Wealth is the abundance of valuable resources or material possessions or the control of such assets. The word wealth is derived from the old English wela, which is from an Indo-European word stem.[1] An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy.
The concept of wealth is of significance in all areas of economics, especially development economics, yet the meaning of wealth is context-dependent and there is no universally agreed upon definition. Various definitions and concepts of wealth have been asserted by various individuals and in different contexts.[2] Defining wealth can be a normative process with various ethical implications, since often wealth maximization is seen as a goal or is thought to be a normative principle of its own.[3]
Although precise data is not available, the total household wealth in the world has been estimated at $125 trillion in year 2000. 90% of this wealth is held by people in North America, Europe, and high-income Asian countries, and 1% of adults are estimated to hold 40% of world wealth, a number which falls to 32% when adjusted for purchasing power parity.[4]
Contents |
For definitions of "wealth," see also Adam Smith, The Wealth of Nations and Max Weber, The Protestant Ethic and the Spirit of Capitalism.
Adam Smith, in his seminal work The Wealth of Nations, described wealth as "the annual produce of the land and labour of the society". This "produce" is, at its simplest, that which satisfies human needs and wants of utility. In popular usage, wealth can be described as an abundance of items of economic value, or the state of controlling or possessing such items, usually in the form of money, real estate and personal property. An individual who is considered wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group. In economics, net wealth refers to the value of assets owned minus the value of liabilities owed at a point in time.[citation needed] Wealth can be categorized into three principal categories: personal property, including homes or automobiles; monetary savings, such as the accumulation of past income; and the capital wealth of income producing assets, including real estate, stocks, and bonds.[citation needed] All these delineations make wealth an especially important part of social stratification. Wealth provides a type of safety net of protection against an unforeseen decline in one’s living standard in the event of job loss or other emergency and can be transformed into home ownership, business ownership, or even a college education.[5]
'Wealth' refers to some accumulation of resources, whether abundant or not. 'Richness' refers to an abundance of such resources. A wealthy (or rich) individual, community, or nation thus has more resources than a poor one. Richness can also refer to at least basic needs being met with abundance widely shared. The opposite of wealth is destitution. The opposite of richness is poverty.
The term implies a social contract on establishing and maintaining ownership in relation to such items which can be invoked with little or no effort and expense on the part of the owner (see means of protection). The concept of wealth is relative and not only varies between societies, but varies between different sections or regions in the same society. A personal net worth of US $10,000 in most parts of the United States would certainly not place a person among the wealthiest citizens of that locale. However, such an amount would constitute an extraordinary amount of wealth in impoverished developing countries.
Concepts of wealth also vary across time. Modern labor-saving inventions and the development of the sciences have enabled the poorest sectors of today's society to enjoy a standard of living equivalent if not superior to the wealthy of the not-too-distant past. This comparative wealth across time is also applicable to the future; given this trend of human advancement, it is likely that the standard of living that the wealthiest enjoy today will be considered impoverished by future generations.
Some of the wealthiest countries in the world are the United States, the United Kingdom, the Republic of Ireland, Norway, Japan, Saudi Arabia, Kuwait, United Arab Emirates, South Korea, Austria, Germany, the Netherlands, Belgium, France, Israel, Taiwan, Australia, Singapore, Canada, Finland, Greece, Spain, Portugal, Sweden, Italy, Denmark, New Zealand, Iceland, Monaco, Luxembourg, Liechenstein and Switzerland, the larger of which are in the G8. All of the above countries, except Saudi Arabia, United Arab Emirates and Kuwait, are considered developed countries.
Industrialization emphasized the role of technology. Many jobs were automated. Machines replaced some workers while other workers became more specialized. Labour specialization became critical to economic success. However, physical capital, as it came to be known, consisting of both the natural capital (raw materials from nature) and the infrastructural capital (facilitating technology), became the focus of the analysis of wealth.
