Oxfam’s Flimflam

OxFam

Goat Gifts: Oxfam’s Unwrapped Campaign

A report of the British charity Oxfam recently drew attention to the fact that Britain’s five richest families had more assets than the lowest 20 per cent of the population put together. It called upon the government to consider instituting a wealth tax to reduce the gap, by how much it did not say. Would the poorest fifth be much the better off, or at least happier, if 20, say, or 50, rather than five families now had more wealth than they?

The recent recession in Britain actually made the country more equal than before. The incomes of the richer classes were more vulnerable to the economic downturn than those of the poorer, which are held more or less constant by the government. If equality is what we want, then, recession is one way of increasing it. But no one seemed the happier for it—certainly not the poor and unemployed, even though they were proportionately better off.

Now that the recession is over (for now), the country is growing more unequal again, hence Oxfam’s moral outrage.

It is curious that a charity should appeal to envy and hatred. Man being a comparing animal, envy comes naturally to him, and I doubt that it will ever be expunged entirely from the human heart; but it is one of the seven deadly sins nonetheless, and for good reason. It poisons the mind by focusing on what a person does not have rather than on what he does, and on what he can’t do rather than what he can; it embitters by drawing attention to those more fortunate than oneself, without causing one to become more compassionate to those less fortunate. Envy is midwife to that most unfortunate of human conditions, fatalism without contentment.

Hatred is the strongest of all political passions, and while it is sometimes justified, often it is not. It is regrettably easy to stir up because it is enjoyable in itself. It is difficult to believe the Oxfam report’s authors were unaware of the document’s hatred-stirring potential. Rarely is hatred constructive; rather it leads to outbursts of destruction, sometimes more destructive to the haters than to the hated.

Only if it were the case that the five richest families enriched themselves at the expense of the poor—only if they were rich as a direct consequence of the poor being poor, for example, by having enslaved them or by taking their property by arbitrary force—would hatred be justified. But in fact the rich did not become rich in this way. They didn’t even become rich by the kind of financial dealings now deemed disreputable by most of the population. Two of the richest families inherited their wealth, but three were self-made (and interestingly, two were of Indian origin). The Oxfam report actively promotes the single most disastrous economic idea of all time, that the economy is a cake and a slice for me means crumbs for you.

There are, of course, illicit ways of self-enrichment: theft, fraud, embezzlement, malversation of funds and so forth. They cannot account for wealth as a whole. After all, something must exist before it can be embezzled.

The charity speaks as from the moral high ground, but if one looks at its website, it is far from morally unimpeachable itself. In fact the group’s self-presentation is grossly dishonest, or perhaps I should say economical with the truth. For example, Oxfam claims that for every £1 donated, 84 pence (per cent) is spent on emergency, development, and campaign work, 9 pence on support costs, and 7 pence on investment “to generate future funds”—presumably using the same methods as the richest families.

A look at Oxfam’s annual report for 2011-2012 suggests that this is a very charitable way of interpreting its own activities. It raised £118.5 million ($196.7 million) by voluntary donations that year, but spent £101.8 million on staff salaries— £59.5 million on British staff alone. No doubt work cannot be done without paid staff, but since the website shows a picture of happy, smiling, formerly impoverished people saved from their misery by Oxfam, I doubt that paying the salaries of staff is what most contributors had in mind when they dropped their coins into the rattling tins. Suggestio falsi, suppressio veri comes to mind.

Nor would most contributors suspect where the majority of Oxfam’s money comes from: government, in other words, from the forced contributions of taxpayers in various countries. Such funds amounted to £170.1 million as against £118.5 million genuinely charitable contributions. An organization so financially dependent upon forced contributions cannot be called a charity at all, in fact, unless taxation under threat of prosecution if not paid be regarded as charity.

The average salary paid to Oxfam workers abroad is $24,000 a year. This is not, of course, a salary to make a Swiss dream; but it may well rank above the average of salaries in the countries where many or even most Oxfam employees work. In that case, the whole raison d’être of Oxfam is non-existent. Its staff may or may not be well-intentioned, but they are not egalitarians where their own income is concerned.

