If World finances was equally re-distributed...

[Stormdash]

Monetary velocity is a thing.

Siphoning money out of an economy at the bow and pouring it back in at the stern creates an illusion of movement, but it's sort of like cutting off your own leg at the knee and eating the delicious drumstick creates an illusion of nourishment. You can eat yourself for every meal and you're guaranteed to eat well for the rest of your life.

[Elegiac]

Siphoning money out of an economy at the bow and pouring it back in at the stern creates an illusion of movement, but it's sort of like cutting off your own leg at the knee and eating the delicious drumstick creates an illusion of nourishment. You can eat yourself for every meal and you're guaranteed to eat well for the rest of your life.

Crap analogy is crap.

[Endus]

Siphoning money out of an economy at the bow and pouring it back in at the stern creates an illusion of movement, but it's sort of like cutting off your own leg at the knee and eating the delicious drumstick creates an illusion of nourishment. You can eat yourself for every meal and you're guaranteed to eat well for the rest of your life.

All monetary velocity is inherently internal to the monetary system. And yet, velocity is still a necessary and important component of economics.

So yes, that "illusion" of movement is absolutely necessary for the economy to function. Because literally all trade and economic activity is just as "illusionary", but just as necessary.

If you think that's a ridiculous description of economic activity, don't blame me; you're the one who labelled it as "illusory".

[Deleted]

Not sure if this math was put forward before, but...

The population of Earth is around 7125000000. The combined wealth of Earth is around $241000000000. If it was divvied up evenly, every person would have around $33824 on their bank account. That, obviously, includes children as well.

Seeing as though the Average Joe on this planet doesn't usually have even that, and a lot of people spend 100% of their pay checks, it would be a pretty nice deal for a lot of people.

Obviously, what would also have to be done, is even out the income of all people. The total income on Earth is around $70000000000 per year, so if it got evened out, the income of every single person would be around $9824 a year, or $818.67 a month, effectively putting every human on the planet to the poorhouse.

I'd take a hit in that scenario, but I'd go with it, if I knew every single undeserving asshole with millions and billions was brought down to our level as well.

[Flutterguy]

What if Blizzard took all the gold from all user accounts and equally distributed it back out to every user?

[Yvaelle]

I did a post on that a few pages ago Sydanyo, it's actually much more than you think

So, the $241 trillion you are likely looking at is an estimate of global household wealth, but this is not actually "all wealth" - its a very narrow tool that factors out most of the wealth on the planet, because household wealth is mostly a combination of reported liquid assets (cash on hand) and tangible property - this means that all the rich people who put all their money into indirect accounts arent included in a measure of household wealth, as well as all their assets which are not property - companies, intellectual property, derivatives and such.

Speaking of derivatives, the global derivatives market alone is worth somewhere between $800 trillion and $1.5 quadrillion dollars - even the lowest estimate dwarves the household wealth figure four times over. Assuming the lowest figure for the global derivatives market of $800 trillion, and assuming that a more accurate measure of assets and cash would be something closer to $800 trillion as well (the top 1% owning 50% of wealth, but aren't represented in the 'household wealth' statistic, with a trail-off effect in the top 2% and etc). The real figure for all the wealth on Earth is probably closer to $1.6 or $2 quadrillion dollars.

This means that divided by 7.12 Billion people, each would receive around $250,000 in a portfolio of cash, derivatives, and property: ranging up to $323,000 if the derivatives market really is as big as the newer estimates suggest.

Also, regarding the income - $10k a year sounds about right to me - but you aren't including capital gains, and given that half of all the wealth on Earth is owned by the 1% - and the 1% get the overwhelming majority (like 90-99% of their annual earnings) via capital gains - we could probably recognize a doubling or tripling of annual income, if the per-person portfolios included some share of the capital the 1% are hoarding (which is the case with the division of wealth described above).

So overall, everyone would get $250-323k USD, and annual earnings of ~$20-30k USD per year.

Now, while that sounds pretty wild - a direct distribution wealth and income might not be quite fair - since different countries have different purchasing power parities - it would make more sense probably to award the already developed economies more than the above, because their costs of living are higher - and award those living in the developing world less - to equitably distribute purchasing power parity.

Over time the markets would adjust - Somalia would obviously industrialize and improve at an incredible rate if everyone suddenly had hundreds of thousands of dollars to spend on houses and consumer goods, and a salary that is more than they had ever dreamed - and as markets adjust you would want to readjust the awarded incomes accordingly by region (relative to shifts in purchasing power). Which means that - not accounting for the effects of this policy - since the costs of goods and services would rapidly rise in the developing world, their income would slowly rise to parity with the developed world, while the developed worlds income (which might actually start somewhere closer to ~$400-500k and ~$50-75k annually) would fall until we approach the original numbers discussed above: approach a global market equilibrium (true equilibrium would never occur, because Canada will never be as good at Bananas as the Banana Republics, and trends/fashions would remain regional and create localized demand).

Now, that sounds less fun initially for the leading countries (Canada and Sweden are right at the top of the list, so we have a right to wonder if this would be in our best interest! ) - but the effects of raising the poorest 3.5 billion out of abject poverty (not to mention the rest of the world that isn't quite on our level yet) - would be an almost incalculable increase in global productivity. Right now, the poorest 3.5 billion have almost zero influence on the global market - they spend all day trying to not-die, but otherwise don't earn money and don't buy goods - that would change - and with it, global wealth creation, which - redistributed equitably the following year - would quickly compensate and easily overtake the unadjusted reductions the developed world would see as global market equilibrium is approached.

All of this is entirely hypothetical, I'm not saying I'm in favour of it without a lot more thought, and my brain is stewing with all the logistical challenges of implementing such a system - but it's an interesting though experiment. Maybe when capitalism dies later this century, something closer to this (but not all the way) will replace it, and in some decades or centuries further a system like the one I'm outlining will eventually occur: much like the economy of Earth in Star Trek.

[kyoloco]

...to every person on the planet.

What do think would happen?


My prediction -

1. Lots of people would stop working
2. Lots of people would go on a spending spree
3. Goods and Services would become extremely scarce

then...

4. Those who continue to supply goods and services would get very rich, very fast
5. Those with no skills, goods or service providings would get very poor, very fast
6. Crime rate would soar

then...

7. The hard workers and newly formed elites would build a new society, isolated and protected from the poor, who are now resorting to crime and living in poverty
8. The poor would rot amongst themselves, and due to the hardships of building their new society, the workers and newly formed elites would provide zero welfare.

9. The end result would be an even bigger, massive gap between the richest and the poorest, with the poorest left to rot receiving zero help whatsoever.


Your turn

so everything would be the same?

[Khoranth]

http://www.nytimes.com/2014/05/19/ny...onditions.html

https://news.usc.edu/65972/dubai-a-c...-forced-labor/

http://en.wikipedia.org/wiki/Kafala_system

http://blogs.wsj.com/indonesiarealti...y-says-report/

http://www.triplepundit.com/2014/11/...-biodiversity/

All the stuff in Dubai is mainly about construction workers and janitors and the like. That has nothing to do with any products i buy. The palm oil stuff is in their own country, not Dubai.