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It's especially interesting, because although a billion dollars is a staggering amount of money for one person to possess, if you distributed the wealth of the

by ksdale 7y ago

It's especially interesting, because although a billion dollars is a staggering amount of money for one person to possess, if you distributed the wealth of the world out to every single person evenly, it would only be something like $50,000 per person (based on some quick Googling), which is a life changing amount of money, to be sure, but it's a one time deal. It's not $50,000 per year of income, it's $50,000, period. The amount of wealth created per year is a fraction of that. Were it all distributed equally, basically everyone in the developed world would be taking a massive hit in quality of life, and every single person in the world would still be sweating medical bills in the low $10,000's. I agree that the numbers become meaningless past a certain point, especially where we're talking about valuations, where it's basically a bunch of people's vague agreement on a price and there are incentives to make it look one way or another, but we also have really bad intuitions about just how much wealth there is out there.

ZhuanXia 7y ago
>distributed the wealth of the world In the limit of a single individual wealth works in a naive fashion where such distribution is possible. But on the scale of the economy, such a thing is not possible without inventing a better distribution mechanism than capital itself. If you redistribute each peace of your car's engine to each passenger, you will be forced to walk. Even as a thought experiment, evenly distributing the wealth of the world is not possible. As the wealth is produced by the incentives inherent in gradients of inequality. Thus the project of the modern socialist is to develop redistributive structures that maintain such incentives. There are echos of this in George and Harberger, but little in modern Jacobin-style socialism, whose proposals amount to gifting the means of production to the sorts of people that staff an HR department.
- ksdale 7y ago
  Yeah I agree it's not remotely practical and that there would be all sorts of crazy consequences, I just think the thought experiment is useful as an intuition check for how much wealth there is. As an aside, I don't agree that wealth is produced by the incentives inherent in inequality. Wealth is created when people make things and do stuff, which often happens because people want more than what they have, and that doesn't require inequality at all, just a desire to have a better life, however defined. Back to the main point, we see someone worth $100b and we think there's plenty for everyone, but even in a best case scenario, where we can magically distribute an equal share of all the wealth to everyone and it all holds its value, there's nowhere near enough for everyone to have the standard of living we have become accustomed to in the richest parts of the world.
  - samatman 7y ago
    Those incentives can't exist if any improvement in the quality of life must be distributed evenly among 7 billion people before it may be claimed. It's true that most people are more interested in absolute quality of life than they are in the relative status granted by inequality, but the one implies the other. You can make a case for less inequality, of course; but now we're quibbling about the price, as it were.
    - ksdale 7y ago
      I mean, the thought experiment isn't about the logistics of redistribution, it's about the sheer amount of wealth. These counterpoints amount to saying that actually redistributing wealth like that would have terrible unintended consequences, which I agree with, and I think just serves to underscore that there is much less total wealth than most people think there is.
  - gremlinsinc 7y ago
    Say a billionaire gave away all his money to middle class families. He targeted those in the range of say 40-80k. In the end he chose people who were entrepreneurial. That's essentially 100k to 1,000,000 families w/ an entrepreneurial bent. Say just 25% are successful in re-investing that money by buying small businesses w/ cashflow off flippa, or buying rental property, etc... Or starting a SaaS business, and that 25% is able to increase their income to 1 million. Then that 1 million+ * 250,000, means his investment of 100B brought 250B to the economy. The other 75% who weren't so lucky in business, maybe they also invested and still built up a nice nest egg for retirement, or maybe they bought a home so they had a guaranteed roof over their head if hard times hit. Many of the 75% might be able to get their net worth to 250-500k because of the 1-time gift. This is all speculation.... In the real world it might be more like 10% are successful, but maybe 1-3% are super successful (become billionaires themselves). If we had a cap on how much capital you could hold, then that would at least guarantee it funnels back to the bottom echelons of society. Though, I think the best cap would simply be a CEO cap of 150x average salaries (including contractors/offshore/etc). The CEO could earn whatever they wanted, as long as they simply gave everyone on their payroll a raise to meet their new bonus. The other fact is that 90% of the successful people ARE successful because they didn't have to worry about money. When you struggle to put food on the table, it's hard to think about anything else or work on a side project. There was a good twitter feed/conversation back and forth w/ some people in SV a few months ago that basically was about one person saying 'anyone can make it', and the others saying 'those same people started at their parent's