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How to Lie with Statistics, An Oxfam Manual


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Once again, the NGO Oxfam shares a report claiming that the wealth of the few is killing millions of people around the world, and that while 10 billionaires have doubled their fortunes during the pandemic, the incomes of the 99% have deteriorated.

Among Oxfam’s other claims this year is that “every 26 hours a new billionaire emerges in the world, while inequalities contribute to the death of at least one person every four seconds.”

The scandalous statement naturally has a political tinge and in its own report it acknowledges that it considers basically any death due to starvation, gender violence, lack of access to health or climate change as a death due to inequality, and next to it it puts the supposed number of billionaires to have a responsible person by association.

Guilt by association: while Elon Musk multiplied his fortune during the pandemic, millions of people died because of “inequality,” according to Oxfam. (EFE)

In the introduction to this year’s report, Inequality Kills, Oxfam acknowledges that “just as every famine is political and man-made, so is every Covid death.” That is, although it explicitly does not do so, it acknowledges that it would be willing to attribute deaths from a pandemic to inequality if it serves its political ends.

This is Oxfam’s big problem, their reports are not really studies in the sense that they state a hypothesis, develop a methodology to corroborate or disprove that hypothesis, and then present public policy recommendations. None of that is in the document.

The NGO reports are merely accusation by association. They pull out any data that serves their narrative, contrast it with some data on the wealth of the 1% and, without saying how or why, presume that the problem would be solved if the mega-rich paid a certain amount of money. In the best style of Darrel Huff’s classic work, How to lie with statistics?

That is why they can pull data like a magician pulls a rabbit out of a hat, along the lines of: if the rich paid a one-time tax on 99% of the appreciation of their assets during the pandemic, it would be enough to fully immunize humanity (although they do not clarify for how long).

How to lie with statistics, Oxfam-approved

Normally, the methodology sheet of a research paper is a technical document where you can find the sources of information and the statistical or quantitative methods on which the authors of the study based their conclusions.

Oxfam’s methodology sheet, on the other hand, looks like a political pamphlet riddled with useless data such as “if the top 10 billionaires sat on top of their combined wealth piled up in US dollar bills, they would reach almost halfway to the moon.” This “fact” literally appears on the first page of the methodology.

Take the NGO’s first statement in its report: “The wealth of the 10 richest men has doubled, while the incomes of 99% of humanity are worse off.” This sentence is misleading and the reason why is answered by a convenient adjustment of the data.

The COVID-19 pandemic affected the income of millions of people, but the average wealth per household grew by 7%, according to Credit-Suisse data. (EFE)

For this data, Oxfam takes the statistics of the fortune of the 500 richest people from Forbes magazine and compares their growth between March 2020 and November 2021, so far so good. The problem comes when estimating the share of the 99% of the rest of humanity, where the NGO only takes income data from the World Bank and omits the income data of the 1%, as these also decreased and do not fit its narrative (something that is confessed in the document’s own methodology sheet).

This trick is fundamental for Oxfam, as it deliberately compares apples with pears. While it takes the entire fortunes of billionaires for comparison, it omits wealth data for 99% of humanity. That is, Oxfam ignores the value of homes, small businesses, pensions, savings, and merely takes current income data that boils down to wages to claim that inequality between the mega-rich and the rest is worse than ever.

Among academics, criticisms of Oxfam’s reports abound: that it does not adjust its data between countries for purchasing power parity (i.e. a dollar buys much more in Tanzania than in New York) or that it does not take into account the value of education as part of people’s wealth. The NGO has not corrected its methodology and has opted for further such adjustments to the data or convenient omissions.

The political agenda behind Oxfam’s “data”

These data adjustments naturally have a political agenda. Among Oxfam’s recommendations to end inequality, a massive cancellation of debt owed by low-income economies to developed economies (including private debts) can be found.

Oxfam cares little that the evidence, as economists such as Zambian Dambisa Moyo and Ghanaian George Ayittey have pointed out, shows that debt forgiveness has had no positive effect on income growth for citizens, and has instead served to line the pockets of the ruling elites.

While inflation devastates the pockets of Argentines, Oxfam praises Alberto Fernandez’s government for taxing the richest. (EFE)

The Oxfam report also pushes for the establishment of a 10% wealth tax on wealth in excess of $1 million, and praises the Alberto Fernandez government for imposing a temporary wealth tax to finance the pandemic, while ignoring that Argentines have been among the people who have lost the most purchasing power during the pandemic due to rampant inflation as a result of Kirchnerism’s policies.

This is not a call for inaction, but solutions to problems such as poverty, lack of access to health or education, are usually local, and are never given because of a mega-proposal that assumes that wealth (among which are machines, homes, pensions, etc.), is cash that could be used to end all the problems of humanity that today are translated —conveniently— in the word inequality.

Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica

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