Grab that Spillover Money

Rich people invest their money to new business enterprises — here are some ideas how to profit from it. Tax evasion galore, there will an abundance of investor’s money for the most outlandish tech ideas, while the poor will starve to death.

The world’s Gini coefficient, a measure for income inequality, is already through the roof. The wealth of eight white guys, about a trillion dollars combined, equals the net worth of roundabout four billion people, the lower income half of the world. A global elite, nicked “the 1%” by left-leaning media, are in control the most influential global corporations.

The optimistic futurists from Singularity University call it the “Age of Abundance”. And it is — for some. Jeff Bezos, Elon Musk, Bernard Arnault, Mark Zuckerberg, Bill Gates, Warren Buffet, Larry Page and Larry Ellison are — according to Forbes.com — the owners of the most valuable companies on the planet.

It‘s debatable if the shares of tech companies are really worth the price. But it is very clear what this means: those eight guys are very much empowered to do what they want with an amount of money they won’t be able to spend — even if they choose to live a totally excessive life of luxury. Today they are “too big to fail” — it’s almost impossible for them to ruin themselves completely.

The top-of-the-list-billionaire are workaholics. They seek to invest in new enterprises. They carefully shape their public image with the help of well-paid PR-companies, trying to create a more or less idolized personal brand version of themselves. So, don’t be fooled into being star-struck. It’s not necessary to be a fanboy of successful tech leaders, as it is fruitless to start hating those guys for their success. In a way they worked themselves up to the top of the crowd, with talent, hard work and mostly incredible luck.

Don’t blame them for being successful. You can blame them often for using destructive business strategies, for monopolizing markets and aggressively selling services that disrupt other people’s livelihoods.

There are a lot of ideologic and political narratives that try to tap either into resentments against our most prominent business leaders or — even more bluntly — push our impulse to envy them for their wealth and fame. But “us versus them” or “the 1% versus the 99%” is a crude oversimplification.

Yes, corporations have strategies and sometimes even “hidden agendas”. Yes, business leaders do push for political objectives. Yes, rich people and people in power meet — at the Bilderberg hotel, at the world economic forum, at tech conferences or on celebrity events. There is a lot of debate about policy, legislation, ethics and responsibilites. Sometimes they follow a basic ethics code, and yes, mostly to evade public scrutiny.

But no, there is no cabal, no billionaire’s club, not even a homogenic group, where all the rich people meet and plot how to treat the rest of the world with some “evil” masterplan.

Don’t believe the conspiracy theories.

The political left wants to unite the poor masses to empower them against the iron grip of capitalism. The political right utilises the same resentments against the super rich and continues to fantasize about a “jewish world conspiracy”, mixing up the problem of increasing inequality with century-old anti-semitic and other anti-elitist narratives.

There is distrust towards the media (mostly owned by big corporations) and distrust in government (heavily lobbied and bribed by big corporations).

But there is a lot of trust in consumer brands, because we at least know the corporations are in for the money. People trust a can of coke further than any random politician.

Successful corporations want to keep successful, and they put a stick into the wheels of every legislative process that tries to regulate and tax them. This is the reason there are way more “conservative” governments in the world than “socialists”. It’s because being conservative meet the demands of the corporations. Therefore conservative politicians are heavily supported by business leaders.

“Some animals are more equal than others.”

The world has zeroed in on western capitalism with huge impact and implications. Corporations based in a handful of nations, grouped by 7 (G7) or 20 (G20), are in control of the majority of the world’s trade, research and technology. Today everybody is more or less connected to the companies of the billionaire class. About 2000 billionaires control business empires of a combined 13 trillion dollars. It’s a little bit silly to compare those numbers, but that’s more than the national debt of the US, which is about 11 trillion dollars. It equals the yearly GDP of smaller countries like Brunei or the Bahamas.