basement, they weren't exactly homeless or struggling'. Actually it was Paul Graham who said:"The next time someone claims that starting startups is for rich kids, remind them that Airbnb happened because its founders literally could not pay their rent," Matthew Prince, the founder and CEO of Cloudflare replied: "Oh Paul, you know better. I had to borrow money from my mom to pay my taxes when we were starting Cloudflare. But I certainly came from a relatively privileged background, and so did the AirBnB founders. It’s hard to take risks if you don’t have a safety net. #bereal," Source: https://twitter.com/paulg/status/1129897694984646657 https://twitter.com/paulg/status/1129897694984646657 I'm not saying we can ever 100% make everything equitable. Not until we have robots doing 100% of the work and < 10% employment and the means to just let people have what they want or need to be happy, in a world where money isn't even a thing we value anymore, or even use. But if we could just give everyone a floor, or safety net then we can see a lot more combined global progress. Imagine if every child had food on the table just in America and a roof, and healthcare, and could focus on being a kid and getting an education. Imagine if just doing this created 1 million new scientists over the next 50 years that wouldn't have originally existed. What could they find or discover? The goal shouldn't be take everything but.. take enough that the game isn't forever slanted out of control. That's what GBI or a negative income tax would do. Hell just single-payer healthcare might be enough for some families -- if they didn't have to pay medical bills or copays.
- TrinaryWorksToo 7y ago
  That's a fallacy. It doesn't consider Knock on effects of that money moving very rapidly to pay debts and trade
hanniabu 7y ago
From my calculations of a total redistribution of money, which will be more than just redistributing funds from the wealthy, you'd have this: Global money: $90,400,000,000,000 Global population: 7,742,131,000 Money per person: ~$11,650
- sharkmerry 7y ago
  Which is almost the poverty level of the US or >14x the global poverty level.
- gremlinsinc 7y ago
  Except some countries 10k is like 100k in U.S.A if you calculated for local costs of living and adjusted you could get away w/ giving 2-3 billion $1k, and then higher amounts to those in the U.S.A. -- you could skip China because they're already a socialist country and should have all their needs met, and skip bad actors like N. Korea, Iran, etc... Might be able to get it up to something like 150k-200k per person in developed world. But money gets spent it all will end up back in the top 1%'s hands. They have funnels in place to ensure that money funnels up into their hands. Which is why GBI makes more sense, by giving money gradually/recurring it keeps cycling. The poorer families getting GBI would spend 100% locally essentially keeping the money in the local economy.
  - JohnFen 7y ago
    > Except some countries 10k is like 100k in U.S.A In some parts of the US, 100k would make you crazy wealthy. In other parts of the US, it wouldn't even make you middle class.
Spooky23 7y ago
That’s the wrong way to look at it. Velocity of money creates value. If you have everyone money, they would buy and sell goods and services instead of hoarding it.
- nickpp 7y ago
  You do realize billionaires actually invest their money, not "hoard" it. In stocks they finance companies. In banks they lend to borrowers. Their money are put to good work. They don’t just put the money under a mattress.
dls2016 7y ago
Not to be a jerk, but I feel this perspective is meaningless from the get go. Redistribution/politics is about the marginal utility of a dollar and the time-value of the application. A dollar in a billionaire's account is worthless. Using those dollars to build a universal pre-k or healthcare system will generate more wealth than a one-time $50k payout.
- Thriptic 7y ago
  I don't think it's that simple. Sure, money in a billionaire's possession probably isn't going to be used for consumption, but it's not like that money is chilling in a matress somewhere; it is invested. Those funds are a source of capital for public companies, seed funding for small businesses, VC investments for growing companies, charitable contributions potentially, even funds for countries through bonds etc. I'm going to stay away from making pronouncements on how this money ought to be used; I'm merely pointing out that the situation is more nuanced than how you have framed it.
  - dls2016 7y ago
    Sure... but there are two simple facts: a) billionaires are unelected and b) they dictate the usage of vast quantities of resources. Personally, I believe this is immoral.
    - ksdale 7y ago
      I think you made great points in your comment above, but I would point out that the thought experiment indicates that the resources they control are actually not that vast, compared to the wealth that would actually be required to raise everyone in the world to, say, the current average American standard of living more than temporarily. It may be moral to take that money and put it to better use, but it would run out a lot faster than most people think.
      - dls2016 7y ago
        Perhaps, but I believe this leads into the issue of the waste inherent in the current American standard of living. The waste (big house, meat every day, giant cars, plastic everywhere, etc.) is, as you know, due to the low cost of extracting fossil fuels. I am optimistic that a lot of this waste can be eliminated without changing our quality of life significantly. The structure of our lives may change, but that's the exact thing I'm arguing for, anyway. Bring on the fully automated luxury communism!

