What Would Happen if Everyone Were Given 1 Million Dollars?

in #money7 years ago (edited)



Sometimes I stumble upon some discussions which reminds that some things might not be so evident after all. When it comes to issues of wealth people seem to get caught up in the myths and narrative of their culture — not reality. Part of the reason is lack of financial literacy, which is completely alien to schools. The other part is the nonsensical infestation of postmodernism that seems to pollute everything it touches. If one does not learn basic economic by themselves, for themselves, then they are doomed to get caught up in the marxist bullshit their government has supplied for them.

We could theoretically distribute 1 million dollars to everyone. In the same respect we could theoretically raise the minimum wage to 1 million dollars as well. The point is that this act would cause the entire system to collapse. Part of the reason the FIAT system is fucked up is exactly because a random central authority decides to print paper and flood the market with what is essential more debt. If we give everyone 1 dollar is the same as giving everyone 1 million dollars because at the end of the day relative value eliminates the buying power from each individual. An item in the store will end up having (more or less) the exact same value whether everyone is given magically 1 dollar or 1 trillion dollars. The magic word here is "inflation".



We could start playing with the average distribution of wealth but that would not take us anywhere. There is a large range of averages per country and from person to person. There are billionaires and there are people with a zero on their name. There are countries with ~200K net worth on average and others down to ~1K. If everyone was given 1 million then money would get devalued severely. There would be more or less an inflation of 50% or more to everything. (The average is a rough estimate considering the gross average net worth of ~$20.000 per human if we distributed equally all the money in the world).

The poorest zero balance folks that will receive the money would see their net worth increase not by 1 million but by ~20k while the richest that already have more than 1 million will also experience a 50% decrease due to the inflation. Whether we gave everyone 1 dollar or 1 million dollars the transfer of wealth from the rich to the poor doesn't change much since the average net worth would not change almost at all.

The value of things is determined by supply and therefore scarcity. Not everyone can be a millionaire for the long run because if everyone had a million dollars all the time, then being a millionaire would be pointless. The number we give to distribution is not the issue. This is also a mistake many motivational books do. They say that "Everyone can do it". "Anyone can become a millionaire". This is clearly marketing bullshit since for one to be "millionaire tier" most have to have much less for that million to worth really a million. It is mathematically impossible for everyone to be below or above average.

"But, but what about muh Zero Sum Fallacy?"

The zero sum fallacy implies that for one to become rich another has to be poor. This is obviously false because wealth is not fixed hence the fallacy. People who complain that immigrants take their jobs are committing the zero sum fallacy since they believe that there is an X amount of jobs to be distributed and that economies do not grow. What we are talking above though is not a zero sum fallacy.

Even if everyone in theory can gain more and more money, the cost of living will also increase. You can hold a million pesos in Venezuela (much like everyone else) but it won't buy you almost anything. Your millions would be irrelevant. In the same respect, everyone could see 1 million dollars added in their balance sheet in the U.S but the cost of living would end up being like the one in Venezuela.



This is exactly why communism failed. When everyone is treated the same based on the same value then everything is pointless. For an economic activity to flourish major dynamics have to be in place. This is why a car is worth so much more than sliced bread. If the supplier of car parts, the farmer and everyone else they interact with had the same capital then they would have to resort to bartering. One loaf of bread for one car. Money was created to resolve this massive difference in value — hence why not everyone can have the same amount of capital.

People who support this form of free redistribution of wealth commit the same economic fallacy. It is much like playing chess without being able to see 2 or 3 moves into the future. How long do you think it will take until 1% controls everything again? Why do you think a capitalistic tendency prevails in all economic models (even before feudalism)? How do you think the prices of products would be evaluated if everyone was a millionaire in their given currency?

These are easy questions that (hopefully) everyone can digest. I would take the argument even further and say that even satisfying basic needs doesn't cut it anymore for the simple reason that humans evaluate themselves by comparing to others. This is only the rich can understand but the poor can rarely grasp. This is also why the Maslow's Hierarchy of needs is bullshit for our times. With every era and every group there is a new pyramid being created because everyone ends up satisfying most of the "needs" on the basis of the pyramid. This is why you don't see breathing at the very bottom unless you live in an environment where oxygen is not for granted.

