Despite the presence of many of the most prosperous individuals in the world on
the Swiss mountain top, this is an instance where an elevated view
doesn’t present a clearer picture.
To answer the question requires a focus on definitions and data – more suited to an academic
seminar than a meeting of the world’s “elite” where drafts of hot air
are actually more common than bright shafts of insight. But Davos,
because of its symbolism, usually inspires an inequality debate.
Oxfam started the week with a report that put them firmly in the “worse”
camp. “The world has become a much more unequal place and the trend is
accelerating” said the Oxfam boss Winnie Byanyima, pointing to research
by the charity which suggested the wealth of the top 62 richest people
on the planet is now equal to that of the bottom 50 per cent
combined.This prompted a barrage of rebuttals from commentators, arguing
the facts were exactly opposite to those laid out by the charity and
claiming that global inequality has, in reality, been falling rapidly in
recent decades.
So who is correct? To begin to answer that question it’s necessary to clear up some definitions. What do we mean by
“inequality”? Are we talking about inequality between average living
standards in different nation states? Or do we mean inequality between
all the individuals on the planet? The answer to those questions will
lead to different pictures. Between the states of the world (unweighted
for population) there is, sadly, still not much evidence of
convergence.Further, are we talking about inequality of consumption, or
income, or wealth? Or maybe we mean inequalities in health, life
expectancy and infant mortality? Again, the answers to those questions
are critical. A focus on health shows that for most people on the
planet, things have been getting better in recent decades as life
expectancy has generally increased – although whether they are
improving as fast as we ought to expect is a reasonable question.
Oxfam’s research is all about the wealth, or net worth, of individuals across
the planet. The charity’s researchers use credible estimates from the
business magazine Forbes to tot up the net worth of the richest 1 per
cent of tycoons, oligarchs, heirs, heiress and entrepreneurs, in the
world. They then make an estimate of the wealth of the least asset rich
inhabitants on the planet and compare the two to arrive at their
striking figure of relative wealth shares.
