Concepts and Terms – What is ‘wealth’?

The world economy isn’t working as well as it should and could. Some countries that enjoyed for some years near full employment, low interest rates, and a bearable rate of price increases, with fast-rising material living standards, all achieved without anything like current high levels of government and private debt, do so no longer. Efforts to restore those happy conditions have had no durable success.

Perhaps current economics of whatever school, from the left to the right, confuses quantities with their rates of change, describes phenomena in terms opposed to their nature, misrepresents things in harmony as being contradictory and vice versa.

Wealth is currently understood to be money, goods and services.

In fact, wealth is environmental resources – clean air and water; metal ores; biological diversity, that is the number and variety of living organisms; fossil fuels; timber; arable land; fish; natural recycling and cleaning systems; pleasant living and recreational environments; the earth’s capacity as a home for life.

Goods and services are wealth in the process of throughput.

Money, people, technology, skill, manufacturing equipment are not resources or wealth. All are agents of throughput. Technology and skill being agents of throughput could be regarded as qualitative wealth, which is quite distinct from quantitative wealth, the feedstock of throughput.

Money facilitates throughput but the total money quantity isn’t the important variable. What matters is the proportion of the total money supply flowing through the different channels in the economy – wages, profits, investment, government spending, social security. This proportionate flow idea will be discussed more fully later, in various chapters.

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