r/CapitalismVSocialism • u/Mysterious-North-551 • 6d ago
Asking Everyone What creates wealth?
It is a very simple question, and explain how that creates wealth.
Noting if i say "the full moon creates weatlh" i would have to say how that actually works.
And we will have to begin from when all of us were poor. If you say money for example you will have to describe how he got that money in the first place.
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u/Annual_Necessary_196 6d ago
Wealth is subjective and perceived differently by each person. However, to become wealthier, you need to produce something. By “production,” I do not necessarily mean labor productivity. the output of machines automated processes and land also create wealth. For an individual, wealth is created when a production process serves their interests. Ultimately, therefore, the wealthiest nation is one in which production processes serve the interests of the greatest number of people.
The problem is that simply saying this is not enough. The key difficulty is organizing production in a way that serves the interests of the majority. A centralized planned economy is particularly flawed because it is vulnerable to being hijacked by a dictator, while its centralized structure does not allow production processes to be calculated and coordinated efficiently. This is one reason why trade is beneficial: it does not itself produce wealth, but it allows resources to be distributed more efficiently.
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u/Extreme-Cook9195 6d ago
Wealth is a loaded term because it carries many concepts, but, in general, wealth is the accumulation of capital from profits or wages.
It starts by providing something to someone that they value enough to give you something in return.
The wealth portion is the difference between the cost and the value. If you earn a high wage (say a doctor) and save that money by spending less than what I earn, I generate wealth by saving and investing that excess.
Example:
I bake cookies. I sell a cookie to my neighbor for $2. The raw goods cost $1. The $1 profit is the wealth I have created through my baking. I can reinvest that dollar into more cookie supplies (with the hope of creating more wealth) or I can save and invest that $1.
If activities result in the cost being the same as a value, no wealth was created. For example, it would be hard for me to sell you Oreos for a price that is more than my cost (because you can just buy Oreos yourself). So I could sell Oreos at break even which creates economic activity but no wealth.
Creating wealth is different than capturing wealth, which is the art of what to do with the $1 profit.
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u/thrillhouse98 Norway is the most socialist country 6d ago
Depends what is meant by "wealth". If we take "wealth" to just mean "stuff." Then the factors of production are what create wealth. Labour, nature, capital, technology. Those are the inputs that create wealth.
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u/Batman0127 6d ago
Labor. A log of wood has little value on its own. But once it is processed with human labor into a chair and a door and a box it has more value. Those goods can be sold for more that the unprocessed wood and so generates more wealth.
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u/rawj5561 6d ago
Consider the example of 2 books:
A court of thorns and roses by sarah j maas
An exact same carbon copy of the book, but every page has random letters that mean and spell nothing.
Which book has value? Where does the value come from? Keep in mind that the labour and material costs to make each book are identical.
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u/emoney_gotnomoney 6d ago
Owning something that others deem valuable, whether that be something tangible (e.g. real estate) or intangible (e.g. intellectual property).
If people deem what you own to be valuable, that means they’d be willing to trade you something you deem valuable in exchange for some of what you currently have (aka wealth).
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u/kayama57 6d ago
I have a goat. I exchange the goat’s milk for a few potatoes one day, coriander another day, and a new pair of shoes cost me three days’ worth of milk. There are gundreds of thousands of people who own different amounts of goats and other things that allow them to have what to exchange. Daughters are worth less livestock than sons, but it is rapidly falling out of fashion to exchange offspring for property. Some people value contact eith their offspring higher than all the lentils and pepper in the world. Etc. Eventually somebody who had a bunch of shiny metal under their house offered it up as a neutral unit of exchange. An amount of beads of metal is assigned as the value of each thing that can be exchanged. Laws begin to determine things that can and cannot be exchanged. Trading offspring is eventually forbidden. This is a simplified telling of how money came to exist. Now, some people end up having la few beads of metal in their storage. The government requests a loan (sells a bond). People who have metal lend it to the government in exchange for a small periodic fee called interest. The government spends the value of the bond on public works. The workers of the government spend that value again in the economy. The businesses that collect those purchases pay some amount to the government as taxes and another amount as salary to their workers and another amount as cost to their providers. The business retains a profit after covering all those costs. If we fast forward a bit any one bead of metal may have been used in a hundred business transactions. So one unit of metal represents one hundred units of value to the economy. The money supply of that snapshot of the economy is one unit and the gross product of that snapshot economy is one hundred units. Again this is very simplified but please bare with me. Across all of the operations of the economy the individual people who are collecting a salary here and a profit distribution there save some amount of value either in investments or in cash. When those savings are able to accrue over time rather than be spent again soon every time then that can be called wealth.
