CHAPTER
THREE
WEALTH and MONEY
What
constitutes “wealth” depends entirely on the context in which the concept is
being used. The context here is
political economy: the realm of social organization having to do with the
state, politics, the production and distribution of goods and services, and the
interplay among all of these aspects of social life. I am not concerned here with “wealth” as a
metaphor or an attribute of thought, as in “a wealth of ideas” or “a wealth of
images.” Nor am I here concerned with
the characteristics, qualities, and endowments of natural phenomena, as poets
might use “wealth” to refer to the splendor of forests, mountains, and seas. Nor are the quality of human relationships
and personal well-being included here, as in the sense that a person may be
considered “wealthy” by virtue of having a multitude of loving, supporting
friends or for being blessed with good health in spite of a condition of
financial poverty. These aspects of
thought, artistry, nature, human relationships, and health may, indeed,
constitute “wealth” in some contexts, and those who possess them may be blessed
(or just lucky), but they do not count as wealth in the realm of political
economy.
Definitions
of Wealth in Economics
In economics, “wealth” has two
meanings. The first meaning is “the
assets owned at any given time by an individual, family, or household, measured
in money value.” It is, in other words,
private property owned by persons or groups of persons (not companies, corporations,
associations, states, or multi-state institutions). A person or family can have more or less
wealth. Indeed, the value of the wealth
can be less than zero if one’s debts amount to more than the value of what one
owns. Indeed, about half of the families
and adult individuals in the
This meaning of wealth is distinguished
from income, the rate at which a
person or group receives assets. Income
is “payment” per hour, week, month, year, or (sometimes) lifetime. It does not have to come in the form of
money, but to count as income it must be capable of being measured by
money. Wealth is usually regarded as the
better indicator of economic well-being because it is the measure of how much a
person or family has on hand to meet debts and emergencies, as well as to spend
at one’s discretion. One might still
have wealth even when one’s income stops or is significantly reduced.
The second meaning of wealth in
economics is broader and less precise, but it is the meaning on which I will
concentrate in this chapter. Here wealth
refers to “an abundance of material valuables.”
The notion of abundance may seem a relative concept in that there may be
more or less of whatever is valuable, but there is nevertheless plenty of
it. Although there is no absolute level
of possession that constitutes wealth, those who, singly or in combination, can
be said to be “wealthy” possess significantly more valuables than those who do
not qualify. For example, the
aristocrats of 14th Century England possessed much less than
“millionaires” in the
What makes things valuable? To say that something is valuable obviously
means that it is desired. This only
raises other questions. Desired by
whom? Why is it desired?
Not everything that is desired is
valuable, but everything that is valuable is desired. For example, children (undoubtedly in very
large numbers) desire candy, but that does not mean that candy is
valuable. In order for something to
become valuable it must be desired by people whose opinions are highly
respected by almost everyone else, which cannot be said for the opinions of
children, although we might all be better off if they were. Alternatively, the desire must be one that
nearly everyone shares. The reasons for
the shared desire might be tradition, the commonly held opinion that something
is required for survival or comfort, or because those who are already deemed
economically wealthy say that it should be desired.
At bottom, something has value (is
desired) if it can be exchanged for something else that is valuable. A veritable cultural system arises by which
most people in a society participate to give value to some things and not to
others. What makes diamonds valuable,
especially when telling the genuine article from a fake requires a trained eye
looking into a microscope?
A
Cross-Cultural Comparison
A
cross-cultural comparison might help make this point clearer. Anthropologists have described a variety of
hunter-gatherer societies. (The
following account of hunter-gatherer societies has benefited from conversations
with anthropologists Alice Reich and Colby Hatfield. I have also drawn on the description of
hunter-gatherer societies by Ernestine Friedl, Women and Men: An Anthropologist’s View,
1984.) In such societies, production is
a matter of hunting animals and gathering roots, fruits, berries, and grains,
plus a system for preparing and preserving, if necessary, whatever is obtained
by hunting and gathering. There is no
significant agriculture. People eat what
nature provides. When nature’s provisions
grow scarce in a particular place, the people move to another place. Dwellings are ordinarily relatively simple
since they are not intended to be permanent.
Production and consumption are directly linked: hunting and gathering
are undertaken when there is need of food, and what is killed or gathered is
consumed as soon as it can be prepared.
