WO2014041562A2 - A method for wealth distribution - Google Patents

Description

Title: A METHOD FOR WEALTH DISTRIBUTION

BACKGROUND OF THE INVENTION:

Currently businesses/companies follow a model where by Revenues generated are distributed to the shareholders) meaning, parties who contributed to the capital base of the company. The model is based on pure opportunism and exploitation of an initial investment that leads to recurring income based on such investment.

PROBLEMS SUFFERED IN PRIOR ART

Contributors of Revenue:

Revenue is contributed directly by:

b) Customers who buy the products and/or Services

Revenue is contributed indirectly by:

a) Employees of a company who produce the Products and/or Services

b) The Capital that is applied towards the factors of production that create the products and/or services

b) The Effecient Management of the Factors of Production OBJECT OF THE INVENTION :

New Revenue Distribution - True Wealth Distribution Model:

In pursuit of Truly Distributing the Wealth arising out of an enterprise, the revenues generated need to be distributed directly to those who contribute to its direct creation, viz., customers/clients

DESCRIPTION OF THE INVENTION:

Wealth Retention by Enterprise (WRE): Ari arbitrary percentage of value from the revenues, that is decided by the enterprise for retention within the firm for distrubution to its shareholders and owners

Wealth Distribution to Customers/Clients (WDC):

An arbitraty percentage of value from the revenues is ear-marked for distribution to customers as decided by two factors: Board/Management (incl shareholders of the company) and Market Forces

Total Net Revenues (see illustration below) = WRE + WDC

Calculation of WDC:

Widil = The base monetized unit of the distributable wealth to the customers/clients 1 Widil = Designated Value of WDC divided by Total Gross Sales

The TWD Algorithm shall be based on the below-illustrated logical Sequence

Illustration:

Customer D Accrue Wi i s 667 Wi i s

"True Wealth Distribution is an attempt at disentangling a century's effort of ignobly placed human values, centered as it may seem, not on development of human race's connect with the higher truth, but culminating into the nucleus of an ever growing contagion of self- gratification by material ownership and means.

The resources of the world today are colonized by constant ingenuity of the human cleverness - having colonized tracts of nature's land and resources by territorial control by sovereign states, temporal control of civilized human actors and held together by statutes written to bind on every other living being of this planet, without their consent and in almost widely disbelieving command of self-deceit, propagate those laws in unilateral extravagance, calling it Just if it helped us, and Unjust if it scuttled the progression of our greed's evil designs." - The True Wealth of Nations (2013), Mr. Shravan Charya

The problem definition and an attempt is made to overcome this problem in this invention

While economic inequality is emergent from disparities between wealth, its implications are far beyond the realms of an economic world. Social inequality and economic inequality are interdependent, one gives rise to another. An uneducated person has a higher probability than a graduate to remain poor and a poor person has a higher chance than a rich person of not receiving any education. Social inequality could be a direct consequence of a historical structure that has evolved to the present day, and thus as we saw earlier, create economic disparities today. In effect, the historical distribution of wealth was based on the social structure, and this has been the starting point of economic inequalities. The trend then carried forward where economies were formed based on these inequalities that served as the basis for the kind of social services received by an individual, and more importantly his occupation through which he strived to earn a living in the society. Occupation determined the earnings through incomes, and each sector, these became dependent on institutions and policies of the economy. The state does practice various mechanisms to redistribute wealth, through taxation or other social welfare programs; however these programs are dependent on certain factors outside the control of the state. Sure, with the process of economic development, inequalities are inherent in the system, but are wealth inequalities really as bad as they're made to be?

Is Inequality Acceptable?

The answer in the basic moral sense of humanity should be a No. Not only is it unfair to the moral appeal of human beings, it is also undesirable under the divine writings of various religions as noted in the first chapter. From an economic standpoint, a more equitable distribution of wealth is important for economic efficiency/ for an equitable growth of all sectors. It is important for democracy, and could even lead to civil disturbance often resulting in conflict in less developed countries. Major issues of political conflict actually have their roots in incomplete social infrastructure, and gaps in knowledge that result from poverty, unemployment, poor health conditions etc. As such, inequalities in wealth could even lead to breakdown of democracies.

