40% of Australia's population live in either Sydney or Melbourne, and these two cities are among the top 5 least affordable in the world [1].
1 - https://www.afr.com/companies/financial-services/australian-...
- There is a ballpark estimate that sum of all physical money in the world is 90.4$ trillion, let's distribute it equally to all 7.53 billion people: we get 12k$ per person. This is not enough to buy an apartment in most parts of the world.
- There is an estimate that 1% has 303.9$ billion, let's distribute it equally to US population of 327.2 million people: we get 928$ per person. Barely enough to buy status smartphone.
So I don't see how wealth distribution can solve anything. Even if we equalize wealth and prices at a same time, free market will quickly spiral down to similar pricing that we have today (things are barely purchasable, or not at all).
Could you explain how you got to that conclusion? It does not seem logical to me at all.
Current prices are in part a result of high inequality: It makes economic sense to sell a house for 10x the median income because they are still groups of people so high above the median that they can afford to pay that price - and of course as a business you'd very much like to sell to those people if in any way possible.
In a society with more equal income, the highest price for which you could find a buyer would likely be a lot closer to the median.
I wouldn't even be sad about the money I'd no longer be making, because right now a good chunk is going into rent, and an even larger chunk is going into savings so I can buy a home at NYC prices. So it's not like I get to spend it on other things. If I didn't have the money but I also didn't have to spend that money on housing, I'd be equally well off.
(And all of this is leaving aside that other people would be better off, which is net good for society, etc. etc. Even the first-order effects alone are selfishly valuable.)
- [0] https://www.businessinsider.com/the-1-percent-dont-know-what...
The world could make do with very little money if it could move faster. Quantity of money times velocity of money times unit of time gives you the total monetary transactions over a time period; if you increase the velocity, then you can decrease the quantity, and nothing else would change.
However, the total value of the S&P 500 (which is probably about half the world stock markets value) is about $26 trillion, so that is about $3400 per person or maybe double or triple for a family. And the dividend of 1.75% means an income of $60/year if you hold on to the stock.
So I think doing this redistribution would result in everybody to whom $3400 is a lot immediately selling (assuming they were allowed to). I'm not sure what the distribution of capital would end up being. Someone would buy, say "Barren Wuffet" who fortunately had all their investments in cash, bonds, and small cap stocks. So ownership would end up being concentrated again, but maybe not as concentrated.
Anyone who has a lot of money saved for retirement in a large-cap fund would be unhappy, but why should you be better off than an average citizen of the world?
It seems like a fine experiment to me.
Edit: but just to spell it out, obviously politically impossible given the consequences for first world people who are relatively privileged but don't think of themselves that way. The median IRA balance (note, not the average that is skewed by the rich) is somewhere around $20-30K, so redistribution would affect those people like a 90% market crash.