Today's rich may look poor to people a century from now
Wealth is relative in time as well as place. Labour-saving inventions and science have lifted the living standards of even the poorest people in modern societies far above those of the past. If that trend holds, the comforts enjoyed by today's wealthiest may one day strike future generations as hardship.
The word descends from the Old English weal, from an Indo-European root meaning to wish or good. Economists define it broadly as the total of anything of value, a deliberately open idea that changes with context. For an individual, the standard yardstick is net worth: the value of what you own minus what you owe. It can be grouped into personal property such as homes and cars, savings built from past income, and income-producing capital like shares, bonds, property and businesses.
Scarcity lies at the heart of it. Something valuable that everyone can easily get confers no wealth on its owner; the same thing in short supply can make its holder rich. Economists also separate wealth, an accumulated stock of assets, from richness, a flow of income. The opposite of the first is destitution, of the second poverty. Adam Smith, in The Wealth of Nations, took a national view, describing wealth as the yearly produce of a society's land and labour.
Place matters too. A net worth of 10,000 US dollars would hardly impress anyone in most of the United States, yet the same sum would be an extraordinary fortune in an impoverished developing country. Wealth also acts as a safety net against sudden shocks and can be turned into a home, a business or a college education, which is why it weighs so heavily in how societies are stratified.
Ideas of wealth stretch back into prehistory. Around 35,000 years ago groups of Homo sapiens became more settled, leaving cave art, burials and ornaments, and began trading tools and building exchange networks; those who amassed tools, weapons, baskets and food were counted wealthy. Today the United Nations measures inclusive wealth by adding up natural capital such as forests and minerals, human capital in skills and education, and physical capital like buildings and machinery.
Source: Wealth
