Why we should beware Oxfam’s claims about the world’s richest 1 per cent – ASI Senior Fellow writes for CityAM

Senior Fellow at the Adam Smith Institute, Tim Worstall, highlights the problems with Oxfam’s inequality report in CityAM:

Oxfam tells us that global wealth inequality is increasing, as the world’s 80 richest people are approaching the same cumulative wealth as the entire bottom 50 per cent of the planet. In fact, the top 1 per cent is about to end up with 50 per cent of everything. This is just terrible, of course, and something must be done. Or perhaps we could just read the economic literature on the subject, where we’ll find out that this is entirely normal.

Since it’s possible to have negative wealth, any wealth distribution will always be hugely uneven (a new graduate with student loans is likely to have negative wealth, for example). And as those doughty researchers (Piketty and friends) tell us, the bottom 50 per cent of the people are always going to have between not very much and very little wealth. That’s just the nature of things. Indeed, we might suggest that Oxfam read its own report. For on page two, it points out that global wealth inequality is reaching the astounding levels of the year 2000. That is, the recent rise in that top 1 per cent share of wealth is really just the recovery back to normality from the recent recessionary travails.

Yet Oxfam also claims, without any real evidence, that excessive inequality hampers economic growth. It suggests that, since we want that economic pie to be as large as possible, we should tax wealth and capital. The problem is that all taxes destroy some economic activity, shrinking that pie. And different taxes do so differently. We also know that capital and wealth taxes destroy more of the pie than almost any others (other than that Robin Hood Tax Oxfam also supported). So the argument is that we must shrink the economic pie in order to stop inequality shrinking it. This has shades of having to destroy the village so as to save it.

Read the full article here.

Kate Andrews discusses the Republican frontrunners for 2016 on Sky News

Communications Manager at the Adam Smith Institute, Kate Andrews, discusses the possibility of Mitt Romney making a third bid for the White House, other Republican favourites likely to run in 2016, and Hilary Clinton’s role in their campaigns thus far on Sky News.

Kate Andrews’ comments on the United States’ ban on haggis feature in CityAM

Communications Manager at the Adam Smith Institute, Kate Andrews, was quoted in CityAM on the United States’ continued ban on haggis imports.

Robert Oxley, of Business for Britain, called on ministers to “fight harder to overturn America’s haggis ban” and Kate Andrews, from the Adam Smith Institute, described the rule as “arbitrary” and “bureaucratic”.

Read the full article here.

Press Release: Oxfam’s inequality figures don’t add up

For further comments or to arrange an interview, contact Communications Manager Kate Andrews: kate@adamsmith.org / 07584 778207

Commenting on Oxfam’s inequality report, Head of Research at the Adam Smith Institute, Ben Southwood, said:

Oxfam’s wealth statistics do not make sense. According to their methodology, Michael Jackson was one of the poorest people in the world, and Ivy League graduates just starting their jobs at Goldman Sachs are in the direst poverty.

It just doesn’t make sense to look at net wealth without considering the incomes people might be expected to earn.

What’s more, it’s not clear why we should care all that much about rising global wealth inequality, when it has come with unprecedented declines in global poverty. Hundreds of millions have escaped penury in India and China, but it is not just there where global living standards have been rising—African poverty fell 38% between 1990 and 2011.

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.