How to distribute wealth equally?

[iceaura]

Distributing wealth equally seems like a form of communism or socialism, whose basic principle sounds ethical.
"From each according to his abilities; to each according to his needs."

That's a basic principle of Christianity, and possibly State communism, but not socialism in general.

It's role in modern political theory is not as principle of action but criterion of evaluation - part of a description, not a prescription. It's a basic attribute of a well-functioning economic and political setup. You would not want your setup to function any other way - right? Surely we can all agree that any setup which wastes ability and fails to provide basic needs isn't working very well.

Notice, by the way, that it does not say "to each only according to his needs". It does not say "from each according to his abilities, or else" either. Neither coercion of effort or limitation of reward is described.

 

[Michael 345]

I am late to this thread so bear with me

I had a brief read through and though I may have missed it no one appears to have mentioned

Interest rates

Money was invented as a universal medium of exchange

However it, in and of itself, has become a commodity

Banks are a one product shop

Normal one commodity shops do not survive long

However when the commodity is a universal medium of exchange it (money) can be dressed up as anything while at the deepest level it remains money

The only two industries which actually PRODUCE something of substance

(there are a couple of other minor industries) are

farming and

mining

Anything else is value adding

Everything comes out of the ground (for the purpose of this post the sea counts as ground)

Back to interest rates

Fortunes have been made from buying and selling money within a single currency and across currencies

These transactions take place at the speed of light via powerful computers set to read market trends

Lowering interest rates would slow the rate of flow of money upwards but not stop it

Two ways I think might help those with lower monetary income

Those with lower income get low interest rates (<< not going to work)

Those who make money from buying and selling money are taxed at a rate of everything above the inflation rate (<< note going to work)

What works in banks favour is the fact wages are paid into bank accounts

I think (ride in the Govenment to the rescue)

Govenment should create a MEGABANK where everyones wage / salary is deposited

This MEGABANK would put money back in the hands of the people

Interest would be paid at the rate of inflation

The PRIVATE banks would then work to entice customers to their bank by offering you, the customer, a higher interest rate on your money in their bank

Most of the bank profits appear to go in manager salaries and shareholders payouts

Phew enough

Rant over

 

[joepistole]

I am late to this thread so bear with me

I had a brief read through and though I may have missed it no one appears to have mentioned

Interest rates

Money was invented as a universal medium of exchange

However it, in and of itself, has become a commodity

Banks are a one product shop

Normal one commodity shops do not survive long

Money has always been a commodity. But that doesn't mean banks are a one product shop; they aren't. The sell loans, rent space in their vaults, and provide a number of other services including wealth management and trading services. And where did you get this notion that one product shops don't survive very long? There are many examples of one product companies who have survived long periods, agriculture comes to mind. I know of a number of dairy producers which have survived long periods of time. So that's nonsense. Further, it's not relevant.

However when the commodity is a universal medium of exchange it (money) can be dressed up as anything while at the deepest level it remains money

You can quibble over how money is defined. That's why we have several measures of money supply. But I fail to see how this is relevant.

The only two industries which actually PRODUCE something of substance

(there are a couple of other minor industries) are

farming and

mining

Anything else is value adding

Everything comes out of the ground (for the purpose of this post the sea counts as ground)

That's nonsensical. Furthermore, it's irrelevant.

Back to interest rates

Fortunes have been made from buying and selling money within a single currency and across currencies

These transactions take place at the speed of light via powerful computers set to read market trends

I don't understand how this is relevant to interest rates.

Lowering interest rates would slow the rate of flow of money upwards but not stop it

No. Lowering interest rates would increase the flow of money, i.e. the velocity of money. That's why interest rates are lowered during recessions. But I don't know what you mean by upwards or why that would be relevant. Lowering interest rates increases the value of debt instruments. But again, I'm not sure how that is relevant to your argument - whatever that is.

