Wealth comes from human action. It does not exist in nature although the ingredients from which wealth is derived through human action does exist in nature. A simple example illustrative example is hydrocarbons in the ground (coal, crude oil, natural gas, etc.) They simply exist in nature. Whether it is useful or not depends on the user. Primitive life forms on earth had no use for it. Dinosaurs did not dig up coal to use as an energy source. Even primitive hominids had no use for coal. Though coal has existed on earth for untold millions of years, it did not become wealth until modern humans figured out only a few thousand years ago that it was great fuel for fires.
Wealth as a concept makes sense only in the context of human beings. Because we humans are the only creators of wealth and the consumers of wealth. What exists in nature is only potentially wealth. That potential becomes actual only after humans know how to use the natural resource.
Since the tens of thousands of years, humans have been creating wealth. That means, at some point in the past, say one million years before the present, when the ancestors of present day humans were roaming the earth, there was no wealth to speak of. Then when they figured out how to make simple tools from sticks and stones, or how to use animal hides for clothing, or how to build shelters — that’s when the first wealth was created. Their actions created wealth. Their knowledge of how to do things created wealth. That know-how is what we call “technology.” They developed the technology for transforming a bit of stone into an arrow head. Fashioning an arrow head out of an appropriate bit of stone is an act of wealth creation.
There is no fixed stock of wealth because wealth is continually being created (and destroyed) through human action. What counts as wealth also changes with technology.
Technology — the knowledge of how to do something — is the secret sauce that makes humans the powerful force of nature that they are.
{Also published on my blog “On India’s Development.”}