The scope

The classical economists emphasized on free market, stating that markets are best left alone to be controlled by an 'invisible hand'. The transformation from that time to the present day has of course seen a lot of modifications in theory. Keynes, in the post classical era talked about consumption being the most important determinant of his economic theory. Then the Austrian School gave the concept of utility, rationalizing human behavior in simple terms- Everybody acts in his best interest, which comes about in order to maximize the utility derived from his consumption. The new age orld economy is vibrant, often dependent upon the political background of a country, and highly interdependent. As a result, the consequences of instabilities are realized by the complete inter woven system instead of being borne by just one national economy. This was evident in the recent Financial Crisis of 2008.

The world today is moving towards a cosmopolitan style of living, with heavy pressure on urban growth, and mounting dependence on capitalist policies. However, it has not benefitted all. The policies that aimed at converging the world into one entity have in fact caused a wide divergence of incomes worldwide. It is true that incomes have increased, but the trickle-down effect that the change makers hyped about, have not been so clear. Perhaps a new set of reforms are needed to address the issues of poverty and unemployment, as it only kept growing poorer with generations.

Wealth of Nations- The Three Worlds

Nations all over the world experience disparities in wealth, in an internal set up, as well as in the international relation. These differences could be passed on by generations as difference in natural endowments, or be a result of difference in policies- political, economic, and other external forces. In terms of monetary wealth, and that really is the real wealth that people talk about today, it is simpler if we can divide everything into rich and poor. Of course the terms themselves are relative to each other. So it would help if we can stress a little on the widely used terms to describe the nations in the current world:

First World Countries

The countries listed as the first world today originally had a political implication to this term. During the cold war, the countries that aligned with the United States, and were opposed to the Soviet Union, came to be called the First World Countries. Today, the term broadly refers to the developed nations of the world, the ones lounging in prosperity, with a record of a high GNP, mostly the North Americas, and the Western Europe, and are also referred to as the developed countries of the world. Sefcond World Countries

These countries were the ones that were originally controlled by the Soviet Union during the cold war, which were primarily the communist countries. Today, in an economic sense, these countries are the ones that lie between the poor and the rich countries, thus standing on a middle point on the path towards development.

Third World Countries

Politically speaking, these were the countries that did not align with either of the sides during the cold war, and primarily followed a mixed economy regime. Today, the third world countries, often called as the developing countries, are the ones lagging behind on the path of development, mostly with low GDPs and high populations.

Rich Vs Poor:

"At the risk of tipping my hand, I shall argue that most answers to the question posed by my title fall into one of the two lines of explanation. One says that we are so rich, and they so poor because we are so good and they so bad, that is, we are hardworking, knowledgeable, educated, well governed, efficacious, and productive, and they are the reverse. The other says that we are so rich and they so poor because we are so bad and they so good; we are greedy, ruthless, exploitative, aggressive, while they are weak, innocent, virtuous, abused and vulnerable."- David Landes, at his lecture on "Why are we so rich and they so poor?

As noted earlier, countries can be ranked according to the monetary wealth estimates (given by GDP), or the overall development (measured by the HDI). Here we compare both these cases.

GDP Levels:

(USD) (USD)

1 Quatar 88,222 1 Democratic Republic of Congo 328

2 Luxembourg 81,466 2 Zimbabwe 392

3 Singapore 56,694 3 Liberia 395

4 Norway 51,959 4 Burundi 410

5 Brunei Darussalam 48,333 5 Somalia 600

6 United Arab 47,493 6 Eritrea 681 Emirates

7 United States of 46,860 7 Central African Republic 744 America

8 Hong Kong 45,944 8 Niger 755

9 Switzerland 41,950 9 Sierra Leone 759

10 Netherlands 40,973 10 Togo 832

In the above charts, I have listed out the ten richest and poorest countries in the world in 2011, as measured by the International Monetary Fund. The richest country in the world earns more than 200 times the income of the poorest country in the world. These figures are per capita, that is they measure the total GNP respective of the population of each nation.

