How Much Could You Sell Planet Earth For? And Why Are All Economists and Financial Influencers Stupid People?

Planet Earth would sell for about $700 trillion if put on the inter-planetary real estate market today. Obviously this is. thought experiment but don't let that stop you thinking about the numbers.

Following is a typical comment by pretty much anyone who thinks money is wealth, especially economists and financial experts:

"Regardless, Bretton woods didn’t last that long… like all schemes: “Everyone has a plan, until they’re punched in the face”"

The meaning of it is that financial exchanges are the root of the problem. Following is how to debunk it in a response you could make:

And the smaller the "plan" the softer the punch. 

International exchanges no matter how big, must be smaller than the total value of land and the economic rents which flow from that. Because no wealth can be created without secure access to a piece of land. And the most valuable locations are where the most is made. Look at the city centres where all the banking skyscrapers are, even in third world nations.

So anyone who talks about  these things and does not mention this is as a first duty, does not know what they are talking about, by implication. Its like being an expert on Bitcoin and not knowing about SPV or that its transactions are not encrypted. This is why no one ever sees it coming, time and time again. Hilarious if not so stupid and systemically devastating for all nations. 

You can do a quick calculation about the total value of land in the world. And then compare it with everything else. You will be surprised at the difference. But will you look?

• 2.2e+8 households in the world
• Assuming the global average house price(2 bed flat) is £220,000
• Thats a common stock of £5e+14
• Or in international money $6.58e+14 or $658 trillion

Can you see the big picture yet? You could say this was what Planet Earth would sell for, not including movables.

The PE ratio of real estate (or the 'earnings' of this 'asset' in annual rent) is de-capitalised at a rate of 5%. So divide by 20 years and you get $33 trillion, close to the GDP of the USA. Which is a monthly rental income of $3 trillion.  Thats about what Mr. Musk was hoping to save once over 3 years, but every year, and forever.

Now before you say thats not enough to do anything, remember, this rent has no capital or labour inputs invested in its output. Its the only asset in this universe which has that astonishing quality. All other capital formation and wealth creation has huge and costly inputs.

And these huge inputs are heavily taxed as a monstrous pathological, no psychopathic incentive to STOP producing economic wealth. Land value, in the end has a negative tax liability. Because after the capital gain in its non stop increase in price at 5% y/y even accounting for house price crashes, any tax liability is easily covered with much more left over to buy more.

What is more, government of all party's, in every single nation in the world, bails out real estate first, during hard times. This is why the wealthy can never be taxed, their portfolio is mostly made up from land value derivatives. And its also why those trying to kill off the wealthy with a wealth tax are also incredibly stupid people, probably even more stupid if that is at all possible. How stupid do you think the experts are now - none of them discuss it, perhaps because they know they will be rumbled as the most stupid people on the planet.

So imagine the unlikely situation where all of the rent were disappeared overnight - productivity would not be harmed one iota. The economy would remain fully afloat. Instead, wages and the profits of capital would pick it all up!

Some foolish dreamers would suggest using it for revenue and abolish all other taxation given this astonishing revelation. Creating a virtuous circle where people suddenly pay 100% for benefits received, no more benefit scrounging and corporate welfare are available. I'd expect the immigration problem would be instantly solved too. 

For this very reason, if this gigantic income stream of rent were no longer available for rent seeking, no monopoly power would be able to form - the rent is gone or no longer available to best scrounger. That is to say, no more corporate monopolies stifling innovation, raising prices artificially and delivering poorer and poorer quality products the longer they artificially corner their markets. There would be no longer be a need for regulations in banking, global finance, intellectual property rights and for corporations at least. Perhaps this effect would spread like a virus it becomes such a boon to producers and creators. 

Now some people think Mr. Musk is a smart man. And I say he is too. But he still does not know about this. Though I think we should do it anyway, would we still need to go to Mars, if no one was able to steal legally any more? Maybe we would because this innovation would not solve all problems. But it certainly would make all other problems now that much easier to resolve. And it would be exciting to go to Mars anyway.

But will we grasp the opportunity? I do not think so. It's always been available since man started farming ten thousand years ago, we've yet to take it and I can see no signal yet we are about to.

And so it goes. We still have God.