I read an essay back about 2005 about the flow of money in the world’s economy. it was written by some economics grad students, and their analysis showed the flow as a very lopsided bow tie, with an overall value of about $29 trillion dollars.
On the large side of the bow tie was the 99% of the world, the multinationals, governments and people. On the small side of the bow tie were the dynastic wealth families, PE operations like Black Rock, Advantis, and a plethora of numbered holding companies in multiple tax havens from the Cayman Islands to the Seychelles. Basically the Musks, Bezos, Rothchilds, Putins, etc…
In the middle was a knot of of about 100 banks, insurance companies and brokers. These are the Goldman Sachs, Behr-Stern, Lehman Brothers, Deutche Bank, Credit Suisse, AIG, et al.
Some of these names should ring warning bells.
Now the analysis estimated that about $19 trillion of the worlds money was parked in tax havens and did not circulate in the world’s economy. The remaining $10 trillion did the actual work, circulating through the world economies. and a limited amount of that $10 trillion is actually taxed to pay everything the governments do for their citizens.
That was 20 years ago. The worlds economy has grown since then, but I suspect nothing has changed. This is what we are up against. And there is no noblesse oblige.
(I have looked for a copy of the paper online, but no luck so far. It may be on some university archive, but Google isn’t going to find it)
Absolutely, Jim. Your recollection of the "bow tie" model of global capital flow is both vivid and relevant. While the specific 2005 study you mentioned remains elusive, the concept aligns closely with analyses by economists like Gabriel Zucman and James S. Henry, who have extensively documented the staggering amounts of wealth hidden in offshore tax havens.
Zucman's research, for instance, estimates that approximately $7.6 trillion; about 8% of global household financial wealth; is held in tax havens, effectively removed from the taxable economy. Similarly, Henry's study for the Tax Justice Network suggests that between $21 to $32 trillion of global assets are stashed away in more than 80 offshore secrecy jurisdictions.
These findings underscore the systemic nature of wealth concentration and the challenges it poses to global economic equity. The "knot" of approximately 100 financial institutions you mentioned, major banks, insurance companies, and brokers, indeed plays a pivotal role in facilitating this concentration, acting as intermediaries that enable the flow of capital into these opaque structures.
The implications are profound: with such a significant portion of global wealth effectively untaxed and unproductive in terms of public investment, the burden of financing public goods and services disproportionately falls on the remaining, more transparent segments of the economy.
Your insights highlight the urgent need for increased transparency, international cooperation on tax matters, and systemic reforms to address these entrenched disparities.
Im very interested in knowing more about how wealth can be distributed horizontally and broadly rather than just vertically within families, as a way of redistributing wealth more fairly instead of just concentrating it further and creating more and more wealth inequality. What kind of incentives could be put in place to make this more attractive?
Much of this thinking was part of the research that I did for UBI, and a few other essays, and it's been sitting in my Scrap File, not that it is scrap, but that it's too radical for most people today the get their heads around.
You're asking the right question, not just how to tax wealth, but how to reroute its flow entirely. Right now, wealth moves vertically, passed down within families through trusts, inheritance, and private foundations designed to preserve elite status. Horizontal distribution means reimagining wealth as something that circulates across communities, generations, and sectors; not hoarded, but invested in collective resilience. Here’s how that can be done:
1. Redefine Inheritance Itself
Right now, inheritance is a dynastic privilege. But what if inheritance could be partially public?
-- Inheritance tax redirect: Instead of merely taxing estates, channel a portion of large inheritances directly into public equity funds, shared national or community-level investment pools that pay dividends to all citizens.
-- Youth Endowment Accounts: A universal trust fund—say $25K—for every citizen at age 18, funded by wealth taxes. Not charity; equity seeding.
2. Employee Ownership & Stakeholding
Rather than wealth staying with capital owners, it should spread through ownership of labor and participation.
-- Mandate profit-sharing for companies over a certain revenue threshold.
-- ESOP (Employee Stock Ownership Plans) incentives expanded, especially for transitioning private companies.
-- Community land trusts: Ensure local ownership of housing and land, especially in rapidly gentrifying areas.
3. Encourage Lifetime Redistribution, Not Posthumous Gifting
We need to incentivize living redistribution.
-- Tax relief for lifetime gifting to cooperatives, mutual aid orgs, and B-corps; not just 501(c)(3)s.
-- Wealth decumulation credits: Offer tax breaks for liquidating and redistributing a portion of one’s wealth in midlife, rather than hoarding it until death.
