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Wealth

Wealth

Overview
Wealth is the abundance
Abundance
Abundance may refer to:In science and technology:* Abundance , the opposite of scarcities* Abundance , growing food with plentiful resources that will not run out -- sunshine, CO2, and waste or brine water....

 of valuable
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 resource
Resource
A resource is a source or supply from which benefit is produced, typically of limited availability.Resource may also refer to:* Resource , substances or objects required by a biological organism for normal maintenance, growth, and reproduction...

s or material possessions
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

. The word
Word
In language, a word is the smallest free form that may be uttered in isolation with semantic or pragmatic content . This contrasts with a morpheme, which is the smallest unit of meaning but will not necessarily stand on its own...

 wealth is derived from the old English wela, which is from an Indo-European
Indo-European
Indo-European may refer to:* Indo-European languages** Aryan race, a 19th century and early 20th century term for those peoples who are the native speakers of Indo-European languages...

 word stem. An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy.

The concept of wealth is of significance in all areas of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, especially development economics
Development economics
Development Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...

, yet the meaning of wealth is context-dependent and there is no universally agreed upon definition.
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Quotations

"It is more difficult for a rich man to enter the kingdom of God than it is for a camel to pass through the eye of a needle."

Jesus Christ, The New Testament, Luke 18:18

"We have no more right to consume happiness without producing it than to consume wealth without producing it."

George Bernard Shaw, Candida, I

"Riches have wings, and grandeur is a dream."

William Cowper, The Task, III, ‘The Garden’, 263

"Penny wise, pound foolish."

Robert Burton (1577-1640), Anatomy of Melancholy, ‘Democritus to the reader’

"Riches are a good handmaiden, but the worst mistress."

Francis Bacon, De dignitate et augmentis scientiarium, Part I. vi. 3. 6

"The rich are the scum of the earth in every country."

G.K. Chesterton (1874-1936), English author and mystery novelist, The Flying Inn (1914)

"There is no Wealth but Life."

John Ruskin, Unto This Last, IV (1860)

"If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed."

Edmund Burke, Letters on a Regicide Peace

"Wealth is not his that has it, but his that enjoys it."

Benjamin Franklin, Poor Richard’s Almanack (1736 edition)

"That man is the richest whose pleasures are the cheapest."

Henry David Thoreau, Journal, 11th March 1856
Encyclopedia
Wealth is the abundance
Abundance
Abundance may refer to:In science and technology:* Abundance , the opposite of scarcities* Abundance , growing food with plentiful resources that will not run out -- sunshine, CO2, and waste or brine water....

 of valuable
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 resource
Resource
A resource is a source or supply from which benefit is produced, typically of limited availability.Resource may also refer to:* Resource , substances or objects required by a biological organism for normal maintenance, growth, and reproduction...

s or material possessions
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

. The word
Word
In language, a word is the smallest free form that may be uttered in isolation with semantic or pragmatic content . This contrasts with a morpheme, which is the smallest unit of meaning but will not necessarily stand on its own...

 wealth is derived from the old English wela, which is from an Indo-European
Indo-European
Indo-European may refer to:* Indo-European languages** Aryan race, a 19th century and early 20th century term for those peoples who are the native speakers of Indo-European languages...

 word stem. An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy.

The concept of wealth is of significance in all areas of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, especially development economics
Development economics
Development Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...

, yet the meaning of wealth is context-dependent and there is no universally agreed upon definition. Generally, economists define wealth as "anything of value" which captures both the subjective nature of the idea and the idea that it is not a fixed or static concept. Various definitions and concepts of wealth have been asserted by various individuals and in different contexts. Defining wealth can be a normative
Normative
Normative has specialized contextual meanings in several academic disciplines. Generically, it means relating to an ideal standard or model. In practice, it has strong connotations of relating to a typical standard or model ....

 process with various ethical implications, since often wealth maximization is seen as a goal or is thought to be a normative principle of its own.

Although precise data is not available, the total household wealth in the world has been estimated at $125 trillion
Trillion
-Numbers:Either of the two numbers :* 1,000,000,000,000 for all short scale countries...