HDI Levels:

It is evident from the above that countries with high GDP may not necessarily be ranked in that order in their HDIs. However, there is a clear link between GDP and Human Development, where countries with high GDP will always be ahead in the HDI chart as well. Disparities within disparities:

Sure, the countries worldwide differ in their income or development indices, however, another trend that is woefully hard to miss, is the emerging disparities within most developing nations. Income disparities within a country are an important issue, because the concept of nation defines a common set of policies for the upliftment of all its citizens. Yet, we keep hearing the annoying sound of the sentence- "The rich are getting richer, while the poor are getting poorer". How valid is this statement in the current economic scenario in the world?

An important feature, often of developing, and especially of the least developed economies, is that of 'dual economy'. This term is given by economists for the growth of two different sectors of development in the same country- One ideally the modern sector- which experiences flourished growth catering to the globalised world, and other the traditional sector, which may not experience growth at all, or in fact, lose out on development in hands of the modem sector. As most developing countries complied with the Washington Consensus in the 1990s, the employment force in this sector complained of being set back in the process of development.

The fundamental objective of True Wealth Distribution is to usher in a global equality amongst the world nations, by brimming each of the participating country with its own internal per capita equality through its unique approach and algorithm.

The philosophy of True Wealth Distribution

The qualms of human greed stems from the art of our economic science that breeds continuous sense of wealth accumulation by multiple means and methods of commercial, economic, bigotic and surrediptious actions that have one thing in common, as a central nervous system's epicenter of unnerving inequities - Inheritance and ownership of wealth. "rfy'e laws of inheritance is one major, if not the only, stumbling block that constantly is at the heart of todays ever growing and widening gap between the haves and the have-nots, not just between the human beings but equally or more so among the living species of the extravagantly beautiful planet. The entitlements of every living being, rightfully entitiled to access the bounty of that higher truth that established this natural phenomena of life, of form and of nature as we have knows within the limitations of our time-space dimension of existence, is jeopardized in gradiose ways of human laws. Inheritance and right of ownership in perpetuity is a folly of the gravest order, propagating greed's endless "maya". Not only did we put the onus of greed into the daily lives of our existence, as a policy of our personal hunger for uncommon supremacy, but also indelibly enshrined the tenets of laws of the society based on constant contempt of natural existence and equilibrium. What we provide for nature is reduced to being charity, while it would seem upon selfless introspection, a cognizable offence of culpable Natural homicide.

To each according to his means, to each according to his capacity, to each according to his own caliber and to each according to his own destiny - that principle of universal existence should be restored. Human race's entanglement with the weaponry of wealth must be un- enslaved. A person's own accumulation of wealth must be re-distributed back to that higher truth's manifest phenomena of life in all its forms, when once he vacates inhabiting this world. It cant be passed on to his predecessors, fait accompli, of crime to rob the world of its wealth, and that of all other life forms.

Wealth is not a birth right. It is a form of notional experiment to which all humans must procreate their allegiance away from and plod towards that higher truth from where we have come and to which alone we will disintegrate into. Nature. The Phenomena of time- space spatial realm of existence.

Importance of True Wealth Distribution:

In "Global Income Inequality: What It Is And Why It Matters?" Branko Milanovic writes: "For Pogge and Reddy (2002) and Singer (2002), global poverty and global inequality are ethical issues. Hence, the rich world cannot disown all interest in global poverty and inequality: to some extent, the fate of every individual in the world affects us. Distributional justice within a nation, and in the world as a whole, is -- from an ethical perspective -- the same thing (see Singer, 2002: Chapter 5).

There are also more pragmatic reasons why global inequality may matter. Kuznets (1965 [first pub- lished in 1954]: 173-174) formulated the following half a century ago: 'Since it is only through contact that recognition and tension are created, one could argue that the reduction of physical misery associated with low income and consumption levels...permit[s] an increase rather than a diminution of political tensions [because] the political misery of the poor, the tension created by the observation of the much greater wealth of other communities...may have only increased.'

