What would Earth be like if everyone were millionaires? (NOT VIA INFLATION)

[Kak]

I see that the title was changed to (not via inflation), but it would inflate prices anyway. Why? Because a new pricing equilibrium must be hit. Job people, a million bucks richer, won't be getting out of bed for a hundred bucks any more. Labor cost will go up. Prices will go upbecause people are willing to pay. Money will change hands and roughly fall into the same peoples hands it's in right now.

Constraints keep the machine running. They keep people showing up for work. A world of retired millionaires wouldn't have anything to buy with their millions because no one is selling anything.

 

[Rabby]

Yeah, I would say we're looking at it already. We're millionaires compared to people living in the 1920s and 30s. People flying around, checking their personal telegraph machines in their pockets? OMG. This is outer space compared to your grandparents' generation.

 

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[lowtek]

Simple math tells you that you would HAVE to inflate the money supply for all 300m + residents of the USA to become millionaires.

Dividing the 20T GDP by 300m people doesn't get you anywhere close to 1M / person. Barely a fraction.

Your question would be better posed as: what would happen if everyone were to act like million dollar producers?

Which is also in denial of basic reality. 15% of the population has an IQ of 85 or lower. These are decent human beings with rights the same as you and I, but they're not producing anything of value in modern society, for the most part. They simply cannot manage the complexity required to build or even operate complex systems, let alone a business.

In other words, the question has no foundation in basic reality. It could be explored as a work of fiction, but nobody is going to take it seriously beyond that.

 

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[Kak]

It would look like German hyperinflation in the 1920s. They burned it for heat.

 

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[Rabby]

Ok, ok. But you did ask if "everyone" was a millionaire. Even the ones lying in the street in Bangkok, and the apparently homeless musicians lining the narrow alleys of Cambridge.

Within a short time (months?) everything would adjust, unless everyone was producing at the millionaire level. All this money is just a signal for value exchange. Ultimately, what do you want from the didgeridoo player sleeping it off behind a church in Cambridge, asking for money whenever he wakes up? Or the guy selling tiny palm-frond boxes on the elevated crosswalk over Thanon Ratchawithi? The signal adjusts to the relative value on either side of the transaction.

 

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[msufan]

Consider the difference in our standard of living today vs. even just 100-200 years ago. We carry around in our pocket a smartphone that holds more knowledge than the richest person on earth could access back then. We eat foods from all over the world, we can communicate instantaneously with anyone around the globe, we can drive and even fly (fly!!) at speeds unthinkable back then.

In another 100-200 years, imagine another similar shift upward in people's standard of living. It won't be like being a millionaire today, because all-new innovations and technologies that we can't even conceive of yet will be available to the masses then. And people wouldn't stop innovating -- instead, the hedonic treadmill will cause people to view the improvements as normal, and most people will work hard to push for even more.

 

[Rabby]

There is a really good introductory-type book on money, and I wish I could remember the name. Now it's buried by all the cryptocurrency books, and I gave my copy to someone. Anyway, it goes into the nature of money as a medium for exchange, and the difference between a store of value (which traditional moneys served as) and a pure currency, like modern fiat currencies. It's been a while since I read the book, but it clarified my thinking on money a lot.

Using fiat currency as a store of value is essentially a bad choice. My takeaway, even though it wasn't a book about assets, was that you really-really need assets that live and breathe currency (if you live in a fiat currency economy), because they will adjust to the value level of the currency.

Another thing about the gold standard that I picked up from economics books/lectures. I think I got the following from Thomas Sowell, who needs to be sainted regardless. The gold standard has its problems. The money supply can only expand at the rate that you can dig gold out of the ground, or move it from private holdings to vaults where the backing for money are stored. As a result, if other forms of trade expand rapidly while gold mining / pilfering do not, you get massive deflation. But the advantage of a backed currency is that it stops governments from issuing money to pay their debts (bonds, salaries, pensions, etc) with less valuable paper than the original debt covenant was based on. This is a very real risk, and not just a cyclic one. There is an incentive for politicians to "fix" money problems with quantitative easing and related strategies (also like Japan, at one time) and pass the buck down the line to the next generation of politicians (now worth 0.75 of a buck). The actual problems -- excessive spending, increased confiscation of wealth, etc, are not improved, but the appearance of a problem is temporarily covered up because the raw numbers look better.

