the debate, he added. According to him, one major challenge that did not get the attention it deserved was the lack of investment in the real productive sectors of the economy.
“The assumption is that more profit means more investment. The problem is that the incentive is to invest in financial assets, not in production,” he said.
South Africa was sitting with a sophisticated financial sector, but a struggling real sector, he said.
Another issue that needed attention was the probability that the expansion of the social security system since democracy was “hitting a wall”.
Oxfam SA would campaign in support of the national minimum wage in South Africa, added Cawe and Wesso.
The Oxfam report was immediately criticised as “bogus”, “misleading” and “meaningless” by some of the oldest free market think-tanks in the world, including the UK’s Institute of Economic Affairs, the UK’s Adam Smith Institute, the Cato Institute in the US and the Montreal Economic Institute in Canada.
The basis for these attacks was that Oxfam was allegedly misrepresenting the Credit Suisse report it used.
Credit Suisse’s report was based on extreme extrapolation from most countries’ very limited wealth data, and the bank itself admitted that global wealth estimates were “in their
While publicity and criticism revolved around the 62versus-50% debate, Oxfam’s new report actually includes a new and more telling set of statistics based on recent work done by the World Bank’s Christoph Lakner and City University of New York’s Branko Milanovic.
This is an ambitious attempt to calculate global income inequality, instead of wealth, from 1988 to 2008.
The nub is that global income doubled to $26 trillion in those 20 years, but 44% of that accrued to the top 5% of the global population.
Lakner and Milanovic combined national income surveys from all over the world to try to calculate a Gini coefficient for the whole planet. The Gini coefficient is a popular measure of inequality, where 100% represents one person owning everything and 0% means everyone has exactly the same share.
They came up with a global Gini of around 70% for 1988 and 2008, with little evidence that it had changed at all. That is comparable to South Africa’s Gini, which is routinely described as the highest (most unequal) in the world.