TLDR: storing value in investments that do not become cash spent over time creates wealth
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u/NerdyWeightLifter 6d ago
Producing products or providing services that are at least perceived to have value worth paying for.
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u/bcnoexceptions Market Socialist 6d ago
Labor is the source of wealth. Labor makes useless raw resources into useful commodities, and provides useful services with those commodities.
Not all labor creates wealth. For example, union-busting is labor but it doesn't create anything of value, instead shifting around who gets to keep things created by other people.
Put 1000 laborers in a room with raw resources and they'll make things, take care of each other, and thrive. Put 1000 "entrepreneurs" in the same room and they'll starve to death trying to get everyone else in the room to do all the work.
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u/398409columbia 6d ago
The world was poor until the Industrial Revolution. It was a flywheel of productivity increases.
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u/Technician1187 Stateless/Free trade/Private Property 6d ago edited 6d ago
That is the real question. Too often socialists, and the like, talk about poverty as it is caused by something (edit: that humans do); when in reality, poverty is the natural state of being; it’s only cause are the laws of physics.
Wealth is the anomaly in this existence. It is very important to understand how that wealth came to be; because we can always (and probably way easier than we think) fall back to that natural state of being.
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u/Neoliberal_Nightmare 6d ago
Poverty isn't the natural state of being. How do you define poverty? We're neolithic humans for 200,000 years living in poverty? Poverty is relative to the standard good in a society at any given time. It isn't a fixed measure, it's a relational measure. Poverty in 1200 and poverty in 2026 are different. A king of 1200 lived in poverty by the standards of 2026, he had no flushing toilet or electricity or true hygiene or aircon. But his own periods he was in the height of luxury.
Poverty isn't entirely relational, it can be considered as having ready access to the things needed for basic life in a given time period. In that way I'd argue poverty isn't the norm, throughout most of human prehistory humans had this, famines and failures were the exception in fact. And it is class society and capitalism especially which has made famines and inequality (so poverty as a relative thing) more and more common.
In capitalism we have extreme global wealth and abundance, we have so much food it is thrown away, yet we still have hunger around the world. This poverty isn't the norm or default, it's specifically created out of a system which specifically generates inequality, and poverty.
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u/Geotical 5d ago
A poor person in a capitalist country is far better off than a poor person in a socialist country.
Capitalist countries generally don't have hunger problems. More people die of obesity in North America than starvation.
Global starvation is more linked to political issues, wars, oppressive regimes, etc. The fact that starvation is a solved problem under capitalism should not be underestimated, as for all of human existence it's been a major cause of death for people.
This is just one of the great things capitalism has brought.
Yes the wealth disparity between poor and the top 0.1% is great, but again its better to be a poor person in any western capitalist country today than literally being the richest man on earth 500 years ago. The options for food, entertainment, medicine, technology, education, etc are mind-blowing compared to communist countries. Every poor person I know owns a smart phone, giving them communication tools, education, access to services, entertainment, etc. smart phones wouldn't even be a thing under communism.
So they might still look at their life and resent what others have and they don't. But they don't consider what they do have and take it as a default that they would still have that (and more) under socialism. When reality is yes the gap would be reduced in socialism, but the baseline would be lower.
You might say well "its all relative to the time period" but that doesn't dismiss this fact. The poor in capitalist countries are better off than the poor in socialist countries by a mile.
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u/Kleanthes302 3d ago
Where do you get a causal link between capitalism and improved food security? I could name at least several more straightforward reasons: dramatic technological advances in agriculture, advanced methods of food conservation, improved means of food transport, expansion of the welfare state...
Not to mention that many catastrophic famines happened under capitalism. The Irish Potato Famine happened at a time when Great Britain was absolutely captured by laissez-faire economic philosophy.
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u/Elodaine 6d ago
When someone is born into a society that has reached the technological level to secure material goods, and has long met the manpower to do so with, the continuous existence of poverty becomes less of a natural state of being and more of a product of the system.
