what wd be ALL THE MAJOR EFFECTS [econ, polit, socl] if fortunes were worldwide limited to US$10 million ...??

Question

& the excess distributed worldwide, with every adult getting equal shares/year of work done? [for simplicity, workyears = years of life minus 15 years]

Answer 1

The most important effect would be a worldwide decrease in investment and capital formation (see Kotlikoff, Laurence J. and Lawrence Summers, "The Role of Intergenerational Transfers in Aggregate Capital Formation," Journal of Political Economy, 89: 706–732, 1981).

The decrease in capital formation, in turn, is likely to lead to corresponding drops in wages and/or employment, especiallly among skilled workers, whose skills only have value if they are paired with requisite amounts of capital.

Answer 2

Mass poverty, revolution and institutional failure to scale including the inability to insure risks such as life insurance.

Such a system would do everything mentioned above and reduce even the wealthy nations to mass poverty. The mistake is in understanding what money is. Money is neutral. A person with $1,000,000 in cash has $1,000,000 worth of potential in our price structure and a person with $1,000,000 worth of productive assets probably has $2,000,000 worth of potential. This is the error in your thinking.

If you were able to appraise everything at current prices, such as stocks and bonds and farm equipment and then divided it up, what good would it do? First, all prices would realign. Second, no one person would have very much capital so business would necessarily grind to a halt as the useful capital would have been transferred randomly around the globe. Right now it tends into the hands of those most capable of using it. Most of it exists in only a few countries so farm equipment in America would rationally be owned by people all over the world, say Botswana. What conceivable use would someone in Botswana have for part of a piece of farm equipment? They would only own probably 1/100th of a major piece of farm equipment and it would be in another country.

Lets instead assume that certificate interests in all these assets were issued instead. Why would the former farm owner be interested in continuing farming when all but a few thousand dollars is his? Even if he were left with $10,000,000 he could gain nothing more. So no matter how hard he worked he would have to distribute the gains to others and keep none. Seems like it would be easier to be indolent then. If the farmer chose to be indolent, the farm equipment that had a premium value since it was producing something would now be of scrap value.

But, you think, look at all the people who now have interests in these assets. What are they going to do with them? One of the principle rules of economics is that prices rise to fit the amount of money. Now that everyone has equal money, prices are going to adjust to destroy that equality and convert it into poverty

If everyone had $100 or $100,000 or $1 or $1,000,000 it would be no different than if everyone had $1. A wonderful example of this was the Weimar Republic that brought Hitler to power. Money is just a machine to facilitate transactions. Its units have no intrinsic meaning except in relation to the willingness of people to trade it.

This was tried, the experiment was called the Union of Soviet Socialist Republics. It did not go so well. Ask any Russian. I know many both from before the end of Communism and today.

Answer 3

Isn't that like communism. I agree people in the world are suffering but, limiting wealth would just cause people to hid their money even more. People would be less motivated to work hard if they knew no matter how hard they worked on could have $10 million, In esscence you'd have a communistic society with people just being unmotivated to make anymore money.

Answer 4

history shows that communism is fabulous.
the incentive to make fortunes in excess of $10 million will evaporate. then you'll change your rule to, say, $5 million, and the cycle will continue to repeat until everyone is wonderfully wealthy and happy. maybe you could invent some special place...oh let's just call it a gulag...for people not enthralled with the plan.

