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Where does wealth come from?

We continue along in the reading of Jaron Lanier's new book, Who Owns the Future?. I began this discussion here on the DP by rebroadcasting a question he raised: What is so interesting about you that you're worth spying on? He is not talking about the NSA, but rather private commercial enterprises.

At Loc 597 (8% into the book), he states:

Much of this book concerns wealth creation, for instance, and yet a consensus on where wealth comes from remains elusive.

I know there are many folks here who subscribe to Austrian economics. What is your opinion on this?

He continues,

I make no claim to be an economist. As a computer scientist, however, I consider how information systems evolve, and that can provide a window on economics that might be of use. Any information technology, fromthe most ancient money to the latest cloud computing, is based fundamentally on design judgements about what to remember and what to forget. Money is simply another information system. The essential questions about money, therefore, are what they always have been with information systems. What is remembered? What is forgotten?

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Health and Happiness. That

Health and Happiness. That is where true wealth comes from.

Never be afraid to ask simple questions.

everything is wealth

Money and material objects are only a couple kinds of wealth. There's other things like entertainment, environment, living situations, how much you like the work you do, your health, etc, etc. These are all things that can be traded for or worked for to improve the quality of people's lives.

With a lot of non-trade activity there is wealth created. Working on your own house, or helping a friend, or making someone feel better, or finding something you need lying around a junkyard, is an increase of wealth. Just because you can't measure it all on the same scale of money doesn't mean it isn't wealth.

It's a weird question to me. It's asking what makes people's lives better, as if it's some mysterious economic process and not the accumulation of the things we do.

In my opinion

Wealth is having something of Value be it Friends, Family, Coin, Talent or Treasure.

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

I would also like to add that

Value is relative to demand and/or personal worth. Personal worth is the sentimental value that may not have value to anyone else.

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

:D :D :D

LOL reminds me of an old cartoon from back in the 70s:

http://lygsbtd.files.wordpress.com/2013/03/freak-bros.jpg

Wealth- Having the ability to

Wealth- Having the ability to acquire the things necessary to maintain your life at a level you are satisfied with.

Wealthy- Having the ability to acquire more things than necessary to maintain your life at a level you are satisfied with.

my version:wealth is the

my version:

wealth is the utilization of resources that make our lives better.

example: giving everyone a million dollars doesn't increase wealth because it just makes the value of a dollar worth less. true wealth is created by productivity, because productivity allows us to have more things for less effort, and it also allows us to seek out other avenues of pleasure or work that we previously couldn't due to more free time being created.

Wealth=Products, therefore wealth comes from production & trade

EVERY libertarian OUGHT to know that. If you don't please google Henry Hazlitt, one of the greatest libertarian writers (and easiest to read) and start learning today.

In reply to the computer scientist who asks, "what is remembered?" and "what is forgotten?" --- the physical manifestation of those questions are --- "What is produced and traded?", and "what is not?".

Yes, please BUY this wonderful libertarian BOOK! We all must know the History of Freedom! Buy it today!

"The System of Liberty: Themes in the History of Classical Liberalism" ...by author George Smith --
Buy it Here: http://www.amazon.com/dp/05211820

Nice!

Good post!

Séamusín

Depends

I've been studying about knowledge based economics.. check out the "see also" list.. http://en.wikipedia.org/wiki/Knowledge_economy

Tracing the Defintion to ts origins

Reveals that 'wealth' is prosperity or a lack of scarcity for food and shelter. Money comes into play because today's world is dominated by Division of Labor where very few people produce most of what they consume, as opposed to hundreds of years ago. We need to be able to trade our specialized Labor for someone else's economically.

I think if more people looked at wealth as the ability to save (being able to produce more than one needs) we'd be in a better situation.

The difference between Money & Currency is also important to look at here. 'Savings' must be durable in that it must retain all or most of its value to be consider 'savings'. I don't believe the US Dollar can be considered part of one's savings anymore in that its value has for the last 100 years trended towards the negative.

