-directing the grievances away from radical and revolutionary paths (and some NGOs even receive funding from Washington to do exactly that).

Representatives of Canadian NGOs who are flocking to the graveside of Nelson Mandela could perhaps reflect on this question by recalling what was their organization's attitude towards the local resistance to apartheid in South Africa back when the ANC was an illegal "terrorist" organization in Canada (somewhat amazingly fighters from that era remained technically banned from our country) and their current attitude to the Israeli occupation of Palestine.

For its part, retired Oxfam staffers like Deborah Toler admit that despite "the dilemmas that come with a solidarity role," they found it impossible to "function" in the region without adopting some form of solidarity with the struggle for liberation. In the UK Oxfam campaigned against Barclay's Bank; and the ANC Toronto office maintained relations with Oxfam Canada since at least the mid-1970s. No doubt its staff were deeply moved by the people's struggle, and perhaps the ANC were to some extent even able to co-opt their efforts -- but the class-based logic of charity still formed the basis of their development aid and shapes the conclusions of Oxfam's latest report.

Not surprisingly the briefing paper goes out of its way to justify "some social inequality" as, they claim, "essential" to motivate people.

And despite praise of Latin America's direction which is breaking with the imperialist domination of their social, economic and political life, Oxfams's conclusions to reduce inequality are firmly within the framework of capitalist economic development.

Nevertheless, the report contains a number of noteworthy facts for socialist and progressive-minded youth.

The full report is available here in summary and downloadable here.

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