Adam Smith saw wealth creation as the combination of materials, labour, land, and technology in such a way as to capture a profit (excess above the cost of production).[6] The theories of David Ricardo, John Locke, John Stuart Mill, in the 18th century and 19th century built on these views of wealth that we now call classical economics.
Marxian economics (see labor theory of value) distinguishes in the Grundrisse between material wealth and human wealth, defining human wealth as "wealth in human relations"; land and labour were the source of all material wealth.
Some of the wealthiest people in the world are Bill Gates, Warren Buffett, Lawrence Ellison.
“Wealth provides an important mechanism in the intergenerational transmission of inequality.”[7] Approximately one half of the wealthiest people in America inherited family fortunes. But the effect of inherited wealth can also be seen on a more modest level. For example, a couple that buys a house with the financial help from their parents or a student that has his or her college education paid for; in both scenarios the participants are benefiting directly from the accumulated wealth of previous generations. [7]
As a result of different economic conditions of life, members of different social classes have different value systems and view the world in different ways. As such, there exist different “conceptions of social reality, different aspirations and hopes and fears, different conceptions of the desirable.” [8] The way the various social classes in society view wealth vary and these diverse characteristics are a fundamental dividing line among the classes. Currently, the concentration of wealth in America is inequitably distributed. [9] In 1996 the Fed survey reported that the net worth of the top 1 percent was approximately equal to that of the bottom 90 percent. [7]
Upper class values include higher education, the accumulation and maintenance of wealth, the maintenance of social networks and the power that accompanies such networks. Children of the upper class are typically schooled on how to manage this power and channel this privilege in different forms. It is in large part by accessing various edifices of information, associates, procedures and auspices that the upper class are able to maintain their wealth and pass it to future generations. [10]
The middle class places a greater emphasis on income. The middle class views wealth as something for emergencies and it is seen as more of a cushion. This class comprises people that were raised with families that typically owned their own home, planned ahead and stressed the importance of education and achievement. They earn a significant amount of income and also have significant amounts of consumption. However there is very limited savings (deferred consumption) or investments, besides retirement pensions and homeownership. They have been socialized to accumulate wealth through structured, institutionalized arrangements. Without this set structure, asset accumulation would likely not occur. [10]
The working class places less value on education and the accumulation of wealth, has fewer options for employment and advancement, has less available income, less stable employment and less savings than the upper and middle classes. Access to structured asset accumulation programs, such as retirement pensions, are not readily available to those in this class and as a result little of their earnings are actually saved or invested. Consequently, there is a limited financial assets available in times of hardship such as a divorce or major illness. [10]
Those with the least amount of wealth are the welfare poor. Wealth accumulation for this class is to some extent prohibited. People that receive AFDC transfers cannot own more than a trivial amount of assets, in order to be eligible and remain qualified for income transfers. Most of the institutions that the welfare poor encounter discourage any accumulation of assets. [10]
Many indigenous cultures, being either nomadic or communitarian in nature, rejected the notion of the private ownership of land wealth.[citation needed] In the western tradition, the concepts of owning land and accumulating wealth in the form of land were engendered in the rise of the first states, for a primary service and power of government was, and is to this day, the awarding and adjudication of land use rights.
Land ownership was also justified according to John Locke. He claimed that because we admix our labour with the land, we thereby deserve the right to control the use of the land and benefit from the product of that land (but subject to his Lockean proviso of "at least where there is enough, and as good left in common for others.").
Additionally, in our post-agricultural society this argument has many critics (including those influenced by Georgist and geolibertarian ideas) who argue that since land, by definition, is not a product of human labor, any claim of private property in it is a form of theft; as David Lloyd George observed, "to prove a legal title to land one must trace it back to the man who stole it."
Many older ideas have resurfaced in the modern notions of ecological stewardship, bioregionalism, natural capital, and ecological economics.
Quotes about wealth.