There are three staff in Oxfam paid between $166,000 and $182,000 a year. There are, of course, many people in the world earning much larger sums, but such a salary represents considerably more than a living wage, which is the most that one would expect a true charitable worker to earn. What’s more, Oxfam runs a defined-benefit pension scheme, of which most workers today can now only dream. The chief executive also incurred $80,000 in expenses in 2013. Again, I doubt that the average donor, thinking of the relief of starving babies with flies on their eyelids, is aware of this as he makes his contribution.

Oxfam runs charity (thrift) shops throughout Britain to raise money. Most of the goods are donated, and most of the people who work in them are volunteers. Moreover, the shops pay reduced local taxes and, of course, no corporation tax. The goods donated free of charge were worth £79.6 million, yet Oxfam contrived to make only £25.2 million profit on them. Oxfam bought goods to sell in its shops for £8.6 million, but it cost Oxfam £11.3 million to sell them.

When I took a straw poll of Oxfam volunteers working in their shops to find out what proportion of the takings they thought went to charitable activities, they all said, as if I were asking a foolish question, “All of it, of course.” In other words, Oxfam was not only operating a grossly inefficient business, at least from the point of view of its ostensible ends, but it systematically misleads its own volunteers. If they knew the truth—which, admittedly, they could find on the Internet—they might choose to occupy themselves differently.

So this organization peddles false impressions in more than one sphere. If ever the argument tu quoque were justified, it is here. Oxfam promotes highly contentious views on the one hand and is less than scrupulous in its dealings with its own supporters on the other. In fairness, many of the largest British charities are worse; in some cases, much worse. Charity is no longer charity.

Theodore Dalrymple

Theodore Dalrymple is a retired prison doctor and psychiatrist, contributing editor of the City Journal and Dietrich Weissman Fellow of the Manhattan Institute.

About the Author

Comments

  1. nobody.really says

    Is envy an optimal tool for promoting public policy? No. By the same token, resentment against “welfare queens” is pretty bad, too. The principle different in these strategies being, the wealth have vast resources with which to protect and compensate; people on public assistance, not so much.

    Oxfam calls for more progressive taxation to finance a stronger social safety net. Oxfam does not call for exempting its CEO from taxation, or its $24000/yr employees, so I don’t see the hypocrisy. Heck, assuming the $24,000/yr employees work in countries with progressive taxation, they may well pay at the high end of those countries’ tax codes – and that’s fine by me.

    It is wrong to ask the rich to contribute more for the support of the poor? Especially if the rich didn’t make their wealth through theft, but rather came to their wealth via inheritance and “self-made” means? No. In short, the vast majority of our wealth is a function of inheritance; none of us are “self-made.”

    Someday someone will do the Great Regression Analysis of Wealth: A calculation reflecting all the life circumstances of every human being that ever lived to find the most predictive variables of wealth. Here’s what I would expect to find:
    1. Wealth correlates with living in the present.
    2. Wealth correlates with living in developed, industrialized nations.
    3. Living in developed, industrialized nations correlates with being born in those nations.
    4. A person’s wealth correlates with the social class of his parents.
    5. Wealth correlates with being male.
    6. Wealth correlates with being able-bodied, and avoiding mental illness.
    Etc.

    In short, the VAST majority of factors that influence wealth are things over which a person has no control whatsoever. My favorite illustration: Who has earned more in his lifetime, JS Bach or Justin Beiber? And why? Maybe Beiber is more talented and hard-working than Bach. Or maybe Beiber happened to be born into circumstances where a person with musical talent and drive could accrue wealth in a way that a person born into Bach’s time could not. Moral: Talent and drive are not the sole determinates of wealth; social context trumps.