Two ways I think might help those with lower monetary income

Those with lower income get low interest rates (<< not going to work)

Those who make money from buying and selling money are taxed at a rate of everything above the inflation rate (<< note going to work)

What works in banks favour is the fact wages are paid into bank accounts

A couple of things, first you need to understand how interest rates are calculated.

Interest Rate = Risk Free Cost of Money + Credit/Default Risk Premium + Expected Inflation Rate + Term/Interest Rate Risk + Cost of Capital (expected profit)

That's what you need to attract capital to your bank. That has nothing to do with wages. Banks need owners of capital to deposit their money in banks, i.e. businesses, wealthy people, and wage earners. But proportionately wealthy people have more money in banks than wage earners.

I think (ride in the Govenment to the rescue)

Govenment should create a MEGABANK where everyones wage / salary is deposited

Governments have already created MEGABANKS, they are called central banks. In the US the Federal Reserve Bank is the American Megabank.

This MEGABANK would put money back in the hands of the people

Interest would be paid at the rate of inflation

The PRIVATE banks would then work to entice customers to their bank by offering you, the customer, a higher interest rate on your money in their bank

Most of the bank profits appear to go in manager salaries and shareholders payouts

Phew enough

Rant over

You are kind of weak on the details and how it would work. But the basic idea has merit and it is being done but not as you have described it. What you are describing wouldn't work for a number of reasons which I'm going to skip over.

The "earned income credit" is a way to get money into the hands of lower income workers. It's a concept that has been around since the 80s and it works. Money is passed from the US Treasury to lower income wage earners. It has nothing to do with interest rates. There are many things that need to be done, but one of them is to expand the earned income tax credit. It accomplishes what you have intended to do but in a much simpler and more straight forward and efficient process.

 

[Jeeves]

Is man made for money or is money made for man?
What's the point/purpose of money? How does it compare to wealth? What's the point/purpose of wealth? How does it benefit mankind?
How does mankind value its members, compared to how it values money?
Answer those questions, and you'll know exactly how to distribute wealth.

 

[Michael 345]

Is man made for money or is money made for man?
What's the point/purpose of money? How does it compare to wealth? What's the point/purpose of wealth? How does it benefit mankind?
How does mankind value its members, compared to how it values money?
Answer those questions, and you'll know exactly how to distribute wealth.

Money was invented by man for man

Money is / was intended as a universal medium of exchange to replace a very complex barter system

Instead of goods of all sorts being exchanged a barter became between the goods and money

Wealth is a value judgement and really is unconnected with money

It, wealth, as a value judgement is neutral as to benefits

Unknown

I stand by my post

 

[Jeeves]

Money was invented by man for man

Money is / was intended as a universal medium of exchange to replace a very complex barter system

Actually, many different media of exchange have been used, none universally. Barter systems of various kinds worked quite well for most societies.
Shells and other kinds of [durable, portable, recognizable, countable] coinage were employed long before the first official coins were minted.
The main point of currency is for the ruler(s) to be able to 1. set a standard value 2. limit the amount of currency in circulation and *3* collect taxes in a convenient form.

Instead of goods of all sorts being exchanged a barter became between the goods and money
Wealth is a value judgement and really is unconnected with money

The standard value of money is set by the rulers who coin a currency; it connects to whatever can be bought and sold.
The absolute standard of wealth in most societies, even to the present time, is land, but other lasting properties, such as fresh water, lumber, metal ores,fisheries
energy, human and natural resources, comprise the total wealth of both individuals and nations.
Wealth is a measure of the amount of goods and services one owns/controls/commands; money is a unit of measurement.
While goods of many kinds can be accumulated, stored and passed on from generation to generation, time and effort cannot.
But time and effort - and human beings - can be owned and evaluated in terms of money.

