I’ve read here that the free market is the best method of social (economic) organization to increase wealth.
What is defined as “wealth” in that statement?
Ability to satisfy wants. Usually money is the best measure of this.
Ability to satisfy wants, yes. Money, no. Money is only good in as far as it can be traded for other things. There is no measure of wealth because everyone’s definition of it is different; a different mix of goods and services of varying quality and prices.
Then is the OP statement fallacious?
But that’s what money is by definition – a medium of exchange.
Robert LeFevre said in his radio talks that money and wealth are indeed different. In essence, wealth is what you can buy with money, wealth is that which satisfies your wants and money is the medium of exchange which you can use to buy the wealth that creates those satisfactions.
In some cases, money can be a wealth if one of your wants were to have a great deal of money sitting in an account somewhere.
Under this rubric, money is not wealth. You cannot eat money, sleep on money, keep the rain out with money. Wealth would be the ability to buy good food, a bed, and a roof over your head.
With this in mind, one can see that having children is a form of wealth, obviously having many physical goods is kind of wealth, the ability to eat enough to become fat is wealth–all these signs of wealth. Usually we use the term ‘wealthy’ as a comparative term to mean someone is more wealthy than the average person, meaning they have more access to money which they can turn into wealth, and it is the wealth we see and judge them by; we never see the money, but we see the mansion, the car, the clothes, etc.
Even a poor American is, by all historical precedent, incredibly wealthy.
By comparison with kings only a few hundred years ago, we could look at Henry the 8th. He never had a balanced meal, never heard a decent musical performance (by our standards), never had adequate medical care or examinations nor medicine, never slept on a decent bed, wore ill-fitting clothes, lived in dirty surroundings, in a domicile without indoor plumbing or central heating–and many more things that we consider bare necessities he never once saw.
I have now, playing on my computer, musical performances more beautiful than any he ever heard in his entire lifetime, for the cost of at most a penny’s worth of electricity, repeatable at will.
All this is wealth.
Money is only good in as far as it can be traded for other things.
That’s what money is
Whoops, Mika addressed this already
IGNORE ME:
[quoteuser=“Anemone”]
In essence, wealth is what you can buy with money, wealth is that which satisfies your wants and money is the medium of exchange which you can use to buy the wealth that creates those satisfactions.
[/quote]
Does one necessarily require exchange for wealth? Or money?
I don’t think you need exchange for wealth, but money seems to become irrelevant without exchange.
In the grand scheme of things, I suppose exchange is mostly involved in all forms of wealth creation, and has been for some time. (Ie, no man is an island and so forth.)
Does one necessarily require exchange for wealth? Or money?
[/quote]
Cooperation has it`s advantages.
Given that man always acts in order to replace a less satisfactory state of affairs (for himself) with a more satisfactory one, and given that exchange is a type of action, it follows that man always exchanges in order to replace a less satisfactory state of affairs with a more satisfactory one. So yes, a person always exchanges in order to obtain more wealth (i.e. a greater ability to satisfy his wants). If he didn’t think an exchange would give him more wealth, he wouldn’t pursue it.
[quoteuser=“Autolykos”]
Given that man always acts in order to replace a less satisfactory state of affairs (for himself) with a more satisfactory one, and given that exchange is a type of action, it follows that man always exchanges in order to replace a less satisfactory state of affairs with a more satisfactory one.
[/quote]
I think I was treating “exchange” more like “trading”. Here, you seem to equate “exchange” to “change”. Is that fair to say?
[quoteuser=“Autolykos”]
So yes, a person always exchanges in order to obtain more wealth (i.e. a greater ability to satisfy his wants). If he didn’t think an exchange would give him more wealth, he wouldn’t pursue it.
[/quote]
So you are trating “wealth” as “the ability to satisfy wants”.
To go back to the OP, the statement now becomes,
“I’ve read here that the free market is the best method of social (economic) organization to increase the ability to satisfy wants.”
Is that necessarily true?
[quoteuser=“excel”]
I don’t think you need exchange for wealth, but money seems to become irrelevant without exchange.
[/quote]
Agreed.
[quoteuser=“excel”]
In the grand scheme of things, I suppose exchange is mostly involved in all forms of wealth creation, and has been for some time. (Ie, no man is an island and so forth.)
[/quote]
I am confused how you are using “exchange” here. Exchange betwwen an individual and his surroundings, or betwwen individuals? Something else?
Mostly, I was thinking in terms of how people start up their wealth-generating endeavors. For the most part, materials already exists with which to produce new goods, and it is far easier to exchange for these materials than to produce them yourself.
For some reason, I got stuck on a farming perspective, and it’s not very likely that someone would cultivate wild plants into a harvestable crop and then use those crops to produce more food for themselves, instead they would exchange for seeds from already existing crops.
So I suppose I would say that exchange between individuals is not necessary for wealth, but it’s hard to get away from, and a lot easier than, for example, going through agricultural history anew, while I consider exchange of labor into your surroundings in order to be necessary for wealth.
No, I’m treating “exchange” the same way you are. I said that exchange is one type of action.
I’m afraid that I need you to qualify what you take “best method” and “necessarily true” to mean before I’ll answer.
[quoteuser=“excel”]
Mostly, I was thinking in terms of how people start up their wealth-generating endeavors. For the most part, materials already exists with which to produce new goods, and it is far easier to exchange for these materials than to produce them yourself.
[/quote]
Does “wealth” always equate to “goods produced”?
[quoteuser=“excel”]
I consider exchange of labor into your surroundings in order to be necessary for wealth.
[/quote]
What do you mean?
[quoteuser=“Autolykos”]
No, I’m treating “exchange” the same way you are. I said that exchange is one type of action.
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Oh, I re-read the passage. I understand now. You roriginal passage doesn’t really address the OP, it’s just a truism about action always working towards the elimination of want.
[quoteuser=“Autolykos”]
“best method”
[/quote]
The most appropriate, given desired ends (wealth, or satisfaction?), and available means .
[quoteuser=“Autolykos”]
“necessarily true”
[/quote]
Being the case in all circumstances.
In other words, is free exchange always the best way to increase wealth?
Yes. Wealth is useful things like cars and haircuts. They are made abundant only by producing them.
Money is an allocation mechanism. People confuse money and wealth because there was no allocation mechanism in our evolutionary past. All socialist ideologies are based on the belief that wealth can be made abundant by tinkering with the allocation mechanism.
Yes, and it was actually based on a mis-reading of your later question. I thought you were asking if one always exchanges for wealth. Somehow I missed the word “require” there. So to answer the question that you actually asked, I’d say that exchange is not required to obtain wealth.
I think a caveat of “at the time” should be added. One is free to change his mind later on, but he can’t undo the past.
Logically, I must answer no to this question. For example, an individual could have a strong aversion to producing things that others value, while at the same time be strongly present-oriented. The “best method” for such an individual could very well be to simply (try to) take what he wants.
Edit: Let me add my own “at the time” caveat to the above.
[quoteuser=“EmperorNero”]
Yes. Wealth is useful things like cars and haircuts. They are made abundant only by producing them.
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“Wealth = Products” in all cases? How do you reconcile this with the Subjective Theory of Value?
[quoteuser=“EmperorNero”]
All socialist ideologies are based on the belief that wealth can be made abundant by tinkering with the allocation mechanism.
[/quote]
That is a very interesting point. Aren’t we guilty of the same charge?