What can be said to be valuable in such
a society? By and large, the only things
of value are the tools for hunting and gathering, preparing and preserving
food, and for constructing shelter. Perhaps
a few religious icons are deemed valuable, but apparently this is rare in
hunter-gatherer societies. In other
words, hunter-gatherer societies produce little wealth in economic terms. Hunter-gatherers accumulate few belongings,
and even among these belongings there is little that is regarded as having
value. In other words, hunter-gatherer
societies do not produce wealth. No one
in hunter-gatherer societies is wealthy.
If, somehow, a member of such a society begins to accumulate things that
other people want, he or she will be compelled by tradition and public pressure
to give it away.
Capitalist societies, on the other
hand, produce a great deal of wealth. In
contrast to hunter-gatherer societies, there is no direct link in capitalism
between production and consumption because production is undertaken for
purposes of trade rather than for purposes of immediate use. Money is used to facilitate trade. It serves as a medium through which goods are
exchanged. Among the many purposes of
money, it can be used as a store or measure of value. Whatever is desired has a money price. If one is hungry, once cannot simply go out
and forage in the local forests and meadows, which are the private property of
someone else, or which are public territories administered by state agencies as
if they were private property. (Of course, some people do forage for food in dumpsters and city dumpsites, but they are
the outcasts of capitalist societies.
And when they hunt for food on land that is someone else’s private
property, they are poachers—criminals.)
One must purchase food. Almost everything else that one might
want—shelter, clothing, transportation, entertainment—cannot be obtained by
producing it directly. Money is the only
way to obtain valued items, through purchase.
The Meaning
of Money
The consequence of this system of exchange
is that money itself becomes the most valuable thing of all. It has a rather wonderful attribute: it is
the measure of, and can be exchanged for, almost anything that is desired. As Karl Marx (1975/1844) wrote, rather
pithily:
Money,
inasmuch as it possesses the property
of being able to buy everything and appropriate all objects, is the object most worth possessing. The universality of this possession is the basis of money’s omnipotence; hence it is
regarded as an omnipotent being…. Money is the pimp between need and object, between life and man’s [sic] means of life.
Can money buy happiness? Well, in capitalist society, it is the only thing that can—if happiness can be
bought. (There are those who say that
happiness cannot be bought. That is still
a hypothesis, unproven as yet, but with considerable evidence behind it. It is certain that a great many people have
tried to buy it, but none have proved they succeeded, nor has it been shown
definitively that all who tried it have failed.) In any case, money is no longer merely the
measure of wealth, although it remains that as one of its lesser
attributes. It is wealth when one has it in abundance.
Recall the two questions posed above:
Whose desires make something valuable?
Why do they desire what they do?
Everyone in capitalist society desires money. Money is desired because it alone can obtain
the goods and services people want for their material, or physical, well-being. Beyond material benefits, money in abundance
obtains high social status. Sufficient
money enables people to attain an acceptable standing in their
communities. For example, Joseph
Kennedy, father of John F. Kennedy, Robert F. Kennedy, and Ted Kennedy, made
the family fortune as a bootlegger during Prohibition. He himself became
One of the most important attributes of
money is that is symbolizes freedom. The
British sociologist Nigel Dodd (1994) has written an extensive discussion of
the symbolic meanings of money, especially its association among the peoples of
Europe and
I do not mean to claim that persons in
capitalist societies can have no motives that are not driven by money, or that
persons in capitalist societies do not appreciate and desire things that have
no monetary value. Most of us “value”
beautiful sunsets, grand views from mountaintops, fresh air, loving friends and
any number of other phenomena and events that seem to have no monetary value in
themselves and cannot be obtained by simple purchase. My point is that members of capitalist
societies are compelled by the social
structure to think about money, whether they want to or not. It is not a choice people have. Money is thought about so commonly that most people
are not even aware that they are thinking about it. But think of it they do. Nearly every action involves some calculation
of a transaction in money terms, whether it is going to the grocery store,
simply window shopping, going on a date, planning to marry, planning for
children, going on vacation, making funeral arrangements, or simply goofing
off. In short, the most intimately
personal, the grandest, and the most trivial aspects of our lives involve
money. Most people must especially think
about how to get money. The decisions they make about that lead to
hundreds of millions of lives spent in dangerous, boring, mind-numbing jobs—and
crime.
