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Wealth means Surplus

2009 Feb 10

Wealth is synonymous with surplus.

Imagine that you are employed at a job that earns a wage. You choose not to spend it all but put some away as savings. This is your surplus. You may have also assisted your employer in creating a surplus otherwise what's the point of being in business. What you do with your cash surplus is another thing.

If you save or hoard your surplus as cash or in a cash account you are banking on the expectation that you will be able to redeem your cash for goods or services sometime in the future. But we all know that inflation takes a terrible toll on savings. Because of inflation the value of your savings is eroding away daily and it will be worth less or even be worthless in the future.

Imagine that your work involves harvesting and chopping firewood. You create a surplus when you can chop enough wood to be consumed this season and save some towards the next season. In addition, you plant more trees to replace what you have harvested. In other words you consume and manage your assets and resources so that they are undiminished over the long run. This is the true meaning of sustainability while creating a surplus.

Or imagine that you work in the construction industry building homes. Through the wages that you earn you are able to provide your family with a home. By creating a surplus for you and your employer you provide homes for others. Hence creating a surplus means creating over and above what we ourselves need. And we do this by being productive.

Wealth or surplus can also be created by building value into the things we create. When we build civic and industrial infrastructure we can create lasting value by ensuring that we build in quality and not by applying stop-gap measures and quick fix-it band-aids. Jobs created to build consumer products do not provide society with assets of lasting value.

Granted, not all workers produce measurable value or surplus. Wealth creation goes beyond things that are physical, visible and tangible. Promoting education, healthy lifestyles, arts, entertainment, peace, social justice and well-being of both humans and nature bring value and benefits to society that sometimes are not immediately measurable.

Wealth or surplus is not created by inflating financial numbers. In order for a cash surplus to retain its original value, society must build an equivalent surplus or be capable of providing the desired goods and services when called upon to do so. We need to ensure that workers and society collectively produce surplus and infrastructure of lasting value.

Building wealth sustainably means consuming and managing our assets and resources so that they are undiminished over time.

Are we as individuals and as a society doing that with our assets and resources? Are we creating a surplus or true wealth for future generations?




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