Is wealth unlimited?

Chenbas27

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Hi,

I've never really understood how wealth seems to be apparently infinite, surely there is a limit to resources and combinations of how they can be used? Why has there been an economic crisis during Covid, the money is all still there somewhere isn't it?

And say if I was suddenly able to sing, and a record company makes millions from me. Does every person on the planet have wealth generation potential value? Or is there a limit?
 

Protocol

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3,572
Wealth in Ireland is currently 800bn approx.

Be careful to not confuse income and wealth.

Wealth is a stock.
Income is a flow.

Wealth is accumulated due to past savings, and valuation changes.



If you could sing, and you and the record company earned income, that is income, not wealth.
 

Protocol

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I don't think wealth is infinite, is it?

It grows each year, due to savings.

Don't confuse money / wealth / income.


During COVID, the stock of money is rising, but income is falling.
 

PMU

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In pre-industrial societies wealth was and is finite as land is the main source of commercial value in such societies, and there is a limited amount of land. In industrial and post-industrial societies wealth grows with the ability of individuals and companies to produce marketable goods and services, i.e. by creating new things that people want (e.g. Steve Jobs and the iPhone) ; new ways of doing things (e.g. Michael O'Leary and Ryanair), (Jeff Bezos and Amazon), and entertaining people (e.g. the Beatles, Michael Flatley, etc.). So you're not stuck with a limited amount of wealth in the form of physical assets such as land; the only limit on wealth creation is mans' ability to meet the needs of others at a price they are willing to pay.
 

RobFer

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137
Hi,

I've never really understood how wealth seems to be apparently infinite, surely there is a limit to resources and combinations of how they can be used? Why has there been an economic crisis during Covid, the money is all still there somewhere isn't it?

And say if I was suddenly able to sing, and a record company makes millions from me. Does every person on the planet have wealth generation potential value? Or is there a limit?
We are in an economic slowdown. But it is only a slowdown. Not a stop. People are adding value to the world all the time. Anytime people renovate a rundown house or invent a new product or a well planned trainline they are creating wealth.
 

joe sod

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Yes wealth now includes many more things like intellectual property and shares in companies that produce it, therefore in theory the wealthiest people on earth are the Jeff bezos and Bill gates however most of their wealth is in these assets. However if they were to decide to convert this wealth to the limited physical wealth like land and resources then there would be an issue. In many cases they would not be allowed to do it because there are limits that countries place on how much one man can own. Therefore the wealthy people of the 18th and 19th centuries were much more powerful than today's wealthy people, the king of Belgium was much more powerful and wealthy essentially than Jeff bezos.
 

cremeegg

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Here is my tuppence.

Wealth is the ability to produce things people want or need. Land, intellectual property, ability to work etc. The land or whatever itself is the wealth, that is a separate thing from control of the wealth.

Wealth is not unlimited, but human ingenuity has the ability to increase the productive capacity of wealth. By inventing new technologies, or just more effective ways of working.

A share in a company or a €50 note is not really wealth, it is a claim to ownership of wealth.

Political power is another thing entirely. Vladimir Putin may have very relatively little by way of cash or shares, but he controls everything in Russia.

If I have €100k in a pension pot, I have no control over the underlying assets, but I have a claim to share in their profits.

The rule of law ties all these things together.
 

joe sod

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The rule of law ties all these things together.
Warren Buffet himself one of the worlds wealthiest men said that his skill in asset allocation was only applicable in highly structured countries where the rule of law applies, he would have achieved nothing in Africa. Also the massive wealth involved in the technology area now could not happen in Africa therefore the rule of law is fundamental to wealth creation.
 
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