Disclaimer, the above paragraph is not intended to be political. It is just a comment on the nature of money/currency, and an inherent danger to fiat currencies which are influenced by people whose office depends on short-term approval ratings.

 

[Kak]

no prostitutes so it would suck.

You've been part of the forum for 3 posts... And you post drivel like this?

Really? Prostitutes, right out of the gate?

 

[Kak]

Sorry it was a joke snow flake

It is not as if I am a offended. What I am is disinterested in reading things from you from this point forward.

All 4 of your posts now have been almost record setting level of useless.

 

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[Kak]

It’s in response to "but it would inflate prices anyway. Why? Because a new pricing equilibrium must be hit.”

I don’t know why we’re assuming that everyone is just gonna cash out then never work again. That never happens. I don’t think I can think of a single example where someone was like “okay i made 10 mil... I’m done making money forever.” Yea, people ‘retire’ (at 29) but 90% of the time during their millionaire ‘retirement’ they make more money than before they retired lol.

Either that or they start doing philanthropy (again, you can argue what MJs is trying to do is philanthropic.. trying to teach people to attain financial freedom)

But people get bored. Real entrepreneurs are tinkerers. They’re builders. They’re playing a real life game of Roller Coaster Tycoon. Donald Trump could have cashed out decades ago. Instead he literally wanted to build towers and hotels and regardless of his current politics you have to admit that’s true. Steve Jobs. The guy just loved building sh*t. He took a $1/year salary. It gets to the point where you have enough money that you can buy whatever you want so you start imagining sh*t lol. “Engineers.... gather!... I have everything i could possibly want... so i want you to make me computer that’s the size of a notepad but instead of a mouse you just use your fingers. and then we will share it with the world and turn a profit on that so we can build a computer into a wristwatch! now vanish!” Elon Musk is another crackpot... trying to build colonies on mars and cars that don’t use gas... these people are just nuts. Both of them have specifically said the only reason they even cared about profits was to raise the money for the next batshit insane ventures they took. I mean when you’re worth that much you don’t need more money.

Point is, no one really just says ‘okay I’m rich. I’m done’ then just cashes out and lives on the beach. Humans are builders.

I mean ‘they won’t get out of bed for a few hundred bucks anymore'... but what makes you think people are going to be performing and producing at the 6/7/8/9 figure level then all of a sudden drop down to the low 5 figure level?



That’s what money has always been though.

Gold has no intrinsic value. You can’t eat gold. It has no real practical purpose aside from coating some electronics for conduction.

Why is gold valuable? Beauty. Why didn’t marble become the official currency. Or acorns.?

I theorize it was Diamonds and gold became currency because when our ancestors found them they found a pile of goose sh*t, a dead frog and this beautiful gold nugget or diamond.

View attachment 21401 View attachment 21402

Wow! look how shiny. The caveman probably stored it away and prized it. He would stare and marvel at it’s beauty, until another caveman who was a master toolmaker/hunter saw what a beautiful treasure he had and made him an offer he couldn’t refuse.... he would trade him 7 hogs, 2 spears and a shovel for his one diamond! Whoa... he wouldn’t have to hunt for a month. The master hunter could make all the tools he wanted, and was good at catching new ones, but this beautiful stone from the gods? He’s never seen one of these. So soon you have this dichotomy where mostly the best tool makers/hunters (aka the wealthy) had all the gold/diamonds (currency.) They were now the caveman 1%. But those gold and diamonds still acted as a vehicle for storing value, just like money does today.

Its simple supply and demand... More money makes it less valuable. Just like more of anything makes it less valuable. There is still an intrinsic value to money despite fiat. It's the work people associate trading for it. Everyone is different, but the collective perceptions create the stability of the value of money.

It is impossible for everyone to have today's millionaire level buying power all at once on a macro "whole world" scale. Relativity is required to even measure. I suppose it could happen in a single country (maybe due to crazy natural resource exports or something). This is why my answer to the original question is that the buying power would simply erode. It's a known cause and effect relationship.