Contents |
Reported in Josiah Hotchkiss Gilbert, Dictionary of Burning Words of Brilliant Writers (1895).
| Wealth disambiguation |
| This is a disambiguation page, which lists works which share the same title. If an article link referred you here, please consider editing it to point directly to the intended page. |
WEALTH, etymologically the condition of well-being, pros - perity in its widest sense. The word does not appear in Old English, but is a Middle English formation, welthe, on the 0. Eng. wela, well-being, from wel, well, cognate with Dan. vel, Ger. wohl. The original meaning survives in the Prayer for the King's Majesty of the English Book of Common Prayer, "Grant him in health and wealth long to live," and in "commonwealth," i.e. good of the body politic, hence applied to the body politic itself.
In economics, wealth is most commonly defined as consisting of all useful and agreeable things which possess exchange value, and this again is generally regarded as coextensive with all desirable things except those which do not involve labour or sacrifice for their acquisition in the quantity desired. On analysis it will be evident that this definition implies, directly, preliminary conceptions of utility and value, and, indirectly, of sacrifice and labour, and these terms, familiar though they may appear, are by no means simple and obvious in their meaning. Utility, for the purposes of economic reasoning, is usually held to mean the capacity to satisfy a desire or serve a purpose (J. S. Mill), and in this sense is clearly a much wider term than wealth. Sunshine and fresh air, good temper and pleasant manners, and all the infinite variety of means of gratification, material and immaterial, are covered by utility as thus defined. Wealth is thus a species of utility, and in order to separate it from other species some dif f erentia must be found. This, according to the general definition, is exchange value, but a little reflection will show that in some cases it is necessary rather to contrast value with wealth. "Value," says Ricardo, expanding a thought of Adam Smith, "essentially differs from riches, for value depends not on abundance but on the difficulty or facility of production." According to the well-known tables ascribed to Gregory King (1648-1712), a deficiency of a small amount in the annual supply of corn will raise its value far more than in pro - portion; but it would be paradoxical to argue that this rise in value indicated an increase in an important item of national wealth. Again, as the mines of a country are exhausted and its natural resources otherwise impaired, a rise in the value of the remainder may take place, and as the free gifts of nature are appropriated they become valuable for exchange; but the country can hardly be said to be so much the wealthier in con - sequence. And these difficulties are rather increased than diminished if we substitute for value the more familiar concrete term "money-price" - for the contrast between the quantity of wealth and its nominal value becomes more sharply marked. Suppose, for example, that in the total money value of the national inventory a decline were observed to be in progress, whilst at the same time, as is quite possible, an increase was noticed in the quantity of all the important items and an improvement in their quality, it would be in accordance with common sense to say that the wealth of the country was in - creasing and not decreasing.
So great are these difficulties that some economists (e.g. Ricardo) have proposed to take utility as the direct measure of wealth, and, as H. Sidgwick has pointed out, if double the quantity meant double the utility this would be an easy and natural procedure. But even to the same individual the increase in utility is by no means simply proportioned to the increase in quantity, and the utility of different commodities to different individuals, and a fortiori of different amounts, is proverbial. The very same things may to the same individual be productive of more utility simply owing to a change in his tastes or habits, and a different distribution of the very same things, which make up the wealth of a nation, might indefinitely change the quantity of utility; but it would be paradoxical to say that the wealth had increased because it was put to better uses.
We thus seem thrown back on value as the essential characteristic, allowance being made for any change in the standard of value; but there are still difficulties to be overcome. Some things that undoubtedly possess value or that can command a price are immaterial, e.g. the advice of a lawyer or physician or the song of a prima donna, and, although perhaps the skill of a workman (in any grade of the social scale) might be considered as attached to the man, as a coal mine is attached to a place, it is more in accordance with popular usage to consider skill as immaterial, whilst at the same time it seems equally natural prima facie to confine the term wealth to material things in the common sense. Again, the credit system of a country is a product of great labour and sacrifice, it is most closely connected with the production of its material wealth in the narrowest sense, and it certainly commands a pecuniary value, and yet credit is more generally held to be a representative rather than a part of wealth, owing apparently to its insubstantial character. Apart from the question of materiality some writers have insisted on relative permanence and possibility of accumulation as essential attributes of wealth, and have thus still further narrowed the scope of the definition.
