Sunday, October 2, 2016

What would happen if everyone on the planet was a billionaire?

The concept of ‘Money’ is the most fantastic creation of the human mind. It is artificial, and holds up only because we all allow it to.

It has helped speed up a lot of our daily lives, due to easy understanding of transactions. This much we all know, agree with, and love, as none would like to prefer using the alternative - bartering.

So what this amazing invention called ‘money’ has done is to reduce every product, experience, service and interaction to a common scale - the value scale - measured through a certain currency (convertible to another, or most of the rest). That this ‘money’ is physical or virtual, convertible or non-convertible, means little in the bigger scheme of things (unless, of course, you are a crook or a cyber-thief siphoning off central banks’ monies! Or North Korea.)

Value” is what underlies everything. It defines how much money we are willing to part with, or earn through hard labour, and also why shining objects called the iPhones can keep commanding ridiculous sums of money to get owned, despite equally good or even better products available at much lower ‘prices’.

Value is, because you have more of what can measure it, and I have less of it (or vice versa). Value (created through human effort) and the dissimilar amounts of moneys that can exchange it, creates the required ‘potential difference’ that keeps economies moving.

brightsparks, sandeep manudhane, money, inflation, hyperinflation, value

So, when you give a sum of, say, $ 1 billion to every human on Earth,

Sums of money with everyone = Equal, huge, equally huge!
Potential Difference needed to create meaningful flows of value = Nil
Value of the “money” we hold = Equal, hence very low!
Worth of what we hold = drastically down
Prices of nearly all products and services = sky high (worth down)
Welcome to hyperinflation, and the breakdown of monetary systems.
Government’s response? Reset the monetary system. Create new potential differences.

As an extension of this thought, it is amazing to visualise mankind’s future. If machine-use speeds up drastically and possible infinite energy sources like cold fusion etc. really come into being, we have a perennial and super-abundant future. Money will become meaningless in the glut-economy, and bingo! We would have created a truly communist society! Ha, ha.

I have tried to analyse the whole idea of money is a series of lectures, the first of which can be viewed by clicking below.

The Concept of Money

Thank you for reading.

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