One of the most insidious and alluring
attributes of money is that it can obtain greater access to many of the things
that seem to have no monetary value—things like sunsets and spectacular
views. People with abundant supplies of
money can reserve for themselves mountaintops with spectacular views. They can travel to places where beautiful
sunsets over unspoiled beaches are plentiful.
They can purify the air in their dwellings or move to places where air
is not polluted. They have the means to
maintain communication with friends in distant places and make meetings among
friends convivial and comfortable, heightening the sense of camaraderie and
intimacy. These things, in capitalist
societies, often assume a monetary value and as such constitute wealth.
In contrast with people in capitalist
societies, hunter-gatherers have no use for money. It can obtain for them practically nothing
that is valuable. Consequently, it has
no symbolic association with being more free or empowered. If hunter-gatherers begin to use money to
purchase the things they previously obtained by hunting and gathering, or by
even-up trade (i.e., a trade of value-for-value rather than profit) with
neighboring societies, they cease to be hunter-gatherers. That is, the introduction of money or
anything else that carries symbolic exchange value changes the procedures by
which they create and sustain the basis for their material existence, and hence
changes fundamentally the nature of the society.
For example, anthropologist Lauriston Sharpe (1952) studied the consequences when an
Australian aboriginal society accepted steel axes from missionaries. The missionaries thought they were simply
providing “better” axes than the stone axes the aborigines used. But they misunderstood what the steel axes
meant symbolically to the
aborigines. The axes became valuable as
means of exchange and the attainment of prestige for members of the society who
had never had such access before. The
society ultimately tumbled into alcoholism and chaos, its symbolic universe
crushed, and it ultimately disintegrated.
It disappeared!
Making and accumulating material goods
is, beyond a few tools, meaningless activity in hunter-gatherer societies. Indeed, a large accumulation of material
goods would work to their disadvantage, since they would have to tote the goods
from one site to the next as the community moved in search of new sources of
food. Wealth, as it is known and
understood in capitalist societies, does not exist for hunter-gatherers.
The
Production of Wealth
This contrast raises another aspect of
the nature and meaning of wealth. Wealth
is created in the same process by which humans create the basis for their
material existence, and the importance of wealth depends predominantly on that
process. In other words, wealth is not
distinct from the fundamental organization and processes of a society’s system
of production but is a direct consequence of production. Wealth is not “accidental.” It does not simply appear as an element of
nature, nor does it accrue to one person rather than another in haphazard
fashion. It is the system of production
that determines whether there is wealth, how much of it there is, and who gets
it.
Whether wealth exists or not seems to
depend mostly on whether production is geared toward immediate consumption by
the community that produces the goods or toward distribution to another
community. Hunter-gatherers, for
example, produce for immediate consumption by the social group that
collectively gathers and hunts. On the
other hand, capitalist societies organize production so that those who produce
the goods ordinarily have no right to them.
The goods are distributed to others primarily in markets (see Chapter
4). In societies that use slaves to
produce goods, slave-owners appropriate what the slaves produce. In feudal societies, only a small part of
production is consumed by those who produce; the bulk goes to those who control
the land or who, by custom or law, lay claim to the produce of those who toil.
The existence of wealth also depends
upon the hierarchy imbedded in the organization of production, as implied by the
examples just given. With respect to
production, at least, there is no hierarchy in hunter-gatherer societies. No one tells another what to gather or how to
go about it, or when or where to hunt.
No one sets a quota of goods for another to “produce” by a certain
time. There are, in short, no managers
or supervisors. There may be accusations
of “laziness” or disagreements about the distribution of food, but these are
not based on one’s hierarchical superiority in the organization of
production. No one can lay claim to what
another has produced except as an equal member of a community that produces
what all share. In other words, there
may be arguments about whether a member of the community is doing her or his
share, but production itself is not organized hierarchically. [See Colin Turnbull (1961); R.B. Lee (1984);
and T.A. Volkman (n.d.)]
By contrast, in capitalist, slave, or
feudal societies there are carefully defined hierarchical relations of
production. Goods flow upward in the
hierarchy. Being able, by virtue of
position in the hierarchy, to tell others what and how to produce also entitles
one to a disproportionate share of what is produced. The hierarchical structure makes possible the
accumulation of goods by some rather than by others. In short, the presence of hierarchy in
production makes possible the creation of wealth. Further, the social system of production, in
particular the hierarchy involved, determines who controls the wealth. In other words, the hierarchy determines how
wealth is distributed.