 

[Kak]

I would argue that instead of the old gold standard... Most money is now on a de facto "work standard".

It represents value that will decay if everyone had more of it because it will no longer represent the same amount of work. 90 percent of people or more trade time for money.

 

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[lowtek]

IQ isn’t the only factor though. Yes, IQ correlates with income..

View attachment 21428


So it is a factor. But IQ certainly isn’t the only factor. As an anecdote, I have a friend who has an IQ of 140. He makes under 20K/yr. Why? He lacks an internal Locus of Control.

This Quality Determines Success Better Than IQ Does - Barking Up The Wrong Tree

The Key to Health, Wealth and Success: Self-Control | TIME.com

Anecdotes aside, Self-Control/Willpower/Locus of Control are significantly better predictors of success than IQ. If you need citations for that, I can get them... I just don’t want to dig through my Evernote if I don’t have to.

The IQ has risen quite a bit over the last 100 years [1] The Average IQ is actually now 120. Okay, I’m just f*cking with you. The average IQ, by definition has to be 100, but I bet I made you steam for a second lol. While the average is 100, what 100 means has risen a lot. In other words, we’re getting smarter than our grandparents. We literally do better on IQ tests so much so that we had to change what ‘100’ posts to.

From the APA:

Over the past 100 years, Americans' mean IQ has been on a slow but steady climb. Between 1900 and 2012, it rose nearly 30 points, which means that the average person of 2012 had a higher IQ than 95 percent of the population had in 1900.

Political scientist James Flynn, PhD, of the University of Otago in New Zealand, first discovered those astonishing IQ gains nearly 30 years ago. Since then, the steady rise in IQ scores in the United States and throughout the developed world has been dubbed the "Flynn effect."

In his new book "Are We Getting Smarter?" Flynn discusses the origins of his eponymous effect and muses on its implications for the economic prospects of the developing world, how we nurture our children and even its impact on death-row inmates.​

And I don’t know if it’s a work of fiction. The entire educational system we have is designed to make us better producers. The result? Look at the world around you. It works. Compare our society to those who have poor educational systems. Say Uganda or instance. The education you get is designed to make you a better producer, thus allowing you to earn more for your enhanced production. You go to school and study engineering, and study what all the great engineers of the past have done, making you a better producer. But there are plenty of people on this forum and other entrepreneurial circles who are coming up with create ways to produce like crazy. MJ opened a company allowing people to find limos in unfamiliar areas. It added significantly more value than simply driving customers. Same IQ, same education just used in a more efficient way. Earth has roughly the same amount of raw materials it had 7 million years ago, yet our world is much different. Why? We arranged those raw materials in a way that was beneficial to us.

Yes, I agree IQ isn't the only factor. From what I've heard (Jordan Peterson is my source, take it for what you will), it's only about 25% of success. So it's no surprise that high IQ individuals don't necessarily make tons of money, but you'd be hard pressed to find someone with an iq of 85 that amasses millions.

There's a reason the Army has a minimum required score on their exams. They're not strictly an IQ test, but they measure the same thing. The reason is that people with an IQ of 85 or lower can't do anything useful and in fact create more work because of the mistakes they make. They can't even be trained to do anything useful. They simply cannot manage complexity well enough to even be cannon fodder on the front lines.

Unfortunately, people can't willpower their way from an IQ of 85 or lower to higher cognitive function any more than my short pasty a$$ (5'5" on a good day) can willpower myself into the NBA.

Not an indictment of them as people (or of myself as part of the manlet brigade), but this is a very very real problem that has to be dealt with. Hand waving it away with a handful of individuals who succeeded with average or above iqs, while others of similar capability did not, doesn't deal with the problem at large, or in the hypothetical you wish to create.

I don't wish to derail your thread, so I'll put aside my objection and just deal with what I think is a more reasonable phrasing: what would happen if everyone lived up to their potential?

I think the second order benefits would be more transformative than the monetary ones. I think we would have less drug abuse, less bullying among children, less obesity and a more well adjusted society. Hopefully less reality tv, as well.

