... essentially reseting the entire monetary/banking system, do you think the same people would become rich/poor again? How? I was discussing with a friend that in developed countries, wealth is a decent indicator of success. That may be networking, that may be my making yourself indispensible, that may be by working hard, anything. He thinks not. We were talking about a documentary where they gave a homeless man $1m and he became homeless again extremely quickly. Can't remember the name. At the core of the question I'm asking... do you think people generally make what they're worth, even if you start them at zero? If Bill Gates lost all his wealth at poker, could he make it back again? If you gave a homeless child wealth through a trust, would they waste it all eventually? If Mother Theresa had won the lottery at age 7, would she still end up becoming Mother Theresa? *For the purposes of the poll and discussion, assume that we are talking about a developed country.
I voted 91-100%. While you are focusing on the wealthy in your post, the vast majority of people in developed nations are middle class or poor. In the US, about 90% of households make less than $150k with two income earners. I think most full-time workers are probably "worth" $75k.
considering that 88% of millionaires in this country are "first generation" rich, I'd bet a vast majority of them would attain millionaire status again. As far as being paid what your worth...if you run a multi-billion dollar company, you should be paid hansomely...but if you run it into the ground you should suffer the consequences too. We hear a lot about the few CEO's etc who get bonuses although their company is not doing well, but that doesn't happen very often..we just hear about it when it does. We rarely hear about the ones who are asked to step down, but it happens more frequently than not.
I think the way these CEOs are paid is a big problem that promotes irresponsible behavior. If they do extremely well, there is a great reward. If they perform disastrously, there is a relatively mild punishment (loss of job). It makes it so that the most rational, self-interested move is for the company leader to make risky decisions.
The vast majority of people who are "technically" millionaires are so only because of property value boom from 1980's through 2000's. Having to start all over again, when property is 1) a lot higher relative to income and 2) income inequality has increased while income mobility has decreased, due to globalization and productivity gains, makes your answer rather dubious. PS if you read the scholarship on it, you'll find very little link between company performance and executive pay, and a lot more links between the degree of control the CEO has over the Board and executive pay.
I think this thread has pointed out the obvious: I suck at wording these kinds of questions. I'll try asking again in a few more ways: 1) How big is the role of corruption/luck/effort in people's income in developed countries? 2) Since money is a medium between (1) the value you provide to people and (2) resources, are people generally getting what they're worth in terms of resources? 3) If you made Bill Gates homeless, and a homeless man the "man" in Microsoft, how much would the trajectory of those people's income change? Would Gates continue to create value in his life? Would the homeless guy proceed to waste a heckload of money? how significantly? Hope I haven't confused anyone more than I initially did. This is all Charlie Sheen's fault. As funny as he is, I can't believe he is worth so much to humanity lol.
I think your experiment will be inadequate. When you take everyone's wealth, they'll still have the education, the skills, the experience, the connections, and the mindset of the person who once had or didn't have wealth. These things are bought with wealth and cannot be taken away. Wealthy people who lose their money should have no trouble getting it again because they still have the engine that earned that money. The only people disenfranchised would be the ne'er-do-wells who inherited from rich parents -- and even they still have a fighting chance with the education/etc that was bought for them. Likewise, the formerly poor are already behind the eight ball even when no one has money, because they lack in all these things. So, yeah, people are probably mostly earning at market rates. That doesn't mean they 'deserve' it though or are 'worth' that much. You'd have to go back to infancy to really level the playing field and get at 'worth.'
No, because most people accumulate wealth through their lives, and the old people who have more wealth would have fewer means to earn it back. Since I know that's not what you mean, I'll answer what I think you mean. From a thread about the importance of education: That being said, I think that if you reset wealth and jobs, most of the top 10% earners and top 1% earners would get back to the top 10% or top 1%. There would be some shuffling, but they'd get back there. The difference would be in the extremes. When you get to the ultramillionaires, there's a lot of good breaks and luck that took them from just successful to ultrarich. Many of them would get back, but many would be replaced by others from the top 1% who got better breaks this time around.
Agree with wes and JV. The top earners would rise to the top again. This is very different from being 'worth' what they earn . Markets aren't necessarily perfect....
Yes but Zuckerberg's business acumen would be just as valuable in another setting. Zuckerberg turned down a $2 billion offer from yahoo several years ago and now facebook is worth several times that. Few people have the foresight and discipline to turn an idea into a multi-billion dollar enterprise that's continuing to grow. Same thing with Gates, his knowledge base would easily put him at the top of any other major tech company. He may not repeat his 'richest man in the world' status but he'd still be very wealthy.
But then he'd still be a billlionaire too, with more money than he could ever hope to spend, even if he made the "wrong" choice - I don't get how this is a testament to business acumen when you're offered a no-lose bet and don't lose it. It's actually more a testament to certain facets of network economics.
