What is "wealth"?

This comment by Faust got me to thinking:

What is wealth?

I don’t have a strong opinion on this - I’m not starting this thread to argue a particular viewpoint. I just think it deserves its own thread.

The word is used many different ways. For most uses in economics, it’s assets minus liabilities. In other words, it’s everything you own in excess of what you need to survive, or that you owe.

When you add future revenue streams, or future assets, thing get a little more tricky, as it’s difficult to predict both those future assets and future needs.

Control of assets?

Well if I need less, am I more wealthy? Faust, you seem to be defining wealth in a way that isn’t independent of capitalism - does the wealth you are talking about make sense independent of capitalism? I’m trying to be a bit philosophical about it, without going too far and saying “I’m happy and need nothing so I’m the wealthiest person in the world” or something like that. Are there other ways to define wealth within a political context?

To your first question - yes, all other things being equal. For instance, someone who makes 100k per year, but who’s debt is 150k and who has no assets (other than income) is less wealthy than someone who makes 50k with no debt and 50k in the bank. That’s a very simple model, of course. And it doesn’t guarantee a higher standard of living for the latter person than for the former.

The difference between (simple model, again) capitalism and, say, communism is not that one system produces wealth and the other does not, but in who (or what) owns the wealth.

Wealth is having desirable choices.

Poverty is having no choices or undesirable ones.

I think it’s another bogus concept/perspective to get people obsessed with money.
(Wealth in the sense Faust explained.)
Yet another tool for illusion controlled mass dreaming.

How so, Nah?

“Wealth is having desirable choices.

“Poverty is having no choices or undesirable ones.”

Surely having choice is the result of wealth, or rather lacking wealth limits your choices? I’m not sure what the actual answer is though, the idea of assets minus liabilities makes sense but implies that all wealth is bound up with ownership. To use climate change as an example, it’s clear that a healthy planet is beneficial to everyone, but ownership of this asset is difficult to determine and thus its hard to factor into a purely economic explanation.

It’s possible to try to, though. It would be a nasty formula, though.

If the planet warmed up, some countries would be able to grow more wheat, and some less (other factors being equal).

Heating costs would rise in some place, as would air conditioning costs elsewhere.

People freeze to death - a monetary value could be placed on a life - insurance companies do it all the time.

It would make a dandy doctoral thesis, though.

It can be whatever you want it to be.

You can treat it as an accounting exercise but valuations are always and everywhere subjective.

A bum on the street may feel wealthy because he does not have many responsibilities.
A king may feel poor because he does not have the freedom to walk down the street and watch a movie.

Emotionalism aside, the price of a loaf of bread is still the price of a loaf of bread.

This is not to say that we cannot use the word metaphorically.

Is it not, though? Is there a corner of human existence where ownership doesn’t reign?

No because the price of something changes with time.
The unit of measurement (for instance, a dollar) does not maintain its value over time and in every place. Furthermore, how somebody values that dollar is different from one person to the next.

Actually, I think it should ONLY be used metaphorically. Using the concept of “wealth” empirically is obfuscation.

Prices change, yes. And purchasing power is the measure of wealth. But that doesn’t mean that wealth cannot be measured against a fixed standard. The standard can be fixed while the values therein can change. To win a baseball game, you have to score more runs than your opponent - the actual number of runs does vary.

And sure - one person may value wealth itself more than another, but that is not the measure of wealth itself, but of the desire for it.

I’m not sure what that means. “Empirically”?

I think it’s bogus because it’s not well defined.
Let’s say if you define it as “Assets - Liabilities”, you need to have valid way of evaluating Assets and liabilities.
Now, we know too well that that even monetary value of assets like stock, real estate, etc would/can fluctuate and sometime wildly.
Also, if you try to equate an asset in a country vs another one in different country, things become more complex.
Do we have a proper formula to evaluate ALL sorts of assets and liabilities?
I don’t think so.
An economist may have one perspective, while IRS may have another, and so on.

You can make the formula very complex, but I don’t think we will have THE formula to properly adjust/evaluate everything.
In short, we can’t really calculate “wealth”. So it’s bogus.

Now, money based economy needs people who think money wise.
And certain market economy (stock market, bonds, etc) needs people who think a lot about money.
Unless people are interested and trained to think in terms of “wealth”, “return”, etc, markets wouldn’t attract lots of money and it wouldn’t grow.
Without growth, it’s less exciting and attract less people, too.
I think it’s a common practice to launch terms/concepts with fancy image and greed provoking campaigns.
Although I don;t think such basic term as “wealth” was promoted alone, it was an element in larger and sustained promotions.

Just like religions and ideologies, I see market economy and/or “wealth” oriented marketing to be selling optimistic illusion for sucking money and other things.

And I even think that “existence” is maybe similar in this regard.
It’s based on the illusion of “positive”, and possibly sucking some sort of energy (out of ever dwindling spiral movements of particles to stars) or something we don’t know.
But this might be a bit too far fetched for this thread. :smiley:

Not if the things you include in your determination of wealth are not up for sale.

The things themselves are not a part of wealth, the ability to acquire them is.

You can’t buy a moonbeam. That doesn’t affect wealth - it’s merely a measure of excess purchasing power.

Look - this isn’t a philosophical position - it’s vocabulary.

Could we agree that wealth is different than a physical trait? For example, being muscular, or good looking, or smart is not wealth?

I hope so.

As long as we can avoid, y’know, endowments.