What is Wealth

Release Date
June 8, 2017

Topic

Basic Economics Economics
Description

We live in the richest society in history, but most people never ask what “wealth” even means. For more about wealth and why it’s on the rise, click here.

    1. What Caused The Economic Boom of Wealth? (video): Deirdre McCloskey explains how innovation and the rise of economic liberty caused the economic boom in wealth. 
    2. World Poverty: Can We End Poverty Overnight? (video): Matt Zwolinski explains why we should focus on wealth creation to alleviate poverty instead of redistribution 
    3. Adam Smith: The Invisible Hand (video): James Otteson explains Adam Smith’s theories about why some countries are wealthy and others are not 

Dan Russell: What is wealth? I want to begin with something I once heard one of my favorite economists say. His name is Russ Roberts, and he said, “How strange it is that we live in the richest society in human history and we don’t teach our children how we got to be the richest society in human history.” He’s right on both counts. We are unbelievably wealthy, and it’s bizarre that we give so little thought to what it takes to create that wealth. That’s what this book is about, and as such, it’s one small effort to break that silence about the nature of creating wealth, but what counts as wealth? And what difference does wealth make in our lives?
The best way to understand wealth is to think about choices. Every choice you make comes down to this one question. What use will you make of the time you have to live? The time in your life is all you have, and one way or another, you will give the time in your life to something. Treat your time like the awesome opportunity it really is and the awesome responsibility it really is. Well, now we’re talking about the meaning of life, and so it might seem that we’ve drifted pretty far from the philosophy and economics of creating wealth, but we haven’t. Actually, we’re right at the heart of it.
Here’s why. To ask, “What is the meaning of life?” is to ask, “How can I make good use of the time that I have?” But of course, you first have to get the chance to ask that question and the chance to take action once you answer that question. In other words, you need to ask, “How can I get to choose how I use my time?” Wealth creation is all about the meaning of life because wealth gives you the chance to make your own use of your time on this Earth. It’s important to see that creating wealth is about the second question and not the first one. Wealth is not the meaning of life. Wealth is about having opportunities to give your life meaning.
Political economy is about creating wealth, so it’s about the second question, but that’s not because the first question is less important. Actually it’s the most important question there is, but precisely because the first question is so important, we have to ask how anyone has ever come to have the awesome privilege of even getting to ask that first question at all. That is what creating wealth is for. To live well is to make good use of your time. To have wealth is to have your own time to make use of. More precisely, wealth is on the one hand, having enough time. I don’t necessarily mean living as long as possible, but having enough time to live a complete life, to accomplish your goals, such as seeing your children grow up or completing a career or growing old with your partner.
We give life meaning by finding things to live for and then living for them. That’s why our lives unfold and why it can sometimes be true to say that a life has been “cut short.” People have wealth when they don’t have to die before they’ve finished living. On the other hand, wealth is also having better things to do with your time. No one can totally escape the have-to’s of life. There are certain thing everyone has to do just in order to make it to another day. But having something better than have-to’s means replacing scarcity with abundance. That’s how we get to turn to the things that give another day its meaning, such as spending time with your family or traveling or creating something beautiful.
People are wealthier when more of their time can be devoted to the things that they are living for. Of course, it follows from all of this that people can be wealthy without living well because people can make poor choices of things to live for. Wealth does not make use of itself, so it’s not a guarantee that one will lead a good life, but it does offer a real chance to try. Justice is about creating that chance for everyone to have wealth and live a good life, so how do we create wealth and how does wealth spread? That’s what the philosophy and economics of wealth creation are for figuring out.