What is Wealth? image

What is Wealth?

Just before Christmas, a brief thought-experiment by Doug Wilson precipitated a fascinating discussion about the nature of poverty, to which (I'm told) we're going to return shortly. But arguably, before you can decide what poverty is, you need to decide what wealth is. So it's handy that the impishly insightful Idahoan has just posted a witty and simple answer to that question, which made me laugh, think and wince all at once:

Wealth is made up of goods and services. One kind of money, the real kind, is a measuring stick for those goods and services ... As an example of the [other] kind of money, if two boys were playing in the backyard, and one of them bets a trillion dollars that his team is going to win the Super Bowl, only an idiot would then add that trillion dollars to the GDP. Nothing was created, no wealth came into being. The only thing that was added was fuel for the second boy’s daydreams. That’s it; that’s all.
Wealth can be destroyed, of course. This is something that hurricanes do, and wars, and floods. That is one kind of economic set-back. But there is another kind of economic set-back, which is what happens when the foolish boy who thought he had a trillion dollars discovers that he doesn’t, and moreover, that he never did.
When a lot of people discover this at the same time, there will be economic consequences—but they do not necessarily result in the destruction of wealth. More often they result in the rearranging of wealth—barring an asteroid landing on Manhattan, the wealth is all still here. If a lot of people believed the miscreants, then you can have massive reallocation of wealth, which is a different thing altogether. This is what happens when someone makes real commitments on the basis of false promises. If a lot of people have done this, the upheaval will be enormous.
So here is the final note. The “lost” money that we will all be lamenting sometime in the near future is money that we never had, that never existed. Unfunded pensions come to mind, as do unfunded entitlement programs. The news stories that cover them will describe them all as “lost trillions,” but it would be better to describe them as “newly-discovered as non-existent from the git-go” trillions.
Only Christ holds the future. Only Christ governs compound interest. Only Christ can tell you to lay up treasures in Heaven, where moth and rust do not destroy, where thieves do not break in and steal, and where this kind of legalized plunder has no place. These economic bubbles that are bursting all around us are actually revelatory of a basic theological problem. When men believe the state is God, they come to believe that this state should have the prerogatives of Deity. They want to say of their god, and do say of it until they are let down in some grotesque fashion, that they know not what the future holds, but they know what holds the future. And then, wham.

Now, it’s fairly obvious that the distinction between these two types of money is not as hard and fast as this, and I doubt Wilson actually believes it is. But if we accept it for a moment - money backed by something that currently exists, whether gold or grain or whatever, versus money that is backed merely by the hope that gold or grain will exist in the future - then there is an uncomfortable similarity between the boys and the banks. There also seems to be a disconcerting resemblance between the premises of capitalism in general, whether practised by Christians or not, and the presumptuous attitude condemned in James 4:13-17. Or have I missed something?

Andrew’s next book, If God Then What? Wondering Aloud about Truth, Origins and Redemption, will be released in April, published by IVP.

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