-- A maximum wealth cap for foundation-controlled assets, forcing dispersal, not hoarding.
4. Cultural and Policy Reframing
You can't just legislate generosity, you have to normalize redistribution as prestige.
-- Create status incentives for wealthy people who actively dismantle their own privilege—think Mackenzie Scott-style redistribution on a mass scale.
-- Publicly highlight and reward horizontal wealth-builders through national honors, media coverage, and policy platforms.
-- Encourage inter-class mutual gifting networks, co-designed wealth redistribution efforts that pair the rich with grassroots organizations on their terms.
If we want wealth to flow horizontally, we need to break the cultural script that says success means accumulating more and passing it down like heirloom trauma. Horizontal distribution isn't just about fairness. It’s about survival. Inequality this extreme isn’t sustainable. It’s a time bomb with a ticking clock, and every policy that broadens ownership, inheritance, and dignity is a defusal tool.
AND, If horizontal wealth distribution is the antithesis of capitalism, it’s not communism, it’s economic democracy. It's the unlearning of inherited extraction models and the designing of systems where power, ownership, and capital flow with consent and contribution, not coercion and concentration.
Here’s what it’s not:
-- It’s not the state seizing your farm and making everyone wear gray jumpsuits.
-- It’s not abolishing markets.
-- It’s not top-down command economies.
What it is:
-- Post-capitalism with a spine, an economy built on shared stakes, shared risks, and shared rewards.
-- Participatory economics (a la Michael Albert), where people co-determine economic outcomes through decentralized planning.
-- Solidarity economy principles: cooperatives, public banks, mutual aid networks, and commons-based ownership models that don’t rely on endless growth or billionaire overlords to function.
At its core, it’s about ending dynastic wealth and returning value to labor, land, and life itself, where power isn’t held by the few to extract from the many, but circulated through design, law, and trust.
If capitalism is a pyramid scheme, horizontal distribution is a rhizome, interconnected, resilient, regenerative.
Want a name for it? Call it Radical Plural Economics. Or just call it a future worth surviving for.
This is absolutely brilliantly written & so relatable…
Thank you, Ronna!
I read an essay back about 2005 about the flow of money in the world’s economy. it was written by some economics grad students, and their analysis showed the flow as a very lopsided bow tie, with an overall value of about $29 trillion dollars.
On the large side of the bow tie was the 99% of the world, the multinationals, governments and people. On the small side of the bow tie were the dynastic wealth families, PE operations like Black Rock, Advantis, and a plethora of numbered holding companies in multiple tax havens from the Cayman Islands to the Seychelles. Basically the Musks, Bezos, Rothchilds, Putins, etc…
In the middle was a knot of of about 100 banks, insurance companies and brokers. These are the Goldman Sachs, Behr-Stern, Lehman Brothers, Deutche Bank, Credit Suisse, AIG, et al.
Some of these names should ring warning bells.
Now the analysis estimated that about $19 trillion of the worlds money was parked in tax havens and did not circulate in the world’s economy. The remaining $10 trillion did the actual work, circulating through the world economies. and a limited amount of that $10 trillion is actually taxed to pay everything the governments do for their citizens.
That was 20 years ago. The worlds economy has grown since then, but I suspect nothing has changed. This is what we are up against. And there is no noblesse oblige.
(I have looked for a copy of the paper online, but no luck so far. It may be on some university archive, but Google isn’t going to find it)
Absolutely, Jim. Your recollection of the "bow tie" model of global capital flow is both vivid and relevant. While the specific 2005 study you mentioned remains elusive, the concept aligns closely with analyses by economists like Gabriel Zucman and James S. Henry, who have extensively documented the staggering amounts of wealth hidden in offshore tax havens.
Zucman's research, for instance, estimates that approximately $7.6 trillion; about 8% of global household financial wealth; is held in tax havens, effectively removed from the taxable economy. Similarly, Henry's study for the Tax Justice Network suggests that between $21 to $32 trillion of global assets are stashed away in more than 80 offshore secrecy jurisdictions.
(If you want to get annoyed, read up on this trick: Base Erosion and Profit Shifting: https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifting )
These findings underscore the systemic nature of wealth concentration and the challenges it poses to global economic equity. The "knot" of approximately 100 financial institutions you mentioned, major banks, insurance companies, and brokers, indeed plays a pivotal role in facilitating this concentration, acting as intermediaries that enable the flow of capital into these opaque structures.
