I don't think most folks think very hard about where most wealth comes from but imagine it just sort of exists in a fixed quantity or is pulled from the ground like coal or diamonds - there's a fixed amount of it, and if there are very rich people, it must be because they took the coal/diamonds away from other people who need it. This leads to catchy slogans.

But it's pretty obvious wealth can be created and destroyed. The creation of wealth comes from trade, which generally comes from a vibrant middle class which not only earns a fair bit but also spends it. Wars and revolutions are effective at destroying wealth and (sometimes) equitably redistributing what's left.

Both the modern left and modern right seem to have arrived at a consensus that trade frictions are a good way to generate (or at least preserve) wealth, while the history of economics indicates quite the contrary. This was recently best pilloried by a comic that showed a town under siege and the besieging army commenting that this was likely to make the city residents wealthy by encouraging self-reliance.

We need abundant education and broad prosperity for stability - even (and maybe especially) for the ultra wealthy. Most things we enjoy require absolute and not relative wealth. Would you rather be the richest person in a poor country or the poorest of the upper class in a developed economy?

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ChadNauseam 2 days ago | parent | next [-]

> The creation of wealth comes from trade, [...]

I'm not sure to what extent you meant this, but I don't know that I'd agree with it. Trade allows specialization which does increase wealth massively, no doubt. And because of how useful specialization is, all wealth creation involves trade somewhere. But specialization is just one component of wealth creation. It stands alongside labor, innovation, and probably others.

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lelanthran 2 days ago | parent [-]

>> > The creation of wealth comes from trade, [...]

> I'm not sure to what extent you meant this, but I don't know that I'd agree with it.

At a very foundational level, all wealth comes from trade, even when there is no currency involved.

When two parties voluntarily make a trade, each party gets more value out of the trade than they had before, so the sum total of value after the trade is, by definition alone, greater than the sum total of value before the trade.

Small example: I offer to trade you a bag of potatoes for 2 hours of your time to fix my tractor, and you accept.

This trade only happens because:

1. I value a running tractor more than I value my bag of potatoes

2. You value a bag of potatoes more than you value 2 hours of your time.

After the trade is done, I have more value (running tractor) and you have more value (a bag of potatoes), hence the total value after the trade is more than the total value before the trade.

The only thing that creates value is trade. It's the source of value.

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zestyping 9 hours ago | parent | next [-]

Wow, that's a massive blind spot you've got there.

The value comes from doing the thing. Fixing the tractor creates value. Growing and harvesting the potatoes creates value.

Trading the potatoes for something you value more, yes, also creates additional value. But notice that potatoes have value to you even if you don't trade them for anything.

If you choke on a grape and a helpful volunteer saves your life, they create value. Nothing was exchanged, but they sure as hell generated wealth right there.

Labour and voluntary trade both create value. I wonder what sort of mindset one must have to forget that labour exists.

	▲	lelanthran 36 minutes ago \| parent [-]
		> The value comes from doing the thing. Fixing the tractor creates value. Growing and harvesting the potatoes creates value. The value from value doesn't come by default; it's not a given. Neither of those things create value unless they are actually used. Fixing a tractor you neither use nor trade does not create value. Growing potatoes you will never eat does not create value. So, sure, labour can create value, but it's not a guarantee. Trade, OTOH, always creates value.

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utyop22 2 days ago | parent | prev | next [-]

Ultimately real wealth is all about enhancing the well-being of individuals in society by way of an exchange of assets.

All we have done is become more elaborate and sophisticated in this stuff but at the core, its been the same throughout much of time.

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elbear 2 days ago | parent | prev [-]

There are people who trade at a deficit just because they believe that's the only viable option. They see commerce as a zero-sum game.

	▲	lelanthran 2 days ago \| parent [-]
		> There are people who trade at a deficit just because they believe that's the only viable option. It's not a deficit if the value they assign to what they get is higher than the value they assign to what they give. If they are giving away something they value highly for something they value less highly, then it's not a voluntary trade, now is it?

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utyop22 2 days ago | parent | prev [-]

There's a subtle and nuanced difference between real wealth and financial wealth that most people never touch on.