Economics and Well-Being 1

Let’s begin today’s blog with some definitions to make a long, complicated story simple.
WEALTH – a large amount of something good Cambridge Dictionary ‘Wealth’ comes from the old English ‘weal’, which means ‘wealth, welfare, and wellbeing’. Weal is in turn related from common word roots to the older word ‘wel’, meaning ‘in a state of good fortune, welfare, or happiness’. Today we have severely narrowed the word wealth to mean an abundance of valuable possessions or money; The state of being rich; material prosperity; Plentiful supplies of a particular resource; A plentiful supply of a particular desirable thing; prosperity; and finally, although little used as a synonym is the compound word Well-being.
WELL-BEING – The state of being comfortable, healthy, or happy Oxford Dictionary
PROSPERITY – the condition of being successful or thriving (it has come to be understood today as economic well-being) Merriam Webster Dictionary.

I have spoken often to business economists and they quite happily use the philosopher Adam Smith as justification for modern business ethics of social Darwinian ideals, profit making for investors, and of course the illusionary Free-Market ideal. Curiously, very few have actually read his tomes The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). My genius economics colleague Rhonda tells me he was writing, before his untimely death, a third tome that would have merged the first two. I’ll encapsulate Smith’s philosophies all here in a basic sentence: he said making money was fine as long as moral oversight and full transparency by everyone was observed, and that such ‘wealth’ be distributed fairly for social benefit of all.
Back in the early 1800’s economics was a social science discipline trying to find a credible niche for itself in the academic realms. They began to dabble more and more in Mathematics and especially were envious of the physicists with all their predictive equations. But what to measure in economics that would be predictive? They did notice that when a person in Europe was in dire proverty the acquisition of money eased their plight, and the more money they gained the ‘better off’ they became – indeed, their overall well-being seemed to increase linearly with monetary ‘wealth.’ Aha, something to be measured, and so modern economics was born. Like any hyperbolic (logarithmic) growth curve, linearity exists only at the start of the curve and quickly climbs to a plateau where no more increase is seen. Not to let such trivialities get in the way, it is still used as justification today for more money equals more well-being – sadly that logic isn’t true. Yes, we need to get everyone out of poverty, but how much money is needed to create a firm sense of well-being? And for that matter, what is well-being more clearly? Deeper down the rabbit hole on the next blog.