The economist who confused income with wealth
A Development PhD compares Amancio Ortega's wealth to an ordinary worker's salary. Criticised for mixing up income and wealth. Mistake or ideology?
English · Original discussion in Spanish · Published
Julen Bollarin compares Ortega's donation to a low earner's salary: the classic confusion between income and wealth
Economist Julen Bollarin, who holds a PhD in Development Studies and teaches at the University of Mondragón, has published a tweet that has caused an uproar in economics circles on social media. In it, he compares Amancio Ortega's philanthropic donation to his fortune —some 10,000 million euros— with the annual salary of an average worker, concluding that the worker's "effort" is greater. The problem, critics point out, is that he confuses flow with stock: an employee's annual income is not equivalent to a billionaire's accumulated wealth.
Confusing flow and stock: a rookie mistake
The comparison, which echoes the arguments of former MP Eduardo Garzón, mixes incommensurable magnitudes. If Amancio Ortega, for instance, donates 100 million euros out of a 10,000-million-euro fortune, that represents 1% of his wealth. If a low earner donates the equivalent of one month's salary, that amounts to 8.3% of their annual income. But income is not wealth. The average citizen does not have a 10,000-million-euro fund to donate from; their "stock" is their latest payslip, as some analysts point out. The criticism turns harsher when it is noted that Bollarin teaches at a private university where tuition costs 6,500 euros a year.
From the agora to the classroom: the pogre economist's paradox
This is not the economist's first gaffe; he had already published articles in La Vanguardia defending a basic income. The paradox of an academic trained in development studies criticising large fortunes while working at a fee-paying institution has not gone unnoticed. The real debate, however, is not personal consistency: it is whether the economic left can build a discourse on inequality without falling into textbook accounting errors.
The awkward fact: while Bollarin was highlighting Ortega's donation, the Inditex founder's fortune kept growing. In economics, figures are not opinions.
Economist Julen Bollarin, who holds a PhD in Development Studies and teaches at the University of Mondragón, has published a tweet that has caused an uproar in economics circles on social media. In it, he compares Amancio Ortega's philanthropic donation to his fortune —some 10,000 million euros— with the annual salary of an average worker, concluding that the worker's "effort" is greater. The problem, critics point out, is that he confuses flow with stock: an employee's annual income is not equivalent to a billionaire's accumulated wealth.
Confusing flow and stock: a rookie mistake
The comparison, which echoes the arguments of former MP Eduardo Garzón, mixes incommensurable magnitudes. If Amancio Ortega, for instance, donates 100 million euros out of a 10,000-million-euro fortune, that represents 1% of his wealth. If a low earner donates the equivalent of one month's salary, that amounts to 8.3% of their annual income. But income is not wealth. The average citizen does not have a 10,000-million-euro fund to donate from; their "stock" is their latest payslip, as some analysts point out. The criticism turns harsher when it is noted that Bollarin teaches at a private university where tuition costs 6,500 euros a year.
From the agora to the classroom: the pogre economist's paradox
This is not the economist's first gaffe; he had already published articles in La Vanguardia defending a basic income. The paradox of an academic trained in development studies criticising large fortunes while working at a fee-paying institution has not gone unnoticed. The real debate, however, is not personal consistency: it is whether the economic left can build a discourse on inequality without falling into textbook accounting errors.
The awkward fact: while Bollarin was highlighting Ortega's donation, the Inditex founder's fortune kept growing. In economics, figures are not opinions.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (17 replies).
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