I go over what "wealth" is in economic terms.
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Transcript
What is Wealth?
When people think of wealth, they often imagine big mansions, sports cars, private jets, and vaults filled with gold bars and cash.
And while having those things may potentially indicate someone has wealth, it does not describe what “wealth” is in economic terms for understanding the divide between wealth versus poverty.
In economic terms, people become wealthier when they can work fewer hours to meet their basic needs.
Basic needs here are survival needs, needs of all people to exist and feel healthy so that pain and suffering does not get in their way of being productive.
The basic needs of all people for survival include clean water, food sufficient to provide robust nutrition for health, and shelter from the elements so that outside threats do not cause harm or end people’s lives.
When people do not have these needs met, they face starvation, early death from malnutrition, and pain and suffering from dangerous weather, animals, or other organisms.
Historically, most people worked long hours and remained in poverty because their efforts spent on trying to meet their basic needs consumed most of their time with simple agricultural activities.
They would spend hours trying to get clean water by having to manually transport it and then purify it for safety.
They would have to plant, grow, and harvest their own foods, and process all their own meats by hand.
Because of this, people spent most of their productive hours barely getting by, with 90 percent of people living in extreme poverty in 1820.
Today, thanks to the capitalist property rights revolution, under 10 percent live in extreme poverty.
Which means that, when we are speaking about “wealth” being increased, we must look at how much effort people put in to afford their basic survival needs.
Let’s look at some hypotheticals to contextualize this.
Imagine a person living in 1820 before all the modern innovation we have today.
To meet their basic needs, they might have to work 70 or more hours per week just to get the necessary food, water, and shelter they need to keep their body in working, healthy order.
This 70 hours per week does not get them extras beyond the basics.
It only gives them a bare subsistence.
Now, imagine someone today who earns $1,000 per hour, a sizeable amount of money, from their modern office job.
That person, within just a few hours of work, can provide for themselves a month’s worth of basic needs, from water, to food, to shelter.
I use these two extreme examples to help you visualize what it means to come out of poverty.
If you can work just a few hours but produce enough to get everything you need to survive within those hours, you’re extremely wealthy in economic terms.
This wealth does not just apply to people with giant incomes, as you can observe from your own experience.
Someone making $25 per hour who lives modestly can easily meet an entire month’s worth of basic survival needs in just two weeks’ time.
The money they earn past two weeks’ worth of work then goes to extras, such as entertainment, leisure, and luxury goods, like eating out or purchasing basketball sneakers.
You might be wondering why then, if people are so much more productive today in their purchasing power, relative to people past, there is still persistent poverty and extreme poverty in our modern world.
That answer is: Government.
The government’s regulations, taxation, and inflation steal away from the productive earnings of people at large.
You take home less when the government steals half your paycheck.
Your dollar is worth less when the government prints more currency.
You can never own your home outright if the government taxes you forever on your home and increases those taxes with new value assessments based on an inflationary environment.
You cannot provide solutions for the homeless, like giving them tiny homes, if the government comes in and destroys those homes and bans their construction, like happened in Los Angeles.
We are all under the government’s propaganda system that tricks people into thinking that they are “poor” because of capitalism and wealth inequality.
This could not be further from the truth.
Rather, the world has become wealthier in economic productivity and purchasing power but, thanks to the government stealing that productivity and wasting it on bureaucracy and war, everyone is far less wealthy than they could be if not for the extreme government control.
So, next time someone wants to complain about wealth, wealth inequality, or poverty issues, remind them that the world has come very far from the past because people today can afford their basic needs with far fewer hours worked.
The root issue is that government is making everything more expensive because of their legalized plunder, property taxes, and perpetual warfare, that stops everyone from feeling the full benefit of their productivity.
Sources
Anyone Who Doesn’t Know The Following Facts About Capitalism Should Learn Them
https://www.forbes.com/sites/rainerzitelmann/2020/07/27/anyone-who-doesnt-know-the-following-facts-about-capitalism-should-learn-them/?sh=7b9457933dc1
IS CAPITALISM TO BLAME FOR HUNGER AND POVERTY?
https://www.adamsmith.org/blog/is-capitalism-to-blame-for-hunger-and-poverty
Capitalism, Global Trade, and the Reduction in Poverty and Inequality
https://www.cato.org/blog/capitalism-global-trade-reduction-poverty-inequality
Extreme Poverty Rates Plummet Under Capitalism
https://fee.org/articles/extreme-poverty-rates-plummet-under-capitalism/
The Cure for Poverty
https://mises.org/library/book/cure-poverty
Lords and Serfs in Medieval Europe
https://fee.org/articles/lords-and-serfs-in-medieval-europe/
Work and Liberty
https://fee.org/articles/work-and-liberty/
Markets, Not Unions, Gave us Leisure
https://mises.org/mises-daily/markets-not-unions-gave-us-leisure
Capitalism and Competition
https://mises.org/mises-wire/capitalism-and-competition
L.A. is seizing tiny homes from the homeless
https://www.latimes.com/local/lanow/la-me-ln-tiny-houses-seized-20160224-story.html