Chapter 12.
Wealth has been a central concept in human society since its earliest days, evolving in form and function alongside our social and economic development. From tangible assets like livestock and land to today’s diverse financial instruments, wealth has always signified power and security. It is the most evident exercise of this power, starkly illustrating a world of the ‘haves’ and the ‘have nots,’ where the rich predominantly get richer, and the poor, relatively speaking, get poorer.
In exploring the complex nature of wealth, we will consider its evolution, examine its various forms, and the implications for individuals, societies, and the global economy. This exploration will address some fundamental questions: Is property itself theft? Is ownership by the state any better? Can there be fairness without sameness? These questions are particularly pertinent as we navigate a period of economic insecurity, austerity, and political reaction, prompting us to ask: Why? Where has all the money gone? Where did it come from in the first place? And what are the possible ways forward? Clarifying how we got here and where we want to go are essential prerequisites in this endeavour. The origin and the destination are integral to mapping our journey.
In primitive societies, wealth was traditionally tied to tangible assets essential for survival and status. A surplus of food, domesticated animals, and fertile land represented a form of wealth that ensured the well-being of the community. The conventional narrative, often introduced in basic economics, posits that the story of money begins with barter. The exchange of goods that are the product of honed skills benefits both in the trade. However, bartering was often inefficient due to the need for a “double coincidence of wants.” This limitation, where both parties had to possess items that the other desired, paved the way for the development of more standardised forms of exchange. Bartering is only feasible on a simple, bows-for-arrows basis and cannot survive scaling to complex transactions unless you view money as a bartered good itself.
The transition from bartering to the use of money as a medium of exchange was a pivotal moment in the history of wealth. Money, initially in the form of precious metals like gold and silver, offered a more portable, divisible, and durable store of value. It also facilitated more complex transactions and allowed for the accumulation of wealth beyond immediate needs. The introduction of coinage further standardised the value of money, making trade and economic activity more efficient. Adam Smith, in his work An Inquiry into the Nature and Causes of the Wealth of Nations (1776), discusses the inefficiencies of barter and the revolutionary impact of money on trade and the division of labour.
The traditional story continues with the problem of protecting valuable gold stocks. Individuals would store their gold with goldsmiths, who in turn issued receipts. Over time, these receipts could be used directly in payments. Goldsmiths realised they did not need to keep all the deposited gold on hand, as not all receipts would be redeemed simultaneously. By holding only a small fraction, they discovered what is now known as the deposit expansion process, and through this evolution, these goldsmiths became the banks we recognise today. In this view, money arises to lubricate the market, serving primarily as a medium of exchange.
Today, the concept of wealth has expanded beyond physical assets and precious metals to include financial capital, real estate, and intellectual property. Human capital, which encompasses the skills and knowledge of individuals, is also increasingly recognised as a vital aspect of wealth. This evolution reflects the increasing complexity of our economies and the growing importance of intangible assets.
It is important to distinguish between wealth and income. Wealth is a stock variable, representing the accumulation of resources at a specific point in time. Income is a flow variable, representing the amount of money or resources earned over a period of time.
While the traditional narrative of money’s origins in barter is widely taught, more recent academic inquiry challenges this foundational premise. Contrary to the idea of money emerging from a search for efficiency in pre-existing markets, many scholars argue there is virtually no historical or anthropological evidence of economies broadly based on barter. As David Graeber meticulously details in Debt: The First 5,000 Years, research suggests that pure barter systems are rarely found as the primary mode of economic exchange in complex societies.
A compelling alternative view posits that money pre-exists markets and is fundamentally a social and political construct rather than a revolutionary market innovation. Evidence suggests that money is as old as writing itself, with the earliest written records primarily serving as accounting tools to track monetary values. One intriguing speculation for the origin of the concept of value comes from the ancient tribal practice of “wergild.” This system, observed in early Germanic societies, involved the imposition of fines for injuries or deaths to prevent endless blood feuds. The practice introduced the profound intellectual jump of comparing the value of disparate things—a hundred chickens to one cow, for instance—to settle a social obligation. This, rather than a market-driven need for exchange, may have been the genesis of a universal unit of account. A key piece of evidence supporting this idea is that many ancient money units—such as the shekel, lira, or pound—were originally grain weight units, suggesting money evolved from systems of measurement used in agriculture and accounting.
