Wealth — What Is It?

Jun 19, 2010 Posted Under: economics

I recently tweeted:

Even the richest person envies someone. The true measure of wealth is gratefulness.

That definition works for me, but the economics lecture I attended today explored more traditional notions: value of use, value of exchange, value from production and value from obligation from the Henry George school of thinking about economics.

I don’t subscribe to basing economics on land use as in the Georgian view, but instead notice that our excess wealth seems to have begun just after we learned to farm, about 15,000 years ago.

That shift from hunter-gathering to farming allowed us to generate more food than needed and thus freed up people to engage in other activities like some of my favorites, mathematics and cosmology.  Ours is the first species to make that transition and as such, the first species to move beyond the normal zero-sum games of survival of the fittest.

As we move towards expected population stabilization at 9 or 10 billion of us, we are in a unique position to continue improving our quality of life by making maximum use of the very adequate energy budget streaming from the sun.

But our DNA lags behind this huge advance into technology and our trading is still driven by considerations of fear and greed.  It is this greed/fear base which we have not learned to overcome that periodically drives liquidity out of our markets by the boom-bust cycle of something-for-nothing investment hysteria bubbles, followed by fear-driven crashes.

The worst part of this cycle is the slow return to economic health caused by the subsequent extreme caution before people again start trusting the idea of investing.

I wonder if we will learn to detune these ill effects from our investment markets before we invent our replacement species, the computer/communications system of the world?

That detuning will require us to mature a little, to give up the irrational something-for-nothing wishful thinking that currently elects politicians who can not ever deliver on the promise.  Their inability to deliver is what causes our governments to operate in a more or less continuous state of bankruptcy, spending more than they have and devaluing our money by inflation and sometimes outright abrogation of debts.

How can we persuade our neighbors to vote to balance the budget?  And ourselves?

After all, this belief in magic was ingrained in us during our earliest, most intense, discoveries of the world — when we were babies. Then, all we had to do to summon the gods to take care of us, was cry out.

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