It, wealth, as a value judgement is neutral as to benefits

The other way around. That which is beneficial (like seasonal rain to a good harvest) adds to wealth; that which is harmful (such as a late hale-storm) detracts from wealth.
For example, if Tribe W controls fertile acreage, a riverfront and a forest with walnut and beech stands, it is richer than Tribe P, that controls arid hills.
The P have only sheep to exchange for W's fish, nuts and yams, which they need, while the W have no great need of mutton and can manage without wool.
However, the W may be short of manpower to till their fields and haul in the nets, and so the P may hire out their labour.
Or the P may discover tin and copper in those hills and become forgers of metal tools, which have a far higher trade value than perishables,
and so the P may, over a few decades, grow richer than the W.
Wealth is relative, but never value-neutral.

Unknown

I presume this refers to the valuation of citizens.
Of any given society, that valuation is knowable and measurable in at least three different ways. One is the distribution of wealth,
but the more reliable are standard of social welfare (health/longevity; contentment/accord) and the system of laws.

My questions were aimed at trying to establish the role money does play and should play in the life of a society.
It's impossible to discuss wealth meaningfully if money is the standard, since money is not only valued arbitrarily,
but is the quintessential medium of skewing relationships, economies, political function, social organization and the allocation of resources.
The great leveller of wealth is social collapse, when currency, stocks and deeds become scrap paper,
and there is no legal enforcement of ownership or rights. Then a nation has to start again, in something like equality -
how well it distributes the available resources then depends on its human values.

 

[river]

Top ten richest men almost have 50% of the total wealth of middle class people.
This is not balanced.
How to distribute wealth equally?

You do not need billions to survive, do you?
So, why accumulate billions of wealth? Greedy?

Can we make all people to have enough money to survive?

Wealth is about power .

To control , to manipulate the populace , through various means .

 

[river]

Wealth should not be a bad idea . Wealth should be the idea that one can have the opportunity to explore one's destiny .

All of us . Every single person on this Earth .

 

[joepistole]

Wealth is about power .

To control , to manipulate the populace , through various means .

Wealth is about power, and with great power comes great responsibilities. We have seen the result of unrestricted avarice and power, it never ends well. Kings have literally lost their heads because they didn’t understand this very basic truth.

 

[joepistole]

Wealth should not be a bad idea . Wealth should be the idea that one can have the opportunity to explore one's destiny .

All of us . Every single person on this Earth .

I don't think most people think wealth is a "bad idea". Unrestricted wealth is a bad idea. Unlimited wealth is a bad idea, as evidenced by history and science.

 

[Write4U]

Excess wealth creates a break in the economic chain. The excess is removed out of the economy and is used only to create more wealth without production.

I have told this story before, but IMO, it bears repeating. I saw an interview of a very wealthy rancher/farmer, who had received a very large tax return as part of the economic stimulus program during the Bush administration.

When asked if he was going to use this windfall to hire more workers, his reply was; " I have enough workers now, why should I hire workers to stand around doing nothing. I just put the money in the bank, where it draws interest."

IOW, he used the money to make more money, not to provide jobs. Thus this excess money was removed from the economy and used to draw more money from the active economy. That's why it is called passive income, which itself is taxed at a lower rate than a person having a job and being taxed at a higher rate from active income.

By the law of the exponential function, eventually this would result in an ever increasing amount of passive wealth owned by a few and less available active wealth for buying products and providing jobs.

This already has resulted in the top 1% of the population owning ~60% of the nation's wealth.

The current effort to kill the ACA, is not designed to sustain a healthier population, but to be used for a tax break, the main beneficiaries being the already most wealthy.

IMO, it is a self-defeating economic system.

 

[Write4U]

Governments have already created MEGABANKS, they are called central banks. In the US the Federal Reserve Bank is the American Megabank.

And privately owned.

 

[joepistole]

And privately owned.