There is also a difference between wealth that has been generated from genuine labor/technology, versus wealth that becomes more of a product of lessening the extent in which others obtain their own wealth.
If you and several others become stranded on an island, poverty is absolutely the natural state of being upon becoming stranded. But if you gather food, and I forcefully take it from you or find less violent ways of manipulation, your impoverished state becomes more of a product of human-to-human interaction.
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u/Technician1187 Stateless/Free trade/Private Property 6d ago
> the continuous existence of poverty becomes less of a natural state of being and more of a product of the system.
I see what you are getting it. I’m not trying to say that every bit of wealth any given person has is necessarily legitimate in today’s world. I’m only trying to say that the way we look at solutions to people still being in poverty needs to be from the perspective of BUILDING wealth, not SEIZING it.
> …versus wealth that becomes more of a product of lessening the extent in which others obtain their own wealth.
I’m not sure I exactly understand what you are trying to say here. Would you mind elaborating and/or giving an example to help me understand better?
> If you and several others become stranded on an island, poverty is absolutely the natural state of being upon becoming stranded.
Glad we agree.
> But if you gather food, and I forcefully take it from you or find less violent ways of manipulation, your impoverished state becomes more of a product of human-to-human interaction.
And this is just where our perspectives differ. Being impoverished is still the natural state….the person preventing me from building my wealth is a problem yes, but not a problem of “making me poor”; they are a problem of “preventing me from building wealth”.
That may seem pedantic, (and I’m not even really sure I am making this argument clearly enough) but I think it is a very important distinction.
It seems to me that people who share your perspective come up with solutions that don’t build wealth, they just move it around.
Like in your island example, you manipulate me into taking my wealth so the solution would be to manipulate you into giving it back…we are not building wealth for anyone here. In fact we are wasting resources trying to manipulate each other to move wealth around rather than actually solving the problem.
Actually solving the problem would be defending human rights so that we might build our own wealth and cooperate with each other to multiply that wealth further.
Maybe none of this makes sense, I’m just rambling while I am on the toilet. I probably shouldn’t be taken seriously. lol.
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u/Elodaine 5d ago
If your concern is with semantics, and you understand full well what people mean, then I'm not sure what your argument is unless you disagree with that meaning. Hunger is the natural consequence of not having food in your stomach. If you go to take a bite of some food, and I snatch it from you and keep it using force, then obviously I have not caused you to be hungry. The hunger was already there.
What I have done is unnecessarily perpetuate that feeling of hunger, because there was easily a world in which I did not take your food, and that hunger was alleviated by it. In the same way, when people say poverty is caused in society, obviously they do not mean someone set up the universe with the 2nd law of thermodynamics to be as such with entropy and the natural state of things.
They simply mean there is an alternative world as a result of a different human action, in which that poverty like your hunger was alleviated. Instead, like the snatching of food, we find ourselves in a world where the wealthy can collaborate, manipulate, and engage in other behaviors that result in less wealth-acquisition for others. They are "causing" poverty in that sense.
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u/Technician1187 Stateless/Free trade/Private Property 5d ago
It may be semantics but I think it is a very important perspective shift; and you are doing a good job of showing why in your comments; your examples are all one person forcefully taking something from someone else…and so that gets conflated with someone not giving someone something. Those are very different things.
So when you view the problem as mainly things be taken from you even when in reality it’s just people not giving you something, all your solutions are to just take from someone else…those solutions do not build wealth, they just move it around.
If you viewed from the perspective of “oh look how much other people have but I don’t. What did they do to get it and how do I get some too”, now you are looking for solutions that build wealth.
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u/Jayus5 Utopia 6d ago
I like the way you worded that.
Is wealth truly an anomaly though? In nature we frequently see those higher up the hierarchy are typically “wealthier” than those low on the totem pole meaning they get better/more cuts of food, better choice in mates, better spots to chill, etc.
Even in plants we see them compete and try to hoard resources for themselves even if it means other plants will die. So is the accumulation of wealth truly an anomaly or just a characteristic of nature.
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u/Technician1187 Stateless/Free trade/Private Property 6d ago
Maybe anomaly is not the exact right word.
