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Cluster Family Office Blog

Monopoly ends in bankruptcy or not at all.

Wealth, fortunately, is mostly redistributed naturally. That is to say, the wealthy spend surpluses more easily in favour of the less wealthy. This quasi-universal law exists in countless areas: From the rich man who lives at a rate that means the livelihood of many families around him; to the football club of the G14 which pays a huge sum for a player from a mediocre club, thus helping to balance the latter's damaged balance sheets.
Almost always the increase in wealth leads to an increase in spending, consumption, investment and/or whatever we want to call it, with many different collaterals benefiting from it. Some of us call this relationship a kind of Win-Win, but sometimes it becomes a parasitic relationship. Some will say that the rich get richer and the poor get poorer, because of the exploitation of the former by the latter. In that case we would enter into the controversy of who is the parasite and who is the host. But the class struggle is not the main reason for this reflection, so we will ignore this polemic and consider (fairly or not) that the rich is the host and the poor the parasite when it is not a Win-Win relationship.

Not all parasitic relationships are trophic, In other words, they involve an increase in monetary resources that feed the parasite. Sometimes the benefit obtained from the rich or powerful translates into protection from third parties, influence, leisure, business, prestige or other very diverse advantages that have little or no relation to money.

Another example of wealth redistribution would be philanthropic giving. Perhaps mostly residual in volume, but look at the large donations that do occur from time to time. For example, Warren Buffett's recent donation of 37,400,000,000′-$ to charitable foundations (when you read all the zeros, it's more impressive, isn't it?). These types of philanthropic acts are the most straightforward and direct way to redistribute wealth. The most radical and at the same time laudable form of Win-Win decompensated or voluntary parasitism on the part of the host. In the face of an altruistic attitude of this calibre, the balance of the two «win» or the «damage»The "parasite as a passive subject" is something that, happily, escapes us from the traditional analysis of the relationship between wealth and poverty.

Some may criticise such acts as merely laundering the conscience of the rich. I prefer to think that laundering or not, we are dealing with effective redistributions of wealth that honour the human race. NGOs (some) will not only redistribute mere resources but also encourage small forms of autonomous wealth creation, e.g. wells, dams, schools, etc. At this point I cannot fail to mention Vicent Ferrer and its copy Foundation, to which I personally have a couple of splendid ties.

Philanthropy, trade, business, leisure, influence.... whether the relationship between the rich and the poor is parasitic or Win-Win, it tends to compensate to a greater or lesser extent for the distribution of wealth.

But lately there is something that has me a little worried. I am not sure that the hands that have accumulated an enormous amount of wealth since the beginning of the new century have the same profile as the rich to which we are traditionally accustomed. I am basically referring to the Chinese and above all to Arabs (natural and legal persons) who are accumulating astronomical amounts of money day after day. Let us bear in mind that money has always been in the hands of Westerners in the past, either through the merits of their own civilisation or through the plundering of third worlds, but that is how it has traditionally been. But the holders of great wealth have changed in the last decade, in the last couple of years, I dare say. And perhaps the way they spend or pass on their wealth to the rest of the planet is not the traditional way either.

The great billionaires of the last century, as long as modern economics has been called that, have always been Westerners. Great businessmen who have amassed their great fortunes in industry, business or even commerce. Diverse men, of course, but all of them of Western culture. Only in the late 20th century did we see some Japanese multi-millionaires whose culture is far removed from Western culture, but they were short-lived and much less significant than today's great fortune-makers. My personal opinion is that many huge fortunes created in the last few years, which are growing at an unprecedented rate, are being formed without the commitment, effort and perseverance of traditional Western multi-millionaire businessmen. It is only an impression, true, but if these new fortunes of unimagined volumes have been formed in a somewhat passive way by their holders, their future objectives will undoubtedly be different from the traditional ones as well.

This is not at all a question of cultural, religious or even racial discrimination. It is only a reflection that leads me to think that wealth is no longer in the hands of our western culture, as it has always been historically until a few years ago. And the next question I ask is: What are the consequences of this phenomenon: will the traditional redistribution of wealth change?

It is as if in an eternal game of Monopoly, tacitly, the winners would cyclically return the banknotes to the bank so that the game would never end. And suddenly, the winners would have a new profile and question whether they will return their wealth to continue the game forever or not. The question I dare not ask myself is what will happen to our game if the nouveau riche decide to break with tradition.

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