The implications are profound: with such a significant portion of global wealth effectively untaxed and unproductive in terms of public investment, the burden of financing public goods and services disproportionately falls on the remaining, more transparent segments of the economy.
Your insights highlight the urgent need for increased transparency, international cooperation on tax matters, and systemic reforms to address these entrenched disparities.
Brilliant and about time!
Thank you, Joan!!
Im very interested in knowing more about how wealth can be distributed horizontally and broadly rather than just vertically within families, as a way of redistributing wealth more fairly instead of just concentrating it further and creating more and more wealth inequality. What kind of incentives could be put in place to make this more attractive?
Much of this thinking was part of the research that I did for UBI, and a few other essays, and it's been sitting in my Scrap File, not that it is scrap, but that it's too radical for most people today the get their heads around.
You're asking the right question, not just how to tax wealth, but how to reroute its flow entirely. Right now, wealth moves vertically, passed down within families through trusts, inheritance, and private foundations designed to preserve elite status. Horizontal distribution means reimagining wealth as something that circulates across communities, generations, and sectors; not hoarded, but invested in collective resilience. Here’s how that can be done:
1. Redefine Inheritance Itself
Right now, inheritance is a dynastic privilege. But what if inheritance could be partially public?
-- Inheritance tax redirect: Instead of merely taxing estates, channel a portion of large inheritances directly into public equity funds, shared national or community-level investment pools that pay dividends to all citizens.
-- Youth Endowment Accounts: A universal trust fund—say $25K—for every citizen at age 18, funded by wealth taxes. Not charity; equity seeding.
2. Employee Ownership & Stakeholding
Rather than wealth staying with capital owners, it should spread through ownership of labor and participation.
-- Mandate profit-sharing for companies over a certain revenue threshold.
-- ESOP (Employee Stock Ownership Plans) incentives expanded, especially for transitioning private companies.
-- Community land trusts: Ensure local ownership of housing and land, especially in rapidly gentrifying areas.
3. Encourage Lifetime Redistribution, Not Posthumous Gifting
We need to incentivize living redistribution.
-- Tax relief for lifetime gifting to cooperatives, mutual aid orgs, and B-corps; not just 501(c)(3)s.
-- Wealth decumulation credits: Offer tax breaks for liquidating and redistributing a portion of one’s wealth in midlife, rather than hoarding it until death.
-- A maximum wealth cap for foundation-controlled assets, forcing dispersal, not hoarding.
4. Cultural and Policy Reframing
You can't just legislate generosity, you have to normalize redistribution as prestige.
-- Create status incentives for wealthy people who actively dismantle their own privilege—think Mackenzie Scott-style redistribution on a mass scale.
-- Publicly highlight and reward horizontal wealth-builders through national honors, media coverage, and policy platforms.
-- Encourage inter-class mutual gifting networks, co-designed wealth redistribution efforts that pair the rich with grassroots organizations on their terms.
If we want wealth to flow horizontally, we need to break the cultural script that says success means accumulating more and passing it down like heirloom trauma. Horizontal distribution isn't just about fairness. It’s about survival. Inequality this extreme isn’t sustainable. It’s a time bomb with a ticking clock, and every policy that broadens ownership, inheritance, and dignity is a defusal tool.
AND, If horizontal wealth distribution is the antithesis of capitalism, it’s not communism, it’s economic democracy. It's the unlearning of inherited extraction models and the designing of systems where power, ownership, and capital flow with consent and contribution, not coercion and concentration.
Here’s what it’s not:
-- It’s not the state seizing your farm and making everyone wear gray jumpsuits.
-- It’s not abolishing markets.
-- It’s not top-down command economies.
What it is:
-- Post-capitalism with a spine, an economy built on shared stakes, shared risks, and shared rewards.
-- Participatory economics (a la Michael Albert), where people co-determine economic outcomes through decentralized planning.
-- Solidarity economy principles: cooperatives, public banks, mutual aid networks, and commons-based ownership models that don’t rely on endless growth or billionaire overlords to function.
At its core, it’s about ending dynastic wealth and returning value to labor, land, and life itself, where power isn’t held by the few to extract from the many, but circulated through design, law, and trust.
If capitalism is a pyramid scheme, horizontal distribution is a rhizome, interconnected, resilient, regenerative.
Want a name for it? Call it Radical Plural Economics. Or just call it a future worth surviving for.
Thank you so much. A great deal to think about here.