The flip side of this, and what may not be obvious, is that inequality would only grow in this scenario. All the lazy brainiacs would become an unstoppable force that would continue to gobble up resources. Since it's not a zero sum game, everyone would ultimately be better off, but the divide in wealth and relative poverty would persist and only grow.

 

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[ChrisV]

Edit again: Guys please read the post. We’re not talking about simply printing more money. I mean if the entire world did the things necessary to create wealth (ie creating value.)

This is always something I’ve wondered. There used to be a time that I wouldn’t help others gain an advantage financially because I thought if they were rich it would just dilute thee value of money that it would be as worthless as paper. Now, I don’t believe that at all. So what do I think the world would be like? Better. I think everyone would simply be adding more value. Cars would be better. Books would be better. Art would be better. And those people who created it would be rich, allowing them to purchase Homes/clothes/cuisine of the same improved quality.

Problems would be few becasue people would be coming up with ideas. Don’t know the best place to get chinese? There’s an app for that? Don’t know where to get a limo in another state? There’s an app for that. Maybe a website.

Obviously all the solutions wouldn’t be apps lol but i wanted to use the line.

So what do you guys think? How would the world change if everyone were millionaires?

Edit: Okay, apparently there a little confusion.. i don’t mean ‘if the government printed a bunch of money and just handed it out’... the answer to that would be obvious: money would become worthless. What I mean is if everyone created enough value to become millionaires the legit way.

 

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[ChrisV]

Consider the difference in our standard of living today vs. even just 100-200 years ago. We carry around in our pocket a smartphone that holds more knowledge than the richest person on earth could access back then. We eat foods from all over the world, we can communicate instantaneously with anyone around the globe, we can drive and even fly (fly!!) at speeds unthinkable back then.

In another 100-200 years, imagine another similar shift upward in people's standard of living. It won't be like being a millionaire today, because all-new innovations and technologies that we can't even conceive of yet will be available to the masses then. And people wouldn't stop innovating -- instead, the hedonic treadmill will cause people to view the improvements as normal, and most people will work hard to push for even more.

Way off topic but:

Holy shit bro.. i just saw your sig and that shit is sick!!!!!!!!!

Dude I’m a total data nerd.. I was even training to become a data scientist before I got distracted by more entrepreneurial ventures

I love Data. Love it. And I’ve always lived the same way. Believe it can accurately answer any question in life.

This is the description from my Twitter/Facebook pages:

yAximJQ.png

Anyway.. i’m going to leave this post while I go read literally everything on your site.. starting with the Top 8 Must Read list

 

[Danny Sullivan]

It's a guess, but: if everyone's a millionaire or rich, then no one is. I think prices would adjust upwards. Why let them pay 60$ for a full gas tank if everyone can pay 1000$ for it?

And so people with a money system in place might be going for a long time, the average mickey millionaire will be poor again in no time. So maybe everything will stay the same with higher prices, costs, wages, etc.

 

[Rabby]

Also, we see no evidence that the price of commodes goes up when everyone can afford better.

I know you meant commodities, but I just wanted to mention that I'm getting ads for Toto brand "undercarriage washing" commodes on this forum. Toto is definitely my fav brand of commode, so maybe I'm just being targeted, but I wonder if miscellaneous typos end up setting the priorities of the advertising engine

Ok, back on topic, that photo makes me want to go to Ethiopia though.

 

[Bhanu]

Okay, apparently i’m not making what i mean clear.. I edited the first post and added

"Okay, apparently there a little confusion.. i don’t mean ‘if the government printed a bunch of money and just handed it out’... the answer to that would be obvious: money would become worthless. What I mean is if everyone created enough value to become millionaires the legit way."​

In that case our earth will be a paradise . With no financial worries everyone will be aiming for and achieving what he really wants . Everyone will be working to serve other . I think there will be no wars,no poverty .

 

[DistressedDenim]

How did everyone innovate without anyone to do the sheep jobs for them?

 

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[Danny Sullivan]

How did everyone innovate without anyone to do the sheep jobs for them?