 (USD 125 x1012) in year 2000.

About 90% of global wealth is distributed in North America, Europe, and "rich Asia-Pacific" countries (not including India), and 1% of adults are estimated to hold 40% of world wealth, a number which falls to 32% when adjusted for purchasing power parity
Purchasing power parity
In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...

.

Definition


For definitions of "wealth," see also The Wealth of Nations
The Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...

and Max Weber
Max Weber
Karl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...

, The Protestant Ethic and the Spirit of Capitalism
The Protestant Ethic and the Spirit of Capitalism
The Protestant Ethic and the Spirit of Capitalism is a book written by Max Weber, a German sociologist, economist, and politician. Begun as a series of essays, the original German text was composed in 1904 and 1905, and was translated into English for the first time by Talcott Parsons in 1930...

.

Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

, in his seminal work The Wealth of Nations
The Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...

, described wealth as "the annual produce of the land and labour of the society". This "produce" is, at its simplest, that which satisfies human needs and wants of utility
Utility
In economics, utility is a measure of customer satisfaction, referring to the total satisfaction received by a consumer from consuming a good or service....

. In popular usage, wealth can be described as an abundance of items of economic value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

, or the state of controlling or possessing such items, usually in the form of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

, real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...

 and personal property. An individual who is considered wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group. In economics, net wealth refers to the value of assets owned minus the value of liabilities owed at a point in time. Wealth can be categorized into three principal categories: personal property
Personal property
Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...

, including homes or automobiles; monetary savings, such as the accumulation of past income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...

; and the capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

 wealth of income producing assets, including real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...

, stocks
Stocks
Stocks are devices used in the medieval and colonial American times as a form of physical punishment involving public humiliation. The stocks partially immobilized its victims and they were often exposed in a public place such as the site of a market to the scorn of those who passed by...

, bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

, and business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

es. All these delineations make wealth an especially important part of social stratification
Social stratification
In sociology the social stratification is a concept of class, involving the "classification of persons into groups based on shared socio-economic conditions ... a relational set of inequalities with economic, social, political and ideological dimensions."...

. Wealth provides a type of social safety net
Social safety net
Social safety nets, or "socioeconomic safety nets", are non-contributory transfer programs seeking to prevent the poor or those vulnerable to shocks and poverty from falling below a certain poverty level. Safety net programs can be provided by the public sector or by the private sector...

 of protection against an unforeseen decline in one’s living standard in the event of job loss or other emergency and can be transformed into home ownership, business ownership, or even a college education.

'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 to at least basic needs being met with abundance widely shared. The opposite of wealth is destitution. The opposite of richness is poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...

.

The term implies a social contract
Social contract
The social contract is an intellectual device intended to explain the appropriate relationship between individuals and their governments. Social contract arguments assert that individuals unite into political societies by a process of mutual consent, agreeing to abide by common rules and accept...

 on establishing and maintaining ownership
Ownership
Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. The concept of ownership has...

 in relation to such items which can be invoked with little or no effort and expense on the part of the owner. The concept of wealth is relative and not only varies between societies, but varies between different sections or regions in the same society. A personal net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...

 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
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called 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
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...

 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((cn)) of human advancement, it is likely that the standard of living that the wealthiest enjoy today will be considered impoverished by future generations.

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
Physical capital
In economics, physical capital or just 'capital' refers to any already-manufactured asset that is applied in production, such as machinery, buildings, or vehicles. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function...

, as it came to be known, consisting of both the natural capital
Natural capital
Natural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...

 and the infrastructural capital
Infrastructural capital
Public capital is the aggregate body of government-owned assets that are used as the means for private productivity. Such assets span a wide range including: large components such as highways, airports, roads, transit systems, and railways; local, municipal components such as public education,...

, became the focus of the analysis of wealth.

Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 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
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

, John Locke
John Locke
John Locke FRS , widely known as the Father of Liberalism, was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social...

, John Stuart Mill
John Stuart Mill
John Stuart Mill was a British philosopher, economist and civil servant. An influential contributor to social theory, political theory, and political economy, his conception of liberty justified the freedom of the individual in opposition to unlimited state control. He was a proponent of...

