Here you are now. What?

Money and wealth

Until an hour ago I thought that the creation of wealth is not a zero-sum game: for example, you and I start with raw materials ... we both make something ... more wealth now exists in the world than existed before we worked ... and therefore we're now both *WEALTHIER* -- neither of us has made the other poorer.

It has just occured to me that the use of money/currency changes that equation: because for example the amount of manufactured goods may increase, but the (national or international) money supply stays the same.

Specifically, I may create goods ... but unless I can convert those goods to money I am not getting any *RICHER* ... and if I do sell these goods, then someone else (my customer, and/or the other, previous supplier, my competitor, that my customer used to buy from) is now poorer.

I'm not sure what I'm saying ... only that if I accept money as the measure of my wealth, then and therefore the acquisition of wealth *becomes* a zero sum game!! Because the one thing I can't "make" is money, except by "taking" money from someone else. Hmm!
Permalink Christopher Wells 
March 25th, 2005
I think that is basically how modern economies work.

However; central banks can make extra money by printing more of it. Essentially, if there is not enough money in circulation to buy all the new goods that get made, the treasury can increase the money supply to balance things out.
Permalink Ian Boys 
March 25th, 2005
Oops, you found an error!