Multiplying Wealth By Dividing It

In one of the forwarded posts recently, it stated:

"You cannot multiply wealth by dividing it"

This got me thinking. Read below:

393 million have USD 200 trillion

3207 million people have USD 7.3 trillion

(https://en.wikipedia.org/wiki/Distribution_of_wealth#/media/File:Distribution_of_wealth_globally.jpg )

So, let us say, by dividing the $200 trillion by half, that is taking away $100 trillion from the rich and giving it to the 3207million poorest people

This will then mean the 3207 million poorest people will now have 107.3 trillion (i.e. increased their wealth by 14.7 times)

Hence, by dividing the richest 393million peoples wealth by half we would have multiplied the poorest 3207 million peoples wealth by 14.7 times (50% reduction of wealth of the richest, results in 1400% increase in the wealth of the poorest)

Therefore, the response to the original statement is:

Yes, you can multiply wealth of people by dividing it.

This is just the mathematical calculation.

We can similarly work out economics, social, health and other calculations; my prediction is that it could work out similar to the mathematical effect.

We could argue that while we have multiplied wealth for large many people, by reducing the wealth of a small number of people, but we have not multiplied wealth itself.

Can we increase wealth itself by dividing it?

Try this.

The wealth of the richest are not stuffed in notes and coins in their mattresses and pillows. They are invested to provide a return.

Let us say for the purposes of illustration, that some of the wealth of the rich are invested in toothpaste, with every rich person buying one tube of toothpaste per month bought at $1 with a profit of 25% per tube. And for the purpose of illustration that the poor cannot buy the toothpaste.

Before dividing any wealth the rich 393million persons get a return of $969 million from the sale of toothpaste.

Let us assume that after the wealth from the poor was given to the rich, the toothpaste still manufactured by investment by the rich, becomes affordable for the poor with a tube sold every alternate month for 50 cents with a profit of 25% - this will provide the rich with a profit of $ 2.4 billion. The wealth made by ‘toothpaste’ profits alone multiplies by 2.47 times.

Therefore the answer to the original statement is still

Yes, you can multiply wealth by dividing it.

In fact I would argue that the rich are getting richer by this method, in the modern world. Like in ancient times if the rich had to mobilise armies to fight for wealth, artisans were making things traded by barter, this phenomenon seen in the modern world by the rich parking the money and themselves not doing a lot thereafter would not happen.

Hemadri 

©M HEMADRI

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M Hemadri’s mini e-book 'Standardised Management Conversation' is available - click http://www.amazon.co.uk/Standardised-Management-Conversation-Hemadri-ebook/dp/B018AWBJTU 

My main healthcare blog: http://successinhealthcare.blogspot.co.uk/

Africa-France link must be broken to ensure peace

I have been thinking of the Paris attacks. They are abominable. Such future attacks must be prevented. The attackers and their evil ideology must be confronted and defeated.
 
I also heard (personal verbal secondary conversations) recently that some African intellectuals were not surprised, nor shocked with the Paris attacks; they do not support such attacks, vehemently condemn them, but apparently understand why Africans might want to be involved in such attacks. Nothing to do with religion directly (the religion element is a superimposition under current circumstances).

The issue seems historical, philosophical, etc
 
I believe they have a number of arguments. One is that France intervenes in Africa more often that we get to hear about. French troops intervened militarily in Africa 54 times since 1962.
 
So if you are an African picking a fight with your government and they get the French troops to sort you out for generations - you develop a certain tendency - if you then happen to be from a religion that is different from most of the French - it becomes a combination of politics-race-religion-social inequity; noxious.

Posting this at a time when France was going through a crisis could be seen as insensitive (hence, while I wrote this some time ago, I am publishing it now). I see it as being comprehensive in attempting to learn about something.
 

African Economics
 
Many west African countries share the same currency - it is called a west African franc; many central African countries share a currency - that is called the central African franc. The first question that arises is why are they called franc? - They are independent sovereign countries, even the french currency is no longer called franc. The second question is why have so many independent countries been sharing a currency for a long time? We did think the Euro was a new concept - No. Shared currency has been the norm in those parts of Africa for many decades.
 
It does not end there. Both the west and central African francs are guaranteed by the French treasury and administered by France. They have a fixed exchange rate against the Euro. This ensures that the governments of those African countries have very little flexibility in the way they can manage their economies.
 
If my references are right and I think they are; both the African francs need to have a very high currency reserve (70% or higher) to be held in France. These countries can borrow from their own currency reserves at high interest rates.
Here is the final bit, both the west and central African francs are technically exactly the same but they cannot be accepted in each others' territories.
 
It therefore begins to emerge that while UK uses commerce/business/finance to 'control the world', France seems to use its government directly to control its former colonies.
 

African-French: Natural resources and ‘trade’
 
France generates 25% or more of its energy from nuclear power. For other countries is about 10%. How come?
 
Apparently there is something called a post-colonial pact (here my knowledge and references are unsure) which gives France the first option or the first right of refusal of any natural resource produces by any of its former colonies. Imagine that. France can import what it wants (at a fixed exchange rate) from its former African colonies. They can sell to others only stuff that France does not want. That is a structural trade imbalance by design permanently favoring one party.

Niger is a former colony of Africa and is the largest producer of uranium in Africa (and 4th largest in the world) - all the uranium is owned by the French. I don't think we can be really sure if Niger actually has assured power supply, nuclear or otherwise.
 
If you were an intelligent person from a former French colony in Africa, how would you feel? If you were a nasty person from the same region, how would you feel?
 
We must not condone violence in any form. We must explore and understand reasons so that we can prevent it. Talking about 'making sure this doesn't happen again' has to include these issues.

The problem is not so simple as the west or France simply walking away from Africa or whatever; resources will fall into wrong hands, since there are very few good hands left in those completely undermined countries. It is about gradually creating good hands so that when the French 'leave', Africans can become true equals.
 
I hope there is peaceful living in Paris and equity for ex-French Africa in the medium term. 

©M HEMADRI

Follow me on Twitter @HemadriTweets

My book Standardised Management Conversation is available at  http://www.amazon.co.uk/Standardised-Management-Conversation-Hemadri-ebook/dp/B018AWBJTU

(nothing to do with Africa or France; everything to do with applying a new model for senior management to interact with their reports especially in healthcare)