How Should Personal and National Wealth Be Measured?
Money For the Rest of Us
J. David Stein
4.5 • 1.4K Ratings
🗓️ 26 April 2023
⏱️ 32 minutes
🔗️ Recording | iTunes | RSS
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Summary
How we measure wealth, riches, abundance, and well-being is more important today than ever.
Topics covered include:
- How late 18th century philosophers Adam Smith and the Earl of Lauderdale defined wealth and the role of capital. Why they worried about income inequality and excess profits
- What led to the dramatic increase in life expectancy and wealth in the 20th and 21st centuries
- How a long life expectancy and well-being can be attained at much lower levels of wealth
- Why John Maynard Keynes was right about the expansion of the economy but wrong about how many hours we would work
- How the U.S. expanded its wealth relative to the rest of world, and at what cost
- Why natural capital should be included in measuring wealth
For more information on this episode click here.
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Show Notes
An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith—Early Modern Texts
About Adam Smith—Adam Smith Institute
The Economics of Biodiversity: The Dasgupta Review—GOV.UK
Less Is More: How Degrowth Will Save the World by Jason Hickel—Penguin Random House
Economic Possibilities for Our Grandchildren by John Maynard Keynes—Yale
America’s economic outperformance is a marvel to behold—The Economist
Related Episodes
8: What If Everyone Worked Only Four Hours Per Day?
142: Why Are Some Nations Wealthier Than Others?
282: Is GDP the Best Measure of Happiness and Well-Being?
300: Ray Dalio and the Changing World Order
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Transcript
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| 0:00.0 | Welcome to Money for the Rest of Us. |
| 0:02.7 | This is a personal financial show on money. |
| 0:05.3 | How it works, how to invest it, and how to live without worrying about it. |
| 0:09.4 | I'm your host David Stein, today is episode 430. |
| 0:12.6 | It's titled How Should We Measure Personal and National Wealth? |
| 0:17.7 | In 1776, Scottish philosopher and economist Adam Smith published a book titled An Inquiry |
| 0:26.8 | into the Nature and Causes of the Wealth of Nations. |
| 0:30.7 | It's a book that is still influential over 200 years later. |
| 0:36.0 | If you take any type of basic economics class, finance class, invariably they mentioned |
| 0:42.4 | this book. |
| 0:43.4 | I suspect most people haven't read it, although I did review a good part of the book this |
| 0:49.3 | past week. |
| 0:50.8 | When the book was published, the consensus at the time was wealth just consisted of gold |
| 0:56.4 | and silver. |
| 0:57.4 | And that wealth was something that we kept close to paying out gold to purchase something |
| 1:02.4 | overseas was considered a diminishing of wealth. |
| 1:06.6 | Smith changed that. |
| 1:07.9 | He described national wealth as the increase of revenue and stock. |
| 1:14.1 | By revenue he meant income, rent, wages, stock he meant land, capital to be invested, money |
| 1:21.5 | including gold and silver. |
| 1:23.8 | That wealth increased as goods and services were produced, as trade happens, as economic |
| 1:32.2 | output increased. |
... |
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