Boudreaux on McCloskey on Oxfam and Inequality

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From the article:

The Oxfam report early in 2014 [noted] that 85 super rich people own as much as the entire bottom half of the world population. . . . But if the $1.5 trillion was seized and distributed to the bottom 3.5 billion people in the world it would amount to only $428 per person.  That appears at first thought a nice, 10 percent supplement to the average yearly income per person of the bottom half of something like $4,000 a year (about 8 percent of U.S. real income per person). But of course, on second thought, if distributed this way the expropriation would give nothing at all next year and the next and the next.  Expropriation of wealth can happen only once, unless we arrange somehow to make Carlos Slim into a slave who keeps slowly re-accumulating his $73 billion, to have it taken in a while again.  On the other hand, if the $1.5 trillion expropriation was invested at, say, 5 percent it would be a perpetual gain of $21.40 a year to each person in the poor half.  Good, and prudent.  But wait: it is a gain of only about half of 1 percent per year of the $4000 of present-day annual income per person, and less and less as the poor countries grow towards the blade of the hockey stick.  We can’t make the poor much better off by taking wealth or income from the rich.  We need the economies in which they work to be vastly more productive—which is what happened 1800 to the present.

Source: Don Boudreaux, "Deirdre McCloskey on Oxfam’s Calculation of World Wealth ‘Distribution,’" cafehayek.com, January 27, 2014