, in the 18th century and 19th century built on these views of wealth that we now call classical economics
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....

.

Marxian economics (see labor theory of value
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...

) distinguishes in the Grundrisse
Grundrisse
The Grundrisse der Kritik der Politischen Ökonomie is a lengthy manuscript by the German philosopher Karl Marx, completed in 1858. However, as it existed primarily as a collection of unedited notes, the work remained unpublished until 1939...

between material wealth and human wealth, defining human wealth as "wealth in human relations"; land and labour were the source of all material wealth.

Economic analysis


In economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, wealth is the net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...

 of a person, household, or nation, that is, the value of all asset
Asset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...

s owned net of all liabilities owed at a point in time. For national wealth as measured in the national accounts
National accounts
National accounts or national account systems are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting...

, the net liabilities are those owed to the rest of the world. The term may also be used more broadly as referring to the productive capacity of a society or as a contrast to poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...

. Analytical emphasis may be on its determinants or distribution
Distribution of wealth
The distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the distribution of income in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society.-Definition of...

.

Economic terminology distinguishes between two types of variables: stock and flow
Stock and flow
Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time , which may have...

. Wealth, as measurable at a date in time, is a stock
Stock and flow
Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time , which may have...

, like the value of an orchard on December 31 minus debt owed on the orchard. For a given amount of wealth, say at the beginning of the year, income from that wealth, as measurable over say a year is a flow
Stock and flow
Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time , which may have...

. What marks the income as a flow is its measurement per unit of time, like the value of apples yielded from the orchard per year.

In macroeconomic theory the 'wealth effect
Wealth effect
The wealth effect is an economic term, referring to an increase in spending that accompanies an increase in perceived wealth.-Effect on individuals:...

' may refer to the increase in aggregate consumption from an increase in national wealth. One measure of it is the wealth elasticity of demand
Wealth elasticity of demand
Wealth elasticity of demand in microeconomics is the proportional change in the consumption of a good relative to a change in consumers' wealth...

. It is the percentage change in the amount demanded of consumption for each one-percent change in wealth.

Wealth may be measured in nominal or real values, that is in money value as of a given date or adjusted to net out price changes. The assets include those that are tangible (land
Land (economics)
In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...

 and capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

) and financial (money, bonds, etc.). Measurable wealth typically excludes intangible or nonmarketable assets such as human capital
Human capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...

 and social capital
Social capital
Social capital is a sociological concept, which refers to connections within and between social networks. The concept of social capital highlights the value of social relations and the role of cooperation and confidence to get collective or economic results. The term social capital is frequently...

. In economics, 'wealth' corresponds to the accounting term 'net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...

'. But analysis may adapt typical accounting conventions for economic purposes in social accounting (such as in national accounts
National accounts
National accounts or national account systems are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting...

). An example of the latter is generational accounting
Generational accounting
Generational accounting is a relatively new method of national accounting for measuring redistribution of lifetime tax burdens across generations from social insurance, including social security and social health insurance...

 of social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

 systems to include the present value
Present value
Present value, also known as present discounted value, is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk...

 projected future outlays considered as liabilities. Macroeconomic questions include whether the issuance of government bonds affects investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 and consumption through the wealth effect
Wealth effect
The wealth effect is an economic term, referring to an increase in spending that accompanies an increase in perceived wealth.-Effect on individuals:...

.

Environmental assets are not usually counted in measuring wealth, in part due to the difficulty of valuation for a non-market good
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...

. Environmental or green accounting
Green accounting
Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations. It has been argued that gross domestic product ignores the environment and therefore decisionmakers need a revised model that incorporates green accounting.- Etymology :The...

 is a method of social accounting
National accounts
National accounts or national account systems are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting...

 for formulating and deriving such measures on the argument that an educated valuation is superior to a value of zero (as the implied valuation of environmental assets).