by ksdale 7y ago

ZhuanXia 7y ago

>distributed the wealth of the world In the limit of a single individual wealth works in a naive fashion where such distribution is possible. But on the scale of the economy, such a thing is not possible without inventing a better distribution mechanism than capital itself. If you redistribute each peace of your car's engine to each passenger, you will be forced to walk. Even as a thought experiment, evenly distributing the wealth of the world is not possible. As the wealth is produced by the incentives inherent in gradients of inequality. Thus the project of the modern socialist is to develop redistributive structures that maintain such incentives. There are echos of this in George and Harberger, but little in modern Jacobin-style socialism, whose proposals amount to gifting the means of production to the sorts of people that staff an HR department.

ksdale 7y ago
Yeah I agree it's not remotely practical and that there would be all sorts of crazy consequences, I just think the thought experiment is useful as an intuition check for how much wealth there is. As an aside, I don't agree that wealth is produced by the incentives inherent in inequality. Wealth is created when people make things and do stuff, which often happens because people want more than what they have, and that doesn't require inequality at all, just a desire to have a better life, however defined. Back to the main point, we see someone worth $100b and we think there's plenty for everyone, but even in a best case scenario, where we can magically distribute an equal share of all the wealth to everyone and it all holds its value, there's nowhere near enough for everyone to have the standard of living we have become accustomed to in the richest parts of the world.
- samatman 7y ago
  Those incentives can't exist if any improvement in the quality of life must be distributed evenly among 7 billion people before it may be claimed. It's true that most people are more interested in absolute quality of life than they are in the relative status granted by inequality, but the one implies the other. You can make a case for less inequality, of course; but now we're quibbling about the price, as it were.
  - ksdale 7y ago
    I mean, the thought experiment isn't about the logistics of redistribution, it's about the sheer amount of wealth. These counterpoints amount to saying that actually redistributing wealth like that would have terrible unintended consequences, which I agree with, and I think just serves to underscore that there is much less total wealth than most people think there is.
- gremlinsinc 7y ago
  Say a billionaire gave away all his money to middle class families. He targeted those in the range of say 40-80k. In the end he chose people who were entrepreneurial. That's essentially 100k to 1,000,000 families w/ an entrepreneurial bent. Say just 25% are successful in re-investing that money by buying small businesses w/ cashflow off flippa, or buying rental property, etc... Or starting a SaaS business, and that 25% is able to increase their income to 1 million. Then that 1 million+ * 250,000, means his investment of 100B brought 250B to the economy. The other 75% who weren't so lucky in business, maybe they also invested and still built up a nice nest egg for retirement, or maybe they bought a home so they had a guaranteed roof over their head if hard times hit. Many of the 75% might be able to get their net worth to 250-500k because of the 1-time gift. This is all speculation.... In the real world it might be more like 10% are successful, but maybe 1-3% are super successful (become billionaires themselves). If we had a cap on how much capital you could hold, then that would at least guarantee it funnels back to the bottom echelons of society. Though, I think the best cap would simply be a CEO cap of 150x average salaries (including contractors/offshore/etc). The CEO could earn whatever they wanted, as long as they simply gave everyone on their payroll a raise to meet their new bonus. The other fact is that 90% of the successful people ARE successful because they didn't have to worry about money. When you struggle to put food on the table, it's hard to think about anything else or work on a side project. There was a good twitter feed/conversation back and forth w/ some people in SV a few months ago that basically was about one person saying 'anyone can make it', and the others saying 'those same people started at their parent's basement, they weren't exactly homeless or struggling'. Actually it was Paul Graham who said:"The next time someone claims that starting startups is for rich kids, remind them that Airbnb happened because its founders literally could not pay their rent," Matthew Prince, the founder and CEO of Cloudflare replied: "Oh Paul, you know better. I had to borrow money from my mom to pay my taxes when we were starting Cloudflare. But I certainly came from a relatively privileged background, and so did the AirBnB founders. It’s hard to take risks if you don’t have a safety net. #bereal," Source: https://twitter.com/paulg/status/1129897694984646657 https://twitter.com/paulg/status/1129897694984646657 I'm not saying we can ever 100% make everything equitable. Not until we have robots doing 100% of the work and < 10% employment and the means to just let people have what they want or need to be happy, in a world where money isn't even a thing we value anymore, or even use. But if we could just give everyone a floor, or safety net then we can see a lot more combined global progress. Imagine if every child had food on the table just in America and a roof, and healthcare, and could focus on being a kid and getting an education. Imagine if just doing this created 1 million new scientists over the next 50 years that wouldn't have originally existed. What could they find or discover? The goal shouldn't be take everything but.. take enough that the game isn't forever slanted out of control. That's what GBI or a negative income tax would do. Hell just single-payer healthcare might be enough for some families -- if they didn't have to pay medical bills or copays.
TrinaryWorksToo 7y ago
That's a fallacy. It doesn't consider Knock on effects of that money moving very rapidly to pay debts and trade

