What would happen if a country’s economy was completely ‘reset’ and the wealth/ assets redistributed?

Question

Meaning all debts, internal and external were erased and all money was taken/ re-distributed?

In: Economics

Answer 1

The answer to this depends on the form of government in place and the balance of rights between individuals and the collective. It’s impossible to answer as stated, unfortunately.

I guess we can take some recent “approximations” of a reset event to study what happened. Look to Japan, North/South Korea, East/West Germany, Vietnam, and to some extent China after the ironically named “great leap forward”.

Answer 2

How do you envision this happening without some type of violent revolution?

It would be utter chaos and likely cost the lives of a great number of people.

Answer 3

I’m the rabid Marxist socialist your daddy told you about.

If somehow, magically, all the wealth in a capitalist country (like the USA for example) was taken from the residents and then redistributed evenly to everyone, there would be a lot of real challenges on day one.

Currently our huge corporate employers, who employ the vast majority of people, depend on their huge stockpile of assets and money to run their business day to day. Those employers would have to turn away their employees and say sorry, we’ve barely got the money for ourselves, we can’t keep you on anymore. The majority of people would be suddenly unemployed.

But they’d certainly have a lot of money in their wallets because of the redistribution. The approximate total value of all money/investments in the USA is $156.4 trillion, and the over-18 population is 272 million. So the redistribution would come to about $575,000 per person. That’s a lot of money, but how do you use it if all the big businesses have gone out of business because they fired everybody?

I’m in favor of redistributing the wealth! Don’t get me wrong! But we need to deal with the way our whole world has come to depend on the way things are, first. We need to carefully dismantle these too-big-to-fail corporations before we can safely redistribute the wealth. Otherwise we’ll see the sorts of chaos, violence, and famine that Russia and China saw when they tried to do this.