There will still be sheep jobs, but they're much higher paid so that employees themself can become millionaires too. That's what i said: everything will just rise (costs, prices) and therefore no one is really rich.

Another scenario could be, if humanity would just work to improve their overall situation and everyone has a right to food, housing, education, mobility etc. that is provided within a system without money. But that's probably even more unrealistic.

 

[Kak]

So then why isn’t the price of gas higher in the US than it is in Zimbabwe?

Not sure I'm seeing the connection between the gas prices in Zimbabwe and what I said...

 

[Kak]

Ah, Ok. We're on the same page. Sorry for going all post-apocalyptic there. I thought you meant like "make them all kings."

Um, I think we would be off the planet in 10 years. If FTL travel is possible, we'd be developing it. You're talking about 7+ billion people. One person's brain plugged into today's mental context can already create technology that almost anyone would assume is impossible. If you somehow convinced all the brains and hands to innovate at that level -- while simultaneously amping up the mental context by 7 billion millionaire-innovators? Uh, chaos-rainbow-cat-meteor-storm of new technology beyond imagining.

Relative value in trade would still hold though... some people would be more-millionaire or billionaire, trillionaire, etc, compared to today's standard. Currency would adjust so that we don't have to count all the stupid zeros.

Yep... Like Japan.

 

[Rabby]

Explain further.. I’m intrigued.

Money can have at least these two features:

1. Medium of exchange
2. Store of value

Depending on the money, it may have these in different proportion.

Money backed by gold is a store of value. The reason for this is that the amount of money can not suddenly be expanded by hundreds of times. At least, not unless a mountain of gold is discovered.

Since the money can not expand, you can be assured that your $1 will not go from "$1 of 1 billion in circulation" to "$1 in 100 trillion in circulation" overnight. But why would someone want to ruin your money like that, you ask? Because promises are made based on an amount of money. The promissors become debtors for a fixed amount. Those debtors now have an incentive to inflate the money supply with cheaper money, paying back the debt with effectively less.

Example:

I want to build a railroad across the continent. To raise money for salaries and supplies, I sell a bond. I promise to pay back the bond with 10% compound interest after 10 years. People buy this bond, which means they are lending me money in exchange for interest.

In addition to raising money through debt, I decide to leverage a second layer of debt to finance labor. Rather than paying the laborers $50,000 per year, I pay them $40,000 per year but promise them a lifetime pension of $10,000 per year if they work at least 10 years. Aha, they think, I will get $10,000 per year for many years after this project. This is also debt financing on my part.

Now, I have all this debt. I owe the bond holders more than I borrowed. I owe the laborers lifetime pensions if they work for 10 years. What if I decide I don't want to make good on all that debt, but I do want to appear to make good on it?

To do this, consider that I have a huge amount of valuable cash on hand. I can become influential with politicians, bureaucrats, etc. with this money. But what do I want from them? How can they solve my debt problem...

The answer is, I want them to debase the currency. If I am a major debtor, and I have lobby power (or if I am a government agency with bond debt and influence over policy), it is in my economic interest, narrowly defined, to make the money less valuable. In other words, more money exists, and it is easier to get each dollar. But my debt is a fixed amount. It becomes easier to pay. Perhaps at the time of my financing, a railway ticket would have cost 3 cents. After 10 years of debasing the currency, it will cost 3 dollars. By the time all the pensioners die, it will cost 30 dollars for the same ticket. Paying back my debts becomes easier over time.
​

The preceding example is among the things that a commodity-backed money was designed to prevent. As a result, such monies were also a store of value, as I mentioned, because they were protected from inflation by the maximum rate that the commodity could expand.

Deflation was actually used as the argument for taking USD off of the gold standard. The true reasons are for the discerning economic historian to decide for himself or herself.

The alternative to money that is "backed" by something is a "fiat" currency. Fiat means "a declaration," in other words, "because we say so." This type of money is more frequently referred to as currency, although I think there is no absolute contrast between the words "money" and "currency" ... they are also used as synonyms. It's useful to refer to fiat as currency though, because its only value is in its movement, like current.

