MEANING OF WEALTH
In material terms, wealth is the individual or collective accumulation of assets over time. In the context of this article, assets are items of value against which, in modern economic systems, monetary worth may be attached. These items may include land, structures built upon it, contents thereof and their applications towards management and accumulation of more wealth. They may also include objects perceived to be aesthetically precious, such as gold, diamond, pearls, and works of art of all kinds.
Other items of value may be ownership of stock in business enterprises, and possession of hard transactional cash both outside and inside the banking system. A summation of all the mentioned gives total wealth of the individual, organization, or nation concerned. When liabilities are subtracted, a net worth is derived. The higher the net worth of an entity, the wealthier they are.
In principle, material wealth ought to facilitate acquisition and provision of life’s basic needs and wants, and much more, for those in possession and management of it. When this happens, a state of opulence has been attained. The wealthy, i.e. possessors of net positive wealth, are defined as such because their wealth gives them almost unlimited possibilities to access and acquire as their needs, wants, and demands dictate. This is manifestation of power. As to the judiciousness of the wealthy’s use of power in society is another discussion outside the scope of this presentation.
Genuine wealth is, by definition, a functionally non-static concept eroded over time. A state of poverty is reached upon when time has, for any reason, eliminated the symbols of, and access to wealth and the benefits thereof accruing for the formerly wealthy.
Wealth is regenerative, self-sustaining, and seeks to perpetuate itself indefinitely, to the extent that natural and social forces permit. Social forces referring here to the mechanisms through which society is organized politically, economically, and culturally. The essence of wealth is growth, that with reference to quantitative and qualitative aspects of existence, for both the individual and society. This denotes progress, leading to overall societal development.
At my age, 57 years old, I have reached a stage in life where, with a mixture of wonder and sadness, I have watched my contemporaries go through the most amazing transformations in life. Some have died; others are dead-people-walking with terminal diseases, or pursuing life-style choices slowly but surely sucking the lives out of them. There are those who have lost, and are losing their loved ones in the same fashion.
Many others have been married and divorced at least once. A few have found more fulfilling lives after divorce. Others have lost their children and everything they had owned, including self-control contra temptations of the world. The latter lead miserable lives of constant searches for ever non-gratifying pleasures of life, also dying slowly inside. Some of them have, with varying degrees of success, even been on the suicide path more than once before. Watching them go by their tragic lives, every day is like on a tick-tock-tick-tock time bomb rhythm. When the lethal explosion finally comes, I hope it’ll find each one alone in each their valleys of death. I hope further that they will finally find peace on the other side, if the other side does exist at all.
And, then, there are those whose fortunes have had a downward turn, either temporarily or permanently. They may have, for various reasons, lost their jobs and businesses – a state of affairs subjecting them to acute dire straits without any money or reliable sources of income. There are many who have gotten to taste the bitter pills of poverty in this category.
I am fascinated the most by those who have been so fortunate as to receive golden hand-shakes upon termination of their jobs. In this category, there are some who receive economic packages exceeding, by far, the amounts of money they could ever envisage possessing even in their wildest dreams. Overnight, these come to believe that they are wealthy. They begin to go around thinking that they’ve got the power buy anything they want, from bread, booze, cars, to pussy. They begin to go around thinking that they are the lords of the rings, and that every other ordinary mortal should worship and praise them, therefore. As if they were the new Gods!
Sadly, the newly financially-endowed have misunderstood what wealth is, what wealth entails. The newly-acquired excessive purchasing power is owing to the fact that they are temporarily rich, and not wealthy. Many of these will have come from humble beginnings in the first place, anyway; knowing little, or nothing at all about the real essence of money. Their new excessive spending habits will, therefore, be reflective of the ever observable phenomenon of the poor’s tendency to exhibit a high marginal propensity to consume with rising purchasing power.
Having gotten it so totally wrong from the outset, the newly rich will go on outrageous spending sprees. They’ll profusely entertain themselves together with old and new relations, thinking that there would be no ending to these new monies; as if, say, paltry US$1.0 million were an infinite number. Living on the fast lane of “my deserved, hard-earned success”, they’ll arrogantly and flamboyantly throw their monies around, buying undignified allegiances from scroungers of all kinds disguised as admirers.
The reality that the newly-rich are blind to is that in the non-replenished outflow of their monies, somebody else’s wealth grows at their expense. External wealth, its creation and growth, are functions of, among others, mindless expenditure patterns of the economically unwise.
Newly acquired fortunes will turn into wealth only when they are spent on ventures that make money grow. That is called investment. There is little wealth generation potential on monies spent in the pursuance of, for example, pleasures of the flesh. However, all things remaining equal, monies spent in the acquisition of assets whose value grows over time do multiply.
The multiplication factor will, then, constitute the rate at which the monies have grown over a given period of time. This translates into what is called return on investment, surplus value, or profit. Wealth is created thus. The more profit earning investments are made, the more wealth grows, and the better quality of life there ought to be for the owners and beneficiaries of the wealth.
The overriding idea is that the process above is sustained in such a way as to survive, to the extent that it is possible, any social construct changes that will inevitably occur from time to time, both locally and globally. At this level, wealth is genuine, giving real substance to the power the wealthy wield, and the subsequent awe and wonder that may be attendant to it. This is how capitalism works. It is not for the ignorant, the myopic, and the faint-hearted who could never swim with the sharks in business and come out alive.
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June 15, 2017