What is Wealth? In the simplest terms, wealth is defined as having sufficient resources to support one’s needs. This can certainly apply to an individual’s lifestyle, but more importantly, it applies to one’s overall wealth as well. The idea of wealth can also be applied to the accumulation of wealth.
Wealthy as a concept has been around almost as long as there have been civilizations. We often think of wealthy as individuals with money, but in actuality, the concept of wealth can also be taken a step further by referring to individuals who have sufficient wealth to support their lifestyle. In modern economics this is often referred to as net worth. We can measure wealth in monetary terms through net worth, or the value of your belongings minus your current debts. This includes both the monetary value of your belongings and the value of your future income streams.
Wealth and its significance to our societies grew considerably during the Industrial Revolution and the onset of the Great Depression. This is due to the development of new industrial processes and new productive technologies that drastically improved productivity. However, the advent of these technologies also created huge gaps in the availability of labor as well as infrastructural capital. Between the creation of these new industries and the widespread use of railroad systems and other modes of mass production, the standard of living and wealth began to increase for many people in both urban and rural areas, but as these trends began to change and were mitigated, the need for individual wealth protection began to become critical.
The first item that came to be seen as a means of wealth protection were the informal, social wealth networks that developed as the result of localized markets and agricultural pursuits. These practices were defined by both necessity and desire. For example, fire order were often traded for food and other goods, and trade unions were places where individuals could meet to make decisions about what to do collectively regarding business and investments. By sharing the risks and rewards of these transactions, these practices were designed to create social wealth sharing in the form of cash flows and social connections.
Wealth and abundance then moved into the realms of formal government action and policies that were designed to create and maintain particular forms of wealth. The most common, and perhaps the most important item to the modern era, were the tax codes and laws regarding wealth accumulation and distribution. In these societies, it became critical to determine who would be considered wealthy and who would be considered not so rich. Often this determined the rules of marriage and family relationships, and even taxation itself. Wealth was seen not only as a product of hard work, but as something that could be accrued through the natural process of accumulation through work and the accumulation of natural capital or “birth right.”
Wealth and abundance then remained a feature of societies that valued and respected wealth. Wealth was seen as a natural process that could be accelerated by accumulation through force of will or the creation of wealth through technological innovations. The perception of wealth changed over time and was replaced with a view of wealth as something that could be accrued through achievement. No longer were natural resources and accumulated wealth viewed as barriers to economic progress and social status. Instead, it was the accumulation of these assets that was the measure of success and social status within any society.