Money is like ninjas.

[Tailsteak]

...the less of it there is, the more significant each dollar is.

It's quite common in fiction - especially in movies - for the Moral of the Story to be "don't care so much about money, family/friends/love is what's important". That's a great lesson for upper-middle class types, where the worry is "Golly, I hope I get a raise at work so I can afford that boat". It's not such a good lesson for lower-class types, where the worry is "Golly, I hope I get a lot of tips at my second full-time job so I can afford medicine for my autistic four-year-old". If you're already rich, "money" and "stuff" aren't as important as "family". If you aren't, then "money" and "stuff" are "family", because you're using that money to buy stuff like food that keeps your family alive.

Imagine you have one hundred dollars - that's it, just $100, and you don't know when or where or if or how you're going to get more. In that case, if I steal $10 from you, that's a shivvable offense. After all, if you stretch it right, $10 can be enough to feed you for a whole day, which is a day you can spend at the library using the computers to search for work. Conversely, if you have a hundred million dollars - again, without any means of making more - and I take ten million from you, you barely feel it. Heck, I could take fifty million from you, half of all of your money, and while you might be upset, it wouldn't actually affect your life all that much.

So what's the equation, would you say? What does the graph look like, where the X-axis is "how much money do you have" and Y-axis is "what is the value of a dollar to you"? And, given that graph, can the argument be made that wealth redistribution allows us, as a group, to attain the greatest amount of value from a given total amount of money?

[snowyowl]

The simplified model I usually use is that money is logarithmic. You'll be equally hurt by losing 10% of your total wealth, no matter how much that is in dollars. It's close enough at low levels.

At the high end of the spectrum, I imagine there's a cutoff point where you have all the money you need for high quality of life, and any surplus doesn't make you much happier. Probably at the top end of the middle class, around the $100K per year salary mark.

[Deepbluediver]

And, given that graph, can the argument be made that wealth redistribution allows us, as a group, to attain the greatest amount of value from a given total amount of money?

I guess if you think that you can quantify total human happiness that way, maybe it would work for a little while.

My bigger concern is that, AFAIK, large-scale economic redistribution has never worked, anywhere, for more than a single (short) generation. I could point to Greece as an example of what happens when the gravy train runs out, but you don't even have to go that far abroad. Right here in American, the federal government is overspending by hundreds of billions of dollars every year. Even the most ambitious plan for raising taxes doesn't come close to covering the debt, because raising taxes that high would CRUSH the economy. Some people's first reaction is "the rich need to pay more" except that at this point even near-100% wealth confiscation from the top 5 or 10 % wouldn't be enough.
I live in NYC, and there is a very skewed tax-base; far more people are in top income bracket due to the financial sector. The city has some of the highest taxes in the nation, and yet it's still barely managing to pay it's bills most of the time (I think it actually went bankrupt back in the 70's).

If you want this to be purely theoretical, then yes, you could make the argument that giving a small amount of money to lots of people is good because the increase in joy outweighs the loss the person you are taking a lot of money from feels. But realistically, that sort of thing is not sustainable.
Amd if you want to be really fair about it, most people in America and Europe would not be in the "receiving line". There's 2-3 billion people in African, India, and China who are ahead of them.

[RyukaTana]

One does not need to be upper-middle class before the amount of money they have is such that they need not concern themselves with it to be happy. There are plenty of people who are quite happy living far below that. I agree that people shouldn't have to live like that, but some people specifically choose to live with as little money as possible and are very happy. Money doesn't make people happy, and plenty of people, given money, will find a way to make themselves miserable, and continue to blame it on other people/circumstances.

That said, I don't think anyone should be forced to live a life of poverty, if they wish to be comfortable, so long as they provide reasonable positive contribution to society as a whole. I also don't think anyone is so valuable that they deserve to live thousands of times more affluently than the average person.

Beyond that, I have no solution, because it will not be through individual effort that the issue is resolved, and most people are complacent.

[Packbat]

Beyond that, I have no solution, because it will not be through individual effort that the issue is resolved, and most people are complacent.

Or resigned, which is an equally useless motive for political action.

[historymaking101]

Tailsteak, diminishing marginal utility of wealth/income is one of the ealiest lessons of economics. You're not saying anything revolutionary here.

[MysticWav]

If you only think people should say revolutionary things, you've already failed your own maxim.

[Nerdsamwich]

Pretty sure your graph would be a parabolic curve that approaches the x-and y-axes. I think I read of a study once that would place the apex of the curve at around $75k a year. That would be the point where more money stops pretty much automatically equaling more happiness.

[Nepene]

Rich people often tip less than poor people, poor lottery winers are very wasteful with money, poor people who win the lottery are often very wasteful with money, rich people are often stingy with wealth and gifts and such regardless.

I'm not sure that in people's heads there is a clear value of money equation that varies with wealth. There may just be an internal pragmatism equation that varies from person to person. A billionaire might haggle over ten dollars of food because that's who they are, a poor person might go to McDonalds because that's who they are.

[Deepbluediver]

Rich people often tip less than poor people, poor lottery winers are very wasteful with money, poor people who win the lottery are often very wasteful with money, rich people are often stingy with wealth and gifts and such regardless.

I'm not sure that in people's heads there is a clear value of money equation that varies with wealth. There may just be an internal pragmatism equation that varies from person to person. A billionaire might haggle over ten dollars of food because that's who they are, a poor person might go to McDonalds because that's who they are.

Where do you get all those assumptions? It's equally true in my experience that rich people can be very generous, and poor people can be thrifty.

The "curse of the lottery-winner" is a well known phenomenon, which is mostly because a large percentage of people who play the lottery have never HAD a significant amount of money and therefor have never learned how to manage their finances. You can be both wasteful and generous at the same time.