From this perspective, money is understood primarily as a state monopoly and a social unit of measurement. The value of this currency is based not on its inherent material worth, but on the power of the issuing authority. Crucially, taxes are what drive the value of money. The state’s power to impose taxes ensures that its currency has value, as individuals and entities need the state’s currency to meet their tax obligations. This fundamental link means that the state has always played a central role in the evolution of money. The idea that money is a “shared fiction,” as discussed by Yuval Noah Harari, is deeply informed by this view. While trust is essential, it is reinforced by the state’s compelling power to issue currency and enforce its acceptance through the tax system.
The contrasting views on the origin of money profoundly shape our perception of wealth and power within society. If we adhere to the traditional view, wealth is seen as an outcome of market processes and individual agency. In this framework, power accrues to those who are most efficient at producing desired goods and services. Disparities in wealth might be seen as a natural outcome of differing levels of talent, effort, or risk-taking. This perspective can implicitly justify existing hierarchies as a consequence of individual merit or market efficiency.
The alternative view, however, reveals wealth as deeply interwoven with the exercise of state power. The value of all assets is denominated in a unit defined by the state. This suggests that the ‘haves’ are not just those who accumulate more, but those who have greater access to, or influence over, the state’s power to issue money, create regulations, and set tax policy. This framework presents a stronger case for wealth inequality being a direct consequence of political choices and power structures, rather than solely market forces. The question “Is property itself theft?” gains new resonance.
The traditional view tends to naturalise existing power structures, seeing wealth as an individual achievement within a neutral market. The alternative view reveals wealth as deeply interwoven with state power, suggesting that economic outcomes, including vast disparities, are profoundly influenced by political decisions and the fundamental design of the monetary system. This distinction is crucial for understanding the roots of economic insecurity, austerity, and political reaction.
Building on our understanding of how wealth and money have evolved, and the fundamental role of the state in defining value, the turn of the millennium marked another profound shift in power dynamics, driven largely by corporate expansion and new forms of monetisation. The era witnessed the escalating rise of financialisation and the shareholder value model, fundamentally altering corporate behaviour across the globe. Companies, increasingly driven by the imperative to maximise returns for shareholders, often prioritised short-term financial gains over long-term investment, employee well-being, or broader societal contributions.
This pervasive shift, widely critiqued for its impact on wealth distribution, intensified existing inequalities, concentrating power disproportionately in the hands of those who could expertly navigate and manipulate intricate financial instruments. This phenomenon is captured by economist Guy Standing’s concept of ‘rentier capitalism,’ where a growing proportion of wealth is derived not from productive economic activity but from controlling existing assets and extracting ‘rents’—be it from land, financial holdings, or intellectual property. The sheer scale of wealth accumulated by these corporations often dwarfs the annual budgets or even the entire economies (GDPs) of many smaller nations. This financial power translates into significant influence over governments and public life. It enables unprecedented lobbying efforts, shapes legislation that favours their interests, and allows them to exert considerable control over information flows and public discourse through their dominant platforms. Such concentrated corporate wealth raises profound questions about who truly holds the reins of power in the 21st century.
Simultaneously, the digital revolution ushered in platform capitalism, a concept well-articulated by thinkers like Nick Srnicek. Here, the immense power of global companies stems from the intense monetisation of data. Our everyday interactions became valuable commodities, transformed into unprecedented sources of corporate wealth and influence. These new digital monopolies, in many ways, embody the essence of modern rentierism, wielding immense power not just over markets but over the very information that shapes public discourse.
The result is an era where corporate power, fuelled by these expanded avenues of monetisation, manifests overtly through soaring profit increases, even amidst broader economic instability, and subtly through significant influence over policy-making. This profound reshaping of our economic fabric demands critical examination: who truly benefits from this intensified monetisation, and at what cost to our collective well-being and democratic processes?
Next Chapter: Corporations: Ancient Entities, Global Influence
Bibliography:
Graeber, David. Debt: The First 5,000 Years. Brooklyn, NY: Melville House, 2011.
Harari, Yuval Noah. Sapiens: A Brief History of Humankind. Translated by Yuval Noah Harari and Haim Watzman. New York: Harper, 2015.
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. London: W. Strahan and T. Cadell, 1776.
Srnicek, Nick. Platform Capitalism. Cambridge, UK: Polity Press, 2017.
Standing, Guy. The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay. London: Biteback Publishing, 2017.