Oxfam, you're full of FAIL. Leave economics to sensible bods

Which 20%?

The subhead says "Five families own more than 20% of the UK? Rubbish"

But the article says the the five families have more wealth than the bottom 20% of the UK households do. I suppose "20% of the UK" could be taken as an ellipsis for "20% of the UK Households Do", but at first glance it appears to say "20% of all wealth in the UK.".

"negative wealth"

What the hell is negative wealth? Is it what people used to call debt? If you have £30K of student debt that is not wealth. You may regard it as an investment in an asset (a university degree) which may or may not result in an improvement in your overall wealth such that the debt is repaid but which ever way you look at it, debt is still debt.

With respect to the taxation of the rich, yes they are taxed in order to pay pensions, for the NHS, defence, policing, etc. But only partially for the benefit of the poorer people in society since believe it or not the availability of pensions, NHS, defence and policing et al is also provided to the rich and let's be clear the poor earning about a certain level also contribute to this at a level that is disproportionate to their income.

Oxfam are right to exclude the pensions and NHS plus all the other state provided elements of wealth from their calculation as these net out at zero in terms of value to all parties (rich and poor). The loss of paying for these items is however far greater for the poor whereas the value of state welfare is far more valuable the wealthy; think tax breaks for buying trees, not using farmland, investing in commercial property, etc. Also think about the tax breaks available for investing in other commercial ventures which mean you get the double whammy of reduced tax and potentially large investment returns.

As for the absurd statement that it is logical that 5 families own more of the UK's wealth than some 20% of the population, why is that logical? Why should it not be 5% of the UK has more wealth than the bottom 20%?

Redistribution of wealth is a bigger driver of progress than ownership by a few will ever be. Those at the bottom should and normally are always striving to improve their lot thus creating demand for goods and services primarily met by large scale industrialization and thus generation of employment and wealth. Those at the top always seem to be seeking greater returns thus generating more automation resulting in fewer jobs or paying of lower wages thus cutting consumption and reducing employment although not necessarily so in the country of low wages.

Wealth inequality will always exist it is something that cannot be changed but the question that Oxfam is really asking is to what should that level of inequality be; where those at the bottom have to rely on charity to feed themselves whilst the rich can pay over the odds for a tin of tuna? or should the inequality be reduced where all people are able to feed themselves to an acceptable level without having to go in to "negative wealth"?

Completely misunderstanding

"It's obvious that the top five families will have more than 20 per cent of all Britons. Do they think we all just got off the turnip truck or something?"

Actually, this is not obvious. In fact, if the Lorentz distributions that Gini uses were correct, this would certainly not be the case. For a Gini of 0.33, the bottom 20% owns/earns 4% of the total wealth/income. For the top 5 families of the UK (~ the top 0.00001%) to earn more than that, the Gini coefficient would have to be very close to 1.

That is the point of the Credit Suisse report that the Oxfam numbers are based on. The Lorentz curves heavily underestimate actual discrepancies in the wealth and income distribution. This goes a fortiori for the after-tax distributions. This is what all the recent hubbub is about: there is a top echelon in our societies that is extremely rich, and hence extremely powerful. There is more than a whiff of ancient regime here, and it is dangerous. It is dangerous for the rich, who may find themselves targeted. It is dangerous for the politicians, who may find themselves stuck between assuaging populist anger and preserving the financial backing they need. It is dangerous for our economies, because - unlike the ancient regime - the rich are globally mobile, so their interests are even less aligned with those of their local economies.

In short, you don't understand why there is an issue because, well, you either don't read the reports or you fail to grasp what they mean. Oxfam may be a peculiar champion for equality in developed nations, but it makes some sense: they know very well how wealth disparity on a global scale can keep vast swathes of the world in dire poverty. Maybe they should focus on fixing the global problem rather than the local one, but perhaps they concluded that developed countries are too much in thrall to those who benefit most from the global inequality. In any case, if you don't understand the message, don't shoot the messenger.

You are full of fail too

Your sub headline and proposition disagree.

Five families own more than 20% of the UK?

vs

The scale of Britain's growing inequality is revealed today by a report from a leading charity showing that the country's five richest families now own more wealth than the poorest 20 per cent of the population.