When people observe each other and interact, it is no longer simply a national yardstick that they have in mind when they compare their incomes with the incomes of others, but an international or global one. What globalization does is to increase awareness of other people's incomes, and therefore, the perception (knowledge) of inequalities among both the poor and the rich. If it does so among the poor, then their aspirations change: they may no longer be satisfied with small increases in their own real income, if they know that other people are gaining much more. Therefore, the process of globalization by itself changes the perception of one's position, and even if globalization may raise everybody's real income, it could exacerbate, rather than moderate, feelings of despondency and deprivation among the poor." ,

The algorithm of True Wealth Distribution

_G _ \ - 2\ L{X) dX

Enterprise product available for distribution = Gross Enterprise Product x (1-G)

Calculation of surplus amount for global distribution after the Country's internal distribution: Global Surplus = Sum of (Country Distribution - (Per Capita GDP x No. of Active Contributors))

Country's share in the global surplus (CSGS):

CSGS = Global Surplus x (Country's inequality index/ Sum of Participating and Eligible Country's inequality index)

Country's Distribution:

Enterprise product available for distribution + CSGS

Distribution within a country, based on Per Capita income and Active Contributor's income:

«

PC GDP- PCGDP

CTWD= (ETWD) - _ gPCGDP

i

As such the invention discloses a novel method for global profit distribution amongst contributors in a business enterprise on the basis of per-capita GDP of each country:

First enterprise product available for distribution is calculated, which is = gross enterprise product x (l-G), wherein G is the arbitrary value determined by the enterprise (driven by market dynamics). Thereafter calculation of surplus (GS) amount for global distribution after the country's internal distribution is calculated which is = sum of (country distribution GEPd)- (per capita GDP χ No. of Active Contributors), wherein GS is the amount over and above what is retained for wealth distribution within the country of business domicile. Then country's share in the global surplus (CSGS) is calculated which is = Global Surplus x (Country's inequality index / sum of participating and Eligible Country's inequality index), wherein CSGS is the Country's own share for distribution within the country as a determinant of its wealth inequity in comparison to all other countries. Thereafter Country's Distribution is calculated which is = Enterprise product available for distribution + CSGS, and then Distribution within a country is calculated based on per capita income and active contributor's income which is

gPCGDP

1 wherein CTWD = Country's True Wealth Distribution arrived at via above formula ETWD = Enterprise True Wealth Distribution, the value retained within

the Enterprise for distribution to its shareholders

PCGDP = Per Capita Gross Domestic Product

Some relevant information is tabled below :

qhina 11267 8.77 -57% -57% 0.55 $ 338.02

Colombia 13826 0.36 -48% -48% 0.765 $ 280.92

Comoros 5182 0 -80% -80% 0.711 $ 473.80

Congo Dem.

