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GDP - yes really!

Once in a while, a reader lets off steam at me. When I wrote a sarcastic piece on rescue animals [op. cit.], I was sent death threats by the cartload. For the most part, I get grunts of mild approval, occasional ‘Wow! Didn’t know that.’ Less often – but not unknown – offers of book deals and marriage proposals. I’ve turned them all down so far.

I generally avoid extreme points of view, because I don’t really have any. I rarely give advice, unless it’s about the best microphone to use for recording meercats mating.

This time (and I’ve worked similar lazy tricks before, when I’m feeling a bit of post-new-year flatfootedness), I’m going to set out a particular, arbitrary list of facts in an arbitrary manner. Think of it like those psychological tests in the 50s where they dropped ink on blotting paper and asked you what came into your mind [For younger readers, I’ll explain what these two things are at the end].

So here we go. Just read through the below, without really thinking too much about it. When you get to the end, write down the first thing that comes into your head and send it to me:

GDP per capita means Gross annual income per head. In other words, how much does each person in a country have to live on subsistence, housing, health, education and leisure?

Here are some current examples of GDP per capita

Rwanda                                            £            582

Burundi                                                          £174

India                                                               £1,406

Morocco                                                        £2,195

Barbados                                                       £11,210

Greece                                                           £12,250

Norway                                                          £49,150

UK                                                                   £29,590

Mexico                                                           £6,073

USA                                                                 £46,280

 

Next …

Elon Musk is worth £220 billion. This means if he sold all his shares in his companies [which no one can stop him doing], he would have that much cash, minus capital gains… so  let’s leave him with:

Elon Musk                                                     £170 billion

On a similar basis let’s add in Jeff Bezos, Warren Buffett, Bill Gates and the Wallmart family.

That’s ten people. So now it looks like this:

Elon Musk                                                     £170 billion

Jeff Bezos                                                      £119 billion

Warren Buffett                                             £57.2 billion

Bill Gates                                                       £38.5 billion

The Waltons                                                 £115.5 billion

Total                                                               £500 billion

Next …

Now let’s leave each of them with £10 million so they don’t starve. We’re still at £499.9 billion!

Right now, on average, wealth invested in a combo of property, shares, companies, banks and markets are yielding around 4% per annum. Not great by old standards, but it still gives an annual pot of £20 billion a year, every year for ever.

For Rwanda’s population of 13 million, this would provide £1,538 per head forever. This would triple the income of every Rwandan for ever. All 13 million of them.

Or £70,000 per head forever for the entire population of Barbados. That’s quite something!

… and that’s just cutting ten people’s money tree down to £10 million each.

But what if each Norwegian also took just 10% pay cut? This would yield another £26 billion per annum. Add this to the pot. Now Rwandans are starting to look like they can maybe feed themselves and Bajuns are – well – coining it!

  • Next …
  • The top 10% of Americans own 70% of the wealth
  • More stunning is that the bottom 50% only own 2% between them!
  • And the most stunning of all … 8 individuals own over half the world’s wealth [according to a survey by OXFAM]. I’m going to write that again:
  • 8 individuals own over half the world’s wealth.

Don’t ever let anyone tell you that the redistribution of wealth is impossible, impractical or – believe it or not –  undesirable.

Notes

  1. Meerkats fight while mating and move around a lot, so I would recommend a pair of Neumann KM84 microphones in a dove pattern on gooseneck stands about 2 metres above the action
  2. Ink was a liquid, usually black or blue, tipped into a straw and daubed all over paper. The result was known as writing. It was very messy. Blotting paper was like kitchen towel but harder.it was used to clean up the mess and also to leave crucial telephone numbers in reverse on the underside in the study of country houses during a suspicious death.
  3. Ink was a liquid, usually black or blue, tipped into a straw and daubed all over paper. The result was known as writing. It was very messy. Blotting paper was like kitchen towel but harder.it was used to clean up the mess and also to leave crucial telephone numbers in reverse on the underside in the study of country houses during a suspicious death.
  4. Rescue animals are creatures taken in by kind, gullible people, without asking for a character reference.
  5. op. cit. stands for opere citato, which means referred to elsewhere in this article … often ibid. is wrongly used to mean this. Wrong because ibid. should be followed by a page number.

Ok that’s quite enough. Now quickly think back to all that stuff about money and write down the first thing you think of. Thanks

Update: Our selfless billionaires saving the world

Well now. have I ever done a follow-up before?

Have I ever lifted a piece straight out of a website?

I don’t recall doing either of these things but the state of the world’s disparity of wealth got you all going. In particular the eight people who control half the world’s wealth … lots of you had to look that up – then you got really really cross.

The reason for the follow up is a few well-argued comments by good, fair-minded folk who wished to let me know of the historical generosity of the very wealthy, citing Carnegie and Rockerfeller and also Bill Gates using his fortune to solve the malaria problem.

This apparently means we need to be grateful for the very rich’s contribution to the world. They also made the point that disposing of all their shares would cause a run on the value of the companies they own. Might that not depend on the stated reason?

Anyway, I felt the urge to lift this straight out of Forbes from three months ago. I suppose Forbes may sue me for breach of copyright, in which case anything I have left after the settlement I’ll probably need for basics. P.S. in the interest of transparency I should say I’ve given 40% of my total wealth away and raised just over £30m fundraising (and my accountant of 20 years reads this so I have to be straight about it).

… Extract from Forbes …

A Record 156 Billionaires Donated Less Than 1% to Charity: Forbes

Jeff Bezos and Elon Musk are among the 156 billionaires on the Forbes 400 who have given less than 1% of their wealth to charity
– Dominick Reuter
– Oct 10, 2021, 5:31 PM

Billionaires including Jeff Bezos and Elon Musk reached new record levels of wealth last year.

Billionaires are also less generous than ever in terms of share of wealth they’ve given away.

Of the Forbes 400, a record 156 — including Bezos and Musk — have given less than 1%.

While Jeff Bezos and Elon Musk feud over who is wealthier and who is more litigious, the business titans are among a group of billionaires in the running for an even less desirable title: World’s Stingiest Billionaire.

Although the pandemic era’s surging stock market has ballooned the fortunes of billionaires to new heights, the wealthiest people in the world have chosen not to keep pace with their charitable giving, according to the Forbes Philanthropy Score.

The team at Forbes adds up all of the lifetime “out-the-door” giving a person has made, and divides that number by the sum of their total current wealth and the total giving amount. The results are categorized into five tiers: less than 1%; between 1% and 5%; between 5% and 10%; between 10% and 20%; and 20% or more.

Private foundations and donor-advised funds don’t count for the Forbes measure, since those “donations” effectively remain under the control of the donor, and also come with generous benefits that enable wealthy people to avoid paying taxes.

If the median American household gave $1,200 to charity across their entire lives based on a present net worth of about $120,000, Forbes would consider that more generous than Bezos and Musk based on this metric.

Of the 400 billionaires on this year’s list, just 19 have given away 10% or more of their wealth, while a record high 156 have given less than 1%. While Bezos and Musk have yet to crack out of the 1%, MacKenzie Scott has left them in the dust by giving away 13% of her fortune. Even with her pace of giving, Scott is wealthier now than she was last year .

Bezos did make headlines this summer with $400 million gifts to the Smithsonian, Van Jones, and Jose Andres, and has given $865 million from his pledge to fight climate change. But his actual gifts are a tiny fraction of the $22 billion gain he made this year alone, to bring his total net worth to $201billion.