One last point. If more people were 'Rainy Day Preppers' then there would be less opportunity for a Doomsday to have long lasting effects. It would be harder to control people via fear of need.

Two questions deserve two answers:

What is wealth?
The fulfillment of human desires.

Where does it come from?
Human action.

The purpose of money is to economize the conversion of one individual's desires into those of another. Because of this, the invention of money is responsible for more creation of wealth than any other technological development in human history.

As for the above post, money is absolutely a system of information and calculation. The price represents an infinite number of bits of information about the costs of production processes, materials, time, skilled labor, entrepreneurial ability, and a number of other resources that go into making a good or providing a service, based on the demand for these resources as opposed to what they could be used for otherwise. The market economy is an interdependent ecosystem where every resource has its place, role and function, and each resource lives in complete harmony with each other, and this relationship made is expressed through it's price.

Séamusín

The root, "the invention of money"

Money is truly the root of all evil. Point me to a wealthy man and I will point to you a hundred men that were deceived and exploited with injustice within the monetary chain that made this man wealthy.

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

If you are going to use the quote, at least get it right

"The love of money is the root of all evil". Greed? Corruption? Vanity? What about when I simply say the word money? Do those descriptors still come to mind or do you think of ways that money can be useful – payment for hard work, tool for doing good, a transfer of value.

The truth is that money in itself isn’t evil. The phrase “money is the root of all evil” is a misinterpretation of the scripture in 1 Timothy 6:10.

"For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs".

Where wealth comes from remains elusive

In reality, I think we all know this statement could be false, We full well know where it comes from. Man just refuses to acknowledge or admit the wrong within themselves.

“Greed, envy, sloth, pride and gluttony: these are not vices anymore. No, these are marketing tools. Lust is our way of life. Envy is just a nudge towards another sale. Even in our relationships we consume each other, each of us looking for what we can get out of the other. Our appetites are often satisfied at the expense of those around us. In a dog-eat-dog world we lose part of our humanity.”
― Jon Foreman

“There is more in you of good than you know, child of the kindly West. Some courage and some wisdom, blended in measure. If more of us valued food and cheer and song above hoarded gold, it would be a merrier world.”
― J.R.R. Tolkien, The Hobbit

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

Wealth

How do you define it?

Different people define it in different ways.

Some define it as money. But (not to beat a dead horse) there are some things money can't buy.

allegory - ˈalɪg(ə)ri/ - noun - 1. a story, poem, or picture which can be interpreted to reveal a hidden meaning, typically a moral or political one.

wealth:

something that improves one's quality/standard of living

Is the converse true?

Wealth: Something that worsens one's chance of dying

NO MORE LIES. Ron Paul 2012.

What Is Wealth, My Definition :

Wealth is the transformation of natural resources into products that others will trade or barter for.

An example:

If I find a Gold nugget { a natural resource} in a river bed, I become more wealthy than before I found it, as someone will trade or barter for it most likely.

Paper promises are only as good as whomever made the promise.

beesting

Wealth is stuff people want.

It sounds too simple but there it is.

Trash is stuff people don't want. Trash costs resources to get rid of.

Wealth is created when more stuff is created that people want than was consumed.

Entrepreneurship is the engine that motivates productive efficiency, that drives fewer resources to produce more goods, that people want.

Profit is the fuel that runs the engine.

Building a ghost city in China, or a road that no one needs, may drive up the phony baloney GDP metric, but it destroys wealth. How do you know? Simple, no one wants to live in the ghost city, and you have to pay to get them to move there. So you wasted resources making a ghost city, then you waste more getting people to, essentially, take out the trash by moving in and making some use of it.

A ghost city is trash. A public works project is trash, that you will have to pay more to get people to utilize.