People can have food, water, health and shelter covered but still be miserable if they start comparing to someone who lives much more luxurious. If in doubt check the influx of economic immigrants flooding the western world. They want a piece of the larger pie as well even if they are doing "good" — even if most middle eastern and african cultures have traditionally strong family bonds — which according to many romantics, family is what is more important. Over 80% are males, leaving their families for a better future. Again. Money talks. Romantics can argue with reality but they cannot argue with the consequences of reality.

In much the same way, people who live in luxury compare themselves with those that are even richer. Some pieces of research suggest that there is a threshold in happiness in respect to wealth. I am not going to delve on this further because I believe happiness is much of a meme much like religion. A false hope. A carrot in front of the donkey. We all compare to each other. This is how the meme of happiness is created. I hear people say "I only need my family, friends and health" to be happy. Clearly this is bullshit since most people have all 3 most of the time and they are still miserable. What most people are afraid to say is "I am secure in my position and I will avoid comparing myself to others because it will make me said". Having a kid is much an accomplishment as having a fart. It is a default biological function and not something that will make you proud or happy unless you are really obsessed with your own DNA for some reason.

Life is not about balance or averages. Life is about extremes. Even life itself exists as defiance against all cosmological laws. Every single element on the periodic table is different, hence why existence of all around you becomes possible. Some elements are abundant, acting much like millionaires, being invested in every single thing around you. Some do not have any use and remain isolated. Not all elements can be averaged and have an equal amount of protons and electrons because they will stop being who they are. We are part of nature and that periodic table of elements. Our economic endeavours are determined from the laws of nature. Sure, add one proton to each element of the periodic table. Watch what happens.

P.S. (I will give 5SD to the first person that analyzes this ^ possibility on the periodic table of elements)













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Ah, this was a lovely read. So much complexity to this. This is all pretty much true, but then does that not mean that people are at fault? I've been one for touting the model of giving everyone x amount of money to survive, and those that want to earn more have the ability to do so, but your article raises a few damn good points. If everyone is given x to survive then I'd expect the value of products would rise accordingly, making people no better off than they previously were. Some good thoughts there.

Communism will always fail because I don't want to be earning the same as someone that puts less effort than me into the economy. That would de-motivate me significantly, as it would others I expect. Most things be rendered valueless. Why work when there's no reward? Unless, of course people are intrinsically motivated to do such, but achieving that, today, is hard. You would also need a robust propoganda machine to keep people believing your bullshit.

I'm not a believer of the zero sum fallacy, there's always opportunity in everything. Nothing is saturated. I also don't believe that immigration steals jobs. I've worked with quite a few amazing foreigners and they've had to pay 60% tax, so to me, they add some serious value to the economy.

Can't say I agree with you on happiness though. I feel happy, not all the time of course, though! We're going through a house move right now and the wife and I are at each others throats, but generally, life is good. I have no issues with myself. Perhaps you're right when I think about it. Happiness isn't like it is in the movies; a constant journey through fields of bright flowers and sunshine, it's a comfortable settling, a groundedness with the world, and when anything bad comes my way I am able to deal with it.

I do believe that society is flawed, though. Far too much emphasis is put on being rich where we do very little to help the poor. I don't know where you live, but here in the UK we hear nothing about what's happening in third world countries, yet I expect it's nothing good. Genocide and war. We've become a world that cares passionately.. for 2 seconds.. from the comfortability of our own armchairs. Yet not even abroad, when we look at the backalleys of our own streets, if we look close enough we'll witness a life we aren't aware of. I can't get my head around how 1% has 80% of the wealth and there are some people with no shoes and have to fight for their food every day. I really struggle with that.

well said

It's a lovely read because you missed the true message. I hate this post so much I'd like to flag it twice :/

You have no idea how spot on this image is :D . Upvoted and followed
Yes, I am pissed off. I'm actually working hard, trying to combat that very graphic of wealth distribution, and this guy has the audacity to say THAT IS HOW IT SHOULD BE.
To make matters worse, he's spreading this message on a cryptocurrency social media platform, designed to combat the status quo and give value to the people. Yet steamians upvote and resteem this. If I wasn't a fan of irony, I think all the guys who upvote and suport this crap would'of gave me a brain seizure.