In the US system, and many others, currency is now issued as debt. The Federal Reserve Bank gives an amount of currency to a member bank. That bank must pay the money back plus a certain interest. Because the Federal Reserve only issues currency in this way, there is never enough actual money to pay back the debt owed.

This is not a problem for the member banks directly. They lend out the money for mortgages, lines of credit, business loans, etc., or maybe they invest it in bonds and treasuries. The debtors who acquire the currency next owe the bank more than they borrow, and that amount is enough to pay back the Federal Reserve and also keep some profit for the bank.

The people and governments who now have that cash owe more to the bank, which owes something to the Fed. But we don't just stuff it in a mattress. We deposit it in another bank, or we use it to invest, or we use it to build something that will later generate tax revenue (if we're a gov't), or we use it in business operations. Et cetera. Any time we deposit the money in a bank, that bank is allowed to lend 90% of the money out. This is called a "10% reserve requirement." It is why you can not go to a bank and demand your 3 million dollars in cash today. They do not have it there. It is lent out.

When that money is lent out, someone else owes more than the amount they got. For example, you borrow it to buy a house. The house costs $100,000. But over 30 years, you'll pay back $200,000 because of the interest.

Meanwhile, the person you bought the house from deposits the $100,000 in the bank. The bank lends out $90,000 of that deposit. Someone puts that in a bank. It gets lent out again.

This recursion of the lending process leads to a lot of debt.

In fact, at least $20 of debt is created for every $1 issued by the US Federal Reserve.

That sounds more problematic than it really is, although it is somewhat problematic. Most of the debt can be paid off because money moves.

Example:

Only $5 exist in the world. Only 4 people exist in the world. You, me, Ted, and Susan.

We have $0, $1, $1, and $3 respectively.

I borrow $1 from you, promising to pay back $1.50 next week. With my $1 I buy reeds from Ted. I use the reeds to make a basket, which I sell to Susan for $2.50. I pay you back next week.

We now have $1, $1.50, $2, and $0.50 respectively. And Susan has a basket.

Notice the debt did not cause a problem here, because the system is balanced and within the limits of human action. The currency served to make the people with less of it more productive, and the one with more of it willing to trade. We still have the same amount of currency in the system. Plus, we have a new basket that did not exist before. Quality of life has risen. It's Susan's turn to do something productive, and she'll probably leverage her new basket as a labor multiplier.

We can get into complex lending scenarios in a system like this, and as long as (1) everyone performs on their debt and produces things, and (2) we avoid excessive indebtedness, the system can balance itself over and over again. And bonus: our quality of life keeps rising as people make tools, gardens, etc to pay back their friends. Currency in this system is just a way of tracking whose turn it is to provide some value. Value adjusts automatically to what people want and need, valuing something useful with more currency (a basket compared to some reeds, for example).
​

~ Pauses for breath. Takes a sip of coffee. ~

So that's why debt can be Ok. But when the Fed is paid back, the money paid to it disappears. They gave out $1, they get back $1.02. $1.02 has been removed from circulation. This is actually a bigger problem than it sounds like. It means that whenever the Fed is paid back, it has to add money to the system... it has to lend out more than it lent before, which causes a recursion of increased lending, increasing money supply. This inflates the money supply at a steady rate... which is sometimes Ok, but it's not Ok if the production rate in the economy is flat or shrinking. Basically, there will be relative inflation if supply is disrupted - particularly labor supply, which depends on population growth.

In addition to that, people can over-leverage with debt. I promise to pay $200,000 for my $100,000 house over 30 years, but then I lose my job. Or I abscond to Canada with a mistress/mister, whatever. What happens to the system, where a bank is counting on me to pay back that money, so that they can pay back the money to pay back the money to pay back the money to pay back the Fed?

Well, it screws it up, of course. If a debtor disappears or can't have his debts collected, the creditor often has its own debts and obligations, and there can be a localized bad effect or even a massive cascading effect (with enough debtors absconding at once).

