Tributum Newsletter #81

Hello

During the month of November, I noticed quite a few publications dealing with wealth and inequality. These covered from Musk’s USD1trillion pay package, singer Billy Eilish (worth a cool USD50m herself) calling on billionaires to give away their wealth, wealth taxes in Norway and the global wealth distribution and inequality report. So, let’s talk about wealth and distribution and equality.

Based on Google Gemini every person in the world will receive around $55,000 of estimated global wealth if it is divided equally among the global population. The majority of the world population by number are now happy (or they?) …the 1 percent definitely won’t be happy. OK, so then what?

A sentence attributed to Zig Ziglar states that poor people have big TV’s while rich people have big libraries. Now, even I know that’s a metaphor – it’s what you do with what you have that matters. Gemini estimates that after an equal distribution of wealth it will take only 2 generations for 80% of global wealth to concentrate in 20% of the world population again. That means inequality will start almost immediately after equal redistribution. Some people will buy entertainment, others an education. Unless what you do with your wealth is also regulated to be equal. Ok, so then what?

If everyone was given a fishing rod and shown how to fish only some will actually learn how to fish. Fewer will be prepared to actually put in the effort to go fishing. Even then some people would catch more than others. Unlike the fishing rods the fish are not distributed equally, and neither are fishing skills. If the equal distribution of caught fish is then enforced, the skilled fishermen will have no incentive to continue fishing and soon everyone will share equally – in nothing. Not OK…

According to Dr Roelof Botha someone that has nothing and want to share it with others is a communist. That was their idea fundamentally, the distribution of resources based on what people need rather than what they produce. Who will then go and produce just so that it can be given to those who need it? Communism tried it and failed and arguably created some the most unequal societies in the world. It requires extreme regulation till the minutest detail (“1984” by George Orwell anybody?) and will likely still fail. Nothing that is forced to be equal will remain equal. That is just fact and facts don’t care about feelings.

And Musk’s $1trillion package? Not cash, but Tesla shares over the next 10 years. Shares that will only retain or increase in value if Tesla delivers. Which means Musk must deliver. He has skin in the game – undiluted. If these shares were divided equally between all the Tesla employees, or the world population for that matter, would any of them continue to have an incentive to deliver? And Billy Eilish – how much of her USD50m is she giving away? USD11.5m to organizations dedicated to food equality, climate justice and reducing carbon pollution. A tidy sum indeed, just wondering how much will actually get to the people who actually need it…

I am not saying that we should not try and make the world a better place. Wealth with values and a conscience. Where you have much, make it easier for a those that have less.  Treat everyone equally and with respect. Do what you can, especially during the festive season, but also beyond. Until next month, keep breathing.