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What is Wealth?

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From the Archives : Originally published June 30th, 2002
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"Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek." (Ayn Rand, Atlas Shrugged)


Wealth is simply an accumulation of products and services that are both available and wanted for consumption. The only way to create wealth is to produce more than is consumed, which is made possible through technology.


Technology is an applied science, and science means knowledge. People increase their productivity by acquiring new knowledge and applying it.


In many ways, our lives are so abundant that this fact is easy to forget. We take for granted the efficiencies introduced in the market through innovations such as specialization, the division of labor, and mechanization. These were all discoveries, ideas in the creative minds of individual people that were transformed into reality.


In a market economy, everyone gains from the creator's discovery. The efficiencies gained through technological innovation cascade through the market so that each person can produce more in less time. As each person produces more, he or she can consume more, according to the law of supply and demand.


No matter how sophisticated the products and services become, no matter how many people get involved in the process, the principles that Crusoe employed on his island remain immutable. To live, one must evaluate what is required or desired to enhance life, and produce in order to acquire it. The price one pays is what one must give up in order to acquire the desired item.


To accumulate wealth, one must save so that time and intermediate products can be invested in acquiring other goods. To diversify one's labour requires innovation, which increases the time efficiency of one's industry.


Resources:


  • Methods of a Wall Street Master by Victor Sperandeo.
  • Mises.org a website devoted to the Austrian School of Economics, a school of economic thought founded by Carl Menger (Feb 28, 1840 - Feb 26, 1921) with his work Principles of Economics published in 1871.




Mike Hewitt

Editor

DollarDaze.org


 



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Mike Hewitt is the editor of www.DollarDaze.org, a website pertaining to commentary on the instability of the global fiat monetary system and investment strategies on mining companies.
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Those who lack wealth will state, "Time is money."

Learn that lesson well as a child and you will never gain wealth. You will become just another obsessive-compulsive driven to make Forbe's list.

Wealth is just an accumulation of unallocated time. Wealth has no value until it is well-spent.
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The key word in Mr. Hewitt's discourse on the meaning of wealth is 'more'. However, wealth is not necessarily surplus. One would like to believe that wealth, intrinsically, is something, anything really, as in wisdom, thrift, intuition, application, interpretation, a something which will not only enhance and produce efficiency, but will provide a sensible framework within which capitalism's survivability will be assured. Unfortunately, that's not happening these days. One simply doesn't run off and begin manufacturing with the goal of achieving surplus. We currently have warehouses full to the gills with good intentions. The wealth that has been missing lately from capitalist production processes is not only capital, but good sense, good planning and satisfaction. There appears to be a anarchistic element running amok in the markets these days which has eschewed the fundamental virtues of thrift, hard work, a useful product, survivability and respect for the future with a 'winner take all' mentality which revels in accomplishments such as destroying competition and getting something for nothing (Sadly enough, Welfare isn't simply confined to those living in poverty). Wealth is not necessarily something you can hold in your hand, but it is something you can use and too much of its current use is destroying the system which produced it the first place.
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Those who lack wealth will state, "Time is money." Learn that lesson well as a child and you will never gain wealth. You will become just another obsessive-compulsive driven to make Forbe's list. Wealth is just an accumulation of unallocated time. Wea  Read more
overtheedge - 3/31/2013 at 5:17 PM GMT
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