What if all monetary wealth on earth was equally distributed among all people [duplicate]

Question

This is a mostly hypothetical course of events that would take place within the population of earth. Now the monetary wealth on earth is distributed very unevenly; some people have more than they could spend in a hundred lifetimes of extravagance and luxury while countless other people struggle to stay alive for just another day, wondering when their next meal will be, if there is going to be one.

Now the hypothetical situation states all wealth will be distributed evenly among all people on earth. Assumptions: People currently destitute won't waste their money just like that and are properly assisted by people who can help them to properly budget (And will be taught to do so themselves as well.)

What would happen on a geopolitical level, economical level (be it macroscopic or on a smaller scale) and what would this mean for the class systems currently in place. Would the world eventually revert to its original state or could humanity take an entirely new course?

Answer 1

Other answers have brought up communism... and tried to argue about it, but anyone who knows about it should know that it's incomplete. It's more like a "wouldn't it be nice" idea that isn't actually a system and isn't well thought out... and the "wouldn't it be nice" parts quickly change to "omg this creates a hell hole" when you start actually figuring out a system to do what the communist ideal is. It also quickly shows that what is needed to create and maintain a communist system makes it not a communist system.

But moving on beyond that there is a single line that can lead you to the rest of what you need to know and that is, "Many things are only valuable in the hands of certain people." To me, gold is worthless as anything other than a paperweight and to trade to someone else. I can't use it to make electronic components nor jewelry. Both of which I may want and so to make sure there is enough electronic components and jewelry in the world I would sell that off pretty quickly, especially since gold is heavy. Uranium is heavy and radioactive as are a good number of other elements that I'd be stuck with which I wouldn;t want around me in most cases.

Even if I recognize the value of something, if I can't use it, then it loses value for me, but there is a worse effect to this. You're now wasting resources by too many people competing or producing their own versions which makes these resources more scarce and of differing quality making it so there can't be standardization which again wastes resources. Instead of having a few standardized sources that use the resources en masse these resources are being sent to everyone which costs time and management which then are sold to a centralized place for low value because I don't value crude oil, for example, but the standard gas is in such low supply (because lots of people are hording it to try to make their own or just can't transport it) and we're wasting it all over, that the price rockets up.

In other words, Distributing equally wastes resources and makes the situation worse overall which causes the poor to maybe be marginally richer presently, but in a worse condition overall and long term.

There are ways around this, not communism though, and definitely not true equal distribution. But lets say everything works out and everyone gets an equal share of all the resources... Well ok, but I don't need these, so I sell that off. And billions of other people do the same and that results more or less back at where we are so we redistribute again and again. This doesn't fix the problem. All it does is drain resources and causes people to be unmotivated because they're having their work nullified.

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Also there is the problem that you have divested the ultimate authority of companies of people who have a profit motive into the hands of CEOs who aren't terribly moral or smart nor do they care about profits any more because they no longer answer to anyone and they don't have a profit motive for themselves either so even assuming everything goes perfect you are still left with the fact that you end up with worse quality of things even if everything continues to run.

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I could layout a much better economic system, but that would be off topic and you can't ask anywhere on here so ^.^ Anyways, to understand economics you should pick up Heinlein's book "For us, the living; A comedy of customs" It's a great read and has a brilliant economics lesson in there.

Answer 2

Setting aside the question how this even distribution took place, although that might strongly influence the outcome, i think that eventually, things would migrate to a state that would strongly resemble the current state of affairs.

Even if you would assume that this even distribution would happen without any sort of unrest and most of all without those currently being rich feeling robbed, you would still have to deal with the fact that people are people.

Some people value fairness, kindness and helping those in need, while others are more the competitive type, who value having more than others more than most other things.
Those latter will attempt to get part of the wealth of others in order to have more than others, since apparently that makes them feel better. This effect alone will eventually lead back to a situation where relatively few people will have a lot more than most of the others.

This could only be averted if you have a sufficiently large group of people watching over the state of affairs, and a second group watching over the watchers, and the general public (or a sufficiently large part of it) watching over those, and actively preventing things getting out of control.

Unfortunately, vigilance will be eroding over time, so you can assume the system will suffer.
Expect some sort of wave-pattern, that can only be kept reasonably smooth, and only if at any given time you have enough determined people willing to work hard to keep things balanced.

As soon as your watcher system fails, your entire system fails.

Answer 3

Utter chaos. There are several kinds of wealth:

• Small valuable objects like gold coins, jewels, etc. Redistributing those would be viable, I guess.
• Money, either physical (coins and bills) or digital representations (accounts) or digital currency (bitcoins). Redistributing those is also somewhat viable. But you can't eat money.
• Ownership in productive assets. Factories with their buildings, machine tools, raw materials, and the like. If it is a publicly traded stock company, redistribution may also be viable. But somebody who gets a stock in such a company and nothing else would be under pressure to extract dividends from the company -- and to run it down in the process. And if the company was a family-owned grocery store, first it would have to be converted into a stock company before it can be redistributed.
• Ownership in non-productive assets. Say a family owns a 1,000 square feet home. Are they going to give individual rooms to other people?

Any meaningful attempt to redistribute the latter two kinds of wealth would totally wreck the global economy.

Answer 4

To make such situation sustainable, it is required to have some continue re-distribution of the wealth: As @Bruki stated before, because of the people's different behavior, some will tend to accumulate wealth while other will not.

Basically, you are speaking about communism. I know this word has a negative connotation, especially in USA, but it is not necessarily bad if correctly managed.

Pros:

• Due to this situation, the average human would have a higher wealth: all will have a little terrain, some revenue, minimal requirement covered, etc.
• Some or most political/cultural/social aberration due to high class difference would be avoided.
• Avoiding the very short time strategy trend of our society: "Who cares about destroying the Earth in 20 years if we may earn money next month?" If all earn the same, we would have more consideration for long term.

Cons:

• Unfortunately, humans usually make efforts only when there is a reward on it. Who is going to study 10 years and have a boring work if the result is the same like playing games at home? So another reward mechanism is required to maintain motivation.
• Difficult to calculate to apply the "wealth" balancing: what has more value between living in a nice place or earning a little more money? Is it the same 3 people living together or in different habitations? What is the real/exact value to all that?

Answer 5

This would (and did) work only in small groups of people which knew each other well, so like under 100 people. Lenin and others tried to do this. They called it communism. And it killed thousands millions of people. Why? Because they expected all people to be honest. Communism is an unrealistic and unachievable project.

On a three-week camp I was on as a leader, I set up the rules. It worked very well, until people found out how easy it is to cheat. Then, it went down.

That was with 50 people. Here, you have 5 billion people. If every 10'000th person cheated, still 500'000 people would be against and destructive to the system.

Conclusion (a mini-TL;DR actually): This would work only if all people and their interests would be honest. Or if every 10th person was a cop. :)

Answer 6

There will be a massive money inflation. For example: because the average human has more money, the grocery stores will higher their prices. Everybody can afford it.

Because of the massive inflation, all ("rich") people will become average wealthy people and everything is back to start.