If you produce something without having made a profit, (as opposed to 'rent'*) it means no one was willing to pay for it. It's therefore trash. You might be able to get someone to make some use for it, if you give them the trash for free, or you might have to pay them to use it. But it is trash. No one was willing to pay for it, and it cost resources to get rid of or 'repurpose.'

Because of profit, assuming money isn't constantly being inflated by central banks, there is continually more stuff that people want which means prices go down and people can have more stuff they want for less effort. IE in the latter part of the 19th century, without the Fed to steal workers income, prices trended down, including wages, but what those wages bought increased dramatically. Real wealth increased and purchasing power increased for everyone.

*Rent, for our purposes, is income generated by using government power to force people to buy your product, or force people to sell to you, etc. Of old Kings would steal land from peasants then give landlords the authority to exact rent from the peasants for living on their own land.

Just like Obamacare licenses only certain insurance companies to 'compete' in the 'market' and forces you to buy from them. Same scam. It's always the same scam.

Consider the definition of

Consider the definition of wealth; an abundance of valuable possessions or money.

Wealth for an individual can come from production, or from saving, or from theft, or from gifts.

For an individual to have wealth, though, requires production (by someone) in order to create or acquire (from natural surroundings) valuable things, which when held in abundance is wealth.

An abundance of money, too, can be considered wealth, but only because it can be exchanged for an abundance of valuable things.

I must be willing to give up what I am in order to become what I will be. Albert Einstein

ecorob's picture

My thought process on the definition of wealth...

follows the line of thinking of just how that wealthy person gained their wealth.

As someone who is content, not wealthy, and works to pay their bills every month, I see wealth only in the abstract sense. I see it as something the other guy has. So, when you pose the question, "Where does wealth come from," I think of Bill Gates, Rockefeller, the Fords, Oprah, Michael Jordan, etc.

To me, their wealth comes from us, the people who have invested in a product or ware that these previously mentioned people created.

Lately, however, "wealth" seems to be something not earned through the hard work of persistence, innovation, and manufacturing but "created" out of thin air by pushing buttons on a financial computer.

That being said, where does the line get crossed between wealth and debt? If this sounds confusing to you I will tell you, it is confusing to me, too. The people I mentioned are all very wealthy but we, the people along with our children and grandchildren are all very much in perpetual debt! (Even if we are paying our bills every month).

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

this subject intrigues me--

and some of you are so smart when it comes to money that it goes right over my head (no joke!)--

but when I think of wealth, I think of:

land + intelligent labor = food

I know there is more to it than that, but I am food-centric. I know there are other resources that matter. I know there are necessary crafts--

Did you know that there were people who hand-loomed beautiful fabrics and tapestries (almost a dead art; it's an art now; it was once a craft, and those who did it were admired and quite well-remunerated)--

?

And people who could take raw leather, tan it (or get it from tanners) and make very nice shoes--

to fit the person who wanted the shoes?

It is sad that so many of these skills are no longer used, though there are those brave and wise people who have kept them alive--

the ability to make fine clothing from fine fabrics that are made from natural fibers that are grown sustainably--

wow; that is wealth.

I realize that knowledge can be wealth, but people who teach must be paid by those who produce and sell food; generally, it was that way--

in farming communities even as recently as the 30s and 40s--

doctors and teachers were paid in 'kind' by farmers; the teacher was given a home to live in (built by the community) and paid with meat and produce from those whose children attended the school--

there might be a small cash salary gathered from taxes paid by those same farmers--

so, it's all, pretty much, about food.

Once there is enough food, there is the luxury of having great minds and great craftsmen/women.

