Blog 05

Who Creates The Real Wealth In The World?

August 2008

The word wealth derives from the old English word "weal", which means "well-being".

FROM WIKIPEDIA
"Wealth" can be described as an abundance of items of economic value, or the state of controlling or possessing such items, usually in the form of money, real estate and personal property. In many countries wealth is also measured by reference to access to essential services such as health care, or the possession of crops and livestock. An individual who is wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group.

Before I list the jobs and professions I consider create or don’t create the real wealth of the world let’s just consider the Wikipedia definition of wealth above. You will see that money is placed first in the order of the items by which wealth is measured, in my opinion it should be included last, if at all.

While money can to some extent represent wealth its value is arbitrary. The amount of money required to convert it into real estate or personal property varies according to its current value. Something costing $100 this year might well cost $110 next year. The item is still worth the same in terms of what it cost to design, produce and bring to the market place, only the value of the money has changed. One of the reasons for the volatility of the value of money is covered in my blog ‘A Bankers Tale’. The real wealth of any country is what it produces, all the things that money can buy. If the amount of money in any system is doubled (the banks are very good at this), then given that there are still the same amount of things in the system that money can buy then the price of those things has to double to maintain the balance between money supply and things. Basic economics, but it has to be mentioned.

So money is really only a measure of wealth when it is actually spent on real estate and/or personal property. In reality, almost without exception, the wealth of others is measured by what they can be seen to own, their house, car, televisions, music system, yacht etc-etc. Someone living meagerly in a hovel with say a million in the bank would not appear to be wealthy at face value, and his money is worthless until it is spent.

In other words real wealth is represented by things, all the things we own and see around us that other people own, every building in every town and city, every vehicle on the roads, every bridge we cross even all the clothes we wear and of course the things in the marketplace available for purchase. So if wealth is things, it follows that all the real wealth in the system is created only by those people that make the things. So there you have it.

THE REAL WEALTH CREATORS (Society's Providers)
People in the front line of real wealth creation:

Manufacturing workers.
Construction workers.
Farm, fishing and food production and processing workers.

WEALTH CREATION SUPPORT WORKERS (Wealth Creation Supporters)
People in the following sectors provide essential support to the front line producers but do not create any actual real wealth themselves. Nevertheless, without these support services the Wealth Creators would not be able to design, market, distribute, advertise or sell the things they make.

Product and building designers.
Manufacturing, construction and agricultural management.
Transportation and warehousing.
Wholesale trade.
Retail trade.
Maintenance workers.
Advertising Services.
Education and health services.
Leisure and hospitality services.
Public utility workers.
Real estate services.
Rental and leasing services.

WEALTH MANIPULATORS (The Takers)
People in the sectors listed below create absolutely no real wealth in the community, they are essentially parasites, they just manipulate the wealth that has already been created by others. The financial institutions have over a period of many years established ever more sophisticated systems to maximize the stripping of real wealth out of the system by creating false wealth using a variety of anti-social financial instruments. Not only do they steal from the community at large but from each other such is the magnitude of their avarice. Ironically people in this sector are usually the richest in any society, so devious and efficient have their 'real wealth' stripping mechanisms become.

Monetary authorities (Central banks).
High Street banks.
Commercial banks.
Credit intermediation and related activities.
Depositary credit intermediaries.
Government employees (excluding public service workers).
Securities and investment brokers.
Insurance carriers and related activities.
Fund, trust, and other financial institutions.
Lessors of intangible financial assets.
Hedge fund managers.

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