What is the total wealth ?
Yea, a bridge the size and location of the Brooklyn Bridge seems like an inherently public use-value, especially for those who live and work in Manhattan and nearby Brooklyn. Big chunks of the total wealth would best be public, not private property. What proportion of the total wealth in the world is in less consumable forms ? Like hedge fund certificates or whatever is the sign of ownership in that ? Charles by Max B. Sawicky You consume a bridge -- make use of it, wear it out just a bit -- when you cross it. Or stand on it. Or jump off it. What proportion of total GDP is consumable ? How much is liquid ? What proportion is in plant , equipment and bridges ? Just full of questions. CB
Re: What is the total wealth ?
You consume a bridge -- make use of it, wear it out just a bit -- when you cross it. Or stand on it. Or jump off it. What proportion of total GDP is consumable ? How much is liquid ? What proportion is in plant , equipment and bridges ? Just full of questions. CB
Re: What is the total wealth ?
Carrol Cox wrote: I don't think estimates of total wealth tell one much. What counts for your purposes is the flow of material goods and services available at any given moment. Or perhaps the productive capacity if everyone were employed, but I doubt anyone could make even a wild estimate of that. I'm not sure I understand your points, but estimating the value of (global) aggregate wealth or what Marx called (global) social capital shouldn't be a challenge to make us feel nihilistic. Next I'll make a wild estimate of the value of world's capital. Well-informed people could correct it or refine it further. Today, with access to markets, accumulated wealth is capital in some phase of the canonical cycle (M-C... P... C'-M'). Sure there's some wealth already at the brink of being consumed, but neglect that. So, for our purpose, global wealth = global capital. Using Doug's figures, last year, global capital generated a *gross* income of USD 7,867.94 per capita. Since global population is, say, 6.3 billion, then we're talking about a gross income of 50 trillion USD, plus or minus change. That and a few other pieces of information (under some roughly plausible assumptions) should suffice to make an estimate. We're just trying to price an (aggregate) asset. How much of this gross income would be required for the simple reproduction of the economy? In other words, how much is it *net* global income, income that we could dissipate without jeopardizing the ability of global capital to generate the same net income every future year? Deduct depreciation and also the fraction of consumption that just replenishes the labor force at its current skill level. So, there's no labor force growth, no accumulation of human capital, and no addition to the capital stock. Assume there's no uncertainty or sustainability issues, so we're certain that global capital will re-generate the same net income forever. Hence, risk = 0. In other words, we are assuming perfect foresight, rational expectations, whatever. (Risk would lower the estimate a bit. But note that, after a few years, sustainability doesn't really matter, because we're going to discount net income and what comes in the far future will be worth little in terms of present value. So I'm making these assumptions to simplify matters only. For instance, if we know or suspect that the world will end by 2050, the calculation would only get more complicated, but the result would not be that different.) I cannot make an educated guess about net global income, so I'll just say it's 30 trillion USD. Global capital can be now treated as an annuity, which is very convenient because its present value formula is net income flow/r. To calculate the present value, we discount net income using its opportunity cost. And what would that be? The value of the next best alternative to dissipating the net global income back into the universe. Say, what we people are actually doing right now, using current net income to expand future income. How? By adding to current consumption (to expand the labor force and to expand its skill) and by adding to the stock of global capital. Say, the labor force will grow at 4% per year in the future and per-capita income at 1%. Then, the next best alternative is expanding global net income at a rate of 5% per year. This growth rate is assumed constant (since there's no risk, no volatility). So that's the global discount rate we should use to price our annuity. Thus, the discounted present value of global capital is: K = 30 trillion USD/0.05 = 600 trillion USD That's close to 100 thousand USD per person. Very roughly. Julio _ De todo para la Mujer Latina http://latino.msn.com/mujer/
Re: What is the total wealth ?
Julio H wrote: I cannot make an educated guess about net global income, so I'll just say it's 30 trillion USD. Global capital can be now treated as an annuity, which is very convenient because its present value formula is net income flow/r. To calculate the present value, we discount net income using its opportunity cost. And what would that be? --- Surely this is the entire problem at the heart of the Cambridge Capital Controversy; you can't work out what the total amount of capital is without making an assumption about the rate of profit and vice versa. dd
Re: What is the total wealth ?
