(Key: Rob’s comments in italics, Derek’s comments in normal font)
We're here today to talk about big numbers—millions, billions, and trillions. I was thinking just before the call, when someone mentions a billion to me, my brain goes, "Oh, that's like a few million." But comparing a million and a billion is like comparing a puddle to an Olympic-sized swimming pool...
Visualizing Big Numbers
That’s about it. To visualize it, a million pounds in 50-pound notes fits in a large briefcase. A billion pounds in 50-pound notes would fill a 30-foot shipping container. And to move on to a trillion, you’d need a freight train of boxcars six kilometres long.
That's like one of those trains they have in Africa that you see going across the horizon, and you can't see from one end to the other.
Exactly. To understand these numbers better, think of a person earning £25,000 a year over a 40-year career, totaling £1 million. A billion is the lifetime earnings of a thousand such people or one person for a thousand lifetimes. A trillion is the earnings of a million lifetimes of such workers.
Wealth Comparison
For instance, Bill Gates' net worth was last estimated at $114 billion. Historically, the Rothschild family's net worth, considered enormous for centuries, is about $1 billion. This shows how modern internet billionaires have amassed wealth that dwarfs historic fortunes.
Earning Power Comparisons
A typical worker earning £25,000 a year takes a lifetime to earn £1 million. A Fortune 500 CEO might take about five weeks, a top football player about nine days, and the world’s top financiers earn that in about six hours.
I'm beginning to think that I'm in the wrong career.
Military and Other Costs
A million pounds can arm three Reaper drones with bombs and missiles. One and a half million dollars is the cost of a cruise missile. Twenty million dollars upgrades one nuclear warhead, and the U.S. plans to upgrade 3,000 of them. An intercontinental ballistic missile costs $85 million.
Spending Comparisons
A million people could be saved annually with access to clean water and sanitation, which would cost about $10 billion, roughly what Europeans spend on ice cream annually. The cost of weapons sent to Ukraine is around $30 billion.
Trillions in Context
The net assets of the 10 richest individuals total $1.7 trillion. The U.S. spent $8 trillion on military expenditure during the Cold War and $5.5 trillion on nuclear weapons between 1940 and 1996. The U.S. GDP is $18.6 trillion, while federal debt is $33 trillion. Total U.S. debt, including state, municipal, and private, exceeds $93 trillion. The three biggest fund managers (Blackrock, Vanguard, and State Street) control $22 trillion in assets. The total value of goods and services traded globally in 2014 was $76 trillion, and financial derivatives held by banks and institutions amount to $5.4 quadrillion.
It's almost like an accounting profit rather than a real profit.
Importance of Understanding Big Numbers
At an individual level, why is it important? It's interesting, but why should people understand these numbers?
It's crucial because it provides context. Without it, announcements about billions or trillions in spending or debt are meaningless. Understanding these numbers shows how feasible it is to solve global issues like poverty with relatively small amounts compared to military or other expenditures.
This is what people want—a good quality of life, stable monetary systems, reliable agriculture, and to be left alone to live good lives.
Conclusion
Let's see whether things will improve or continue to worsen. I'm hopeful we can reach a tipping point for a better world.
I oscillate on that. It depends on the time of day. We'll leave this one here.
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Big Numbers!