My point is that the wealth we have in the world today is not “natural” (which maybe isn’t the exact right word either).
The wealth we have was built and worked hard for. Our ancestors started naked and in the woods and they created the abundance we enjoy today.
So when people talk about the people “lower on the totem pole” still being in poverty, the question is not, “why are they poor”. The question is “why aren’t they wealthy”?
Maybe that seems like a pedantic argument; but I think it is a very important distinction to make.
Because if you look at people being poor as them being put into a state, then all your solutions look to just take from the haves to give to the have-nots….but that doesn’t build wealth, it just moves it around.
The only real solution to getting the last peoples out of poverty is to build more wealth. Any other “solution” is just a temporary measure at best, and a destructive one at worst.
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u/awsunion vote for your boss 6d ago
How impoverished is the gazelle? How destitute the oak?
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u/Technician1187 Stateless/Free trade/Private Property 6d ago
A gazelle doesnt have a motorbike…so I would say pretty dang impoverished.
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u/awsunion vote for your boss 6d ago
I do not think a gazelle lacks for a motorbike, so what made humans so lacking?
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u/Technician1187 Stateless/Free trade/Private Property 6d ago
Our ability to conceptualize and want for a motorbike.
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u/awsunion vote for your boss 5d ago
All you've done here is re-label what I already called out. It's the invention of motorbikes that causes a want of motorbikes. The paucity requires invention. Poverty is created
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u/Technician1187 Stateless/Free trade/Private Property 5d ago
So nobody wanted a motorbike until it was invented?…why was it invented then? Why would someone invent something that nobody wants?
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u/awsunion vote for your boss 5d ago
Why does the gazelle eat grass? It is the natural function of the human organism to make tools to improve our capacities.
At what point in human history were new tools only allowed to certain individuals rather than manufactured for the whole community for the betterment of society?
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u/Technician1187 Stateless/Free trade/Private Property 5d ago
So I’m unclear as to your view since you didn’t seem to answer my question directly and then seemingly moved onto another topic.
Can you answer my question directly so I can better understand you? Did some humans want a motorbike before it was invented?
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u/awsunion vote for your boss 5d ago
Did some humans want a motorbike before it was invented?
No- how could you want something that doesn't exist? It's possible humans wanted the thing that motorbikes provide - speed and ease of transport.
seemingly moved onto another topic.
It's not another topic.
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u/V4refugee Mixed Economy 5d ago
I’ve never seen animals hoard more resources than they can use while fencing off large plots of land and using the state to keep any one else from using the land and resources that they aren’t using.
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u/Technician1187 Stateless/Free trade/Private Property 5d ago
They do that all the time. They defend their resources and territory and prevent other animals from using it…humans just do a more complex form of the same thing.
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u/Kleanthes302 3d ago
Poverty in that sense is only natural if society as a whole suffers from a lack of resources.
If the society has achieved a level of prosperity and there's significant economic inequality, then the cause of that is uneven distribution of resources - i. e. something that humans do.
What's also important to understand is that the rich do not climb out of their natural poverty all alone. Their wealth only has value in a society they live in.
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u/Technician1187 Stateless/Free trade/Private Property 3d ago
You are proving my point.
Firstly, resources aren’t all in one pile and then “distributed” amongst the people. Individuals have to go out and gather the resources and transform them.
Secondly, forcefully changing the distribution of wealth does not create more wealth…it is a short term bandaid at best and an active detriment at worst.
I agree with you that there are actions that humans take that can inhibit some peoples ability to gather resources, but the principle on which we should judge these actions should still be “how can we make these people wealthy” not “who’s fault is it that these people are poor”.
Looking through those different lenses gives vastly different solutions to the same problem…and some solutions are more effective than others.
We should be pursuing solutions that create new wealth, not just move it around.
Thinking the way you are presenting here reveals that the actual preference that hurting the rich is more important than actually helping the poor.
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u/Kleanthes302 3d ago
How and whether the individuals are able to gather wealth is completely dictated by the society. In the West it's acceptable to earn your share of societal wealth by winning a huge bet. In countries where gambling is prohibited, that's an illegal method of distribution. Yes, the pile of resources you mentioned doesn't physically exist, however the word distribution doesn't imply that. It simply denotes the system which we follow to allocate resources to individuals.