    This is not to say that we should ignore incentives for people to make use of their talents, such as the profit motive. Quite the opposite. Yet we focus on incentives not because they influence the most dominant determinants of social outcomes, but because incentives are the primary way we can have any influence at all on social outcomes.

    In short, no one’s wealth is self-made; the most important determinates of wealth are provided by the society into which a person just happens to be born. Given society’s contribution to creating wealth — and, arguably, society’s burden to care for people who just happen to be born into circumstances that do not facilitate wealth creation (e.g., with physical and mental disabilities) — it’s entirely appropriate to allocate societal wealth to provide for societal needs. Questions about whether the wealthy “stole” from the poor are really a side issue.

    Thus, there is nothing wrong with society allocating social wealth as society deems appropriate – except to the extent that the cost of any resulting bad incentives outweigh the benefit of the reallocation.

    • Doubting Rich says

      “Is envy an optimal tool for promoting public policy? No. By the same token, resentment against “welfare queens” is pretty bad, too.”

      You do realise that the original “welfare queen” embezzled tens of thousands from the government, don’t you?

      Regardless, the difference is obvious. The welfare recipient is making money from resources removed from those that worked for it by threat of force. The targets of envy did not make their money at the expense of others.

      Of course there are legitimate targets of wrath. Government employees paid high salaries despite working in jobs that many others could do, or despite utter incompetence in those jobs are taking money at the expense of us all, again money taken under threat of force. Government employees or politicians who are paid large salaries by private companies either as second incomes during their office or in work they are given immediately after resigning, those large salaries being dependent upon their government work either as pay for favourable treatment or due to horrible regulation they implemented, and on which they are now expert.

      People who made their wealth under contracts freely entered into and fulfilled honestly are not legitimate targets of anger.

  2. gabe says

    ” My favorite illustration: Who has earned more in his lifetime, JS Bach or Justin Beiber? And why?”

    Certainly not for the reasons that you assert.

    Let us look at them.

    First however, could it be that the reason why JS Bach had less wealth than that insufferable Boober was because over the course of several centuries a system (capitalism) created a hitherto unheard volume of wealth that has been shared far more equitably than in previous agrarian, pre-capitalist societies?
    Consider, if you will, that for the time period when good old Johann plied his trade that there was insufficient capital, actually coinage, to make wage payments to workers or to finance any significant market endeavors. How was this favorable or equitable to the poor who, in fact, lived a life that was short and brutish and in many instances amounted to no more than serfdom. Contrary to popular opinion there was much charitable giving by the wealthy and by no-state agents (church, parish, local societies, etc) – and this continues to this day. An argument can be made that those non-state actors provided a much more efficient AND effective source of relief to the impoverished and disabled and that this was accomplished without the consequent “enrichment” of the welfare providers such as is the case today. Ever wonder why the CEO of the Red Cross was receiving $1,000,000 in wages? Nice gig, if you can get it. I do not recall ever seeing the local priest or rabbi driving around in a chauffered automobile. You claim ” there is nothing wrong with society allocating social wealth as society deems appropriate” – true – IF you accept the premise that Government is society – it is manifestly not so! At best, it represents a transient majority, if at all, and further suffers from a “distance” from the very people it claims to support. Additionally, in its willful refusal to recognize and value “local sentiments” and traditions it isolates and marginalizes local efforts / communities. Seems to have worked out pretty well, duh ya think???

    You assert:
    1. Wealth correlates with living in the present. – True
    2. Wealth correlates with living in developed, industrialized nations. – True
    3. Living in developed, industrialized nations correlates with being born in those nations. – A Truism of nominal informational value
    4. A person’s wealth correlates with the social class of his parents. – Not quite as true as you assert!
    5. Wealth correlates with being male. As the narrator on Liberty Insurance commercials says, “Not so much” anymore –
    6. Wealth correlates with being able-bodied, and avoiding mental illness. – True, yet meaningless as there is nothing much to be done about unless, of course, one wishes to accept Margaret Sanger’s eugenicist argument.

