'Wealth' refers to some accumulation of resources, whether abundant or not. 'Richness' refers to an abundance of such resources. A wealthy (or rich) individual, community, or nation thus has more resources than a poor one. Richness can also refer at least basic needs being met with abundance widely shared. The opposite of wealth is destitution. The opposite of richness is poverty.
The term implies a social contract on establishing and maintaining ownership in relation to such items which can be invoked with little or no effort and expense on the part of the owner (see means of protection).
The concept of wealth is relative and not only varies between societies, but will often vary between different sections or regions in the same society. A personal net worth of US $10,000 in most parts of the United States would certainly not place a person among the wealthiest citizens of that locale. However, such an amount would constitute an extraordinary amount of wealth in impoverished developing countries.
Concepts of wealth also vary across time. Modern labor-saving inventions and the development of the sciences have enabled the poorest sectors of today's society to enjoy a standard of living equivalent if not superior to the wealthy of the not-too-distant past. This comparative wealth across time is also applicable to the future; given this trend of human advancement, it is likely that the standard of living that the wealthiest today enjoy will be considered rude poverty by future generations.
Some of the wealthiest countries in the world are the United States, the United Kingdom, the Republic of Ireland, Norway, Japan, Kuwait, United Arab Emirates (especially Dubai), South Korea, Germany, The Netherlands, Belgium, France, Israel, Taiwan, Australia, Singapore, Philippines, Canada, Finland, Greece, Spain, Portugal, Sweden, Italy, Denmark, New Zealand, Iceland, Monaco, Luxembourg, Liechenstein and Switzerland, the larger of which are in the G8. All of the above countries, except United Arab Emirates and Kuwait, are considered developed countries.
Industrialization emphasized the role of technology. Many jobs were automated. Machines replaced some workers while other workers became more specialized. Labour specialization became critical to economic success. However, physical capital, as it came to be known, consisting of both the natural capital (raw materials from nature) and the infrastructural capital (facilitating technology), became the focus of the analysis of wealth. Adam Smith saw wealth creation as the combination of materials, labour, land, and technology in such a way as to capture a profit (excess above the cost of production). The theories of David Ricardo, John Locke, John Stuart Mill, and later, Karl Marx, in the 18th century and 19th century built on these views of wealth that we now call classical economics and Marxian economics (see labor theory of value). Marx distinguishes in the Grundrisse between material wealth and human wealth, defining human wealth as "wealth in human relations"; land and labour were the source of all material wealth.
As a result of different conditions of life, members of different social classes view the world in much different ways. This allows them to develop different “conceptions of social reality, different aspirations and hopes and fears, different conceptions of the desirable.” The way different classes in society view wealth vary and these diverse characteristics are a fundamental dividing line among the classes. Today there is an extremely skewed concentration of wealth in America, more so than even income. In 1996 the Fed survey reported that the net worth of the top 1 percent was approximately equal to that of the bottom 90 percent.
The accumulation of wealth fosters a growth of power, which in turn creates privileges conducive to more wealth. Children of the upper class are socialized on how to manage this power and channel this privilege in many different forms such as gaining access to other’s capital and to critical information. It is by accessing various edifices of information, associates, procedures and auspicious rules that the upper class are able to maintain their wealth and pass it along, and not necessarily because of an extreme work ethic.
However, at any given point in time, there is a limited amount of wealth which exists. That is to say, it is fixed in the short term. People who study short term issues see wealth as a zero-sum game and concentrate on the distribution of wealth, whereas people who study long-term issues see wealth as a non-zero sum game and concentrate on wealth creation. Other people put equal emphasis on both the creation and the distribution of wealth. It has been theorized, for example, by Robert Wright, among others, that society becomes increasingly non-zero-sum as it becomes more complex, specialized, and interdependent.
It was often seen as self-interested arguments by the powerful explaining why they should remain in power. In The Prince, Niccolò Machiavelli had commented in that earlier era on the prudent use of wealth, and the need to tolerate some cruelty and vice in the use of it, in order to maintain appearances of strength and power.
Jane Jacobs in the 1960s and 70s offered the observation that there were two different moral syndromes that were common attitudes to wealth and power, and that the one more associated with guardianship did in fact require a degree of ostentatious conspicuous consumption if only to impress others.
This logic is almost entirely absent from neoclassical economics, which in its extreme form argues for the abolition of any political economy apart from the service markets wherein favours may be bought and sold at will, including political ones - the so-called political choice theory popular in the U.S.A.. While it is entirely likely that such assumptions apply in the subcultures that dominate modern discourse on technical economics and especially macroeconomics, the less technical notions of wealth and power that are implied in the older theories of economics and ideas of wealth, still continue as daily facts of life.
Sustainable wealth is defined by the author of Creating Sustainable Wealth, Elizabeth M Parker, as meeting the individual’s personal, social and environmental needs without compromising the ability of future generations to meet their own needs. This definition of sustainable wealth comes from the marriage of sustainability as defined by the Brundtland Commission and wealth defined as a measure of well-being, not only from marriage but it also can be earned by working hard.