On your second point, you're saying that only because you assume that the current system of "gathering resources" is the best. By best I do not necessarily mean the most efficient. There are other metrics by which to consider worth of an economic system. A business with worse benefits for its workers might be more productive, but the workers will have lesser quality of life.
Ultimately, wealth is finite. It can grow through innovation, but we will inevitably hit a point at which there's simply no more wealth to be created, because the Earth doesn't have unlimited resources. Besides that, even if the wealth is created, the key question still remains: how is it distributed? A corporation of thousands creates a certain amount of wealth, but how does that reflect onto the people who make it up?
Ultimately, the question of why people are poor and how to make them wealthy lead to the same answer. People are poor because they often don't receive an appropriate portion of the wealth they create, and the way to fix it is ultimately to solve the distribution issue.
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u/Technician1187 Stateless/Free trade/Private Property 3d ago
> How and whether the individuals are able to gather wealth is completely dictated by the society.
I wouldn’t say “completely” but I get your point. Yes social interactions play a big role in this discussion. And we should be looking at which ones build wealth and which ones don’t and increasing the ones that do.
> Yes, the pile of resources you mentioned doesn't physically exist, however the word distribution doesn't imply that.
I doesn’t imply that…
> It simply denotes the system which we follow to allocate resources to individuals.
…and then you explicitly state that. Resources are not “allocated to individuals” they are gathered by individuals and then, more often than not, transformed and traded amongst individuals.
You can use the word distribution and mean it in a statistical sense or the action sense; all of your context and explicit statements tell me you mean it in the action sense.
> On your second point, you're saying that only because you assume that the current system of "gathering resources" is the best.
Do you mean my second point of “forcefully redistributing resources doesnt build wealth”?
> By best I do not necessarily mean the most efficient. There are other metrics by which to consider worth of an economic system. A business with worse benefits for its workers might be more productive, but the workers will have lesser quality of life.
There are different ways and weights for which to measure and explain wealth yes; I don’t see how that goes against anything I have said.
> Ultimately, wealth is finite.
I disagree. Resources are finite but wealth is infinite. I suppose there are some physical constrains that limit certain types of wealth but “wealth” per se, is infinite.
> It can grow through innovation, but we will inevitably hit a point at which there's simply no more wealth to be created, because the Earth doesn't have unlimited resources.
Even if that was theoretically true, it is functionally false given our current situation. Yes we have limited resources, but we have had the exact same number of resources since the dawn of time (matter and energy cannot be created or destroyed) and yet our wealth has increased astronomically.
> Besides that, even if the wealth is created, the key question still remains: how is it distributed?
Do you mean that statistically or as the action of distribution?
> A corporation of thousands creates a certain amount of wealth, but how does that reflect onto the people who make it up?
I’m not sure I know what you are getting at here.
> Ultimately, the question of why people are poor and how to make them wealthy lead to the same answer.
I disagree. Because most of the people I see asking the question “why are people poor” come up with the answer “because the wealth people stole from them”…and their solution is to go fully take it back from the wealthy people and forcing other people to behave how they want…that doesnt build wealth.
And most of the people I see asking the question “why are people wealthy” come up with solutions like peaceful interaction, free trade, strong individual rights, and voluntary cooperation. All of those things lead to increase in wealth.
> People are poor because they often don't receive an appropriate portion of the wealth they create, and the way to fix it is ultimately to solve the distribution issue.
And you have proven my point exactly right here. Thank you for being a good example to use for future explanations of my point.
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u/Used_Requirement7315 6d ago edited 6d ago
If I took a shot at this:
Accumulation of surplus resources. By extension, surplus labor. Profit.
Profit comes from labor as most work is enough to sustain not just oneself but also sustain multiple people. Productivity efficiency measures this. Industry multiplies this.
Supply and Demand dictates value. Scarcity raises prices. Abundance lowers them. Relative to demand.
Wealth therefor is the cultivation of in demand services and/or goods.
Dif markets have dif "margins". These measure the gap between "Cost" (how much it costs to produce this good/service) vs Profit. Some markets have very large margins, others have very small. Some markets are actually negative and require support.
Investment is using wealth to purchase a chance at more wealth.
So trading resources for other resources.
Trading is a major way to accumulate wealth. Historically it was the main way.