In one of the last paragraphs of my previous posting, I wrote: Say, the labor force will grow at 4% per year in the future and per-capita income at 1%. I meant: Say, the POPULATION will grow at 4% per year in the future and per-capita income at 1%. Doug's figure is per capita, not per worker. Not that it makes much of a difference. Julio _ Visita MSN Latino Noticias: Todo lo que pasa en el mundo y en tu paín, ¡en tu idioma! http://latino.msn.com/noticias/
Re: What is the total wealth ?
I'm glad that someone still remembers the CCC. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine From: Daniel DaviesSurely this is the entire problem at the heart of the Cambridge CapitalControversy; you can't work out what the total amount of capital is withoutmaking an assumption about the rate of profit and vice versa.dd
Re: What is the total wealth ?
Daniel Davies wrote: Surely this is the entire problem at the heart of the Cambridge Capital Controversy; you can't work out what the total amount of capital is without making an assumption about the rate of profit and vice versa. You caught me! Yes, you're absolutely right. My exercise is formally flawed. Yet, Marx would pull a trick out of his dialectic hat and say: In practice, the markets solve the paradox all the time. We'd look around and note that -- after all -- marketable assets do get priced. So, at a point in time, the sum of their values must be some definite number. How flimsy will that number be if it is based on circular reasoning? As flimsy as the human condition is. If we think about it, this paradox is at the heart of any theory of value. What's the measure of all things? For all we know, other things, the neoclassical would claim. The claim of the humanist (the Marxist included) would be: For all we know, we humans are the measure of all things. How can humans measure their humanity using their humanity as the standard? Well, we can -- we do it somehow as we proceed to live our lives. And we won't be able to move beyond that point... Julio _ De todo para la Mujer Latina http://latino.msn.com/mujer/
Re: What is the total wealth ?
Sorry if this has already been quoted. ...when the limited bourgeois form is stripped away, what is wealth other than the universality of individual needs, capacities, pleasures, productive forces, etc., created through universal exchange? ... The absolute working-out of his creative potentialities, with no presupposition other than the previous historic development, which makes this totality of development, i.e., the development of all human powers as such the end in itself, not as measured on a predetermined yardstick... Grundisse 488 Jonathan
Re: What is the total wealth ?
Julio Huato wrote: Say, the labor force will grow at 4% per year in the future and per-capita income at 1%. Then, the next best alternative is expanding global net income at a rate of 5% per year. This growth rate is assumed constant (since there's no risk, no volatility). So that's the global discount rate we should use to price our annuity. Thus, the discounted present value of global capital is: K = 30 trillion USD/0.05 = 600 trillion USD Another approach. According to the BEA, the value of fixed reproducible tangible wealth (including consumer durables) in the U.S. was $32.8 trillion in 2002. (Note that the rate of return on those assets implied by GDP is a lot higher than Julio's estimate - around 30%.) That year, according to World Bank stats, the U.S. had 32% of world GDP. So, scaling up based on that income share, we can estimate that the global capital stock is worth $102.1 trillion - or roughly $16,000 per capita. Doug
Re: What is the total wealth ?
Daniel Davies wrote: Surely this is the entire problem at the heart of the Cambridge Capital Controversy; you can't work out what the total amount of capital is without making an assumption about the rate of profit and vice versa. Yeah, but nobody cares about that anymore. It was an obsession of some weirdos in England a generation ago, but we've moved beyond that now. Doug
Re: What is the total wealth ?
Right, they should teach that marginal productivity theory created economic justice because everybody got rewarded according to their marginal product. Sraffa proved that it was BS. Samuelson and others attempted to refute him, but were unsuccessful. Solow said that it was a tempest in a teapot. Now nobody cares, but they continue to teach the same BS. On Wed, Aug 04, 2004 at 12:07:17PM -0400, Doug Henwood wrote: Yeah, but nobody cares about that anymore. It was an obsession of some weirdos in England a generation ago, but we've moved beyond that now. Doug -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: What is the total wealth ?