With all the debtors in the system, and with the possibility of bad debts that have to be accepted as noncollectable, there's some pressure to expand the money supply right? At least some of these parties - the mortgaged homeowners, the bond issuers, the pension grantors, etc - would be relieved if more money became available. So, groups form with their interests at heart, and attempt to pressure people who can influence economic policy. Some groups tend to gain more lobby power than others, naturally, and those are usually the more sophisticated ones. If these groups that tend to be debtors as described above succeed in lobbying, or if they are already members of a governing body, inflation is likely to increase.

As a result, this type of debt-financed currency is not a good store of value.

One other thing that can go wrong with this modern type of system is that the Federal Reserve Bank can become concerned that they are creating too much debt and currency in the system, causing what their experts have at various times called "unfettered growth" or "unfettered economic expansion" etc. Worried that they are creating something unsustainable, they shrink the money supply by ceasing to issue money and/or readjusting rates so that the total in circulation stops growing as quickly.

When this happens, debtors suddenly can not make the shrinking pool of currency move fast enough to repay their debts at the required rate -- the debts are a fixed number, but the currency is fluid. A crash results, because the many debtors - businesses with lines of credit, mortgaged homeowners, cities that issued bonds, etc - can not pay. When they don't pay, other debts go bad too. The system freezes, and people stop moving money because they are afraid it will not come back to them anymore. No more money is issued because it's not moving anyway - nobody is lending. The result is economic meltdown, and the classic fear is that money will leave the system, going back to the Fed and disappearing, and you'll have no economy plus massive deflation. The Fed's attempt to slow the money supply in the late 20's are actually the root cause of the Great Depression, according to current understanding. In fact, Alan Greenspan acknowledged the same.

By the way, I'm just explaining all this as I currently understand it. If there's an economist in the house, feel free to correct or clarify.

 

[ChrisV]

Simple math tells you that you would HAVE to inflate the money supply for all 300m + residents of the USA to become millionaires.

Dividing the 20T GDP by 300m people doesn't get you anywhere close to 1M / person. Barely a fraction.

Your question would be better posed as: what would happen if everyone were to act like million dollar producers?

Which is also in denial of basic reality. 15% of the population has an IQ of 85 or lower. These are decent human beings with rights the same as you and I, but they're not producing anything of value in modern society, for the most part. They simply cannot manage the complexity required to build or even operate complex systems, let alone a business.

In other words, the question has no foundation in basic reality. It could be explored as a work of fiction, but nobody is going to take it seriously beyond that.

IQ isn’t the only factor though. Yes, IQ correlates with income..




So it is a factor. But IQ certainly isn’t the only factor. As an anecdote, I have a friend who has an IQ of 140. He makes under 20K/yr. Why? He lacks Self Control and an Internal Locus of Control.

The Key to Health, Wealth and Success: Self-Control | TIME.com

This Quality Determines Success Better Than IQ Does - Barking Up The Wrong Tree

Anecdotes aside, Self-Control/Willpower/Locus of Control are significantly better predictors of success than IQ. If you need citations for that, I can get them... I just don’t want to dig through my Evernote if I don’t have to.

The IQ has risen quite a bit over the last 100 years [1] The Average IQ is actually now 120. Okay, I’m just F*cking with you. The average IQ, by definition has to be 100, but I bet I made you steam for a second lol. While the average is 100, what 100 means has risen a lot. In other words, we’re getting smarter than our grandparents. We literally do better on IQ tests so much so that we had to change what ‘100’ posts to.

From the APA:

Over the past 100 years, Americans' mean IQ has been on a slow but steady climb. Between 1900 and 2012, it rose nearly 30 points, which means that the average person of 2012 had a higher IQ than 95 percent of the population had in 1900.

Political scientist James Flynn, PhD, of the University of Otago in New Zealand, first discovered those astonishing IQ gains nearly 30 years ago. Since then, the steady rise in IQ scores in the United States and throughout the developed world has been dubbed the "Flynn effect."

