1
$\begingroup$

I once heard a fact that the richest 85 people are as wealthy as half the world's population put together. My question is, what does that mean?

Does it mean that there is some feasible method in which these 85 people can double the wealth of half the world's population? What would happen if they decided to do so? How would they go about doing this?

$\endgroup$
  • $\begingroup$ These are three separate questions. The second and third are completely opinion-based and hence off-topic. $\endgroup$ – Giskard Jun 2 '17 at 12:03
  • $\begingroup$ how are they opinion based? Something would happen (to the economy), that is centered on fact $\endgroup$ – slashbubblecrunch Jun 2 '17 at 13:06
  • $\begingroup$ perhaps my third question is a reiteration of the first $\endgroup$ – slashbubblecrunch Jun 2 '17 at 13:06
  • $\begingroup$ Next week's lottery numbers are also centered on fact (especially in hindsight) but hopefully you agree that any guessing about the actual outcome is primarily opinion based. $\endgroup$ – Giskard Jun 2 '17 at 14:38
  • 2
    $\begingroup$ I don't think there is a major problem with this question. Sure it's a hypothetical and not quite the standard kind of question within academic economics, but I don't think that's too much of an issue. I envision an answer providing institutional details about the most realistic way in which this would be accomplished. The answer would be opinion-based to some degree, but it would be grounded in details about how redistribution works or would work on a global scale (foreign aid, restructuring trade, etc...?). $\endgroup$ – jmbejara Jun 2 '17 at 23:35
1
$\begingroup$

It seems safe to say that the bulk of that wealth consists of equity (stock) holdings, not "money." (For example, Bill Gates owns a lot of share of Microsoft.)

Let's assume that the top 85 people wanted to redistribute their wealth voluntarily.

  • If they tried selling that equity all at once, the price of the equities would likely collapse (who would pay a lot of money for those shares, if everyone know that they were selling all at once?) The amount of money to redistribute would be a lot less than the current estimate of their wealth (which uses the current stock prices). The logistics involved with the transfer would probably consume most of of the transferred wealth. (If it were easy to transfer wealth to individuals in poorer countries, aid programmes would have been more effective than seen in practice.) That is, some people would be wealthier, but it would likely be intermediaries skimming off the cash transfers.
  • Logistically, there would be no way to transfer all of those shares to half the world's population. (They would need something like a brokerage account.) And even if that were somehow accomplished, the recipients would likely dump their shares, and their value would collapse. Brokers would probably end up getting all of the value from their transaction fees.

In other words, there would presumably be a transfer of wealth, but it would be a lot less than what is implied by current market prices.

This of course raises the obvious question of why they would do this voluntarily; the top 85 richest people did not get that way by dumping their wealth on random strangers.

$\endgroup$
0
$\begingroup$

There a no realistic expectations of doing this and nor a technical way of doing it, because every people on earth dont have a bank account or in age to have it.

No they don't double the wealth of every of them, they hold the same amount of wealth. If they would give it would be not well distributed.(fairly)

If they give to the haft of the humanity with no strategic distribution nothing will happens. Poor people always consume n amount of money for they basic needs. So they will spend it. And you would have 85 new poor guys.

They will not like it for the reason just exposed before. They will be no impact at all ( its like having and extra meal for tomorrow). That why development is so crucial and smart investment too.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.