Sociological treatments


"Wealth provides an important mechanism in the intergenerational transmission of inequality." Less than 10% of the wealthiest people in America inherited family fortunes. But the effect of inherited wealth can also be seen on a more modest level. For example, a couple who buy a house with financial help from their parents or a student who has his or her college education paid for; in both scenarios the participants are benefiting directly from the accumulated wealth of previous generations.

Wealth and social class


Social class
Social class
Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...

 is not identical to wealth, but the two concepts are related (particularly in Marxist theory
Marxist philosophy
Marxist philosophy or Marxist theory are terms that cover work in philosophy that is strongly influenced by Karl Marx's materialist approach to theory or that is written by Marxists...

), leading to the combined concept of Socioeconomic status
Socioeconomic status
Socioeconomic status is an economic and sociological combined total measure of a person's work experience and of an individual's or family’s economic and social position in relation to others, based on income, education, and occupation...

.

Partly as a result of different economic conditions of life, members of different social classes often have different value systems and view the world in different ways. As such, there exist different "conceptions of social reality, different aspirations and hopes and fears, different conceptions of the desirable." The way the various social classes in society view wealth vary and these diverse characteristics are a fundamental dividing line among the classes. According to Richard H Ropers, the concentration of wealth
Concentration of wealth
"Concentration of wealth" often refers to:*Wealth condensationRelated:*Distribution of wealth*Income disparity*Economic inequality*Income inequality metrics*International inequality...

 in the United States is inequitably distributed. In 1996, the United States federal government reported that the net worth of the top 1 percent of people in the United States was approximately equal to that of the bottom 90 percent.

The upper class


Upper class
Upper class
In social science, the "upper class" is the group of people at the top of a social hierarchy. Members of an upper class may have great power over the allocation of resources and governmental policy in their area.- Historical meaning :...

 values include higher education, and the wealthiest people the accumulation and maintenance of wealth, the maintenance of social networks and the power that accompanies such networks. Children of the upper class are typically schooled on how to manage this power and channel this privilege in different forms. It is in large part by accessing various edifices of information , associates, procedures and auspices that the upper class are able to maintain their wealth and pass it to future generations.

The middle class


The middle class places a greater emphasis on income. The middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....

 views wealth as something for emergencies and it is seen as more of a cushion. This class comprises people that were raised with families that typically owned their own home, planned ahead and stressed the importance of education and achievement. They earn a significant amount of income and also have significant amounts of consumption. However there is very limited savings (deferred consumption) or investments, besides retirement pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...

s and homeownership. They have been socialized to accumulate wealth through structured, institutionalized arrangements. Without this set structure, asset accumulation would likely not occur.

The lower class


Those with the least amount of wealth are the welfare
Welfare
Welfare refers to a broad discourse which may hold certain implications regarding the provision of a minimal level of wellbeing and social support for all citizens without the stigma of charity. This is termed "social solidarity"...

 poor. (see underclass
Underclass
The term underclass refers to a segment of the population that occupies the lowest possible position in a class hierarchy, below the core body of the working class. The general idea that a class system includes a population under the working class has a long tradition in the social sciences...

) Wealth accumulation for this class is to some extent prohibited. People that receive AFDC transfers cannot own more than a trivial amount of assets, in order to be eligible and remain qualified for income transfers. Most of the institutions that the welfare poor encounter discourage any accumulation of assets.

Wealth in the form of land


In the western tradition, the concepts of owning land and accumulating wealth in the form of land were engendered in the rise of the first state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...

, for a primary service and power of government was, and is to this day, the awarding and adjudication
Adjudication
Adjudication is the legal process by which an arbiter or judge reviews evidence and argumentation including legal reasoning set forth by opposing parties or litigants to come to a decision which determines rights and obligations between the parties involved....

 of land use rights.

Land ownership was also justified according to John Locke
John Locke
John Locke FRS , widely known as the Father of Liberalism, was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social...

. He claimed that because we mix 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
Lockean proviso
The Lockean Proviso is a portion of John Locke's labor theory of property which says that though individuals have a right to acquire private property from nature, that they must leave "enough and as good in common...to others."...

 of "at least where there is enough, and as good left in common for others.").

