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Oxfam Would Like Davos to Tackle a New “Problem”: Billionaires

By Walter Donway

January 22, 2020

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Talk about an all-out attack on Capitalism.

There is competition, this year, for seizing the attention of the “3,000 business leaders, international political leaders, economists, celebrities, and journalists” at the World Economic Forum at Davos, Switzerland’s biggest ski resort.

According to the Financial Times, President Trump’s policies will be huge. (Topic: Can the global economy “recover” from his trade interventions?) Climate will be big, including the “Children’s Crusade.” Dangers of technology are on the agenda. And the social responsibility of corporations. Talk about an all-out attack on Capitalism.

It seems too few people are starving—Oxfam’s founding focus—so Oxfam this year is pushing: “Bring down the rich.”

At the same time, the charity group, Oxfam, has made its bid, as it does annually, to set the agenda. It seems too few people are starving—Oxfam’s founding focus—so Oxfam this year is pushing: “Bring down the rich.”

Just in time for Davos, Oxfam has issued its report “Time to Care.” The headline statistic is that the world’s 2,153 billionaires hold more wealth than the poorest 4.6 billion people combined. That is 60 percent of the world’s population.

For Oxfam, the problem that should be addressed at Davos is that the “gap between rich and poor can’t be resolved without deliberate inequality-busting policies.” And, says the report, “… too few governments are committed” to inequality busting.

If there is one billionaire for roughly 2 million people on the planet, so what?

For Oxfam, the problem hardly needs any explanation. But what if we insist on asking: So why is there a problem? If there is one billionaire for roughly 2 million people on the planet, so what?

To answer, egalitarians would simply repeat, their tone now incredulous: What?  One individual has as much wealth as two million others?

Of course, we are not talking about what an individual consumes. As Forbes points out:

Overwhelmingly, the wealth of billionaires is held in equities—ownership of productive assets. If you set aside the pleasures of displaying wealth, status, and conspicuous consumption, what are the significant differences between what a billionaire and a guy with a middleclass income can consume?

What is the point being made by Oxfam?  Well, it differs every year, but for 2020, one point is the monumental total of unpaid work that the women of the world provide:

The report also noted gender disparities in the world economy. For example, it found the 22 richest men in the world have more wealth than all the women in Africa. The report said that women and girls put in 12.5 billion hours of unpaid care work … every day around the globe—a contribution to the global economy of at least $10.8 trillion a year, more than three times the size of the global tech industry.

The report describes in moving detail the plight of women in undeveloped economies: restricted by social status to family work and care, seldom educated, usually unpaid, of low social status. I have little doubt that these women are the glue holding together families, tribes, villages. …

But those are not the countries in which the billionaires live and work. At the end of 2018, worldwide, there were 2,153 billionaires. Of those, more than 600 were Americans; that is, well over one-fourth were in the country identified—despite the efforts of socialists of every stripe—as still the world’s most capitalist. The overwhelming majority of other billionaires are in European or Asian market—or semi-market economies.

It is not in the United States that the majority of women have no access to education, spend their time on uncompensated care, and are of low social status.

How about Africa, where so much grinding poverty exists, including of women? How many “billionaires”?  On the entire continent in 2018 there were 23—an all-time high. Overwhelmingly, they are in the North African oil sheikdoms: ruling Arab sheiks who own by birthright and then lease a country’s oil resources and sit back generation after generation collecting billions. According to the UBS report, Dubai is home to more than 30 billionaires, by far the most in any Middle Eastern city. These billionaires produce nothing; their wealth is obtained by political power. Nothing else. (Sheikh Khalifa, whose family has $150 billion, is the current Emir of Abu Dhabi and the president of the United Arab Emirates.)

Forbes 400 annually lists the wealthiest Americans. Most readers are familiar with the top names. They have created ideas and companies that are part of the everyday life that makes America virtually another planet as compared with Zimbabwe, Chad, Liberia, and Burkina Faso: Jeff Bezos, Amazon; Bill Gates, Microsoft; Warren Buffet, Berkshire Hathaway; Mark Zuckerberg, Facebook; Larry Ellison, Oracle software; Larry Page, Google; Sergey Brin, Google; Michael Bloomberg, financial technology; Jim Walton, Walmart.

The essential talent and focus required to become a billionaire is entrepreneurship. The lifeblood of entrepreneurship is economic freedom and the rule of law: patents, free flow of investment capital, low taxes on corporate earnings, free labor contracts. In its story on the new billionaires, Inc. comments that “Perhaps most important is the U.S.’s special relationship with entrepreneurs. It goes without saying that the majority of billionaires got there by founding their own companies, including the world’s three richest people.” Entrepreneurs make up the bulk of new billionaires in the United States.
 

Oxfam makes no distinction between wealth achieved by productive ability and wealth achieved by controlling government power.

Like all socialists, who never focus on the production or the wealth-creation side of the economic equation, but only on the consumption side, Oxfam makes no distinction between wealth achieved by productive ability and wealth achieved by controlling government power. A billionaire born into a sheikdom sitting atop an oil dome is interchangeable with a brilliant, restless, fiercely competitive Harvard University dropout, Bill Gates, who created and made available to the world the computer operating system (Windows) that literally changed the life of every individual on the planet. (By the way, “billionaire” is not a caste; last year, worldwide, 247 billionaires, 10 percent of the total, became non-billionaires.)

For Oxfam, the money exists; people need it; the problem is to gain the political power necessary to give it to them. The media release of its report recommends: “Getting the richest one percent to pay just 0.5 percent extra on their wealth over the next 10 years would equal the investment needed to create 117 million jobs in sectors such as elderly– and childcare, education and health.”

That is literally ridiculous if they are talking about billionaires who earn their wealth by productive activities. Their wealth is already invested in jobs. How do Microsoft, Google, and Walmart operate? For government to tax not just their income but their wealth (total assets) would yield what gigantic government budgets (and deficits) always yield: sheer waste combined with gross inefficiency in economic activities. And richer, more corrupt government bureaucracies. It would also eliminate billionaires—who, then, would be left to loot?

The only real problem that the Oxfam report (accidentally) highlights is that too few of the world’s countries have even semi-capitalist economies. Those that do have semi-market economies do not have the problems of poverty, including of women, described in the report.

(As an aside: One of America’s newest billionaires is Kylie Jenner, the youngest billionaire in the world, who created a huge success with her new cosmetics line, which she created, and “by her decision to outsource nearly every function and keep overhead unbelievably low …” The millions of women buying her cosmetics are not unpaid caregivers.)

The worldwide problem is economies mostly in Africa, parts of Asia, and part of Latin and South America that either are socialist in one form or another—often a scarcely identifiable system of government-by-political-gangs enriching themselves in a shambolic economy of controls, political-influence, and whatever “economic freedom” remains not by principle and law but by default. Organized socialism would make them even worse.

It can be done. The U.S. Constitution is not copyrighted.

What if Davos devoted its meeting to the theme “a new constitution of wealth”? It would call for reorganization of governments focused upon new republican constitutions that would guarantee property rights and consistent, principled freedom of economic activity. That requires the strict limitation of government power and the rule of law, not political pull.

It can be done. The U.S. Constitution is not copyrighted, you know.

 

 

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