There can be no doubt that it is on many grounds desirable in economics to use terms as far as possible in their popular acceptations; but this rule must always be subordinate to the primary object in view. In nearly every department of know - ledge in which popular terms have been retained it has been found necessary either constantly to use qualifying adjectives where the context is not a sufficient guide, and in some cases, when analysis discloses very different elements, to make a selection. Sometimes it has been found convenient to use a term with some variation in the definition according to the branch of the subject in hand. 1 Applying these rules to the definition of wealth, perhaps the best solution is that which is generally connected with German economists (e.g. Adolf von Held). Wealth consists of utilities, and in the first great department of economics - the consumption of wealth - it is utility with which we are principally concerned - the idea of value, for example, being overshadowed. The most general law of the consumption of wealth is that successive portions of any stock give a diminishing amount of utility when consumed. Then in the department of the production of wealth the most important characteristics are the labour and sacrifice necessary to put the utilities desired into the things and to place the things where they are wanted. The idea of value is again secondary and subordinate. We can readily see the part played by nature, .labour and capital respectively in the production of any commodity without con - sidering the effects on its value of the various factors; we can understand the principles of division of labour and of the relative productiveness of large and small industries without entering into questions of value except in the most general manner. In the department of the distribution of wealth the fundamental conception is the right of appropriation; and accordingly J. S. Mill very properly commences this part of his subject by an account of the relative advantages of the socialistic and individual systems of property. It is quite possible under the former to conceive of all the distribution being made without any exchange and with reference simply to the wants or the deserts of the members of the society. Thus it is not until we arrive at the department of the exchange of wealth that the characteristic of value becomes predominant, although of course value is closely connected with utility and labour and sacrifice.
1 On the uses and difficulties of definitions in political economy compare H. Sidgwick's Principles of Political Economy, bk. i. ch. ii., and J. N. Keynes's Scope and Method of Political Economy. Usually, however, it will be found that in most cases anything which can fairly be classed as wealth in one department is also wealth in the others, and thus the definition is reached that wealth in general consists of all "consumable utilities which require labour for their production and can be appropriated and exchanged." It only remains to add that "utilities" may be divided into "inner" and "outer" (to translate the German literally) - the "inner" being such as are simply sources of personal gratification to their possessor, e.g. a good ear for music; the "outer" utilities again may be divided into "free" and "economic," the former, as a rule, e.g. sunlight, not being the result of labour and not capable of appropriation or exchange, and the latter as a rule possessing each of these marks. It is these "economic utilities" which constitute wealth in the specific sense of the term, although its use may be extended by analogy to include almost all utilities.
See A. Marshall, Principles of Economics (1907) J. B. Clark, Philosophy of Wealth (1886) and Distribution of Wealth (1899); W. E. Hearn, Plutology (1864); F. A. Walker, Political Economy (1888); and J. S. Nicholson, Principles of Political Economy (1903). (J. S. N.)
|
<< Wealden |
Weapon >> |
Categories: WAU-WES
Wealth often means that much money is available. But there are several other aspects that can be more important. If one thinks of single persons one will look at their personal property like land and livestock. Looking at countries one thinks of GDP per capita and of natural capital.
The original meaning of the old English word for "weal", where wealth comes from, was "well-being" or welfare. (It was an adjective.)
   | An Inquiry into the Nature and Causes of the Wealth of Nations - An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith - Project Gutenberg |
| | section 1075.25 - 1000.00 OMNITOPOLOGY |
| | Work and wealth, Red. Gegenstandpunkt/free link - Work and Wealth: Contents |
| | http://www.privatebanking.com - Private Banking Directory Wealth Management Offshore Banking Investment |
| | Plutonomics: A Unified Theory of Wealth - Plutonomics: A Unified Theory of Wealth - S. E. Harrison - an Inventerprise® book - ePoet® LLC |
|
|
Top topics
Wikis
Quiz
Map
Misc
Search