It isn't privately owned. It's an independent agency of the US government.

https://www.federalreserve.gov/faqs/about_14986.htm

 

[Write4U]

It isn't privately owned. It's an independent agency of the US government.
https://www.federalreserve.gov/faqs/about_14986.htm

Yes, the Federal Reserve Agency is an independent Agency, but it has no Federal Bank . There are many commercial banks which handle Federal Reserve funds. Those funds may not be mixed with commercial funds but Stockholders earn dividends on a regular basis.

Federal Reserve Board issues interim final rule regarding dividend payments on Reserve Bank capital stock
For release at 4:00 p.m. EST
The Federal Reserve Board on Thursday issued an interim final rule that amends Regulation I to implement provisions of the Fixing America's Surface Transportation (FAST) Act. The FAST Act reduced the dividend rate applicable to Reserve Bank depository institution stockholders with total assets of more than $10 billion (large member banks) to the lesser of 6 percent or the most recent 10-year Treasury auction rate prior to the dividend payment. The dividend rate for other member banks remains at 6 percent. Reserve Banks typically pay dividends to member banks in June and December each year.
The interim final rule also adjusts the treatment of accrued dividends when a Reserve Bank issues or cancels capital stock owned by a large member bank.

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20160218a.htm

 

[joepistole]

Yes, the Federal Reserve Agency is an independent Agency, but it has no Federal Bank . There are many commercial banks which handle Federal Reserve funds. Those funds may not be mixed with commercial funds but Stockholders earn dividends on a regular basis. https://www.federalreserve.gov/newsevents/pressreleases/bcreg20160218a.htm

No. With the exception of savings bonds, commercial banks to not act as agents of the Federal Reserve. The Federal Reserve is governed, i.e. managed and controlled, by the Federal Reserve Board of Governors. It's governors are appointed by the president and ratified by the Senate. There are 12 Federal Reserve Banks which carry out the policies of the Board of Governors. Each Federal Reserve Bank functions as a clearing house and carries out policy set by the Board of Governors. They aren't independent of the Board of Governors. Each member bank is required to keep a deposit at the Federal Reserve Bank. The amount deposited is based on a percentage of the commercial (member) bank's capital, and interest (i.e. dividend) is paid at 6% per annum of the amount on deposit. The deposit is referred to as stock, and the interest payments are referred to as dividends. The "stock" cannot be traded. It cannot be sold. It cannot be used as collateral. The "stock" conveys no ownership rights. It's a deposit which is referred to as stock. It's an artifact dating back to the origins of the Federal Reserve. When the Federal Reserve was first conceived, Federal Reserve Banks were suppose to be independent. Hence the structure. But over time the Federal Reserve has changed. Federal Reserve Banks are not independent. They are not private, but they retain some of the archaic structures of the old Federal Reserve system which confuses people.

Profits from the Federal Reserve System are remitted to the US Treasury general fund. Member banks have no ownership. All profits are remitted to the US Treasury.
https://www.wsj.com/articles/fed-se...in-profits-to-u-s-treasury-in-2015-1452531787

 

[Write4U]

Profits from the Federal Reserve System are remitted to the US Treasury general fund. Member banks have no ownership. All profits are remitted to the US Treasury.

I still am not quite satisfied by that.

Pursuant to the Federal Reserve Act, each of the 12 Reserve Banks is separately incorporated and has a nine-member board of directors.
Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank and elect six of the Reserve Bank's directors; three remaining directors are appointed by the Board of Governors. Most Reserve Banks have at least one Branch, and each Branch has its own board of directors. Branch directors are appointed by either the Reserve Bank or the Board of Governors.
Directors serve as a link between the Federal Reserve and the private sector. As a group, directors bring to their duties a wide variety of experiences in the private sector, which gives them invaluable insight into the economic conditions of their respective Federal Reserve Districts. Reserve Bank head-office and Branch directors contribute to the System's overall understanding of the economy.

The Federal Reserve is not funded by congressional appropriations. Its operations are financed primarily from the interest earned on the securities it owns--securities acquired in the course of the Federal Reserve's open market operations.