It would be a dream to live in a world where each person had the means and ability to develop his/her particular skill and be paid what it was worth--

no central banks; no manipulating elites--

when the industrial revolution came and the skilled weavers no longer had a market for their wonderful fabrics--

many of them went hungry; their wives and children went to work in the factories, and they went to work in the mines--

many came to America. Before the factories came they did have a living, even if it was poor. It was better than the mines and the factories. Those who were angry at this loss of livelihood sometimes joined the Luddites, who tried to tear down the factories--

Some were my ancestors. They called them cottage weavers. They didn't make nearly as much money as those who wove fine tapestries; the entire family had to sustain the craft--

Everyone in the family worked to make the cloth.

it's hard to be awake; it's easier to dream--

This is not veiled attack (or an overt attack for that matter)

But this sounds so Marxian! And I kind of agree (about the food thing) but starving isn't the ONLY way to die :-)

So I point this out because I think there is enough food now to feed everyone. Maybe the farmer is an artist who presumably only wants to live to work his craft.

Maybe all the chasing of exorbitant sums of money comes from fear that your progeny may not find a financially rewarding craft and could die of starvation. What if... What if, all that food went to people because of love. Love of the joy gained when one shares the FRUIT of their labor....And the recipient shares his fruit, maybe a small machine to help mow, or a picture, or a solar heating unit he/she created.

But whatabout those "outsiders" who will come and destroy our simple love-trading society? Well, I guess we need standing armies and need to make more than we want to, to ensure "our" survival. I guess we could all just die-off when the foreign invaders get here. Or pull a ghandi and non-comply. But History (whether its true or not) tells me that the invaders will not care if we comply or not. And perhaps disease will get us all before the swords do.... What do you say to this dilemna?

NO MORE LIES. Ron Paul 2012.

I say it's a dilemma--

indeed. :)

Yes, it does sound Marxist--

I have a fear of hunger, because I've been hungry, and I know people who have been hungry, because of political corruption--

I've seen it first hand and battled it, so I have a unique perspective.

I know people who do not fear hunger, but they haven't been hungry--

and I do believe in love.

And, you are correct, there are people out there who believe in power, not in love.

It's a dilemma.

Seldom have peace-loving people survived. But it's a hope, a wish--

it's hard to be awake; it's easier to dream--

wealth comes from savings

In the strictest sense. If you produce more than you consume, you have created wealth.

Other than that, you haven't really defined what you mean by "wealth". Do you mean personal wealth? The wealth of a society as a whole? How much the average person has in the bank? The standard of living? How developed the infrastructure is? The wealth of knowledge of the human race?

“With laws shall our land be built up, but with lawlessness laid waste.”
-Njal Thorgeirsson

Ahh, what level of analysis is your "wealth" term regarding...

What is yourz?

I like your last point.

Remember in idiocracy, that normal Joe was the smartest man alive, because at that time in the future everyone was dumber. He became very wealthy, despite having no cred-stik thing. He had something people wanted, something all the people needed in order to survive. That made him the wealthiest man alive.

NO MORE LIES. Ron Paul 2012.

Subjective valuation...

It depends. Period. Creating garbage is creating wealth for a collector who recycles. GOd this is intense to think about. It's difficult to extricate the idea of money from wealth. Also, sometimes the monetary unit is a mark wealth. So wealth can be having something you want or having the means to get the things you want OR (and this is important) the means to get the things you MIGHT WANT in the future.

So maybe a proper definition of wealth would be, "being able to get what you might need in the future".

and a proper measure of wealth would be, "your ability to get things that others may want now (and presumably thus you would want in the future)"

This is why Trump can have -1.8 million dollars (be in debt) but still be very "wealthy"?

It's based on the model that if x,y,or z happens at some point in the future, you will be able to procure a,b or c "goods or services" at such time.

NO MORE LIES. Ron Paul 2012.

Work. Production. The

Work. Production. The ability to produce, manufacture, create and sell.

Or a huge inheritance from your family.

Never be afraid to ask simple questions.

Michael Nystrom's picture

What if I "work" all day playing Angry Birds?

Some of those levels take a lot of work to get through.

Will I create wealth?

What if I produce vast quantities of information that no one uses?

What if I makes something and sell it, but my price is less than my cost?

The inheritance from my family, I understand. But where did that wealth come from?