Here’s an interesting stat to put things in perspective: 

According to Oxfam the top 26 billionaires in the world own as much as just the bottom 3.8 billion people in the world. That figure is around $1.4 trillion. In other words this year 26 of the wealthiest people own as much wealth as the bottom half of the entire planetary population combined. Last year it 43 billionaires to equal the bottom half of the world in monetary value. What that tells us is that the richest of the rich are increasing their wealth at a phenomenal rate.  They increased their wealth by 12% while the poorest saw their wealth fall by 11%. Those figures almost sound like the very wealth lost by the poorest went straight to the richest. I don’t know if we can actually make that assumption directly, but the coincidence is interesting. Some might say it’s alarming.

 I call it the “trickle up economy”. 

As for trickle down, well even Wikipedia concludes that it doesn’t work. Studies by the IFM from 2015 show that there is no trickle-down effect as the rich get richer, so the idea of taxing them less so that they will prosper and the prosperity will filter down to the rest, is a fallacy. It can also be called, “the rich pissing on the poor”. Previous generations, who were more caked in mud and muck (perhaps before the invention of the motorcar), describes it as the “horse and sparrow theory” by saying: 

“If you feed the horse enough oats, some will pass through to the road for the sparrows.” 

Which is a joke actually, on you. Statistically if the income share of the top 20% increases, then it is seen that GDP actually decreases, whereas when the income of the lowest 20% increases, then GDP actually grows. 

Probably because the poorer spend more when they are paid more. It’s a simple as that. So there is actually a genuine case for boosting the minimum wage. Even the Universal Basic Income (UBI) is a subject worth considering nowadays. With AI taking all the menial jobs and even the skilled ones like driving and cleaning, etc, many more of the coming generation will be unemployed with less work available to them and thus they will be left to pursue new experiences with the time available to them. A culture of artists, philosophers and gamers may emerge, particularly as those pastimes become monetised and incentivised more. 

Water may flow down but money flows up. 

This may be what is spurring on today’s new economic concept in cryptocurrency of the “airdrop”. New start-ups or ICOs are giving away free coins to interested parties, in small doses admittedly, but still hundreds of thousands of dollars worth are spent in this way to spur on the launch and use of a new token. And this is a logical philosophy or economic policy. It follows the “trickle up” strategy and it gets the ball rolling, or more particularly the coin.  That being said, one could liken the printing of new coin like that to the printing of paper fiat money, a strategy called Quantitative Easing (QE) much loved by the Federal Reserve Bank of America. In times of financial difficulty, they have in the past printed their way out of trouble in stagnant economic times. This does unfortunately lead to inflation in time as it simply educes the overall value of the currency when you print so much more of it. 

When Satoshi Nakamoto released bitcoin s/he wrote into the code a measure to counter this very problem, by limiting the production of bitcoin to only 21 million ever. And that makes it limited, like gold, and thus deflationary. It should only ever increase in value as more people take to buying it. Similarly any new coin or token released usually has a maximum supply that will ever be mined. Even though new tokens nowadays are released in the billions sometimes, what to speak of 21 million, still at least they have a hard cap.  

The exception to this rule that the tokens are in limited supply – in my opinion – is when a hard fork occurs. Out of the blue at the whim of the developers, they might decide to split the chain and start a second parallel chain running a new token, just like we saw in Bitcoin Cash recently. Curiously bitcoin cash is already a hard fork of bitcoin. On both occasions holders of the original coin were simply given the new coin for free to the same value as your original holdings. Talk about money for nothing. Instantly your money was doubled. That, to me, is a loophole in the system. It runs contrary to the deflationary aspect of the cryptocurrency and seems ethically questionable. What do you think? Give us your opinion in the comments section below. This is an important issue which needs to be discussed if we ever want to improve a potentially flawless and world changing concept. 

Pic: https://mercercapital.com/riavaluationinsights/a-rising-tide-lifts-all-boats-all-classes-of-asset-managers-up-over-the-last-year/

http://knowledge.wharton.upenn.edu/article/trickle-economics-flood-drip/  https://en.wikipedia.org/wiki/Trickle-down_economics