This article has a very ambitious aim – to find out exactly how much money there is in the world. It’s ambitious for many reasons, principally because the amount of money in the world is always changing. Stocks and shares will rise and fall, and currencies strengthen or weaken at the click of a broker’s fingers, so it would be impossible to provide an exact answer. And of course, if you had a million dollars to burn, like KLF members Bill Drummond and Jimmy Cauty did in 1994, you always could. But it IS possible to look at each country’s estimated wealth, along with the individual wealth of the richest people in the world, and come up with an approximate answer.
To begin with, a quick Google brings back an approximate total in the trillions – that’s a “$” followed by 12 zeros. Figures range from $75,000,000,000,000 to $241,000,000,000,000 but the real question that first needs to be answered is ‘what is money?’ That might seem dumb, right? After all, we all know what money is, having had it, lost it, earned it or owed it. But to economists, money exists in different categories delineated by the letter ‘M.’
M0 is money in its purest form; cash. Pure, hard and cold cash, whether in bills or coins. This is also referred to as ‘currency in circulation.’
M1 is the next level up and includes all the M0, along with what’s known as ‘demand deposits.’ This is money that can be withdrawn without notice, so is everything in every single current account.
M2 goes even further to add in all that exists in savings accounts, too, including those which require a period of notice in order to make a withdrawal.
M3, the final level, adds in what we can consider to be ‘corporate money,’ ie, institutional funds, stocks, bonds and shares and other liquid assets.
M 0 – 3
You may notice that the less money you have, the less familiar you are with levels M2 and M3 and perhaps even M1, whereas the richest people in the world have far more involvement with those levels. It seems that the richer you are, the less tangible your riches actually become, which is why some very wealthy people are able to hide their money in ways which mere M0 mortals may not fully understand. It also helps us see how businesses and very wealthy individuals may be able to evade the IRS through complicated accounting and taxation procedures.
We then need to look at each country’s GDP or gross domestic product. This is largely considered to be a measure of each country’s economy, as it represents the total value of all goods and services held within its borders. A country’s GDP helps set the stage for a chart of world wealth, from the top to the bottom, with the richest countries enjoying more political, social and even moral influence over the rest of the world. Looking at statistics taken this year, the top ten countries are perhaps the most predictable – USA, Germany, China, Japan and the UK all enjoy a place at the table. And perhaps unsurprisingly, the poorest countries – as calculated according to GDP – are all within Africa, with Malawi, Burundi and the Democratic Republic of Congo all falling in the bottom ten.
Wealthy individuals are also a source of great interest when it comes to calculating the world’s total wealth. As previously mentioned, they tend to keep their wealth tied up in all manner of ways, but put simply – a billionaire is very unlikely to have a billion dollars in a bank account. Most usually, the world’s self-made richest people have started their own company, so their wealth exists in ownership of their company. The more they own of the company, the richer they are, but the corollary of this is that only by shedding their claim to their company (ie, selling shares) does their fortune actually become a material asset. This is why some people who you’d consider to be rich prefer to describe themselves as ‘asset rich, cash poor,’ which describes this situation perfectly.
Some of the world’s wealthiest individuals are household names – Bill Gates, for example, the founder of Microsoft has becoming as famous as his product, with his trademark geeky glasses. And indeed technology features highly when it comes to naming the world’s richest people – the founders of Google, Larry Page and Sergey Brin, feature in the top ten with $31 billion each. Mark Zuckerbeg, founder of Facebook is just a billion dollars behind them and Jeff Bezos, whose vision of a one-stop shopping portal for just about anything turned into Amazon which has, in turn, netted him $32 billion.
But the problem with so much wealth in the hands of so few people is that if we take the world’s wealth to be, as some have estimated, $241,000,000,000,000, then if that was to be divided equally among the world’s population, we would all have approximately $51,600. While this may not seem like anything at all to a man like Bill Gates, or even a hard-working white-collar professional whose annual salary may be double that, to the rest of the world, it is a fortune. For calculations have shown that the wealthiest 1% of the world’s population own 46% of the world’s wealth, leaving the remaining 99% of us to share in just 54% of that wealth. That leads to the calculation that by taking into account the world’s wealth, the world’s population and the spread of that wealth, the average human being has just $4,000 to their name.
Arguably, as issues relating to social inequality arise, and the political landscape of the world remains subject to frightening opposition, wealth distribution, and particularly capitalism, are coming under increased fire. Whilst it is a good thing to have a self-determining attitude to life, and a belief that you can turn your dreams into reality, the attitude to do so often leads to the expense of other people, particularly those who are more vulnerable or who live in countries with commercially attractive natural resources. The world’s sum wealth of approximate $241 trillion dollars may be an impressive figure, but it might be more so were it meted out more fairly to ensure that issues facing mankind as a whole could be better supported.