    While there is a certain truth in these assertions, they are nevertheless FALSE.
    It is easy to arrive at such a false conclusion when one ignores history. For all the “truth” of the above statements which you posit as an indictment of the current system, there is a hidden truth which you do not, or choose not to share. It is this, wealth has accrued (actually been created) in developed countries precisely because of a system that fostered the creation and free movement of capital; it is this capital formation and its power to break free of certain legal constraints which supported the previous agrarian economy that has resulted in the greatest improvement for the greatest number of people that humanity has ever experienced. It is also why(contrary to your point #3) that there is still a massive in-migration into industrialized nations.
    One could go on……….

    It is important to remember that this massive expansion in prosperity was possible only because of a belief in property rights, but I’ll not belabor the point.
    Should one with accumulated wealth provide for the less fortunate – of course!
    Should they be compelled by government to do so – “Not so Much” as to toss the system out on its head!

    Prof. Dalrymple’s essay while describing a “private sector” charity (questionable since its funds come primarily from government) could just as easily be describing any Federal Agency. They really are rather inefficient and most ineffective in that “Golly Gee, the poverty rate just seems to go up and up” even though we have spent upwards of $4-5 trillion on it over the last 40+ years. And you seek more of this “beneficience” to be bestowed upon the public.
    Nobody really believes that!

    • nobody.really says

      ” My favorite illustration: Who has earned more in his lifetime, JS Bach or Justin Beiber? And why?”

      Certainly not for the reasons that you assert.

      Let us look at them.

      [C]ould it be that the reason why JS Bach had less wealth than that insufferable Boober was because over the course of several centuries a system (capitalism) created a hitherto unheard volume of wealth that has been shared far more equitably than in previous agrarian, pre-capitalist societies? [Etc.]

      Why — you’re right! Gosh, it’s almost as if Beiber happened to be born into circumstances where a person with musical talent and drive could accrue wealth in a way that a person born into Bach’s time could not. Such an insight might even support a moral that talent and drive are not the sole determinates of wealth; social context trumps.

      I wish I’d said that. I must console myself with the humble conclusion that nobody.really could have reached this insight before Gabe did.

      Ever wonder why the CEO of the Red Cross was receiving $1,000,000 in wages? Nice gig, if you can get it. I do not recall ever seeing the local priest or rabbi driving around in a chauffeured automobile.

      Perhaps you are unacquainted with prosperity gospel ministers?
      Moreover, what of it? Are you seriously suggesting that people engaged in public service should earn less than hedge fund managers? That you, a private citizen, should dictate what other private agents do with their money? I understood Dalrymple’s complaints about the pay scale of Oxfam’s CEO to be facetious, a way to make a point about how count-productive it is for Oxfam to stir resentment toward the top five wealthiest families in England. In contrast, I can’t see what point you’re trying to make.

      If we, as a society, conclude that market mechanisms are insufficient to police CEO pay – and there’s some evidence for that – then we, as a society, should adopt policies to address it. Those policies would presumably apply to the CEO of the Red Cross as to anyone else. But if we don’t feel that way, I’m not seeing the point of grumbling about the Red Cross more than any other entity.

      [I]n its willful refusal to recognize and value “local sentiments” and traditions [government] isolates and marginalizes local efforts / communities. Seems to have worked out pretty well, duh ya think???

      Admittedly, the Civil War and the repeal of slavery had some effect to stigmatize and isolate the South. But in truth, the South was already stigmatized and isolated. So yes, the policy had adverse consequences. Nevertheless, I think stamping out the South’s “peculiar institution” had more benefits than costs in the long run.

      Not sure how this pertains to the rest of the discussion.

      1. Wealth correlates with living in the present. – True

      2. Wealth correlates with living in developed, industrialized nations. – True

      3. Living in developed, industrialized nations correlates with being born in those nations. – A Truism of nominal informational value

      4. A person’s wealth correlates with the social class of his parents. – Not quite as true as you assert!

      Social class gets manifest in a child’s biological data; it’s effects are pervasive throughout a person’s life – further undermining the thesis that a person’s fate is purely a function of individual, rather than social, circumstances.

