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’.

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.

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. So if wealth is things, it follows that all real wealth is created only by those people that make the things.

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

Product and building designers.
Manufacturing workers.
Construction workers.
Farm, fishing and food production workers.
Manufacturing, construction and agricultural management.

WEALTH CREATION SUPPORT WORKERS
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 Producers would not be able to design, market, distribute, advertise and sell the things they make.

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 following sectors create absolutely no real wealth at all in the community, they just manipulate the wealth that has already been created by others. The financial institutions have over a period of many years systems to maximize the stripping of real wealth out of the system by creating false wealth using a variety of anti-social mechanisms. Ironically people in this sector are usually the richest in any society, so devious and efficient are their 'real wealth' stripping mechanisms.

Monetary authorities (Central Bank).
Financial and Insurance Institutions.
Credit intermediation and related activities.
Depositary credit intermediaries.
Commercial bankers.
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.