As the above illustrations show, the
social significance of wealth is not determined primarily by what it can obtain
for gratification, but rather by how it is produced. Put another way, although desire defines what
is valuable, it has little to do with access to what one desires. One can desire a great deal, but that has
nothing to do with obtaining what one wants, that is, with having wealth.
Wealth, after all, does not merely
appear. It must be created. It is not created merely by people wanting
something. Its creation is a social
process. Specifically, objects in the
natural world must be manipulated, re-arranged, transformed into something else
in order for wealth to be created. In
other words, wealth cannot be created unless human beings act upon the natural
world in some way. Furthermore, not all
such action creates wealth. We have
already seen that hunter-gatherers produce little or no wealth, although they
are almost constantly involved in transforming nature by killing animals and
harvesting vegetation.
Why is wealth created in capitalist
societies and not in hunter-gatherer societies?
Why does wealth become such a preoccupying aspect of consciousness among
people in capitalist societies whereas hunter-gatherers give it practically no
thought at all?
The answers lie in the manner in which
production is carried out. The essential
character of wealth is that it cannot be created without putting people to work
at tasks that are not directly linked
to the usefulness of the product.
For example, the transforming
activities of hunter-gatherers are directly connected to the purposes for which
things are transformed. They kill game
and gather fruit in order to eat. They
build huts in order to be sheltered. In
the capitalist system of production, by contrast, people’s work is not directly linked to the satisfaction
of any desires. Farmers grow food in
order to sell it, not in order to eat it themselves. Autoworkers do not produce cars for their own
transportation, but so that they can acquire money in the form of wages, and
the auto companies can sell the cars the workers make. In order for wealth to exist, things must be
produced for purposes other than their use.
In particular, use by the actual producers must not be a factor.
Put another way, wealth can be produced
only by a production system that generates surplus. Hunter-gatherers produce only what is
necessary for all members of the society to survive. The methods and tools of production are
incapable of producing much of a surplus, and whatever surplus is created is
preserved for use by all during those times when necessities become
scarce. On the other hand, capitalism is
geared to produce surplus. Each worker
must produce far more than he or she could possibly consume. Indeed, workers as a group must produce more
than can be consumed by everyone in the entire society, so that some members of
society can accumulate and hold for themselves things that are valued by others.
Economies organized to produce surpluses
(and hence wealth)—slave, feudal, or capitalist—have another feature in common:
those who produce the wealth may not participate in it to any great
extent. Those who produce the wealth do
so for the benefit of those who do not produce.
Capitalism, it might convincingly be argued, is simply the most
efficient of systems so far devised for getting most people to produce a
surplus that will be available almost exclusively to those (the relatively few)
who do not produce it.
This arrangement is not arbitrary. It is necessary to maintain the social
arrangements by which one person or group compels another to create more than
is necessary for everyone’s existence on a more or less equal basis. In order for surplus—hence wealth—to be
created, those who produce the surplus cannot
benefit to the extent that non-producers do.
If they could, there would be no social mechanism powerful enough to
convince them to keep producing. Not even the threat of coercion would suffice. After all, the guns, prisons, and poorhouses
used as a last resort to coerce the cooperation of workers under capitalism
would be equally available to workers if goods were distributed equally. Everyone would have equal access to the means
of coercion. There would either be
perpetual war or perpetual stalemate. In
either case, no group, or “class,” would be able to maintain a disproportionate
and secure share of the surplus. Indeed,
it is doubtful under conditions of perpetual war or stalemate that any surplus
would be produced.
But is
production-for-surplus a necessary condition for the creation of wealth? Perhaps it is possible for a surplus to be
created and that surplus held in common by all society members equally. In that case, no actual wealth would be
created. According to this argument, the
reason for the absence of wealth in hunter-gatherer societies is not the
limitation of their tools and the organization of production. Rather, the absence of wealth is the
consequence of the system of distribution by which everything that is produced
is shared equally. Wealth, according to
this argument, is not the result of the system of production but of
distribution, specifically the unequal
distribution of surplus.
Such arguments, however, are irrelevant
to an understanding of economic institutions.
