RE: Re: More on Wealth

From: bernuetz.oliver_at_...
Date: Fri, 28 Sep 2001 17:03:02 -0400


Alex :

>> >Wealth indicates your purchasing power, and you can only buy items
>> >with "stuff" by getting rid of the stuff first.
>>
>> I quote :
>>
>> "The wealth rating represents not only the cash (or goods) on hand, but
also
>> the ability to borrow small sums of money, ease of getting credit,
>> reputation for honest dealing, and other nontangible sources of wealth."
HW
>> pg 36
>>
>> So wealth is not just your purchasing power.

>Actually the above _is_ a description of purchasing power. Being able
>to get credit, having a good rep, etc, enhances your "purchasing power"
>beyond the "cash in hand" you have...

Sorry, I work in a business library and none of the business dictionaries I just consulted, The Oxford Dictionary of Economics, The Dictionary of Business and Management, The CCH Macquarie Dictionary of Business define purchasing power that way. Purchasing power is solely tied to money : (from The Oxford Dictionary of Economics : Purchasing power : "The amount of real goods and services each unit of money will buy." The rest of the definition just refers to fluctuations. (The three dictionaries are English, American and Australian).

I'm afraid the definition of wealth from HW is much broader than a banker would appreciate. (Though not an economist). I can just see someone telling a banker how good their word is when they go for their mortgage renewal. Just picture the banker getting a real good chuckle. (I can however see how important it can be in a less contract bound society though).

Well unless I was misinterpreting what Tim said he was saying that my owning a gold torc meant nothing unless I was prepared to sell. The description from HW would indicate that owning goods is worth something whether I really wish to sell them or not. I could always use them as collateral. Things have value whether you sell them or not and that is NOT the impression I got from Tim's statements.

Quoting you from another message :

>I suppose I'm just bugged by the lack of clarity of the existing account of
the
>wealth numbers, and the difficulty of getting any sort of useful feel at
all for >"what my total wealth is".

I agree and the more I look at the way wealth works I don't think my suggestion works very well. If wealth is just money and assets well fine but since it's more than that. Given the generous nature of the definition as given in HW simple solutions like "what's a cow worth" while nice aren't going to be enough since intangibles have to be accounted for as well. Your wealth has to account for :

  1. Your profession i.e. your earning potential
  2. Your possessions
  3. Your character - whether people trust and will lend to you. Not the same as credit history.
  4. Your credit history - which doesn't have to mean you're a nice or otherwise trustworthy fellow.
  5. Your success in your profession, whether raider, carpenter, etc.
  6. Your spouses wealth? People might give you more money thinking your spouse will cover their loan whether it's true or not.
  7. The fact you claim to know where a treasure is hidden? Wealth covers all these.

We need to equate more than just cows to wealth. How much is keeping my word all the time worth? How much is always repaying my loans worth. What if I'm a generous guy does that make it more likely people will lend me money? It might in some societies.

Oliver

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