The Nature of Wealth
Amy Kim (ISB G11)
Join Amy as she dissects wealth and money’s true nature, plus why we like it so much.
Through her analysis of certain characteristics and media influences, we’ll come closer to the conclusion that make up why we love wealth so much.
“Wealth is the ability to fully experience life”
“Where wealth accumulates, men decay”
Can you notice the contrast between these two quotes? According to Thoreau, wealth is beneficial as individuals have the opportunity to enrich their life, whereas Goldsmith asserts that wealth is a source of decay. Which one do you think is a more correct way of considering the concept of “wealth?”
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What is wealth?
Wealth measures the value of all the assets of worth owned by an individual community, or nation, which is determined by taking the total market value of all assets owned, then subtracting all the debts included. Generally speaking, specific people or organizations are considered wealthy when they possess many valuable resources and goods. The relative differences in wealth among individuals are what we use to determine whether they are wealthy or not.
Why do people prefer wealth?
An individual, as a wealthy person, would have access to anything that makes his or her life comfortable and safe. In other words, if you were born rich, you will consider things like education, family, holidays, and gifts as granted. Consider a person who earns a low income. That individual would have difficulties in maintaining basic needs for life and would not have opportunities to enjoy luxuries. In terms of middle-class individuals, they consider social status as the most important factor that would give themselves access to prestige, thus improving their financial status and wealth. Now, why do people prefer wealth then? This question can be answered in three different categories: self-fulfillment needs, psychological needs, and basic needs. Money is essential for individuals to get access to these needs. First, self-fulfillment needs are achieving one’s full potential, including diverse activities one can encounter in life. Second, psychological needs, more specifically esteem needs, and belongingness, refer to prestige and feeling of accomplishment and intimate relationships between individuals. Last but not least, basic needs refer to safety needs and physiological needs (food, water, warmth, etc.). Individuals argue that these needs in life can only be fulfilled if there is a sufficient amount of money and wealth.
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What are the characteristics of wealth?
First, it must possess utility: it must have the power to satisfy a want. In other words, wealth should be desirable for individuals of all kinds. For instance, a considerable number of people might have dreamed of a life full of luxury and wealth, which they believe would bring happiness; this definitely is one characteristic of wealth.
Second, it must be limited in supply: For instance, air and sunshine are essential for life but are not classified as a source of wealth since they are available anywhere in large quantities. Here, scarcity plays a significant role, which refers to the state of having a relatively low amount of supply compared to the demand. Air and sunshine are free goods that do not apply to the concept of scarcity, which lacks the characteristic of wealth. Unlike these goods, the supply of wealth should be limited.
Third, it should be transferable, which means that individuals should be able to transfer their ownership of their wealth to others around them. For instance, in terms of houses, individuals can transfer the possession of houses to others, which is transferring the ownership of their own wealth.
Fourth, sometimes it may be external. For instance, the goodwill firms experience from their economic activities is also a type of wealth. Copyright of a certain book or a movie is an example of goodwill of a business, which is classified as external wealth. Another external example of wealth is the benefits and enjoyments an individual can experience in life. For instance, eating a chocolate bar after solving complex math problems! This might seem like a very trivial matter, but it might provide you a significant amount of happiness, which is your wealth for that very moment.
Fifth, inner personalities can also be classified as wealth. Are you an optimistic person who always looks at the bright side of life? Then you are a wealthy person since you possess a rich personality that helps you handle the struggles and challenges you might face in life. Moreover, you would create positive influences on the environment around you as a wealthy person.
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Elements of wealth inside the story of Cinderella
You might be familiar with the story of Cinderella, which illustrates a girl’s experience of attending a ball with the help of a fairy godmother. Previously, her mother has passed away, her father remarried, and she needed a mother’s care. However, the reality was different as her step-mother and step-sisters treated her harshly. Here, we can notice an element of wealth: mother’s care. Cinderella received a lack of love from her mother since she was surrounded by a jealousy-filled stepfamily. For her, the lack of her mother’s love is the biggest loss she experienced, which she considers as a source of “wealth.” Later, she meets a fairy godmother, who acts as a catalyst for Cinderella to become a princess and attend a ball to meet the prince. This was possible due to Cinderella’s kind-spirited and internally beautiful heart. She eventually marries the prince and lives happily ever after. Here, we can notice that her spirits were her “wealth” that allowed her to reach a bright and optimistic life. Moreover, when we go back to where Cinderella receives help from the fairy godmother to become a princess, we can see that monetary values can also be a source of wealth. Since beautiful clothes, shoes, and jewelries were very scarce for Cinderella, she might have considered this experience as something that is significantly valuable and luxurious for her current status.
Is possessing wealth always satisfying?
Did you know that possessing wealth is not always satisfying? Let’s say that you are able to buy anything you want and can enjoy luxuries anytime. Would you be satisfied? This way, wealth might not seem rare for you, as a luxurious lifestyle would be a common thing you enjoy daily. Moreover, social comparison is one psychological explanation that supports the idea that wealth is not always satisfying. According to The Atlantic, “the sensation of being well-off is not about fulfilling a childhood dream of buying a sailboat or something; feeling wealthy is about comparison with others in your reference group. So, the question is not what individuals want to buy, but what they feel they must buy in order to keep up their status.” This indicates that social comparison always follows the concept of wealth and may not bring happiness.
Overall, wealth is considered as an element that is scarce and has a certain amount of monetary value. However, it can be something that enriches your life in a different way: your inner spirit and the enjoyments you have in life!
What is your biggest wealth in life?