Never enough tp. More tp! I need ALL TP in the world!

I am Cornholio! (Whoa! Hm heh... that was cool) I need T.P. for my bunghole! Come out with your pants down!

Would you like to see my bunghole?

Everyone better exchange it to Steemit)

There are in fact other ways to make people more equal, like helping by giving away food, for instance, or helping orphans to make their one-day dreams come true. Money is not everything. This being said, giving 1 millions to everybody will fail, as you analyzed it.

Now to answer the final question, adding a proton to every single element will destroy everything. Matter is in general neutral and adding a proton without touching the electrons will make it charged. And charged guys interact. End of the story, and the world, probably. I am not sure this is what you had in mind.

Another option would be just to consider the element nature and ignore the electrons (I don't know whether this is what you have in mind too). Then, nothing changes. Each element becomes the next one, and free electrons become hydrogen atoms.

Yeap. I was rather going with the next one. Nothing pretty much changes, same as with giving everybody 1 million dollars. That was the point I wanted to make

thanks for the reply man.

My pleasure :)

The problem with the "increase money supply = increase inflation" argument is that it isn't actually reflected by reality. It's a too simplistic an analysis. There's a lot of factors that go into inflation. I've got no doubt that if we gave everyone $1million that inflation would go up. But this idea that if we increase money supply by X% we necessarily increase inflation by X% is wrong.

Regarding the zero sum fallacy, you are right when it comes to unit-less "wealth". But as soon as you start using dollars to measure (and transact) wealth, it does become more or less a zero sum game. The reason is that essentially all economic growth in the system is actually new money created as debt. So for person A to increase their wealth by 1 million, there needs to either be 1 million new dollars in circulation, or someone else has to lose 1 million dollars.

The DEFINITION of inflation is increase in money supply.

No it's not. It might be in primary school, but in the real world it's far more complex than that.

Inflation is increase in money supply, by definition. This is a fact. Not arguable. Definitions apply from kindergarten to PhD.

Again, no it's not. First sentence from Investopedia for "Inflation":

What is 'Inflation'

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.

Inflation is an increase in money supply. This can manifest itself in many ways. Right now life itself is unaffordable in the US after ben shalom bernanke and janet yellen have printed trillions of dollars out of thin air and bailed out criminals. They are the biggest counterfeiters in history and should be apprehended immediately as Enemies of the State for destroying our currency and our economy. Real estate is a bubble, stock market, bubble, cost of living, bubble. All of this was caused by an inflating money supply. Don't read keynes and act like you understand economics. keynes himself did not understand economics and neither does paul krugman. keynes was a mentally sick pervert who vacationed in Tunisia to buy boys, he was a proponent of inflation to steal from the masses in an undetected manner. https://wiki.mises.org/wiki/Inflation

"Inflation is an increase in money supply."

For the third time, no, it's not. It's an increase in prices. And now that you are going on about Joos and Pedo's, you can safely be ignored.

Oh, you didn't click the link, did you? That's right, just ignore the facts.... you do realize inflate means to increase in size, as in increase the money supply. Learn to think or yourself, you've been lied to... Also, where did you get joos and pedos from? wtf are you talking about?

I really didn't want to get into the details of inflation even I had in mind what you suggested. The post would be extremely long. I agree. I merely wanted to make a point that not much would change if everyone was given one million dollars aka "if everyone was ending up being a millionaire".

When it comes to the zero sum fallacy because forget the gap of wealth. Sure everyone is getting wealthier but what matters is the difference between the peers — and as we all know millionaires and billionaires are increasing while the poor and middle class are merging together.

