If we take all the wealth (cash, property, your old klunker, everything) and divide it up equally to everyone on Earth, what will each person get?
You’ll find a couple of answers on the net. Here’s a typical one at Yahoo that is neither better nor much worse than any of the others. In 2006, they said it would be $6,685.92.
Now I don’t know about you but, yeah, I could use an extra six grand.
But don’t forget that you’re first giving up everything you own.
Your home, any equity therein, your car(s), the food in the refrigerator as well as all your appliances, the computer you are reading this on, the clothes you wear, all of your checking account, savings account, 401(k) savings, any vesting in retirement plans, stocks, bonds not to mention the contents of your pockets, your right to call any property your own and, well, you get the idea.
Basically you will be standing naked in the park along with all your neighbors, each of you holding a check (or cash) worth $6,685.92.
The bad news gets worse.
Your job is gone because your employer has no money either. They can’t pay you until they’ve sold something and collected the money — there’s that nasty thing called “lag”. But, assuming they can find a buyer who is willing to give up some of their $6,685.92 instead of using it for food or shelter, and assuming you don’t need to pay someone for shelter or food for a while, there’s still moving the money from the buyer to your employer, their divvying it up amongst all employees and then actually getting the cash into your grubby — as in you don’t have any toilet paper — hands.
Meanwhile, you’ll be lucky to find a shade tree to sit under and a dead lizard to eat.
And when some people get discouraged, they give up. They’ll take their $6,685.92 and burn through it in a couple of days or weeks. In a short amount of time, they’ll be broke.
Where will their $6,685.92 go?
That’s easy. The cycle will pick up where it left off as the rule of “supply and demand” starts over. Those that don’t get discouraged, those who get out there and work at supplying goods and services that others want will end up with the money.
Just like they always have.
So, yes, you could distribute all the wealth in the world and we would all then be equal … for a few minutes.
But before long, someone will find something in the dirt that someone else will want.
The “haves” and the “have nots” are back.
Yeah, I’m oversimplifying for sure. And the global disaster that would follow the total economic collapse that such a redistribution of wealth would almost certainly create would kill millions, maybe even billions.
“Any dead today, Mam? I’ll cart them off in exchange for a small fee.”
The bottom line is things work the way they do because it works.
It’s not rocket science. (It’s economics.)