hanniabu 7y ago

From my calculations of a total redistribution of money, which will be more than just redistributing funds from the wealthy, you'd have this: Global money: $90,400,000,000,000 Global population: 7,742,131,000 Money per person: ~$11,650

sharkmerry 7y ago
Which is almost the poverty level of the US or >14x the global poverty level.
gremlinsinc 7y ago
Except some countries 10k is like 100k in U.S.A if you calculated for local costs of living and adjusted you could get away w/ giving 2-3 billion $1k, and then higher amounts to those in the U.S.A. -- you could skip China because they're already a socialist country and should have all their needs met, and skip bad actors like N. Korea, Iran, etc... Might be able to get it up to something like 150k-200k per person in developed world. But money gets spent it all will end up back in the top 1%'s hands. They have funnels in place to ensure that money funnels up into their hands. Which is why GBI makes more sense, by giving money gradually/recurring it keeps cycling. The poorer families getting GBI would spend 100% locally essentially keeping the money in the local economy.
- JohnFen 7y ago
  > Except some countries 10k is like 100k in U.S.A In some parts of the US, 100k would make you crazy wealthy. In other parts of the US, it wouldn't even make you middle class.

Spooky23 7y ago

That’s the wrong way to look at it. Velocity of money creates value. If you have everyone money, they would buy and sell goods and services instead of hoarding it.

nickpp 7y ago
You do realize billionaires actually invest their money, not "hoard" it. In stocks they finance companies. In banks they lend to borrowers. Their money are put to good work. They don’t just put the money under a mattress.

dls2016 7y ago

Not to be a jerk, but I feel this perspective is meaningless from the get go. Redistribution/politics is about the marginal utility of a dollar and the time-value of the application. A dollar in a billionaire's account is worthless. Using those dollars to build a universal pre-k or healthcare system will generate more wealth than a one-time $50k payout.

Thriptic 7y ago
I don't think it's that simple. Sure, money in a billionaire's possession probably isn't going to be used for consumption, but it's not like that money is chilling in a matress somewhere; it is invested. Those funds are a source of capital for public companies, seed funding for small businesses, VC investments for growing companies, charitable contributions potentially, even funds for countries through bonds etc. I'm going to stay away from making pronouncements on how this money ought to be used; I'm merely pointing out that the situation is more nuanced than how you have framed it.
- dls2016 7y ago
  Sure... but there are two simple facts: a) billionaires are unelected and b) they dictate the usage of vast quantities of resources. Personally, I believe this is immoral.
  - ksdale 7y ago
    I think you made great points in your comment above, but I would point out that the thought experiment indicates that the resources they control are actually not that vast, compared to the wealth that would actually be required to raise everyone in the world to, say, the current average American standard of living more than temporarily. It may be moral to take that money and put it to better use, but it would run out a lot faster than most people think.
    - dls2016 7y ago
      Perhaps, but I believe this leads into the issue of the waste inherent in the current American standard of living. The waste (big house, meat every day, giant cars, plastic everywhere, etc.) is, as you know, due to the low cost of extracting fossil fuels. I am optimistic that a lot of this waste can be eliminated without changing our quality of life significantly. The structure of our lives may change, but that's the exact thing I'm arguing for, anyway. Bring on the fully automated luxury communism!