What if the top 1% wealthiest people (Defined by net worth and value of all Items owned) suddenly vanished? [closed]

Question

If the wealthiest people disappeared, how would that effect the economy and the political landscape? What would be the social impact of such an event? ( I also Should clarify that the wealth and all their money, heirs, and belongings go with them [If they owned a house it would disappear])

Answer 1

Nothing positive

Economics is a tricky thing to understand and, especially when you're World-Building, can be difficult if you intend to balance the books. Taking our current world and removing the top 1% financially would do more harm than good; especially if that money completely vanishes from the system.

Also, determining how your 1% is calculated can cause difficulties, for example, would you call someone who owns a £350,000 house, no kids, no mortgage and owns a fairly old car within the top 1%? How about someone with a £1,000,000 house, a £500,000 mortgage on said property, three kids and a fairly new sports car?

Western doctrine would state that the latter of the two is more likely towards that top 1% even though, in contrast to the former, he is in fact, poorer by far.

The way our current financial policy works (or at least is supposed to work) is that the more money someone earns, the more taxes they have to pay.

This money is then re-distributed in the form of Government Spending to various companies, who then use the money to sell and buy goods and give people their wages. (and thus, completing the circle here)

The goods can be bought from either government (again, returning the money back to the completed circle) or on to other companies who make the goods, which repeats the cycle above.

Each element of this cycle isn't perfect, as current companies like to maximize profits and so, a little bit of the money is taken out each time as pure profit, but thankfully, this money eventually makes its way back in when the person earning said profit goes and buys personal items; houses, cars, etc.

Now, while taking out the top 1% of earners would seem to be good, in fact it destabilizes this circle, all of a sudden you've just lost approximately 85% - 90% of the money in the world (FITA Estimate)

All of those taxes levied on the super-rich; or at least, the ones who contribute the most to our tax system, would be lost. The cycle of funding would grind to a halt as more pressure to pay for said services would fall on those poorest, raising the poverty line (An arbitrary line that many say is the absolute minimum a person can earn in order to be able to sustain themselves)

Massive tax levies lead to inflation, which if left unchecked, leads to hyper-inflation; which is BAD.

You might recognize this as familiar; it's happened before in pre-Soviet Russia, although the money never disappeared, but it might as well have; we ended up with a communist state, a cold war and nuclear tension so high we had an acronym for it, MAD; Mutually Assured Destruction.

Answer 2

1% is a lot of people. Furthermore these people are not uniformly distributed, rich countries would lose a lot more than 1% of their populations.

The threshold is only $770000 according to http://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp

So you would be losing your business leaders, political leaders and top professionals.

So you have a major emergency (nearly a hundred million people just disappearing) and the people who would normally provide leadership in such a situation also disappearing.

The big question is would the people who are left cooperate with each other to try and form a government that could hold the mass-panic at bay and pass laws to allow for emergency administration of companies whose major shareholders and board of directors had gone missing.

Or would the power vacuum lead to massive infighting and war.

I expect the answer would vary a lot by country.

Even in places where the situation was handled peacefully I think it would take a long time for things to get back to normal. Eventually the people would be moved to "missing presumed dead" status and their assets would be passed on to whoever was set to inherit them.

Answer 3

I'll agree with Raisus and say, "Nothing positive."

The top 1% of wealthiest people works out to 70+ million people at the moment, and while they may not be the top 1% most productive people on the planet (I'm sure that quite a few got their wealth via inheritance and/or government favors), they are certainly concentrated at the top end of the productivity scale.

More importantly, they are concentrated in the management levels of the economy (whether in or out of government), and so the economy of the richest nations will suffer a catastrophic setback.

You are also going to lose every autocrat on Earth and most of the their hangers-on; they have all used their power to put themselves well into the 1%.

You will also lose the top tier of our entertainment industry (the top musical acts, top movie stars, and top sports stars).

So in the freer nations the management of the economy is suddenly cratered (not good), in the non-free nations the top level of government has just be taken out (which sounds good, but), leading to acute instability (which is not good), and a whole lot of wanna-bes in the entertainment industry will finally get their chance at stardom (which may or may not be good).

Answer 4

It depends on whether the family members of the wealthy are included in the 1%. Does the billionaire's wife and children, who, perhaps, have no income of their own, count as the 1%, or as unemployed with no assets?

If the latter, then they'll inherit everything, becoming the new 1%.

If the former, then the type of wealth becomes an issue.
If the wealth is all cash, it'll remain in the bank, which will reissue it in the form of loans to the public, and eventually deposit it in the state exchequer. No real change.
As shares/stock, with no heir, the corporations will either suspend voting rights and dividends, until an heir comes forward; or again, it will be claimed by the government (unlikely). Again, bar the initial shock, business as usual.
If it is landed property/ gold bullion, etc., the property will simply lie there until eventually, the government eventually, seizes it and auctions it off to bring it back into the economy. Again, no change.

Stuff like this has happened multiple times throughout history, whether it was plagues, natural disasters, revolution or invasions; though, admittedly, never on this scale. Society has survived, often without major upheaval. Consider the French Revolution: while they were executing aristocrats in Paris, farmers were going to their fields as usual.

Even if the wealth disappeared, what would it consist of? Most personal wealth these days, is investments and intellectual property. Does the entire investment vanish, or just the paperwork? Does every copy of Star Wars vanish with George Lucas, every iPhone with Tim Cook, every Trump Hotel with Donald? It isn't solely their investment, there are hundreds of other investors, most of whom AREN'T in the 1%. About the only things that should vanish is their personal wealth, and any personal property, and in commodity terms, that's a few sheets of paper, houses, and vehicles. In terms of actual value to the economy those are negligible. What would be lost of real value is the individuals' skills/talents, but that would happen when they eventually died. As always, someone else would step up.

Answer 5

Nothing special will happen. The people in the 1%-2% bracket will suddenly becomes the top 1% with all the advantages and disadvantages that come with it.

People fail to understand that wealth is really relative. If the top 1% dies, the fanciest villas in the world would become the property of the 1%-2% bracket etc...

A mediaval king was litteraly the wealthiest and most powerful person in his kingdom yet he was living in a shitty rocky castle with no TV,computer or internet. He was eating good food but probably not as good as a 2 star restaurant. He would have 0 hygiene and medical support and probably die at 50 of some common disaese if he didn t die in a fight before. What I mean is that you probably woundn't want to exchange your lifestyle with his.

Answer 6

As long as their wealth does not go away with them (their houses, air planes, boats, enterprises, etc.) nothing special will happen at all.

The 1% don't comprise the people keeping our society really running (the engineers and scientists, the adminstration clerks and medical doctory, the public service workers). They include some entrepreneurs and some top mangagers that will be replaced by other qualified persons, that's all.

Nothing special also means that the wealth distribution will not change substantially by this happening; it will be just different people being the new 1%.

P.S. Think of this: Also the members of the 1% die, and there is continous replacement happening every year.