On Wealth

I have wondered if I would (or even should) write anything about the “Occupy” movement. There are plenty of things I could say, but I feel like there are nuances that would lead to confusion if I did not explain myself well. This leads me to try to mentally unpack things, explain the fundamentals, and hopefully build on them to broader ideas. I honestly have not had the energy recently to go through this process, so for the time being I do not think I will will say much about “Occupy” itself.

The topic reminds me of some fundamentals about wealth that I am prepared to talk about, though. Wealth is often equated with money, but they are not the same thing. If you were stranded on an island (with a group of hot people and a mysterious smoke monster) and had one million dollars, you would not be wealthy. You would have a lot of pretty, printed paper that you would not be able to exchange for something of actual value to you — food or shelter, in this example.

Mary Ruwart explains in her book, Healing Our World, that money is a store of value and a measure of how much of the available wealth a person has access to. She further explains that wealth is created when we discover new ways of using existing resources. Human ingenuity allows us to create new things from existing resources that improve our well-being and make tasks more efficient. That is wealth.

While the money supply is finite¹, the possibility to create wealth is practically limitless. We can witness this by looking at computing technology over the last 30 years. Ingenuity and mass replication have given us more and more computing power at cheaper and cheaper costs. This is expanding the supply of wealth in the world.

I think the most important thing to realize is that wealth is not a zero-sum. There is not a fixed amount of wealth in the world that everyone is competing for.

See also: Wealth Creation and the Zero-Sum Fallacy by Warren Meyer.

1 Let's keep this simple for now and not talk about the inflationary policies of central banks. ↩