Additionally, in developed countries post-agrarian society
Agrarian society
An agrarian society is a society that depends on agriculture as its primary means for support and sustenance. The society acknowledges other means of livelihood and work habits but stresses the importance of agriculture and farming, and was the most common form of socio-economic oganization for...

 (Industrial society
Industrial society
In sociology, industrial society refers to a society driven by the use of technology to enable mass production, supporting a large population with a high capacity for division of labour. Such a structure developed in the west in the period of time following the Industrial Revolution, and replaced...

) 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
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...

 in it is a form of theft; as David Lloyd George
David Lloyd George
David Lloyd George, 1st Earl Lloyd-George of Dwyfor OM, PC was a British Liberal politician and statesman...

 observed, "to prove a legal title to land one must trace it back to the man who stole it."

Many older ideas have resurfaced in the modern notions of ecological stewardship, bioregionalism
Bioregionalism
Bioregionalism is a political, cultural, and environmental system or set of views based on naturally defined areas called bioregions, similar to ecoregions. Bioregions are defined through physical and environmental features, including watershed boundaries and soil and terrain characteristics...

, natural capital
Natural capital
Natural capital is the extension of the economic notion of capital to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future...

, and ecological economics
Ecological economics
Image:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...

.

See also


  • Affluence in the United States
    Affluence in the United States
    Affluence in the United States refers to an individual's or household's state of being in an economically favorable position in contrast to a given reference group...

  • Capital accumulation
    Capital accumulation
    The accumulation of capital refers to the gathering or amassing of objects of value; the increase in wealth through concentration; or the creation of wealth. Capital is money or a financial asset invested for the purpose of making more money...

  • Capital (economics)
    Capital (economics)
    In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

  • Distribution of wealth
    Distribution of wealth
    The distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the distribution of income in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society.-Definition of...

  • Financial independence
    Financial independence
    Financial independence is a term generally used to describe the state of having sufficient personal wealth to live indefinitely without having to work actively for basic necessities . In the case of many individuals whose financial circumstances fit this description, their assets generate income...

  • Household income in the United States
    Household income in the United States
    Household income is a measure commonly used by the United States government and private institutions, that counts the income of all residents over the age of 18 in each household, including not only all wages and salaries, but such items as unemployment insurance, disability payments, child support...

  • Income in the United Kingdom
    Income in the United Kingdom
    In terms of global poverty criteria, the United Kingdom is a wealthy country, with virtually no people living on less than £4 a day. There is both significant income redistribution and income inequality. Thus in 2008/09 income in the top and bottom fifth of households was £73,800 and £5,000...

  • International Ranking of Household Income
  • List of Average Wages per Country
  • Lists of billionaires
  • Millionaire
    Millionaire
    A millionaire is an individual whose net worth or wealth is equal to or exceeds one million units of currency. It can also be a person who owns one million units of currency in a bank account or savings account...

  • Personal income in the United States
    Personal income in the United States
    Personal income is an individual’s total earnings from wages, investment interest, and other sources. In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis’s personal income and the Census Bureau’s per capita money income...

  • Poverty
    Poverty
    Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...

  • Private banking
    Private banking
    Private banking is banking, investment and other financial services provided by banks to private individuals investing sizable assets. The term "private" refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers...

  • Surplus product
    Surplus product
    Surplus product is a concept explicitly theorised by Karl Marx in his critique of political economy. Marx first began to work out his idea of surplus product in his 1844 notes on James Mill's Elements of political economy...

  • Value added
    Value added
    In economics, the difference between the sale price and the production cost of a product is the value added per unit. Summing value added per unit over all units sold is total value added. Total value added is equivalent to Revenue less Outside Purchases...

  • Wealth and religion
    Wealth and religion
    There has been some research on the correlation of wealth and religion. Wealth is the status of being the beneficiary or proprietor of a large accumulation of capital and economic power...

  • Wealth condensation
  • Wealth in the United States
    Wealth in the United States
    Wealth in the United States is commonly measured in terms of net worth, which is the sum of all assets, including home equity, minus all liabilities....