Wealth

Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating old English word weal, which is from an Indo-European word stem. The modern concept of wealth is of significance in all areas of economics, and clearly so for growth economics and development economics, yet the meaning of wealth is context-dependent.

Definition

At the most general level, economists may define wealth as "anything of value" that captures both the subjective nature of the idea and the idea that it is not a fixed or static concept. Various definitions and concepts of wealth have been asserted by various individuals and in different contexts. Defining wealth can be a normative process with various ethical implications, since often wealth maximization is seen as a goal or is thought to be a norm. This can lead to political controversy since, for example, wealth taxation is a type of progressive taxation that taxes the wealthy at a higher rate.

Conceptual history

The word "wealth" originated in old English, where it meant "well-being" or "welfare". The term was an abstract noun formed from the adjective "weal", which comes from the Proto-Germanic word "wela". "Wealth" is a measure of the value of all of the assets of worth owned by a person, community, company, or country. Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts.

Economic analysis

In economics, wealth refers to the value of assets owned minus liabilities. In this context, assets include land and other real property, labor, and "capital" (machines, tools, and buildings, for example). Some economists define wealth as "those material things produced by labor for the satisfaction of human desires and having exchange value".

Distribution and inequality

Wealth distribution is a crucial factor in the understanding of societal structures, politics, and issues such as social justice. The distribution of wealth in a society is a form of inequality that often leads to other forms of inequality, such as disparities in health, education, and quality of life.

See also

• Economics
• Financial asset
• Wealth inequality
• Wealth taxation

References

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