There is a debate in economic literature, usually referred to as the limits to growth debate in which the ecological impact of growth and wealth creation is considered. Many of the wealth creating activities mentioned above (cutting down trees, hunting, farming) have an impact on the environment around us. Sometimes the impact is positive (for example, hunting when herd populations are high) and sometimes the impact is negative (for example, hunting when herd populations are low).
Most researchers feel that sustained environmental impacts can have an effect on the whole ecosystem. They claim that the accumulated impacts on the ecosystem put a theoretical limit on the amount of wealth that can be created. They draw on archeology to cite examples of cultures that they claim have disappeared because they grew beyond the ability of their ecosystems to support them.
Others are more optimistic (or, as the first group might claim, more naïve). They claim that although unrestrained wealth-creating activities may have localized environmental impact, large scale ecological effects are either minor or non-existent; or that even if global scale ecological effects exist, human ingenuity will always find ways of adapting to them, so that there is no ecological limit to the amount of growth or wealth that this planet will sustain.
More fundamentally, the limited surface of Earth places limits on the space, population and natural resources available to the human race, at least until such time as large-scale space travel is a realistic proposition.
Wealth is a stock that can be represented in an accounting balance sheet, meaning that it is a total accumulation over time, that can be seen in a snapshot. Income is a flow, meaning it is a rate of change, as represented in an Income/Expense or Cashflow Statement. Income represents the increase in wealth (as can be quantified on a Cashflow statement), expenses the decrease in wealth. If you limit wealth to net worth, then mathematically net income (income minus expenses) can be thought of as the first derivative of wealth, representing the change in wealth over a period of time.
Wealth has also been defined as "the amount of time an individual can maintain his current lifestyle for, without any new income." For example if a person has $1000, and their lifestyle dictates $1000 per week of expenses, then their wealth is measured as 1 week. Under this definition, a person with $10,000 of savings and expenses of $1000 per week (10 weeks of wealth) would be considered wealthier than a person with $20,000 of savings and expenses of $5000 per week (4 weeks of wealth).
Different societies have different opinions about wealth distribution and about the obligations related to wealth, but from the era of the tribal society to the modern era, there have been means of moderating the acquisition and use of wealth.
In ecologically rich areas such as those inhabited by the Haida in the Cascadia ecoregion, traditions like potlatch kept wealth relatively evenly distributed, requiring leaders to buy continued status and respect with giveaways of wealth to the poorer members of society. Such traditions make what are today often seen as government responsibilities into matters of personal honour.
In modern societies, the tradition of philanthropy exists. Large donations from funds created by wealthy individuals are highly visible, although small contributions by many people also offer a wide variety of support within a society. The continued existence of organizations which survive on donations indicate that modern Western society has at least some level of philanthropy.
Furthermore, in today's societies, much wealth distribution and redistribution is the result of government policies and programs. Government policies like the progressivity or regressivity of the tax system can redistribute wealth to the poor or the rich respectively. Government programs like “disaster relief” transfer wealth to people that have suffered loss due to a natural disaster. Social security transfers wealth from the young to the old. Fighting a war transfers wealth to certain sectors of society. Public education transfers wealth to families with children in public schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads). Certain people resent having to contribute to some or all of these programs, and disparagingly label them social engineering.
Like all human activities, wealth redistribution cannot achieve 100% efficiency. The act of redistribution itself has certain costs associated with it, due to the necessary maintenance of the infrastructure that is required to collect the wealth in question and then redistribute it. Different people on different sides of the political spectrum have different views on this issue. Some see it as unacceptable waste, while others see it as a natural fact of life, which is inevitable in all kinds of inter-human relations.
Proponents of the supply-side theory of "trickle-down" economics claim that it is a form of time-deferred philanthropy. The theory is that newly created wealth eventually "trickles down" to all strata of society. The argument goes that although wealth is created primarily by the wealthy, they will tend to reinvest their wealth, and this process will create even more wealth. As the economy grows, it is said that more and more people will share in the newly created wealth. A similar argument can be made in the case of Keynesian economics. According to this theory, government redistributions and expenditures have a multiplier effect that stimulates the economy and creates wealth. Supply-siders claim that wealth is created primarily by investment (supply), whereas Keynesians claim that wealth is driven by expenditure (demand). Today most economists agree that growth can be stimulated by either the supply or demand side, and some of them argue that these are really two sides of the same coin, in the sense that you seldom get one without the other. Nevertheless, the dispute between supply-side and Keynesian economics is of continuing interest.
Stresses within social distribution systems can be understood within a broad theory of political economy, where tradeoffs between means of protection, persuasion and production, and valuations of different styles of capital, are described. Simply put, if the rich do not at least once in a while give away, of their own free will, at least a small part of their wealth to the poor, then the poor are much more likely to rebel against the rich.
Land ownership was also justified according to John Locke. He claimed that because we admix our labour with the land, we thereby deserve the right to control the use of the land and benefit from the product of that land (but subject to his Lockean proviso of "at least where there is enough, and as good left in common for others.").
Additionally, in our post-agricultural society this argument has many critics (including those influenced by Georgist and geolibertarian ideas) who argue that since land, by definition, is not a product of human labor, any claim of private property in it is a form of theft; as David Lloyd George observed, "to prove a legal title to land one must trace it back to the man who stole it."