They are particularly irrelevant to an understanding of wealth. Production and distribution are inextricably
linked. A system of production geared to
surplus must be based on unequal distribution of the product, and a system of
unequal distribution is necessarily based on a hierarchical system of
production. Which one “causes” the other
simply does not matter. For the creation
of surplus, hence, of wealth, the system of production must be organized so
that those who will benefit the most from the surplus are able to control the
activities of those who will not. If
control rested with the producers themselves, distribution would necessarily be
equal, no surplus would be produced (except as a common hedge against future
shortfall), and there would be no wealth.
Whether those who control production do so by dint of what they have
accumulated or accumulate surplus because they control production is not the
issue.
Wealth Is
Power
The key to
understanding wealth is to realize that wealth only exists when those who have
abundance are different from those who created the abundance. Understood this way, wealth is much more than
“an abundance of valuables.” It is a system
of human relationships. In particular,
it is a system of power by which those
who control the abundance also control the people who created the
abundance. It follows that wealth is
also a system of exploitation in that
the non-producers expropriate what is produced from those who do the work.
The concept of wealth implies these
attributes of human relationships. It
should be impossible to hear or read the word “wealth” in the context of
political economy without making the connection between having wealth and
having power over others—without recognizing, to put it tersely, that having
wealth always involves controlling others against their interests and taking
from them what they have produced.
Some people object to this
characterization of wealth, especially to calling it exploitation. It is all right to recognize wealth as
power—nearly all ideological tendencies recognize that—but “exploitation”
carries a connotation that suggests misuse of power, a sinister purpose,
perhaps even a wanton meanness.
I would use another word if I could
find one that described the process of controlling people against their
interests and expropriating what they produce as well as “exploitation”
does. I do not mean to assess blame to
wealthy persons or those who actually control workers (managers) in the
interests of the wealthy. My point is
that the capitalist economy—and other
economies that produce surplus and a class of wealthy persons—necessarily involves the process of
using some people’s labor in a manner that is more beneficial to people who do
not produce anything than it is to the actual producers. That, it seems to me, is what nearly everyone
would call “exploitation.” It is “sinister” and “mean,” not as an
attribute of anyone’s consciousness, but precisely because we can (and do)
engage in this process without being
conscious of what we are doing.
Please note also that the exploitation
is not a matter of forcing people to work in adverse conditions or not
compensating them enough for their work.
There is a difference between exploitation and abuse. While the institutionalization of
exploitation is an invitation to abuse—and we see plenty of abuse of workers in
the history of capitalism, from the child labor in the coal mines and textile
mills of the 19th and 20th centuries to the sweatshops of
today—there is no necessary link. Many a
capitalist exploiter has been gracious and generous, even to his
employees. At this point, I only want to
stress that the exploitation involved in wealth is contained in the mere fact
of controlling the work time of workers and expropriating what they
produce—regardless of how much they are paid and the conditions under which
they work.
Conclusion
The
conceptualization I have presented here is in sharp contrast to predominant
understandings of wealth. It is common
for economists and sociologists, as well as nearly everyone else, to
conceptualize wealth simply as a collection of valued material goods. Rarely do we realize what is implied by
wealth in human terms. By ignoring its
social origin and significance, we may be led to accept wealth as an accident
of birth, as a “just reward” for hard work or skill or even cunning, or a
“natural” and therefore unavoidable phenomenon.
Such an “unsocial” conception of wealth, one that defines people in
relation to things rather than in relation to other people, encourages us to
overlook our capacity to change the social arrangements by which wealth is
created and maintained.
Note:
Recommended
One of the
very best brief accounts of the history and social significance of money is in
Richard H. Robbins (2005), Global
Problems and the Culture of Capitalism, 3rd Edition.
[Revised
August 2004]
References
Dodd, N. 1994. The Sociology of Money.
Friedl, E. 1984. Women and Men: An Anthropologist’s View.
Galbraith, J.K. 1975. Money: Whence It Came, Where It Went.
Lee, R.B. 1984. The Dobe !Kung.
Marx, K. 1975. Economic and
Philosophical Manuscripts (1844), in Karl
Marx: Early Writings, edited and translated by R. Livingstone and G.
Benson.
Sharpe, L. 1952. Steel Axes for Stone-Age Australians. Human Organization. Vol. 11 (Summer).
Turnbull, C. 1961. The
Volkman, T.A. n.d. The San
in Transition, Vol. 1: A Guide to “N!ai, the
Story of a !Kung Woman.” Documentary
Educational Resources and Cultural Survival.