Of course, the current thinking is that it is human capital that is responsible for most of the productivity. Has anybody made a recent estimate of the aggregate human capital? On Wed, Aug 04, 2004 at 12:06:08PM -0400, Doug Henwood wrote: Another approach. According to the BEA, the value of fixed reproducible tangible wealth (including consumer durables) in the U.S. was $32.8 trillion in 2002. (Note that the rate of return on those assets implied by GDP is a lot higher than Julio's estimate - around 30%.) That year, according to World Bank stats, the U.S. had 32% of world GDP. So, scaling up based on that income share, we can estimate that the global capital stock is worth $102.1 trillion - or roughly $16,000 per capita. Doug -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
What is the total wealth ?
Wow . Thanks Julio. I have to study your calculation more to understand it. What are the parts of this whole ? Like Max's Brooklyn Bridge. What proportion is fictional (?) capital ? What proportion is owned by the wealthiest individuals ? by Julio Huato I'm not sure I understand your points, but estimating the value of (global) aggregate wealth or what Marx called (global) social capital shouldn't be a challenge to make us feel nihilistic. Next I'll make a wild estimate of the value of world's capital. Well-informed people could correct it or refine it further. Today, with access to markets, accumulated wealth is capital in some phase of the canonical cycle (M-C... P... C'-M'). Sure there's some wealth already at the brink of being consumed, but neglect that. So, for our purpose, global wealth = global capital. Using Doug's figures, last year, global capital generated a *gross* income of USD 7,867.94 per capita. Since global population is, say, 6.3 billion, then we're talking about a gross income of 50 trillion USD, plus or minus change. That and a few other pieces of information (under some roughly plausible assumptions) should suffice to make an estimate. We're just trying to price an (aggregate) asset. How much of this gross income would be required for the simple reproduction of the economy? In other words, how much is it *net* global income, income that we could dissipate without jeopardizing the ability of global capital to generate the same net income every future year? Deduct depreciation and also the fraction of consumption that just replenishes the labor force at its current skill level. So, there's no labor force growth, no accumulation of human capital, and no addition to the capital stock. Assume there's no uncertainty or sustainability issues, so we're certain that global capital will re-generate the same net income forever. Hence, risk = 0. In other words, we are assuming perfect foresight, rational expectations, whatever. (Risk would lower the estimate a bit. But note that, after a few years, sustainability doesn't really matter, because we're going to discount net income and what comes in the far future will be worth little in terms of present value. So I'm making these assumptions to simplify matters only. For instance, if we know or suspect that the world will end by 2050, the calculation would only get more complicated, but the result would not be that different.) I cannot make an educated guess about net global income, so I'll just say it's 30 trillion USD. Global capital can be now treated as an annuity, which is very convenient because its present value formula is net income flow/r. To calculate the present value, we discount net income using its opportunity cost. And what would that be? The value of the next best alternative to dissipating the net global income back into the universe. Say, what we people are actually doing right now, using current net income to expand future income. How? By adding to current consumption (to expand the labor force and to expand its skill) and by adding to the stock of global capital. Say, the labor force will grow at 4% per year in the future and per-capita income at 1%. Then, the next best alternative is expanding global net income at a rate of 5% per year. This growth rate is assumed constant (since there's no risk, no volatility). So that's the global discount rate we should use to price our annuity. Thus, the discounted present value of global capital is: K = 30 trillion USD/0.05 = 600 trillion USD That's close to 100 thousand USD per person. Very roughly. Julio
What is the total wealth ?
