On Wed, Jan 21, 2015 at 12:14 AM, Patrick Bond <[email protected]> wrote:
> (Touching albeit distracting naivety from Oxfam's CEO: “*I am optimistic > that there will be change. A few years ago the idea that extreme poverty > was harmful was on the fringes of the economic and political debate. But > having made the case we are now seeing an emerging consensus among business > leaders, economic leaders, political leaders and even faith leaders*.” > Luckily though, most of the world needs no such reality check, as the > Edelman survey below finds "*alarming evaporation of trust across all > institutions, reaching the lows of the Great Recession in 2009. Trust in > government, business, media and NGOs in the general population is below 50 > percent in two-thirds of countries*.") > This is another of those things whose primary value and function is as a rhetorical instrument. There are many methodological problems with this kind of study. A nice takedown is here: http://fusion.net/story/39185/oxfams-misleading-wealth-statistics/ --------------------------------snip Oxfam claims that the $1.9 trillion owned by the world’s top 80 people is equal to the amount of wealth held by the bottom 50% of the world’s population. But look at just the top two-fifths of the 3.5 billion people referred to in the Oxfam stat. That’s 1.4 billion people; between them, they are worth some $2.2 trillion. And they’re a *subset* of the 3.5 billion people who between them are worth $1.9 trillion. As you add more people at the bottom of the wealth distribution, the Oxfam aggregate doesn’t go up, it goes down. The first lesson of this story, then, is that it’s very easy, and rather misleading, to construct any statistic along the lines of “the top X people have the same amount of wealth as the bottom Y people”. The second lesson of this story is broader: that when you’re talking about poor people, aggregating wealth is a silly and ultimately pointless exercise. Some poor people have modest savings; some poor people are deeply in debt; some poor people have nothing at all. (Also, some rich people are deeply in debt, which helps to throw off the statistics.) By lumping them all together and aggregating all those positive and negative ledger balances, you arrive at a number which is inevitably going to be low, but which is also largely meaningless. The Chinese tend to have large personal savings as a percentage of household income, but that doesn’t make them richer than Americans who have negative household savings — not in the way that we commonly understand the terms “rich” and “poor”. Wealth, and net worth, are useful metrics when you’re talking about the rich. But they tend to conceal more than they reveal when you’re talking about the poor.
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