Rep. 1400 0.04 -95% -95% 0.711 $ 558.18

Congo Rep. 2806 0.01 -89% -89% 0.711 $ 526.81

Costa Rica 14718 0.04 -44% -44% 0.732 $ 261.02

Cote d'lvoire 5212 0.05 -80% -80% 0.712 $ 473.13

Croatia 22021 0.06 -17% -17% 0.654 $ 98.07

Czech Rep. 32431 0.21 23% 0 0.626 $

Denmark 66191 0.22 151% 0 0.808 $

Dominica 12717 0 -52% -52% 0.763 $ 305.67

Dominican Rep. 13873 0.07 -47% -47% 0.723 $ 279.87

Ecuador 6758 0.05 -74% -74% 0.76 $ 438.63

Egypt 15541 0.65 -41% -41% 0.689 $ 242.65

El Salvador 18408 0.07 -30% -30% 0.746 $ 178.68

Equatorial

Guinea 7404 0 -72% -72% 0.688 $ 424.22

Estonia 24556 0.02 -7% -7% 0.675 $ 41.50

Ethiopia 1412 0.06 -95% -95% 0.652 $ ^' 557.92

Fiji 9928 0.01 -62% -62% 0.709 $ 367.90

Finland 53154 0.17 101% 0 0.615 $

France 94557 3.49 258% 0 0.73 $

Gabon 14833 0.01 -44% -44% 0.784 $ 258.45

Gambia 3894 0 -85%Π -85% 0.723 $ 502.54

Georgia 12358 0.04 -53% -53% 0.725 $ 313.68

Germany 90768 4.65 244% 0 0.667 $

Ghana 3903 0.05 -85% -85% 0.692 $ 502.33

Greece 69855 0.48 164% 0 0.654 $

Grenada 15250 0 -42% -42% 0.763 $ 249.15

Guatemala 12858 0.09 -51% -51% 0.779 $ 302.52

Guinea-Bissau 1673 0 -94% -94% 0.71 $ 552.09

Guinea 7756 0.04 -71% -71% 0.693 $ 416.36

Guyana 5697 0 -78% -78% 0.707 $ 462.30

Haiti 6244 0.03 -76% -76% 0.755 $ 450.10

Honduras 5318 0.02 -80% -80% 0.743 $ 470.76

Hong Kong 188699 0.78 614% 0 0.74 $

Hungary 31452 0.2 19% 0 0.651 $

Iceland 81945 0.01 210% 0 0.664 $

India 6513 4.14 -75% -75% 0.669 $ 444.10

Indonesia 7973 1.04 -70% -70% 0.764 $ 411.52

Iran 16673 0.69 -37% -37% 0.707 $ 217.40

Ireland 91432 0.22 246% 0 0.581 $

Israel 64633 0.25 145% 0 0.677 $

Italy 120897 4.34 358% 0 0.609 $

Jamaica 9601 0.02 -64% -64% 0.686 $ 375.19

Japan 124858 9.86 373% 0 0.547 $

Jordan 10792 0.03 -59% -59% 0.678 $ 348.62

Kazakhstan 13723 0.13 -48% -48% 0.655 $ 283.22

Kenya 3442 0.07 -87% -87% 0.699 $ 512.62

Kyrgyzstan 5174 0.02 -80% -80% 0.68 $ .473.97

Latvia 18958 0.03 -28% -28% 0.67 $ 166.41 Uebanon 20560 0.04 -22% -22% 0.762 S 130.67