Answer 5

INDUSTRIAL JUSTICE

You have questioned me about strikes. This question is and will be for a long time the subject of great difficulties. Strikes are due to two causes. One is the extreme sharpness and rapacity of the capitalists and manufacturers; the other, the excesses, the avidity and ill-will of the workmen and artisans. It is therefore necessary to remedy these two causes.
But the principal cause of these difficulties lies in the laws of the present civilization; for they lead to a small number of individuals accumulating incomparable fortunes, beyond their needs, whilst the greater number remains destitute, stripped and in the greatest misery. This is contrary to justice, to humanity, to equity; it is the 281 height of iniquity, the opposite to what causes divine satisfaction.
This contrast is peculiar to the world of man: with other creatures, that is to say with nearly all animals, there is a kind of justice and equality. Thus in a shepherd’s flock of sheep, in a troop of deer in the country, among the birds of the prairie, of the plain, of the hill or of the orchard, almost every animal receives a just share based on equality. With them such a difference in the means of existence is not to be found: so they live in the most complete peace and joy.
It is quite otherwise with the human species, which persists in the greatest error, and in absolute iniquity. Consider an individual who has amassed treasures by colonizing a country for his profit: he has obtained an incomparable fortune, and has secured profits and incomes which flow like a river, whilst a hundred thousand unfortunate people, weak and powerless, are in need of a mouthful of bread. There is neither equality nor brotherhood. So you see that general peace and joy are destroyed, the welfare of humanity is partially annihilated, and that collective life is fruitless. Indeed, fortune, honors, commerce, industry are in the hands of some industrials, whilst other people are submitted to quite a series of difficulties and to limitless troubles: they have neither advantages nor profits, nor comforts, nor peace.
Then rules and laws should be established to regulate the excessive fortunes of certain private individuals, and limit the misery of millions of the poor masses; thus a certain moderation would be obtained. However, absolute equality is just as impossible, for absolute equality in fortunes, honors, commerce, agriculture, industry, would end in a want of comfort, in discouragement, in disorganization of the means of existence, and in universal disappointment: the order of the community would be quite destroyed. Thus, there is a great wisdom in the fact that equality is not imposed by law: it is, therefore, preferable for moderation to do its work. The main point is, by means of laws and regulations to hinder the constitution of the excessive fortunes of certain individuals, and to protect the essential needs of the masses. For instance, the manufacturers and the industrials heap up a treasure each day, and the poor artisans do not gain their daily sustenance: 282 that is the height of iniquity, and no just man can accept it. Therefore, laws and regulations should be established which would permit the workmen to receive from the factory owner their wages and a share in the fourth or the fifth part of the profits, according to the wants of the factory; or in some other way the body of workmen and the manufacturers should share equitably the profits and advantages. Indeed, the direction and administration of affairs come from the owner of the factory, and the work and labor, from the body of the workmen. In other words, the workmen should receive wages which assure them an adequate support, and when they cease work, becoming feeble or helpless, they should receive from the owner of the factory a sufficient pension. The wages should be high enough to satisfy the workmen with the amount they receive, so that they may be able to put a little aside for days of want and helplessness.
When matters will be thus fixed, the owner of the factory will no longer put aside daily a treasure which he has absolutely no need of (without taking into consideration that if the fortune is disproportionate, the capitalist succumbs under a formidable burden, and gets into the greatest difficulties and troubles; the administration of an excessive fortune is very difficult, and exhausts man’s natural strength). And, the workmen and artisans will no longer be in the greatest misery and want, they will no longer be submitted to the worst privations at the end of their life.
It is, then, clear and evident that the repartition of excessive fortunes amongst a small number of individuals, while the masses are in misery, is an iniquity and an injustice. In the same way, absolute equality would be an obstacle to life, to welfare, to order and to the peace of humanity. In such a question a just medium is preferable. It lies in the capitalists being moderate in the acquisition of their profits, and in their having a consideration for the welfare of the poor and needy; that is to say, that the workmen and artisans receive a fixed and established daily wage, and have a share in the general profits of the factory.
It would be well, with regard to the social rights of manufacturers, workmen and artisans, that laws be established, giving moderate profits to manufacturers, and to workmen the necessary 283 means of existence and security for the future. Thus, when they become feeble and cease working, get old and helpless, and die leaving children under age, these children will not be annihilated by excess of poverty. And it is from the income of the factory itself, to which they have a right, that they will derive a little of the means of existence.
In the same way, the workmen should no longer rebel and revolt, nor demand beyond their rights; they should no longer go out on strike, they should be obedient and submissive, and not ask for impudent wages. But the mutual rights of both associated parties will be fixed and established according to custom by just and impartial laws. In case one of the two parties should transgress, the courts of justice would have to give judgment, and by an efficacious fine put an end to the transgression; thus order will be re-established, and the difficulties settled. The interference of courts of justice and of the Government in difficulties pending between manufacturers and workmen is legal, for the reason that current affairs between workmen and manufacturers cannot be compared with ordinary affairs between private persons, which do not concern the public, and with which the Government should not occupy itself. In reality, although they appear to be matters between private persons, these difficulties between patrons and workmen produce a general detriment; for commerce, industry, agriculture and the general affairs of the country are all intimately linked together. If one of these suffers an abuse, the detriment affects the mass. Thus the difficulties between workmen and manufacturers become a cause of general detriment.
The court of justice and the Government have therefore the right of interference. When a difficulty occurs between two individuals with reference to private rights, it is necessary for a third to settle the question: this is the part of the Government: then the question of strikes—which cause troubles in the country and are often connected with the excessive vexations of the workmen, as well as with the rapacity of manufacturers—how could it remain neglected?
Good God! is it possible that, seeing one of his fellow-creatures starving, destitute of everything, a man can rest and live comfortably 284 in his luxurious mansion? He who meets another in the greatest misery, can he enjoy his fortune? That is why, in the religion of God, it is prescribed and established that wealthy men each year give over a certain part of their fortune for the maintenance of the poor and unfortunate. That is the foundation of the religion of God, and the most essential of the commandments.
As now man is not forced nor obliged by the Government, if by the natural tendency of his good heart, with the greatest spirituality, he goes to this expense for the poor, this will be a thing very much praised, approved and pleasing.
Such is the meaning of the good works in the Divine Books and Tablets.