Section 1.4 – Wealth
Section 1.4 – An introduction to the ‘Wealth’ thread
One of the major promises of western civilisation is that it will make us all wealthy. Of course it also claims that it will make us happy, satisfied and fulfilled. But it seems that these days more and more people are depressed, neurotic or frustrated; as well as being broke or burdened with debt.
In a recent discussion on Facebook in response to my question “What is Wealth?”, a lot of the answers concentrated on things like health, friendship, satisfaction, fulfilment and love. It’s a fair point that no amount of possessions can compensate for lack of those things, but of course that’s not the sense in which the word wealth is normally used in everyday speech. Although, funnily enough, if we look at the derivation of the word ‘wealth’ you see that – just as width is the quality of how wide something is, and length is the quality of how long it is – wealth logically would be the quality of how well you are. In fact the Oxford English dictionary’s first definition of wealth is “the condition of being happy and prosperous: well-being”. We would normally refer to well-being as ‘health’. Actually all of these words come from the same root: whole, hale, heal, well.
So how did wealth come to take on its contemporary meaning: owning lots of stuff, or even owning lots of money? The contemporary obsessive fixation on money is one of the pathologies of our age. Money is not wealth as we’ll investigate in detail later, and we will distinguish the relationship between money and wealth. This is why I have two separate threads within this book: one for finance and one for wealth.
So as a starting point, let’s consider that wealth is stuff that can be owned: TV sets, washing machines, cars, houses, and so forth. Could it also be used to describe more abstract things: a novel, a poem, a song, a computer program, a design? Could any sort of stuff be called wealth? Obviously if I have a piece of rock, that generally wouldn’t be described as wealth! But suppose other people want that rock – perhaps they find it beautiful, or think that it has magical properties? Then it might count as wealth? So let us say that we could define wealth as as “stuff people want“.
And what is it to be wealthy? To have an abundance of wealth? Apart from the fact that we are in danger of a circular definition here, this begs the question of “How much is an abundance? Ten dishwashers are obviously not going to make me more content than one dishwasher!
And how is wealth to be acquired? In the final analysis there are only two ways to acquire wealth: earn it or steal it. The second method can take many forms, from crude and blatant to subtle and sophisticated. (Just to be clear I don’t recommend any form of that second route! We will go into more detail on that point in the “meaning of it all” theme later in the book). How do you earn? By creating something that someone wants, and then trading what you’ve created for something that you want. How do you create? By working. And working takes energy. We will follow up that these ideas more fully in the “work, energy, wealth and power” thread of this book.
Does any work count? No, because much of what goes by the name work in today’s world is unproductive or pointless, or even actually destructive. What do I mean by unproductive or pointless? – that there is no more wealth at the end of the work than there was to start with. And destructive work is where there is less wealth at the end. Vandalism, demolition, weapon building, warfare. Consider that accepting payment for unproductive work is a form of theft.
I’m proposing a provisional definition of “being wealthy” as “possessing assets which generate an income adequate for your purposes without requiring activity on your part”. Of course this begs the question of how much is adequate, but we will deal with that in due course. In fact almost everybody aspires to becoming wealthy according to this definition in the course of their life. They look forward to receiving a pension at some time. And yet as we’ve already seen in Section 1.2 – The Great Pension Robbery, they may be disappointed in the outcome. Later on, we will look at some case studies of dramatically successful episodes of wealth creation such as Steve Jobs going from zero to $265 million in four and a half years.
So, if we are happy with the definition of wealth as “stuff people want”, the question arises: “What stuff do people want? – and why do they want it?” The best answer to those questions that I have found is indicated by Abraham Maslow’s ‘hierarchy of human needs’. An understanding of the layers in this hierarchy will support you in answering the question “how much is enough?” It will also provide you with a useful context when you contemplate the question of how you can best create wealth with work that you are happy to do.
According to Maslow’s theories, the needs in each layer need to be addressed before higher ones can be attended to. The physiological needs – for air, water, food, shelter and warmth must be met as a matter of urgency, since their absence threatens survival itself. Next in importance is the need for safety. In the society we live in, the essential lower-level needs are usually met through monetary transactions. But financial considerations need not be a requirement for finding love, companionship, esteem or Self-actualisation. On the other hand, many people may attempt to compensate for inadequacies in these areas by the pursuit of ever greater amounts of wealth and power; a strategy that often becomes self-defeating.
This is Section 1.4 of my forthcoming book The World in 2100: What might be Possible for Humanity? When we return to the ‘Wealth’ thread, the next topic will be The Difference Between an Enterprise and a Ponzi Scheme.
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