Lesotho 2876 0 -89% -89% 0.767 $ 525.25

Lithuania 21566 0.05 -18% -18% 0.666 $ 108.22

Luxembourg 185231 0.05 601% 0 0.65 $

Macao 71660 0.02 171% 0 0.58 $

Macedonia 14759 0.02 -44% -44% 0.661 $ 260.10

Madagascar 2226 0.02 -92% -92% 0.722 $ 539.75

Malawi 2559 0.02 -90% -90% 0.736 $ 532.32

Malaysia 12458 0.18 -53% -53% 0.733 $ 311.45

Mali 1798 0.01 -93% -93% 0.75 $ 549.30

Malta 74246 0.02 181% 0 0.664 $

Mauritania 3966 0.01 -85% -85% 0.686 $ 500.93

Mauritius 60398 0.05 129% 0 0.661 $

Mexico 23488 1.46 -11% -11% 0.749 $ 65.33

Moldova 7790 0.02 -71% -71% 0.691 $ 415.60

Morocco 12440 0.23 -53% -53% 0.69 $ 311.85

Mozambique 2820 0.03 -89% -89% 0.689 $ 526.50

Namibia 8843 0.01 -67% -67% 0.847 $ 392.11

Netherlands 121165 1.2 359% 0 0.65 $

New Zealand 55823 0.13 111% 0 0.651 $

Nicaragua 5161 0.02 -80% -80% 0.755 $ 474.26

Niger 1755 0.01 -93% -93% 0.729 $ 550.26

Nigeria 905 0.07 -97% -97% 0.736 $ 569.23

Norway 79292 0.22 200% 0 0.633 $

Pakistan 5987 0.53 -77% -77% 0.698 $ 455.83

Panama 15003 0.03 -43% -43% 0.766 $ 254.66

Papua N. Guinea 3629 0.01 -86% -86% 0.738 $ 508.45

Paraguay 10879 0.04 -59% -59% 0.766 $ 346.68

Peru 11577 0.19 -56% -56% 0.738 $ 331.10

Philippines 12453 0.59 -53% -53% 0.717 $ 311.56

Poland 24654 0.59 -7% -7% 0.657 $ 39.32

Portugal 53811 0.34 104% 0 0.667 $

Puerto Rico 77876 0.19 195% 0 0.753 $

Republic of

China (Taiwan) 100009 1.38 279% 0 0.655 $

Romania 14806 0.2 -44% -44% 0.651 $ 259.05

Russia 16579 1.51 -37% -37% 0.699 $ 219.49

Rwanda 2955 0.02 -89% -89% 0.714 $ 523.49

Sao Tome and

Principe 3235 0 -88% -88% 0.711 $ 517.24

Saudi Arabia 22025 0.29 -17% -17% 0.737 $ 97.98

Senegal 4309 0.03 -84% -84% 0.697 $ 493.28

Seychelles 26486 0 0% 0 0.76 $

Sierra Leone 2043 0.01 -92% -92% 0.687 $ 543.84

Singapore 113632 0.28 330% 0 0.689 $

Slovakia 24049 0.08 -9% -9% 0.629 $ 52.82

Slovenia 37019 0.05 40% 0 0.626 $

South Africa 16266 0.46 -38% -38% 0.763 $ 226.48

South Korea 45278 1.32 71% 0 0.579 $

Spain 93086 2.36 252% 0 0.57 $

Sri Lanka 10337 0.13 -61% -61% 0.665 $ 358.77 1ft Kitts and

levis 22339 0 -15% -15% 0.763 $ 90.97

St Lucia 18013 0 -32% -32% 0:763 $ 187.50

St Vincent- Grenadines 13287 0 -50% -50% 0.741 $ 292.95

Swaziland 12773 0.01 -52% -52% 0.78 $ 304.42

Sweden 78148 0.43 196% 0 0.742 S

Switzerland 137549 0.61 421% 0 0.803 $

Syria 8917 0.09 -66% -66% 0.704 $ 390.46

Tajikistan 2940 0.01 -89% -89% 0.664 $ 523.82

Tanzania 1216 0.03 -95% -95% 0.676 $ 562.29

Thailand 13920 0.53 -47% -47% 0.71 $ 278.82

Togo 2217 0.01 -92% -92% 0.711 $ 539.95

Trinidad and

Tobago 51101 0.04 93% 0 0.689 $

Tunisia 20534 0.12 -22% -22% 0.693 $ 131.25

Turkey 22379 0.95 -15% -15% 0.718 $ 90.08

Uganda 2889 0.04 -89% -89% 0.723 $ 524.96

UK 128959 4.71 388% 0 0.697 $

Ukraine 9547 0.29 -64% -64% 0.667 $ 376.40

Uruguay 20926 0.04 -21% -21% 0.708 $ 122.50

USA 143727 25.4 444% 0 0.801 $

Venezuela 14711 0.22 -44% -44% 0.712 $ 261.17

Vietnam 5621 0.28 -79% -79% 0.682 $ 464.00

Yemen 1426 0.02 -95% -95% 0.613 $ 557.60

Zambia 2010 0.01 -92% -92% 0.766 $ 544.57

Zimbabwe 6104 0.05 -77% -77% 0.845 $ 453.22

1898% -6791%

The invention hereby disclosed is a new process with an underlying redistribution model, which is novel, new and has industrial application.

Claims

1. A method for global profit distribution amongst contributors in a business enterprise on the basis of per-capita GDP of each country comprises the step of :- a. calculate enterprise product available for distribution, which is = gross enterprise product x (l-G), wherein G is the arbitrary value determined by the enterprise (driven by market dynamics)

b. calculate surplus (GS) amount for global distribution after the country's internal distribution which is = sum of (country distribution GEPd)- (per capita GDP x No. of Active Contributors), wherein GS is the amount over and above what is retained for wealth distribution within the country of business domicile

c. calculate country's share in the global surplus (CSGS) which is = Global Surplus x (Country's inequality index / sum of participating and Eligible Country's inequality index), wherein CSGS is the Country's own share for distribution within the country as a determinant of its wealth inequity in comparison to all other countries d. calculate Country's Distribution which is = Enterprise product available for distribution + CSGS, and

e. calculate Distribution within a country, based on per capita income and active contributor's income which is

gPCGDP wherein CTWD = Country's True Wealth Distribution arrived at via above formula ETWD = Enterprise True Wealth Distribution, the value retained within

the Enterprise for distribution to its shareholders

PCGDP = Per Capita Gross Domestic Product