A very pertinent subject that has been on my mind a lot lately.I hope I don't digress too much but I've got to disagree with one part though. "Having a kid is much an accomplishment as having a fart. It is a default biological function and not something that will make you proud or happy unless you are really obsessed with your own DNA for some reason." I don't think this is as simple as you put it. Having a child can be an encounter with death to many women (Are your farts that smelly? XD). It's a time of great transformation and possible trauma. The interactions created by generating life, and seeing your children grow, will change you, transform you, transcend you. It has little to do with obsession with DNA in a lot of cases I know. I just thought this line was too reductionist.
That being said I don't believe true happiness and fulfillment are possible for any human being that is not psychopathic in this world, riddled with so much suffering. I think we can only be natural or non-controlling (totally accepting the impermanence of life and the abyss of our own psyche, thus accepting the natural unhappiness of life and focusing more on becoming than on being - Deleuze-like) or controlling, partitioned, not-whole, focused on playing a part. When you identify completely with the part you can become incredibly unhappy. When you can't be a part you can't interact in the play, and it is the play that makes you compare and focus on the outside conditions, making them a vortex for your thoughts and feelings. It's a hard balance to achieve... but surely having a million dollars will change nothing if you are miserable anyway. I know a lot of people who have more than that and are completely depressed or worse.
Good article! Thanks

The interactions created by generating life, and seeing your children grow, will change you, transform you, transcend you

so is war...exercise...having a job...anything really that can add meaning to life.

That being said I don't believe true happiness and fulfillment are possible for any human being that is not psychopathic in this world, riddled with so much suffering.

now we can agree on at least some part. i don't believe in happiness

so is war...exercise...having a job...anything really that can add meaning to life

exactly why I said too reducionist. They are not simply "default biological function". These things can come in to your life for a very large number of reasons and maybe they are a part of a drama you must live, maybe as catharsis for the frustration the quest for meaning in life entails, or for escaping existential dread.

This is such a large and complex subject and I agree that most people lack the understanding to approach it properly.

Is the one million to every pocket a variation on the universal minimum income idea? I do agree that something like that is quite likely to cause inflation I've experienced hyper-inflation and I know it's an economic disaster first-hand. But one has to understand that what happens when a process like that gets triggered is that it's not the top 1% that are hurt by it. Whenever there is a crisis the ones with the most resources available (who usually also have a better understanding of the system as well) are the ones that find a way to position themselves in a way that doesn't protects them from losses and they usually ride the market movements for gains. I'm convinced that if everybody got a million dollars at the same time, the ones that would emerge even richer after the inevitable destabilization would be the generally the same people who were richer before it and the gap would most possible have become larger, not smaller.

If we leave things to the market forces, this is still what one would expect. The people with more resources could leverage them to get even more resources. Sure, some people may climb into a different strata and some member of the 1% might waste their wealth, but in the general case, the free market favors and widens this distribution.

While a cool million sent to every person out there is not something that has any chance of working, I personally think that a society should be set up in such a way that the gap wouldn't widen so much. You could do this by taxing the wealthier more instead of less and by using those additional taxes for public goods like free health care, free education, public infrastructure and so on. Of course, this is all easier said than done, but I think there are places around the world that have demonstrated working models. Much like communism has failed, so has trickle-down economics, so I personally think there is a point in making some changes.

Still, we don't have a better system than the free market to help prosperity, progress and humanity is certainly not ready for an idealistic Star Trek-like society which might turn out to be an impossible utopia. If you want people to do things, capitalism is the best way to motivate them and if we want to live better lives than the generations before us, this is our only viable option.

One loaf of bread for one car.

That's a bit of a falsity (or purposeful oversimplification of course) in describing a barter system and doesn't illustrate what's the main problem with it in my opinion. While you could barter a truckload of bread for a single car, it's extremely inefficient and extremely unlikely for the two people that need to be on either ends to be found. The problem is not really that things can't have value, but that it's extremely impractical, inefficient and non-conducive to large-scale enterprises. Money as an instrument to detach value from objects which allows for flexible trade and allows objects, goods and services to be viewed as abstractly valuable, not just as valuable in a limited, rigid and impractical barter transactions.

As far as your chemistry comparison, I'd say it doesn't apply that well to what you were talking about. People and their financial clout are not so rigidly affixed as elements are to their place in the periodic table of elements. People earn and spend millions all the time and this is what allows them to participate in the economy while elements participate in nuclear reactions really rarely and under special consequences.

