I have a hypothetical scenario I'd like some help with. Let's imagine a country, I was going to say the USA or something easy to recognize but let's use Brazil or India, one of those countries that has a lot of potential yet seems to find itself in a constant state of economic fuckery.
Let's say the country is taken over by a Trillionaire King, a guy with almost infinite money, and this King proceeds to remove all market regulations except extremely basic stuff, ends all taxes (pays for everything himself) and proceeds to invest something around 50-100 Trillions into the country's industries.
What exactly would happen?
I've posed this question to a libertarian/ancap friend of mine and he thought about it a little and laconically answered "inflation".
If its trillions in fiat, then inflation is right. If its gold or crypto with a hard cap, then thats different.
Logan Smith
Where did his money come from? At the level of trillionaires you might as well forget about amounts of dollars or coins and think directly about the claim on resources and productive capacity that the money represents. If his money came from other countries, it would basically be a massive transfer of wealth from the other countries to the country he rules. But since we're talking about tens to hundreds of trillions, yes there would also be a lot of inflation.
Benjamin Nelson
It would be most likely in stocks
Let's say they were acquired by investing in the foreign (American) stocks market, cashed out and kept in one singular bank account - for the sake of an easier allegory.
And then this money was used to invest in stocks in the local industries.
Aaron James
In that scenario, in the short term American stock markets would have a massive crash, and his country's stock markets would have a massive pump. Effectively his country's companies would temporarily have access to an infinite amount of financial capital. This would boost growth, but since you only need so much financial capital before you're more constrained by human capital and labor, it might not be as much of a boost as you'd expect. Wages would rise, so more people would want to come there for work. Real estate prices would rise. Overall it would be great for growth. Also in the short term, people in his country who already owned stocks would have a huge windfall and could afford nicer stuff for a certain amount of time.
Lucas Rodriguez
So the entire country would kind of become Monaco, with the insanely low (in this case non-existent) taxes, high real state prices and people with a lot of disposable income, if not at the price of some inflation that may end up being somewhat manageable.
Interesting.
Thanks for the help.
Charles Ward
Depends to some degree on how immigration is controlled. If the king allows a lot of immigration, companies could afford to spend their windfall on hiring a ton of people, so you could end up with the most densely populated country in the world with less total wealth per capita but probably still a high average standard of living.
If immigration is tightly controlled, companies would be restricted to mostly just investing in overseas enterprises for growth, so you would end up with a hyper-Monaco of a capitalist leisure class country that mostly just extracts rents from the rest of the world by investing their abundance of financial capital. Everyone who's not in this capitalist class because they didn't own enough stock or real estate before this happened would be priced out of the country.
Camden Adams
It would be particularly good to have a "loose" immigration policy in the cases of Brazil and India so that the impoverished populations of neighboring countries could pour in and get some of the action. In which case the country would look more like Singapore.
Carter Gutierrez
Well if it's Brazil or in particular India, you have to take into account that the existing population is already huge. You probably couldn't get India to the level of Singapore just by investing a lot of money, the entire world economy might not be productive enough to support that.
