Core Concept Conversation: What is wealth?

I see “wealth” not as a collection of desirable things but as a potential or a power. An individual who has some wealth has the potential or power to undertake certain things they would like to do, over and above basic survival. An individual with greater wealth has greater choice of the things they can choose to do. Such things might include eating Michelin 3 star food, or driving a Ferrari along the coast. They also might include a simple afternoon walk in the woods. In the latter case the  “wealth“ required to undertake this activity comprises having the leisure time available for the activity, the personal good health that allows for enjoyable walking, clothing of suitable quality for the activity to be pleasurable, and a means of fairly effortlessly getting to the woods in the first place.

It follows that, whilst “wealth” might have a roughly linear relationship to “money”, the amount of surplus money one has to attain a certain “wealth” will be different for everybody, principally because we all different ideas of how we might use our wealth, some of which will cost more than others.  Additionally, some wealth doesn’t necessarily cost any money to create or to acquire. Consider a coder who makes a compelling game and puts it out as open source. The coder has created “wealth” because they have created the potential for others to undertake something they would like to do, namely, play the game.  The coder has used their own time and little else. If the creation of the game was an enjoyable activity for the coder then the wealth has been created at zero cost.

Something I'm realizing in the comments is that different people seem to have notably different ideas about what wealth means. That makes me think that the concept of wealth itself is either too fuzzy or not taught well.

Etymology isn't a reliable guide to what words mean now, but in a case like this one where there isn't a universally agreed definition it seems like it might be worth a look.

The "-th" in "wealth" is the same as in growth, health, sloth (= slow-th), warmth, etc. And "weal" just means "wellbeing"; "weal" and "well" are originally the same word. So wealth is whatever confers or constitutes wellbeing. When the word "wealth" first existed, it was mostly pretty much synonymous with "wellbeing".

But it was always also able to mean, more specifically, "worldly" goods, valuable physical possessions, especially ones that you could exchange for other things you value. So money (which is more or less by definition maximally exchangeable-for-other-valuable-things) is wealth, and so are things you can easily sell; possessions that for one reason or another you couldn't easily convert into other valuable things are less-central examples of "wealth" (but were, from the outset, also considered varieties of wealth).

I'm leaning on the OED here, and here's something informative: its sense 4.

Economics. A collective term for those things the abundant possession of which (by a person or a community) constitutes riches, or ‘wealth’ in the popular sense. There has been much controversy among economists as to the precise extent of meaning in which the term should be used. The definition that has been most widely accepted is that of Mill (quot. 1848¹ below).

...

1848   J. S. Mill Princ. Polit. Econ. I. Prel. Rem. 8   Money, being the instrument of an important public and private purpose, is rightly regarded as wealth; but everything else which serves any human purpose, and which nature does not afford gratuitously, is wealth also.

1848   J. S. Mill Princ. Polit. Econ. I. Prel. Rem. 9   To an individual, anything is wealth, which, though useless in itself, enables him to claim from others a part of their stock of things useful or pleasant. Take for instance, a mortgage of a thousand pounds on a landed estate. This is wealth to the person to whom it brings in a revenue... But it is not wealth to the country; if the engagement were annulled, the country would be neither poorer nor richer.

1848   J. S. Mill Princ. Polit. Econ. I. Prel. Rem. 10   Wealth, then, may be defined, all useful or agreeable things which possess exchangeable value; or in other words, all useful or agreeable things except those which can be obtained, in the quantity desired, without labour or sacrifice.

So, according to Mill (and, according to the OED, according to most economists) wealth is anything that serves any human purpose and isn't abundantly available without human effort being required.

I distinguish between Wealth and Value as concepts. Lots of things provide Value (a croissant, a free library app, refactoring code, project management), but Wealth is specifically things that provide ongoing value when used, without being used up. For example, a code base provides ongoing value to its owners, and a refactoring code base provides more ongoing value, so that increases Wealth. Living near a beach or other nice place is a form of Wealth. Money in the bank, or in stocks, that is generating enough income to outpace inflation is Wealth. Strong relationships is Wealth. Useful knowledge is Wealth. In summary, Wealth is anything that generates (not "is convered to") Value over time.

Life requires physical consumption: oxygen, water, food. Consumption also includes deterioration through use, for further life-required values like clothing, shelter, transportation, security. Even highly abstract values like art/music/software/friendship/justice all rest on a foundation of consumable physical objects. Production is transformation of physical matter into consumable form.

Wealth is everything produced but not yet consumed. Money is easily exchangeable wealth.

The idea of wealth can be extended into intellectual or spiritual or poetic realms. But the root of the idea of wealth is the physical requirements for life.

One way that Buddhism might deconfuse this concept of wealth is to say that it wasn't "not meeting your needs" that was causing suffering in the first place, it was grasping. The better you get at meeting your needs, the more you think that's a solution, but it actually causes more grasping.

Hence your realization that wealth doesn't seem to make people happier. Not only does wealth not make people happier - it's fairly plausible that e.g. hunter gatherers were actually more happy than agrarians.

I think truly grasping this (and it's obvious when you look at the decoupling between happiness and wealth, as you do here), really erodes some of the foundations of the humanist/transhumanist philosophy that underpins much of the rationality community

I think of wealth as a top level bucket/concept. Like others have mentioned, I consider wealth that which allows me to satisfy my wants and needs. That can be by engaging others to make or trade things or my ability to make/do something myself. 

I also separate out two main subsets: elements of my wealth that are largely consumables and elements of my wealth that are put to productive uses with the intent of maintaining or increasing my wealth (capital).

The core concept of wealth is "the ability to motivate many humans to satisfy your demands".  In non-monetary societies, kings and tribal elders were wealthy, because they can order others to do their bidding.  In modern fungible-money economies, the wealthy are those who can control enough of the economy to be able to direct many people in their activities.  This includes both production activities (which presumably generate MORE money for the wealthy, in addition to generating some for the followers) and consumption activities (which are a net drain on the wealthy, but still generate income for the followers).

wealth is physical goods and services, information connections to others, etc. money attempts to track wealth; often, however, money results in the destruction of wealth, relabeled as the creation of it. stock market crashes are often a result of wealth creation in the hands of someone unexpected, and can even occur when no destruction occurred at all.

In the essay PG talks about how when you generate wealth you make the pie larger. So like if I invented some sort of spice rub that you could rub on any food and make it taste 50% better and sold it for an amount that'd cost people $1/day, that seems like it'd make the pie larger. For $30/month you get 50% more enjoyable food. I envision mostly everyone in developed countries making that trade.

But on the other hand I just have trouble visualizing this. What does a bigger pie actually mean? Happiness? That doesn't feel right. We've supposedly created a ton of wealth over and over throughout the centuries but are we a corresponding amount happier than we were? I'm skeptical.

If it doesn't mean happiness maybe it means something more like, if you take the things we have now, we'd be more willing to spend money on them than the things people had 100 years ago. I'm having a hard time thinking concretely about this. Like, Arthur in 1923 has an amount of things that he's willing to spend $X on but Aiden in 2023 has an amount of stuff that he's willing to spend 5X inflation-adjusted dollars on? Something feels wrong about that.

There is a lot of OSS that I use but wouldn't pay for if it costed money... if it wasn't free I would just use underscore instead... you get value from something but wouldn't pay for it because there happen to be similarly valuable products available for free.

Imagine if the other OSS package(s) you'd use instead also didn't exist. How much would you pay for one of them to exist or be available to you? Maybe not very much, but whatever amount that is, is a benefit you have from the item(s) existing, and that benefit is part of "wealth" the way he is using the term.