I don't have the next thought wellformed, but don't the wealthiest people have to guarantee that they own a certain portion of the total wealth/social capital in order that it be capital with capital power ? If the bottom 6.28 billion people had a larger portion of the total, they could live comfortably and not depend on the richest to survive and live. Isn't the value of hedge fund wealth dependent in part on it being part of hedge fund owners and other finance capitalists owning a certain portion of total wealth ? Of the different forms of wealth, what is the significance of fictitous capital ( if I use that term correctly)being so attenuated from a result of a labor process and from use-values ? Isn't owning it a way of indirectly owning and controlling a major portion of wealth that is in the form of non-fictitious capital ? What proportion of total wealth is far attentuated from attachment to any use-value ? By defining wealth as capital, isn't the value of that capital defined based on its ability to generate more capital ? What proportion of total wealth is in a form that is of use to the vast majority of the people ? Charles Julio Huato wrote: Say, the labor force will grow at 4% per year in the future and per-capita income at 1%. Then, the next best alternative is expanding global net income at a rate of 5% per year. This growth rate is assumed constant (since there's no risk, no volatility). So that's the global discount rate we should use to price our annuity. Thus, the discounted present value of global capital is: K = 30 trillion USD/0.05 = 600 trillion USD Another approach. According to the BEA, the value of fixed reproducible tangible wealth (including consumer durables) in the U.S. was $32.8 trillion in 2002. (Note that the rate of return on those assets implied by GDP is a lot higher than Julio's estimate - around 30%.) That year, according to World Bank stats, the U.S. had 32% of world GDP. So, scaling up based on that income share, we can estimate that the global capital stock is worth $102.1 trillion - or roughly $16,000 per capita. Doug
Re: What is the total wealth ?
The BSers of the world have united. The revolutionary result is mainstream economics.. Cheers, Ken Hanly - Original Message - From: Michael Perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, August 04, 2004 11:38 AM Subject: Re: [PEN-L] What is the total wealth ? Right, they should teach that marginal productivity theory created economic justice because everybody got rewarded according to their marginal product. Sraffa proved that it was BS. Samuelson and others attempted to refute him, but were unsuccessful. Solow said that it was a tempest in a teapot. Now nobody cares, but they continue to teach the same BS. On Wed, Aug 04, 2004 at 12:07:17PM -0400, Doug Henwood wrote: Yeah, but nobody cares about that anymore. It was an obsession of some weirdos in England a generation ago, but we've moved beyond that now. Doug -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: What is the total wealth ?
it is surprising what a man can understand when his pocketbook depends on him not understanding it, or some such. dd -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Michael Perelman Sent: 04 August 2004 17:38 To: [EMAIL PROTECTED] Subject: Re: What is the total wealth ? Right, they should teach that marginal productivity theory created economic justice because everybody got rewarded according to their marginal product. Sraffa proved that it was BS. Samuelson and others attempted to refute him, but were unsuccessful. Solow said that it was a tempest in a teapot. Now nobody cares, but they continue to teach the same BS. On Wed, Aug 04, 2004 at 12:07:17PM -0400, Doug Henwood wrote: Yeah, but nobody cares about that anymore. It was an obsession of some weirdos in England a generation ago, but we've moved beyond that now. Doug -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: What is the total wealth ?
ken hanly wrote: The BSers of the world have united. The revolutionary result is mainstream economics.. For many years I taught a course in ancient (greek) literature in translation -- including the Odyssey and the Oresteia. One of the problems was convincing the students that, yes, Homer (the Odyssey poet that we call Homer for lack of an actual name) and Aeschylus really did believe in the existence of Zeus, Athena, et al. In the future (if we have a future) I suspect teachers of twenty-first century history will have an even more difficult time convincing their students that anyone ever really believed mainstream economics! One of the gimmicks I used a few times in the class was to paraphrase a few premises of mainstream economics and point out that the Greeks really had better reason to believe in Zeus and Athena. Carrol
What is the total wealth ?
What is the total wealth, networth, valueof all the economies of the world ? Do any economists estimate this ? What is total wealth divided by the population of the earth ? If total wealth were divided equally, what would be per capitanetworth ? Charles
Re: What is the total wealth ?
The Fed Gov says it's $89.9 trillion for the U.S. Some of it -- like the Brooklyn Bridge -- would be hard to divvy up. Would you want a share in the Brooklyn Bridge? It would look nice on the wall. mbs From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of Charles BrownSent: Tuesday, August 03, 2004 4:10 PMTo: [EMAIL PROTECTED]Subject: What is the total wealth ? What is the total wealth, networth, valueof all the economies of the world ? Do any economists estimate this ? What is total wealth divided by the population of the earth ? If total wealth were divided equally, what would be per capitanetworth ? Charles
Re: What is the total wealth ?