This situation won’t disappear. The Gini coefficient will not level out. Even if there is any legislature made by any country to tap into the billionaire class’ wealth by taxing it more, their corporations have very much recruited the best managers, PR-companies, lobbyists and strategists to further evade taxes. Inequality will continue to rise to even more absurd levels. Maybe some day everything, and I mean EVERY THING, will belong to a few individuals.

The interesting point of this situation is, that the money that is spent by the billionaires is spent in a very flexible way. Those individuals decide where they put the money. As long as there is some kind of profit in the end, they are able to invest in any branch, in any technology. They are free to spend their money into whatever they want.

This creates what I call “spillover money”. The billionaires don’t want to simply lose their money. So they usually never invest in social enterprises or money for the poor and uneducated. Their world is an elitist world and they are the leaders of the elite pack. And they are very keen to keep it that way.

Yes there are some billionaires, even the richest ones, who do spend money on “charity”. There is the Bill & Melinda Gates foundation. There is the “giving pledge” of Bill Gates and Warren Buffet. Mark Zuckerberg built the “Chan Zuckerberg Initiative” who actually does invest in projects in poorer countries.

In the best case their charity work of billionaires reflect their interest in certain segments of public prosperity, in the worst case it’s just another way to evade taxes. The foundations are just another aspect of the big distrust billionaires have towards government: they don’t give the money to the government by paying taxes. Instead they want to decide for themselves which causes they want to support, and there is always a huge chunk of self-serving in there, because why not? In their mind this reduces friction and less money get lost in the process.

They are not completely wrong. Government and democracy are painfully slow and utterly inefficient, compared to the quarterly cycle of business empires.

Dreaming of taxes?

I would advocate to give money to the poor by taxing the hell out of the billionaires and big corporations. Money that is spent in the public sector is completely different than the money billionaires chose to spend on charity. Public money can be simply spent for good, and even if it’s kind of “wasted”, it might have helped someone to get around. There is at least some sort of scrutiny in the work of governments. At least we try to make politicians accountable. And at least there is public discourse where to spend the money exactly.

But this is a social utopia. In reality, billionaires can do whatever they want. If Elon Musk sees a chance to build a pyramid on Mars he probably will do it. Remember: he already sent a car into space — an utterly useless publicity stunt, but it created enough news value that he did not lose a dime with it. World wide publicity and fame is something that can make or break a billionaire’s business. Donald Trump’s campaign has been successful not despite but because he has being obnoxious on social media. Trump has been a notorious rule bender and that made him president of the United States, shaping himself after the ruthless oligarchs of China, Russia and Saudi-Arabia. The Trump presidency is a first taste how an unveiled oligarchy might look like.

Billionaires will control an increasing share of the money circulating around the globe. Most of their money will be spend on the core businesses of their companies with the focus on creating even more profits.

But what’s going on with that “spillover money”? Well, if you have a good narrative, there is a lot of money that needs an investment opportunity. So if you want to start a business and work yourself up into the Forbes 500, try some of these sectors:

• Some of the spillover money will be invested in new companies, that may even help to solve some of societies bigger problems, like environmental issues. If it’s a good cause, but also makes money, this is the sweet spot where the investors are already waiting for you.
• Some of the spillover money will simply be wasted at the “hot potato” gambling with the Art Market, Alt-Coins and — worst of both worlds––nonfungible tokens. If you’re talented with technobabble, this might be a promising sector to sell very expensive hot air.
• Some of the money will be spent for some insane luxury products like midtown ivory towers, racing cars and megayachts. If you always enjoyed luxury, why not design a Lamborghini?
• And a small part of the billionaires’ money will be spend on more ridiculous publicity stunts. Like a pyramid on Mars. Brace yourself for bat shit crazy headlines. If you have a really creative mind, just sell your craziest dream to someone who needs something to impress his neighbour on the billionaire’s ball.

Sadly, the one problem that won’t be tackled at all is inequality itself. The public sector will dry out until it drops dead and we are going to live in a neo-feudal state under our neo-aristocratic money kings. Release the Hypno-Drones!