      5. Wealth correlates with being male. As the narrator on Liberty Insurance commercials says, “Not so much” anymore –

      6. Wealth correlates with being able-bodied, and avoiding mental illness. – True, yet meaningless as there is nothing much to be done about [it]….

      Seriously? You think there’s nothing to be done about this – yet the statement about wealth being correlated with living in the present doesn’t provoke a similar remark? Apparently you own a time machine?

      This whole discussion was triggered by Oxfam advocating for a more progressive tax structure to provide a stronger safety net for, among other things, people with mental and physical disabilities. In short, yes, we can do something about this – and Oxfam is suggesting precisely what we can do. We can acknowledge that the principle drivers of our wealth are matters that were purely a matter of chance, and thus there is no injustice in distributing wealth to people who, for purely matters of chance, have been put into positions where they will be unlikely to accrue wealth.

      • gabe says

        “We can acknowledge that the principle drivers of our wealth are matters that were purely a matter of chance, and thus there is no injustice in distributing wealth to people who, for purely matters of chance, have been put into positions where they will be unlikely to accrue wealth.”
        No, you may wish to assert such a fallacy – but the mere fact of your assertion does not compel me to accept it.

        The principle drivers of our wealth are not solely circumstantial as you would wish or require to justify your “redistributionist” fantasies. If this were the case, why are not all persons similarly situated wealthy? why is there so much movement between the various stratas of wealth – perhaps a better indicator may be age. Older folks have more money – why did the society change so profoundly (in the ways you mention) during their lifetime? – or is it due to good habits of enterprise, moderation and thriftiness. But we can not have that, now can we? If we did, it may make it a bit more difficult to justify taking Grandma’s money from her!

        As to providing for the disabled, I know of no one who does not support this. My point, and i think it is consistent with the good Professors, is that these “charitable” actors, like the government actors which they align are far less effective at ameliorating the problem than is private local based charity. What is more they tend to be populated at the managerial level with self-serving, self-promoting characters who do enjoy their perks! In respect to government, they also define their success in terms of how well they GREW the agency. (Just check out the historical figure).

        No, thank you. I will stick with the local yokels who provide a far more effective and humane mechanism and whose motives are not sullied by personal aggrandizement.
        As to the “mega-church” looney-tunes” there will always be fraudsters amongst us -similar to Oxfam, duh ya think?

      • says

        “We can acknowledge that the principle drivers of our wealth are matters that were purely a matter of chance, and thus there is no injustice in distributing wealth to people who, for purely matters of chance, have been put into positions where they will be unlikely to accrue wealth”

        Well yes, luck has a lot to do with success. That’s several steps back from all the other slightly vague waffle you’re claiming. For example everything you say after the word “thus” (forsooth!)

        “Thus” is a word that makes your argument sound tightly reasoned, like a mathematical proof. In actual fact there is no connection at all between the vaguely true premise and the wild assertion that follows.

        It’s also rather difficult to say how much of someone’s success is luck, and how much talent and hard work. How would you measure that? That you think it is “purely a matter of chance” makes it sound as though you’ve swallowed a particular political view uncritically.

        Lastly I’d point out that though luck is important – there remain the questions what if anything can/should we do about it? At which point people of a certain persuasion say “obviously state confiscation & redistribution of wealth” without checking a) whether it’s fair or b) does it work