Those are not the same thing. If the poorest 20% of the country own lets say 1% of the countrys wealth (just an EXAMPLE!!!) then saying 5 of the countries families own 1% of the countries wealth seems likely?? rather than owning 20% of the UK which is entirely different. i think this is poor statistical analysis, even after some lunchtime grape juice

WTF has this got to do with IT? This is The Register, not The Guardian.

Oxfam don't know their arse from their elbow

I don't know why people listen to the rubbish they spout.

Yes and the top 1% in the UK pays 27.7% of the tax.

http://ukhousebubble.blogspot.co.uk/2012/04/who-pays-income-tax.html

So while people do what they can to avoid tax *at all ends of the scale* - "discount for cash mate, cough cough", I think that's a pretty generous contribution/

Says it all really....

Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of the feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.

Money – almost akin to dark matter – it's everywhere, we are told nothing would function without it and it interacts, with varying degrees, with all of us. Some have the means to attract large amounts of it to themselves, whilst others are less concerned with such attachments, preferring to place more 'value' in people and their environment. Or just plain 'putting up' with the fact that the bloody stuff has to be dealt with at times.

Money as a Sticking Plaster (read Oxfam and International Aid etc.) – doesn't really work because it won't interact properly with 'softer' real-life values, like how to build a shelter for me and my family without it bloody interacting with the individuals who act as a conduit for it and syphon a portion off for their own gains. Human individuals go all bat-shit at the very sight of the stuff and cannot control themselves or think rationally about how to convert it into useful things. Neither does it solve underlying problems in the developing world, it just keeps interacting destructively with dumb people again and again.

Every man on this planet wants; a dwelling, some active employment – rewarded with food or the means to buy food etc. and the chance to improve the lives of their offspring (read educational opportunities). But this bloody stuff (money), distorts and skews the chances wildly. Some people go crazy for Cartier watches and luxury cars – pumping up the particle energy levels of money to unsustainable stupid values. They revel in orgasmic-like trances over everything that glitters, further reducing their ability to rationalise the wider impact of applying too much value to this little understood material.

People themselves are of so much more real value and importance – get over it.

Will the Physician be taking his own medicine?

How about El Reg sticks to what it knows... Biting the hand that feeds IT. Leave the hand that feeds the hungry to those who know what they're talking about.

You've got 'em across the pond, too, eh?

Maybe I am assuming that the article writer is UK because that is where most of the articles hail from, but this "oh, shut up and eat your gruel" is classic Tea Party drivel. I have no problem with him asking organisations to stick to their original mission, but being proud of being a right wingnut is frankly proof of his stupidity. "I'm right(wing), and therefore, by definition, you are wrong" is what is murdering whatever "exceptionalism" the USA could have claimed to have. Yes, some people are poorer than churchmice. The question is, what if anything, to do about that? Throwing crusts to a permanently underfed, undereducated underclass and neglecting public works (from roads and sewers to libraries), or reasonable attempts to help people get out of that condition? "I've got mine - shove off" or "I got this partly through my own efforts and partly because those before me invested in the public good - so I need to pay it forward also" The US is foundering not because of the income inequality, but because people conflate wealth with superiority, with knowing what's best for all others, with OWNING others (we made that mistake once).

The problem is often liquidity, not inequality

I think the problem is liquidity rather than inequality. You might have lots of shares, property, etc, but they don't mean much in your bank account when you need dosh at short notice. Likewise property often attracts lots of costs (e.g. maintenance, security, etc). Plus, owning an house only puts you at a wealth advantage if you can dispose of it for less than it would cost to house you for the rest of your life.

I recently joined the ranks of the negatively wealthy by buying an house with the help of a mortgage. I have some savings and an income so we can live comfortably right now, but we could theoretically be turfed out by the bank if it wants its share of our house's equity.

Inequality isn't a big problem so long as the bell curve of wealth is wide enough and people can live comfortably.

Magna Carta happened because no one person was powerful enough to dictate things. We celebrate it because of the philosophical value, but the reality was that it mostly affected the barons who owned lots of land. They were the ones who had most to lose if the king arrested them without due cause. The peasants' lot was most improved by the forest charter, which was also signed at the time of Magna Carta.