Additionally, the tiers that are the elements have very different qualities from one another. While people become more financially potent while climbing the economic ladder, elements change their properties drastically and they become intrinsically a brand new thing.

Where your metaphor works a bit better, is in the claim that there are segments of the economy that more reactive than others. And this is indeed the case with people, some participate actively in the economy, speculate and interact with other agents while other hold on to some value but remain for most intents and purposes quite nonreactive.

What would happen if you added a proton to each atomic core out there would be violent destruction as everything will immediately become something else with very different properties. Pretty much all chemical bonds are going to fail immediately and each atom will rush to combine with a new partner forming brand new molecules, possible quite violently. This would create a brand new universe with a very different balance of elements (and a pretty strange one at that) but things will not be very likely to deteriorate back to the previous state and the balance of elements will remain drastically different despite some nuclear decay to be present after this major shift. (I assumed each proton to the core would be paired with a corresponding brand new electron)

I'm convinced that if everybody got a million dollars at the same time, the ones that would emerge even richer after the inevitable destabilization would be the generally the same people who were richer before it and the gap would most possible have become larger, not smaller.

and still, people don't seem to get this simple fact.

You could do this by taxing the wealthier more instead of less and by using those additional taxes for public goods like free health care, free education, public infrastructure and so on

if you tax the wealthier then you widen the gap. The build up corporations, raise costs, drop salaries and fatten their bonuses to cover for the loss. The poor always pay the extra taxing of the rich. this is why they get richer.

That's a bit of a falsity (or purposeful oversimplification of course)

it was to show how things can get if money became a non-issue.

I like your answer about the proton. I will send you the 5SD once I get a payout.

if you tax the wealthier then you widen the gap. The build up corporations, raise costs, drop salaries and fatten their bonuses to cover for the loss. The poor always pay the extra taxing of the rich. this is why they get richer.

I'm not so sure I'm convinced of that, but I'm also not so sure it's the other way around either. I guess I think that the rich are likely to keep getting richer regardless of the exact tax burden they have to carry. What's important for a society is to keep as many people as possible out of poverty and a version of the free market that allows for upward mobility and larger middle class. Having a well-funded social programs, free health-care and education seems like a good way to go and there is no way to pay for something like that besides taxes. I for sure don't see a logical reason for the richer people to pay a lower tax rate. I also don't see a reason to think that anybody that's trying to pay as little taxes are they can is a villain or something as everybody acts and is expected to act in their own interest, so I'm certainly not saying screw rich people. But, yeah, that's a huge discussion and I certainly don't think I have all the answers ;)

I like your answer about the proton. I will send you the 5SD once I get a payout.

I'm very happy to hear that and it's an honor. :) A payment for just a comment under your post is a very generous thing! Or course, I would have commented either way as I really enjoy thinking about this issues and it's easier to start from an interesting post as a basisthan to come up with original stuff :P

You can search the law. Ask people who have corporations in America and they will reassure you.

People would become even more greedy because nothing is ever enough for them, they work their whole life to chase money , and once they have the money, they keep chasing it until one day they realize , money is not the happiness, money just makes you into a whole different person. Share the wealth among those in need, and you will for sure yet back @kyriacos

When people are given a million dollars, according to me..!!! most of them will be directly bought luxury cars, expensive property and, because people will be blind and will never remember their survival in the future.and some other little will, invest into things useful.

great post @kyriacos
glad to know you on steemit. you are the best

The financial equlity is not a stable model. Why people will work for others if they get the same salary by doing the task which are easy and less time consuming. No one will go for the jobs like cleanig, sweeping or something like that. Even students will also stop to compete because then there will be no concept of ranking first because everyone will be weighed on the same scale.

😂😂😃😂 . Dear come to my blog and see some of my creativity. I am an artist struggling to establish myself here. I hope you can help in thus.

Great read, the fiat system will and must fail at some point history has shown this . No one should be able to create money out of fresh air and change us interest on it. The elite run the central banks and like us to be in debt it gives them a degree of control over us, the debts can never be paid back, cheers mike. Ps sorry for my English