Wealth is the accumulation of wealth or the value of any commodity or material possessions that could be converted to a liquid form which could be utilized for future transactions. This includes the original core concept held in the original root English word weal, that is from an Indo- Icelandic word stem. It can also be derived from Latin, from the verb meaning “to make”. Weal, however, does not clearly indicate what the original intent was as there are many examples of how this word has been used in modern times.
For our purposes in economics, wealth is defined as the value of whatever it is that humans can produce and/or obtain through natural capital. Natural capital is anything humans can produce with their body including food, water, shelter and so on. All things considered, it would be impossible for us to produce more wealth in quantity as compared to what humans consume in a very short time period. If wealth is measured in terms of production, then there would be an equal amount of wealth produced as well as consumed. There is no way to get around this as the law of demand and supply takes precedence over all other considerations in economics.
In economics, the term wealth has three components: personal assets (which includes human capital), tangible assets and net worth. Personal assets include human capital such as education, money and property. It also includes intangible assets such as reputation and ability to acquire and produce more wealth. The net worth of the economy is basically the net value of all the wealth in the economy. The net worth of the economy as a whole is expressed as a positive gross domestic product (GDP).
There are two main types of wealth in economics: private wealth and public wealth. Private wealth refers to the assets owned by individuals individually. Public wealth refers to assets accumulated by governments or organizations in common. A small portion of the public wealth is invested in private real estate assets as part of their infrastructure.
If we look at wealth from a different perspective, then it would be more appropriate to view it as a process. For instance, wealth may be generated through intellectual capital or technological innovations. This sort of wealth creation does not require that physical assets are destroyed in any way. The process also does not involve any borrowing from others nor do you have to wait for something to “earn itself”. Wealth can be created through innovation or creation of new processes or products.
If you have read this far, then you are probably very concentrated on the concept of wealth as something that results from production processes that have been automated over time. While the automation process is important, it is only one part of the overall process. Production must continue to take place in order to create wealth. As stated before, the production cannot be automated away, so the emphasis has to be placed on creating wealth indirectly through production techniques that create wealth indirectly. The wealth created through intellectual property rights, technological innovation, and the creation of new processes and products have become critical to sustaining the U.S. economy.