In our ‘Behind the Headlines’ blog, we take a closer look at one of the week’s big news pieces, considering its significance and the response it has generated, as well as how it could further play out. This week, Sam Oakley looks at the reaction to Oxfam’s report on inequality and its causes around the world and questions whether it’s a sustainable strategy for the charity.
Oxfam released its annual report on ‘the global inequality crisis’ – always impeccably timed for the beginning of the World Economic Forum at Davos (which starts today). The report, which led the agenda on the Today programme as well as all of the early headlines on Monday morning, noted that the “richest 1% now has as much wealth as the rest of the world combined”, with “the richest 62 people in the world having as much wealth as the poorest half of the global population”. The report explicitly criticised lobbyists and tax havens for their role in perpetuating global inequality.
Why is it important?
Oxfam have long been held up as the doyen of the charity sector in tackling issues of global poverty. Their work has, of course, been notable throughout the world but has been fundamental in tackling issues of hunger in some of the poorest parts of Africa and they remain one of the go-to bodies for policymakers looking for solutions to one of the world’s biggest challenges: how do we feed a growing population?
However, in recent years Oxfam has turned its focus away from fund-raising and raising awareness of poverty and hunger around the world and has instead begun to shine a light on what it perceives to be a growing inequality between the richest and the poorest.
Their pursuit of the inequality agenda has landed them in hot water before, notably in the UK where they were censured by the Charities Commission for a campaign that was seen as overtly political in its condemnation of the Coalition Government’s policies. The ruling came after a tweet that described a ‘perfect storm’ of zero hour contracts and benefit cuts, among others, led to some Conservative MPs and candidates labelling the charity as “thinly disguised left-wing lobby group”.
Oxfam’s recent reports have indeed adopted an increasingly left-wing, anti-capitalist tone – criticising the world’s wealthiest for not doing enough to solve global poverty and for hoarding wealth that governments around the world would redistribute. It is a stark departure from the Oxfam of old and poses serious questions about the role of the charity sector in public life. Is it the responsibility of charities to attack government policy and use their trusted position to pursue their own political agenda? Or is it, in fact, the responsibility of organisations like Oxfam to try and do their best to mitigate the circumstances that government policy and capitalism may have inadvertently fostered?
What’s the reaction been?
Mixed, it would be fair to say. The major takeaway from the report has been Oxfam’s decision to highlight tax evasion by wealthy individuals and companies as the driving factor behind what they view as increasing inequality. This led many to question firstly whether there is any historical evidence that increased tax revenues actually lead to greater redistribution of wealth or reduction of inequality (hint: there isn’t any) – but also whether vastly increased government spending in a time of financial uncertainty should be viewed as a sustainable solution to disparities in earnings.
Whilst tax evasion is, of course, a significant issue for all global governments, many questioned whether this is really the nub of the inequality issue. The ‘1%’ that Oxfam targets in its report in the UK pay nearly a third of all tax in the country, with the richest 0.01% (about 3,000 people) paying more combined than the lowest paid 9 million workers. A simple understanding of economics demonstrates that there is only so far you can push this group before they up sticks and leave and slice up to 5% off the Exchequer overnight.
The report drew a number of articles looking to debunk Oxfam’s political motives, with the Spectator’s Fraser Nelson highlighting how immensely successful capitalism has been in lifting people out of poverty – thus, significantly reducing inequality – around the world and how much the world’s wealthiest contribute to that system (and that’s before taking into account their substantial philanthropy). Chris Giles at the FT also poured scorn on the charity’s misinterpretation of the data and questioned (and he’s not the first) the methodology of ‘adding-up’ the wealth of the poor. It’s worth noting that, slightly ridiculously, Oxfam’s figures include debt-laden Harvard graduates in their assessment of the world’s poorest.
A strange focus on tax evasion, as Fraser Nelson notes, completely distracts Oxfam from making an analysis of why the rich keep getting richer and robs the report of any economic credibility, leaving only the pursuit of an overtly political agenda loosely related to the data available.
Chris Giles noted that the Oxfam press release had generated more than 350 write-ups – but there was one headline that Twitter took glee in highlighting. It was perhaps the best example of how the report’s release valued a punchy headline over actual analysis coming with The Independent’s carry of Oxfam Chief Executive, Mark Goldring’s op-ed on the subject:
The headline has now been altered, but it was telling that what was hoped to be an explosive statistic was inadvertently turned into a banal and slightly comic observation (you could fit the two richest on a tandem, for example), severely undermining any of the salient messages.
Oxfam should be admired for not standing still as a charity and looking to do more than just create headlines about the plight of Africa. However, releasing essentially the same report consecutively for three years based on a questionable interpretation of the widely available data, manipulated to fit an overtly left-wing political interpretation of inequality is a questionable strategy in the long-term.
Much like Ed Miliband, Oxfam’s strategy is predicated on a leftward-shift in the public’s attitude towards business and corporate interests – but it is one that has never been borne out in anything more tangible than a catchy twitter hashtag or a march of a few thousand people who all agree with you.
The report and its resulting coverage raises interesting questions about the role of charities in our political system, and whether an organisation that many would expect to be impartial and trust accordingly, is wise to pursue an aggressive anti-capitalist agenda supported only by a minority. Whilst Oxfam’s agenda will win favour with Corbynites, the tone of its campaigns risk alienating substantial numbers of potential donors, with only detrimental effects for those who have benefitted so much from the organisation’s help in the past. The question for Oxfam is that, yes, this type of report and campaign gets media hits – but at what cost? I would argue that it will only harm their reputation in the longer term.
Picture Credit: Oxfam