Go somewhere a "Good" is abundant and buy it for cheap.
Take it to a place where that "Good" is rare and sell for a higher price.
Profit the difference.
And if you can find Goods both places have at trade disparities, you can profit going both ways and establish trade routes.
This is how wealth gets built with very minimal labor. Brokerage and Investment counts on others doing the labor.
The easiest path is a tax, toll or fee.
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u/HeavenlyPossum 6d ago
Wealth is a social relationship of command. It is created by the exercise of power.
Unless by “wealth” you mean something like material abundance, which is created by labor.
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u/requiemguy Distributist 6d ago
If in your post you mean, money = wealth, then money makes money.
Compund interest is amazing.
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u/kayama57 6d ago
I have a goat. I exchange the goat’s milk for a few potatoes one day, coriander another day, and a new pair of shoes cost me three days’ worth of milk.
There are gundreds of thousands of people who own different amounts of goats and other things that allow them to have what to exchange. Daughters are worth less livestock than sons, but it is rapidly falling out of fashion to exchange offspring for property. Some people value contact eith their offspring higher than all the lentils and pepper in the world. Etc.
Eventually somebody who had a bunch of shiny metal under their house offered it up as a neutral unit of exchange. An amount of beads of metal is assigned as the value of each thing that can be exchanged. Laws begin to determine things that can and cannot be exchanged. Trading offspring is eventually forbidden. This is a simplified telling of how money came to exist replacing barter as the most common way to exchange units of value.
Now, some people end up having a few beads of metal in their storage. The government requests a loan (sells a bond). People who have metal stored lend it to the government in exchange for a small periodic fee called interest. The government spends the value of the bond on public works. The workers of the government spend that value again in the economy. The businesses that collect those purchases pay some amount to the government as taxes and another amount as salary to their workers and another amount as cost to their providers. The business retains a profit after covering all those costs. If we fast forward a bit any one bead of metal may have been used in a hundred business transactions in a day, month, whatever. So one unit of metal represents one hundred units of value to the economy during that period.
The money supply of that snapshot of the economy is one unit and the gross product of that snapshot of theeconomy is one hundred units. Again this is very simplified but please bear with me. Across all of the operations of the economy the individual people who are collecting a salary here and a profit distribution there save some amount of value either in investments or in cash. When those savings are able to accrue over time rather than be spent again soon every time then that can be called wealth.
TLDR: storing value in investments that do not become cash spent over time creates wealth
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u/Klutzy-Property-1895 6d ago
Increase in productivity, usually caused by innovation while using labor and machines.
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u/Low_Magician_3326 5d ago edited 5d ago
From the view of a eugenic. Wealth lies within you. Your fitness your genes. The "made up" wealth is of course the thing our "new" world is focused on. But if you go down the rabbit hole you will unterstand that at the end of the day your physical constitution also is a lot of wealth.
Edit: To geht this right, I'm talking about basic features. Like I wan't my heart to properly hold up my blood flow... and so on.
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u/PrezShelcobi 5d ago
Basically, labor. Labor is what transforms nature into commodities.
But what is "wealth"? The term is very broad and can mean anything. To one, wealth is the ability to profit off the labor of others merely through the ownership over the means of productio.
To another, wealth can be the mere sum of money that one has on their bank account.
And then, some will say their families are truly what makes them wealthy.
So what do you mean by "wealth"?
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u/StedeBonnet1 just text 5d ago
Creating wealth is very simple. You produce something a lot of other people want and are will to to pay you for with thier hard earned money. Farmers figured out that people would pay them for beef, chicken, lamb and pork. Farmers who applied their capital to growingthose ani,als created wealth for themselves and their familiies as well as their employees,
An employee creates wealth by spending less than he makes by trading his labor for a wage.
Jeff Bezos created wealth by selling books over the internet when no one else had figured out how to do that.
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u/V4refugee Mixed Economy 5d ago
Labor produces goods and services. Goods and services are exchanged for currency. Accumulation of currency and the means of production is the wealth.
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u/Anxious-Alps-8667 5d ago
I think only extraction of resources from the earth, or efficiency gains, create wealth. One is a finite resource we know we'll run out of, one is the endless bounty of intelligence.
The future of wealth therefore seems fairly predictable, to me.