The fees received for priced services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations, are another source of income; this income is used to cover the cost of those services. After payment of expenses and transfers to surplus (limited to an aggregate of $10 billion), all the net earnings of the Federal Reserve Banks are transferred to the U.S. Treasury.

https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-banks.htm

 

[iceaura]

It isn't privately owned. It's an independent agency of the US government.

Only the Board of Governors is a Federal agency, independent or otherwise. https://en.wikipedia.org/wiki/Structure_of_the_Federal_Reserve_System

Profits from the Federal Reserve System are remitted to the US Treasury general fund. Member banks have no ownership. All profits are remitted to the US Treasury.

The investors in the Federal Reserve, namely the private banks who own stock in the individual Reserve banks and choose their executive management, receive guaranteed percentage returns on their investment - dividends on their stock. The current rate is 6%.

In addition, the Federal Reserve banks accumulate "surplus funds" not remitted to the US Treasury, which their privately appointed and hired executives use along with the invested principal for various purposes - including "open market" dealings which can be coordinated with the private dealings of member banks and other interested parties not coincident with the general US citizenry.

 

[joepistole]

I still am not quite satisfied by that.
https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-banks.htm

Well, you can be not satisfied if you wish, but it will not change the facts. The Federal Reserve is an agency of the US government. It was created by the federal government. It is controlled by the federal government. The governing body, the Federal Reserve Board of Governors, are appointed by the POTUS and are confirmed by the US Senate. The Federal Reserve chairman reports to Congress twice a year. Those reports are referred to as Humphrey-Hawkins Reports. And all Federal Reserve profits are remitted to the US Treasury. Member banks have no say in selecting the Board of Governors.

Individual Federal Reserve Banks are the arms of the Federal Reserve Board of Governors. They execute directives from the Board of Governors. They function as banking clearing houses, i.e. they provide services to member banks like check clearing. They conduct the audits, enforce banking policies and laws, and serve as the lender of last resort. Some Federal Reserve Bank presidents serve on various Federal Reserve committees, e.g. The Federal Reserve Open Market Committee. It's really not that difficult. But most people don't understand the Federal Reserve, hence it is an easy target for conspiracy theorists. They are confused by the archaic structure of the Federal Reserve Banks. Per my previous reference, member banks do not own the Federal Reserve or its constituent banks. Member banks are required to keep a portion of their capital (currently 6%) on deposit at the Federal Reserve Bank, and that deposit is referred to as stock. That portion is decided by the Federal Reserve Board of Governors. Member banks are paid interest (i.e. dividends) based on their deposit/stock.

Member bank deposits/stock cannot be sold, transferred, and the deposit/stock doesn't give member banks control of the system. It's a strange system, I'll grant you that. But as I said before the system has evolved over time. There is nothing nefarious about the Federal Reserve.

 

[Write4U]

Did I make such a claim? I said the banks where the Fed funds are held in deposit are privately owned banks. Why such a defensive attitude?
There is no single or twelve Federally owned banks. The Federal reserve funds are held in separate savings accounts, that's all. The account earns interest which creates a surplus and may be used for commercial purposes by the bank, because the Federal Reserve is a not-for-profit Agency.

To my knowledge there is not a single non profit bank on earth. Every bank earns or pays interest on every account, regardless of the account holder. When the earned interest is not claimed by the account holder, the bank can use the surplus for it's own purposes.

You decide if that amounts to nefarious Federal practice.

In days of old, when single gold miners deposited their gold in the bank and then got shot at the poker table, who do you think inherited the gold. The killer? The bank never loses except on unsecured loans and history has told that story..

 

[river]

Wealth , distributed equally is how Humanity will survive in the end . Wealth allows for creativity .

The more wealthy the people of this planet are , the better .

Ideally

The more millionares and billionares on this planet the better chance of Humanities survival in the big picture of our Universe .