Charles Brown wrote: What is the total wealth, networth, value of all the economies of the world ? Do any economists estimate this ? Wealth is tough. Income is easier. Acc to World Bank, per capita GDP (PPP, with all Paul A's caveats incorporated by reference) in 2002 was $7,867.94. Cash money, no PPP magic: $5,212.56. Doug
What is the total wealth ?
by Max B. Sawicky The Fed Gov says it's $89.9 trillion for the U.S. Some of it -- like the Brooklyn Bridge -- would be hard to divvy up. Would you want a share in the Brooklyn Bridge? It would look nice on the wall. Mbs ^^ Ok I said it dumbly, but I'm trying to start a holistic thought like Levins and Lewontin might advise. Is there enough wealth in the whole world to give everybody a decent minimum ? Could we have a world minimum income/networth ? So, you want to sell me the Brooklyn Bridge ? I must look like a peasant from Detroit. Can I sell the paper on the bridge and buy some use-values I can use ? Charles ^ Subject: What is the total wealth ? What is the total wealth, networth, value of all the economies of the world ? Do any economists estimate this ? What is total wealth divided by the population of the earth ? If total wealth were divided equally, what would be per capita networth ? Charles
What is the total wealth ?
by Doug Henwood Wealth is tough. Income is easier. Acc to World Bank, per capita GDP (PPP, with all Paul A's caveats incorporated by reference) in 2002 was $7,867.94. Cash money, no PPP magic: $5,212.56. ^^ So, in a very abstract sense, if everybody had equal cut from GDP in 2002, everybody would be poor, but not real poor ? Or do I misinterpret this ? Charles
Re: What is the total wealth ?
Charles Brown wrote: So, in a very abstract sense, if everybody had equal cut from GDP in 2002, everybody would be poor, but not real poor ? Or do I misinterpret this ? It's roughly at the level of Mexico, PPP-wise. Doug
Re: What is the total wealth ?
Charles Brown wrote: Ok I said it dumbly, but I'm trying to start a holistic thought like Levins and Lewontin might advise. Is there enough wealth in the whole world to give everybody a decent minimum ? Could we have a world minimum income/networth ? I don't think estimates of total wealth tell one much. What counts for your purposes is the flow of material goods and services available at any given moment. Or perhaps the productive capacity if everyone were employed, but I doubt anyone could make even a wild estimate of that. Carrol
Re: What is the total wealth ?
the reason why the income number is easier than the wealth number, of course, is that if you had all the world's wealth, what would you buy with it? In a very real sense ( this phrase [c] Alan Bennett), the world's wealth can probably only be measured in hours of equivalent socially necessary average labour time, because that's what you'd command if you owned all the other stuff. The global money supply question is also very difficult indeed; my ex-colleague Peter Warburton used to collect decent money for a now-defunct brokerage by guesstimating a Global Hard Money Equivalent figure, but this was about five years ago and I haven't kept in touch with him. The differential between the cash and PPP numbers Doug quotes below would probably indicate to a better Keynesian economist than myself something about the relative tightness/looseness of the GHME money supply, but I'm too frazzled to work it out right now. The answer to Charles' fundamental question is of course yes; if you're on $1,000 per year you're doing much better than the official poverty levels, and there's enough production going on in the world to give everybody that much. cheers dd -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Doug Henwood Sent: 03 August 2004 21:41 To: [EMAIL PROTECTED] Subject: Re: What is the total wealth ? Charles Brown wrote: What is the total wealth, networth, value of all the economies of the world ? Do any economists estimate this ? Wealth is tough. Income is easier. Acc to World Bank, per capita GDP (PPP, with all Paul A's caveats incorporated by reference) in 2002 was $7,867.94. Cash money, no PPP magic: $5,212.56. Doug
Re: What is the total wealth ?
Wealth is liberty... it is disposable time and nothing more. Tom Walker 604 255 4812
What is the total wealth ?
by Carrol Cox I don't think estimates of total wealth tell one much. What counts for your purposes is the flow of material goods and services available at any given moment. Or perhaps the productive capacity if everyone were employed, but I doubt anyone could make even a wild estimate of that. ^ What proportion of total GDP is consumable ? How much is liquid ? What proportion is in plant , equipment and bridges ? Just full of questions. CB