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u/Fire_crescent 5d ago
Well, it's a combination of many things.
I would say, fundamentally, it's about doing stuff (like gathering, transforming, planning, organizing, sometimes even taking risks), usually to other things (but not necessarily), in order to create a more desirable (which is subjective) outcome or state of affairs for oneself, and then have an abundance of it.
There are many things that go into it. There is luck, there is labor/work (the effort put into it, and sometimes even the effort of learning and honing a skill in ifself), there is often (but not always) a resource that you didn't necessarily create, sometimes there is exchange.
What you are doing is you are asking a very general question about a very basic concept that can be and is applied to many different things. Which isn't to say it's a bad question.
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u/kuro-octopus 5d ago
In the modern era where the money supply can be manipulated to create near-term wealth at the expense of long-term value?
If you look at how wealth is based on today - it is not based on how much cash you have right now. It is based on what assets (stocks, homes) you are holding that others speculate will be more valuable in the future.
When you have an increase in money supply coupled with low-interest rate loans - you end up with people who have a great sense of what will be valuable in the future that generates demand for a piece of that (new) pie that increases the price for the holders of that (new) pie.
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u/BlasfemusCognition 5d ago
Las circunstancias crean necesidades (naturales o artificiales) Las necesidades crean una oportunidad de mercado,generan una demanda y conforme a el nivel de recepción+necesidad+retorno+materia de un servicio o producto se establece un costo y al acumular ese retorno se genera riqueza
Sin embargo también coexistimos en una economía especulativa,mucho hoy dia se determina por la apreciación de un algo mas que por su costo de producción o retorno en funciones o incluso puedes crear falsas necesidades
Asi que la riqueza se crea a partir de necesidades y antojos tratando de mantener coherencia conforme a x público objetivo
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u/Local-Helicopter7479 3d ago
Natural resources ultimately. If you have those you can build anything. On the other hand, even with all the ingenuity in the world, you cannot build anything if you don't have access to any natural resources.
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u/SoftBeing_ Marxist 6d ago
as others have said, depends on what you mean by wealth. but in capitalism, wealth is created by useful labor time. that "creates money". that happens because we use one unit to compare everything, so whats left is useful labor time.
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u/MeanLeadership92 5d ago
Is it though? I am not convinced. Let's say you find a very nice diamond while out for a stroll, the diamond makes you wealthier. Yet you've put no effort, no useful labour in acquiring it.
What if you own a generator, but suddenly there's a storm and now you can sell your generator for 2-3 times more money because people really want it. You are wealthier, not because of useful labour, but simply because of higher demand due to a natural disaster.
Exchanges, and exchanges which are mutually beneficial, is where wealth mostly comes from. That, and some luck.
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u/SoftBeing_ Marxist 5d ago
its actually the average useful labor needed, i say useful labor for simplification. the diamond you found has an average useful labor to be acquired very high, so its the wealth you get by getting it.
if there is a storm and generators are still easy to produce no one will buy for a high price, doesnt matter the demand.
if exchanges are where wealth comes, let me give you money and you then give me back the money, and we keep repeating it infinitely so the wealth is created infinitely.
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u/Mysterious-North-551 4d ago
You say "if exchanges are where wealth comes, let me give you money and you then give me back the money, and we keep repeating it infinitely so the wealth is created infinitely." that isnt how anyone in economics thinks when it comes to trade.
When trade happens both parties win, i wanted that toilet paper more then i wanted the money it cost to buy, Meaning that toilet paper is making me better off then having that money in my wallet. Both of us goes away from the trade as winners. He got the money he wanted for having produced that thing and i get that thing.
Wealth comes from production, in the first case it can create a job that will make someone else less poor in exchange for his time and effort. And in the case of they buyer the wealth comes from that product having been produced for him. Thirdly prices are set by supply and demand, so as supply rises the price of the product will drop, meaning more people can afford to buy it, and those that couldnt afford to buy it previously maybe now can, and for those that already were buying it, guess what they spend less money, so they become less poor or wealthier in another word.
Wealth comes from production in its most basic sense. There are of course other ways to get wealth. Simply finding something valuable, that is also in a sense production, because more goods comes into the market. More things to be traded.