  3. libertarian jerry says

    In the end “societies” don’t exist. You exist, he exists,she exists but the idea of a society is an abstraction. Yes it is true that we live in an abstraction that benefits most people but who or what entity decides how individual wealth is to be distributed for those benefits? Is it the State? Is it the politicians who were voted into power by a majority? What about the property rights of the minority? Are we to live in an “economic democracy” where people’s property rights are voted away by a majority? In this abstraction called “society” history has shown that the more free the economy is the more prosperous are the members of this thing called a “society.” Only in a “society” where property rights,the rule of law and the right to keep the fruits of one’s labor do a majority of most people prosper. Free market capitalism is not perfect yet it is the system that has lifted more people out of poverty then any system ever tried,including socialism. Socialism or the modern Welfare State is a gutter philosophy in that it depends on the envy,coveting,greed and the megalomania of it’s supporters. Socialism is based on the idealism of force and violence to achieve the socialist’s world view. After all,where would all the tax revenue come from if not for tax collectors,law enforcers,guns,prisons and threats of violence against people who don’t want to pay their “fair share” or obey the laws of the State. In the end taxation is theft, even if the world views of people who believe in redistribution seem like something that is the “moral” and “just” thing to do. People who have been successful in life,whether by hard work or luck own 100% of their property. If they wish to help the poor by voluntary charity so be it. If not that is their business. To claim that somehow people who are financially successful must have an albatross hung around their necks called society and that they have to “give back” to that society is not only ludicrous but opens up the road to serfdom. History shows,over and over again,that the more economically successful a “society” is the more volunteered for charity. This is why historically Americans have given away more to charity then most of the nations of the world combined.

    • nobody.really says

      To claim that somehow people who are financially successful must have an albatross hung around their necks called society and that they have to “give back” to that society is not only ludicrous but opens up the road to serfdom.

      “There is no reason why, in a society which has reached the general level of wealth ours has attained, the first kind of security should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured …. but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody….

      Nor is there any reason why the state should not assist the individuals in providing for these common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state’s helping to organize a comprehensive system of social insurance is very strong…. [T]here is no incompatibility in principle between the state’s providing greater security in this way and the preservation of individual freedom. To the same category belongs also the increase of security through the state’s rendering assistance to the victims of such “acts of God” as earthquakes and floods. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken.”

      Friedrich Hayek, The Road to Serfdom, Chap. 9, “Security and Freedom”

      “I have always said that I am in favor of a minimum income for every person in the country.”

      Hayek on Hayek: An Autobiographical Dialogue by F. A. Hayek, edited by Stephen Kresge and Leif Wenar (Chicago: University of Chicago Press, 1994)

      “The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born.”

      Friedrich Hayek, Law, Legislation, and Liberty, Vol. 3.

      “Perhaps it is best to view some patterned principles of distributive justice as rough rules of thumb meant to approximate the general results of applying the principle of rectification of injustice. For example, lacking much historical information, and assuming (1) that victims of injustice generally do worse than they otherwise would and (2) that those from the least well-off group in the society have the highest probabilities of being the (descendants of) victims of the most serious injustice who are owed compensation by those who benefited from the injustices (assumed to be those better off, though sometimes the perpetrators will be others in the worst-off group), then a rough rule of thumb for rectifying injustices might seem to be the following: organize society so as to maximize the position of whatever group ends up least well-off in the society.”

      Robert Nozick, Anarchy, State, and Utopia, at 231.

  4. libertarian jerry says

    To Nobody really: Private charity yes coerced state charity no. Voluntary cooperation yes the use of violence no. The fruits of my labor are my property and don’t belong to the collective to be “redistributed.” The rest is political mumbo jumbo. You cannot legislate morality. Especially the moral world view of collectivists. In the end it comes down to violence. How else to part people with the fruits of their labor that they don’t want taken from them. Distributive justice? Not at the point of a gun.

  5. says

    The paragraph on envy is excellent and very to the point.

    The following bit about “hatred” is less so. We’ve heard so much about “hatred” recently – from rabid leftists and feminists – that it’s focused my mind on the fact that the word has no meaning (like “love”, which of course covers hundreds of different states).

    “Politically self -ighteous anger and spite fuelled by the envy” isn’t quite so succinct, I grant you, but “hatred” is becoming meaningless, and will be ignored by those who don’t wish to listen to you

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