Money Does Best In Whose Hands?

At a basic level, the bigger a country's GDP the better off everyone is. Also, it is axiomatic that exchange increases the wealth of both parties. So, if I can give away a dollar, who should I give it to? Empirical research has actually answered this.

If my goal is a bigger GDP then, empirically, the correct answer is: a poor person. Next best: the government. Worse: A corporation. Absolute worst choice: a rich person. This last one should only be done if the alternative is burying the dollar.

Why is this true? Because of the empirical reality of what corporations and rich people do with their money. If you give a dollar to a poor person he buys food from a corporation and is better off. The corporation spends the dollar lots of ways, some goes to a rich person. A government similarly spends every dollar, buying roads and doctor training and elderly people's rent, etc. it makes it's way to corporations and rich people as surely as if you gave it to them directly.

So why give it to them directly? You skip value creating exchanges. And, because of stock options and shareholder value and captured boards and the rest, the corporation often gets very little per dollar exchanged with the rich person.

Then the dollar dies. Many rich people just pile it up like Scrooge McDuck. Or it gets "invested" in the burgeoning finance industry where most money never builds anything, it just gets shoved up the ass of another rich person.

Very little is put back into the real economy. Instead, Wall Street is basically a million rich people sticking dollars up each other's asses. Whether in a pile or up an ass: that dollar is at the end of the road. No more exchange, no more increase in GDP.

 Update: Check this out: 

In 1598 Barthélemy de Laffemas, a French thinker, denounced those who opposed the use of expensive silks. He argued that purchasers of luxury goods created a livelihood for the poor, whereas the miser who saved his money “caused them to die in distress”.