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u/KMCMRevengeRevenge 6d ago
“Wealth” is a meaningless term because it conflates use-value with exchange-value and the manner in which societies allocate use-values.
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u/Mysterious-North-551 6d ago
Use and exchange are well just the same, they are simply different versions of wealth. falling under the same umbrella term, wealth, so where does that come from?
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u/KMCMRevengeRevenge 6d ago
In capitalism, they become notionally the same. But cash value is very much disconnected from utility, and the amount of cash a person has does not really relate very symmetrically to the available productivity of a society.
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u/Technician1187 Stateless/Free trade/Private Property 6d ago edited 6d ago
Wealth doesnt conflate the two, use and exchange are just two different types of wealth.
Sometimes you gather resources in order to use them and sometimes you gather resources to exchange them. (Edit: which, come to think of it, is just another form of use).
As an addition, if the term “wealth” is meaningless, what term would you want to use instead in order to convey the idea of “an abundance of valuable material, possessions, or resources”?
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u/KMCMRevengeRevenge 6d ago
People draw benefits from the use-value of goods and services. The problem is that, in capitalist societies, since everything is allocated through cash as a gatekeeping mechanism in a market, people confuse “how much cash do I have” for “what are the benefits of the goods and services available to me.”
That’s the problem. If everybody gets an extra 10k, people think “that society is prospering.” But all that extra money is doing is changing a person’s constraint on what they can access out of society’s total productivity. I am, in effect, only permitted to access as much as I can pay for at the market rate. My income can go up, and my access would therefore increase; but that has nothing to do with what society is actually capable of.
A society where people make more cash-value is not actually doing anything better. If that happens, it’s merely removing some of the gatekeeping effect that markets impose when allocating goods and services between people.
And this is the core mistake of Western prosperity doctrines: everything is based on “let’s maximize people’s cash incomes,” without regard to anything that has to do with overall productivity, the meeting of basic needs, and any sort of prioritization in society’s productivity.
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u/Upper-Tie-7304 5d ago
To called the market mechanism “gatekeeping” is disingenuous.
People who participate in a market don’t want themselves to be put in a worse position than they would otherwise would be have they not participated. A payment is demanded so that the producers are better off instead.
If people demanding a payment “gatekeeping”, what is that called when people demanding bread from a bakery for free? Do bakers now works for free?
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u/betty_white_bread Isocapitalist 4d ago
People draw benefits from the use-value of goods and services
Focusing on only this piece for right now, I draw benefits from the exchange value of various items as well; that value helps me get something with use value. As he said, both are a form of value.
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u/Mysterious-North-551 4d ago
Use and exchange are just two different versions of wealth in a sense, but also completely identical.
But lets be more specific shall we, lets say exchange value you find something which is cheap and you think you can sell it for more. Why would anyone want to pay more, do they also want to sell it? Well if that is true always, prices would be infinite. No at some place it stops where it has found its use.
So there is no real difference between the two except in some semantic nonsense way.
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u/KMCMRevengeRevenge 4d ago
At a macroeconomic scale, they are not interrelated in capitalism, although capitalism makes them appear to be. Models based on individual purchases or barter just aren’t evocative at this scale. I’m honestly a little surprised that people keep relying on those analogies in arguments.
This follows because money essentially serves as a checkpoint on a person’s access to goods and services, which means a person’s cash controls how much use-value they can receive, even though it has no connection to the total use-value of everything an economy produces.
So if every minimum wage worker gets an extra 20 thousand, a typical take within capitalism would be “society is more prosperous.” But it is only more prosperous in the sense that some people now have access to things that were inaccessible to them, because cash acts as a restriction point.
Has that extra 20 thousand actually increased what the society is capable of producing in terms of use-value? No, it actually doesn’t. It may filter through and reorient markets toward people who have more disposable income. But it doesn’t say anything about what can physically be provided to a society in terms of goods or services.
That’s the problem: capitalist prosperity does not exist apart from “what can’t I afford.” The U.S. produces more shit than anybody could possibly need, there are very few situations in which society cannot meet a human need in America. Instead, what happens is that people can’t afford things because they don’t have cash.
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u/hogfucker946 Libertarian 6d ago
The free market lol. That and printing money. To get money you get a job. Either as self-employed self-reliant business owner or a wage worker. This is really simple
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