It is kind of funny isn’t it, that we define wealth in relative terms, but people oftentimes balk at measuring poverty the same way. For example, on these threads people will say that the poor in America are not poor compared to the poor in LDCs. But the same people will almost always set the wealthy bar above them. ** I’m certainly not one who balks at thinking of poverty as relative. I know lots of people who are technically “below the poverty level”, but live quite well. I know people who have better incomes but live terribly. The discretionary income one has at one’s disposal certainly does make a difference, but it’s not the only determinant of one’s material wellbeing. Productive capital is certainly one element of “wealth”, but it is not the only one. And even “productive capital” is not always what we think it is. I knew a man who, to my knowledge, never had a regular job. He hunted and fished, kept a milk cow and raised a hog or two, for most of his, and his family’s food. Well, yes, his wife bought a bit of flour, salt, sugar and cloth here and there. He did have a grape arbor and four hives of bees. He only worked at seasonal (summer) labor, and not a whole lot of that. But he had a couple of chain saws and a double bladed axe, some wedges and a sledge hammer and an old pickup truck he was able to keep running for decades. Each winter, he cut logs, (mostly deadfalls on other peoples’ land, or “timber tops”) split them and sharpened them, and sold them in the spring to farmers who were rebuilding fence. I used to drive by his place, and could watch that pile of posts grow, then go down, grow and go down, seasonally. I was astonished when, shortly after his death, his daughters informed me that he had something on the order of $350,000 in the bank. They assured me that, no, I was right about how he got it. Didn’t inherit a dime of it. He and their mother (who predeceased him) had put his two daughters through college too. Well, his wife did sell eggs in the neighborhood.**
I would say in both of these cases, as long as they have the ability to sell their stock or their farm, they should be considered wealthy. ** But was the guy with the options wealthy when he couldn’t access them? Was he before they vested?** After all, wealth is a stock variable, income is a flow variable. So if you have a farm that is worth $5 million, but you only make $100,000 per year in income, the fact still remains that you could invest the money in the farm in some other way and make more money. ** We wouldn’t have very many farmers, then, would we? I, for one, am glad those guys are out there on those tractors on their million dollar farms when it’s 10 below or 110 above. I eat what they produce.**
I would say that he is wealthy, but risk loving. Which means that he may or may not stay that way. Well, he’s certainly not wealthy right now. If he liquidated, he sure wouldn’t be.
Human capital definitely is a form of wealth. I agree.
Yes, I realize that you were being facetious, and I answered accordingly. But, you made a claim as well, and I wanted some explanation of your claim.
