An aerial view of Rio de Janeiro, Brazil.
“Together, we fight inequality to end poverty and injustice”—proudly declares Oxfam International. Like clockwork, the organization uses the World Economic Forum annual meetings to issue a predictable, if repetitive, communiqué that has become influential in policy circles around growth: sustainability issues and income inequality are the root causes of poverty across the world.
This unfortunate zero-sum mentality begs the very question at issue. It would be hard to find policy intellectuals opposed to a more just society or to work at eliminating poverty. But Oxfam’s position confuses means and ends. Is taxing the 1% and empowering self-congratulating noble bureaucrats (those featured in Bill Easterly’s intellectual exposé as “the tyranny of experts”) the best way to address the great challenge of reducing poverty? This position is a highly misleading picture of inequality and poverty—almost to an extent where facts are irrelevant to the anti-entrepreneurial ideology embodied in the Oxfam statement. All people, even hard-core Maoists, engage in human action; and humans, here and everywhere, respond to incentives.
As a counter to Oxfam’s “same time next year” message on income inequality, a group of Atlas Network partners in Latin America, together with other allies and civil organizations, have issued a communiqué in the same spirit, to take the conversations about inequality and poverty in a different direction. At Atlas Network’s Center for Latin America, we support the work of our partners and allies on behalf of rule of law and sound property rights, freedom of choice to engage in open markets (produce, invest, consume, innovate), and freedom to trade with other persons across borders. These principles have helped to reduce worldwide poverty to the lowest levels in history (from 26% of the world population to 5.4%), in under three decades. They are still the best course of action to enhance the livelihood and human dignity of families that continue to live in dire economic conditions—especially as the world attempts to find a light at the end of the pandemic tunnel and the global economic depression it has generated.
Our partners reject the facile “magic wand” approach that mistakenly assumes that the solution to poverty lies in wealth-distributing strategies akin to fashionable positions of democratic socialism, rather than with wealth-creating approaches that emphasize innovation, social mobility, and empowering citizens with opportunities for progress.