In his new book "Are We Getting Smarter?" Flynn discusses the origins of his eponymous effect and muses on its implications for the economic prospects of the developing world, how we nurture our children and even its impact on death-row inmates.​

And I don’t know if it’s a work of fiction. The entire educational system we have is designed to make us better producers. The result? Look at the world around you. It works. Compare our society to those who have poor educational systems. Say Uganda or instance. The education you get is designed to make you a better producer, thus allowing you to earn more for your enhanced production. You go to school and study engineering, and study what all the great engineers of the past have done, making you a better producer. But there are plenty of people on this forum and other entrepreneurial circles who are coming up with create ways to produce like crazy. MJ opened a company allowing people to find limos in unfamiliar areas. It added significantly more value than simply driving customers. Same IQ, same education just used in a more efficient way. Earth has roughly the same amount of raw materials it had 7 million years ago, yet our world is much different. Why? We arranged those raw materials in a way that was beneficial to us.

 

[ChrisV]

you'd be hard pressed to find someone with an iq of 85 that amasses millions.

Brittney Spears hahahahah

Yes, I agree IQ isn't the only factor. From what I've heard (Jordan Peterson is my source, take it for what you will), it's only about 25% of success. So it's no surprise that high IQ individuals don't necessarily make tons of money, but

Dude, you listen to Jordan Peterson? I was trying to get into his work, but I have no idea where to even start. I started on his book but the thing is like the length of the Bible.

Re:IQ - There’s some evidence that education itself raises IQ! That’s the main theory behind the Flynn Effect (the rise in IQ over the past 100 years).. they postulate that it’s been the improvements in public education over the years [again, if you need citation i can dig it out]

I don't wish to derail your thread, so I'll put aside my objection and just deal with what I think is a more reasonable phrasing: what would happen if everyone lived up to their potential?

Yes, that is a good way of putting it.

I think the second order benefits would be more transformative than the monetary ones. I think we would have less drug abuse, less bullying among children, less obesity and a more well adjusted society. Hopefully less reality tv, as well.

Well, all those things positively correlate with income, so yea, that probably would happen.

(sorry for blurry quality)





And even...



Bonus =P


But actually Obesity and Drug abuse have interesting relationships with income. This is in the US. Both of those thing fall somewhere on a U shaped curve. Basically you have to have some level of wealth to afford overeating or drugs, but once you’re above a certain income level those issues go away.

 

[Rabby]

Millionaire forum trolls... what would that level of production look like?

 

[jon.M]

What about countries like Denmark, Switzerland and Sweden where redistribution of wealth is basically par for the course? The tax rate in those countries are astounding... ~60%[1] and a lot is given to social programs. For instance rent? It’s free. Everyone is given a subsidy check to cover their rent. If you want a nicer place you can pay more.

Sounds pretty horrible, right?
View: https://www.youtube.com/watch?v=u6XAPnuFjJc

Chris, a lot of what you're saying in this post is factually incorrect. I live in Sweden. Rent is absolutely not free. I have no idea where you got that from. Don't know if you're trolling or lying but this statement is absurd. We pay rent out of our own pockets.

After some research, there seems to be a subsidy for people under 29 years of age or families with kids. But to qualify for that is rare and only happens if you're a low-income earner renting a ridiculously expensive apartment. And in that case, we're not talking about sums that nearly cover the rent.

Same goes for Denmark. Where did you get this information from?

 

[G-Man]

So, after all that, I get back to the first post, and the question is basically "Do you think the world would be better if everyone produced at the maximum of their potential, the government didn't print money, and we all looked at the world as non-zero sum?"

Yes.

Just trying to save any other newcomers to the thread 4 pages of reading.

 

[msufan]

Hahaha -- thanks, man!! I didn't think anyone read the signatures. Appreciate the love! I've made 250K playing silly stuff like Bejeweled and beating the lottery, and I had to try to share it with the world!

 

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[ChrisV]

Hahaha -- thanks, man!! I didn't think anyone read the signatures. Appreciate the love! I've made 250K playing silly stuff like Bejeweled and beating the lottery, and I had to try to share it with the world!

Nah I used to have a blog called Evidence Based Living.. my focus is more on the social sciences and data what they can teach us about human behavior but holy shit.. we’re gonna be best friends lol

 

[ChrisV]

Anyway sorry lol.. back on topic. Anyone else?