What would happen if everyone on youtube, subscribed to every other channel on youtube?

You don't get money from gaining subscribers. You gain money from getting views.

You don't get paid per subscriber, you could have 10 million subscribers and get no money. You get paid per amount of advert clicks or if viewers watch an advert for 30 seconds or more. So it is not based on subscribers at all, however there is a positive relationship between the two as more subscribers often mean more ad clicks as you have a larger audience to do so, but if everyone subscribed to each other, nothing would happen in money terms apart from maybe everyone getting a gold/silver play button.

There is one other way to get money from YouTube (it is my main income source on my channel) and that is from YouTube red accounts.

your subscriber count has nothing to do with how much you get paid. Its based on how many views you get on videos that have advertisements enabled so even if an inactive account had a billion subscribers they wouldn't get any money