Ahead of the Davos economic summit this week in Switzerland, the UK based anti-poverty charity ‘Oxfam’ has published their perfunctory call to legislative arms. Citing income inequality, the group has called for globalized taxes, maximum wage laws and regulation of shareholder profits.
At the heart of their plea is the claim that “80% of the world’s wealth goes to the top 1% while the bottom half gets nothing.” This is being intellectually dishonest, as it ignores two basic items: the standards of living and the economic activity created by the accumulation of wealth. The ‘poor’ in first world countries are fed, live in well-built homes, have televisions and cell phones. The sustenance farmer in India and Nigeria has gone from living in mud huts to frame houses and purchasing consumer goods. Furthermore, wealth accumulated by the 1% is not hoarded in a giant vault a la Scrooge McDuck, it is invested in jobs, production, and modernization.
Capitalism is currently most effective means of creating economic justice and has brought more people out of poverty worldwide than all government programs combined. You won’t hear this from some supposed leaders or the press, you see; as they know people can be easily manipulated through the politics of fear and mistrust. Is it optimal that some billionaire businessman pulled in more profit than your entire state? No. Is it useless or ill-gotten gains? Also, no.
People are introduced to this falsehood from a young age because it wins votes. It feeds into our mistrust of wealth and power while satiating our emotional perceptions of fairness. In a recent poll, the American public believes companies pull in 36% profit on a yearly basis. It is actually closer to 6%. Typical progressive bugaboos, such as WalMart and Exxon-Mobil, have even thinner margins.
