# What is Wealth in 2026? > [!info] Resource details > **Date:** 2 June 2026 · STE lecture > **Presenter:** [Alex Trew](https://www.alextrew.net) (University of Glasgow) > **Topics:** #adam-smith #wealth-of-nations #gdp #wellbeing #sustainability > **Subjects:** #economics #history #politics Gold, burgers, or clean air — which would you pick? It sounds like a silly question, but it's really asking something Adam Smith asked 250 years ago: **what do we mean when we call a country "rich"?** Different societies have answered it in different ways. This page describes three of those answers — what each one means, where it came from, and what it does and doesn't capture. > [!abstract]+ From a STE lecture > Based on the talk *"Gold, Burgers, or Clean Air: What makes a country rich?"* given by **Alex Trew** (University of Glasgow) at a Scottish Teachers & Students of Economics (STE) event on 2 June 2026, marking 250 years of *The Wealth of Nations*. ## Gold, burgers, or clean air? These three things are really stand-ins for three different ideas of what wealth *is*: - **Gold** — money and what it can buy. - **Burgers** — the goods and services production provides: food, homes, clothes, leisure. - **Clean air** — broader measures of how a society is doing: fairness, wellbeing and the environment. In *The Wealth of Nations* (1776) — in full, *An Inquiry into the Nature and Causes of the Wealth of Nations* — Smith distinguished the **nature** of wealth (what it *is*) from the **causes** of wealth (what *makes* it). The three conceptions below can each be described in those terms. ## Wealth №1: a pile of gold For roughly 150 years, the popular answer was: a country's wealth is its **gold and silver**. This view is called **mercantilism**. Gold pays armies, never rots, and is accepted everywhere — and because the world's gold seemed fixed, trade looked like a contest: win gold, or lose it. The merchant Thomas Mun put it plainly in 1664: the way to grow our wealth is to "sell more to strangers yearly than we consume of theirs in value." If that's what wealth is, the **policies** follow: block imports with tariffs, subsidise exports, hand monopolies to favoured companies, and grab colonies for cheap raw materials and captive markets. (That system ran on enslaved labour — something Smith attacked on moral as well as economic grounds.) > [!abstract]+ Smith's objection > *"Wealth does not consist in money, or in gold and silver; but in what money purchases"* (WN, IV.i.17). On Smith's view, what people actually want is the goods money buys, not the metal itself; and treating trade as a contest for a fixed stock of gold overlooks the mutual gains exchange can create. His illustration: Scotland *could* grow its own wine in hothouses, at about "thirty times the expense" of buying it from abroad — possible, but a poor use of resources. > [!note] What it captures, and what it misses > **Captures:** money's real usefulness — it is liquid, durable and widely accepted, which is why states have long cared about it. **Misses:** money is a *claim* on goods, not the goods themselves; a focus on bullion alone says little about what a population can actually consume or produce. ## Wealth №2: what you can make and enjoy A second conception defines wealth as the goods and services people can produce and enjoy. Smith put it this way: *"Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life"* (WN, I.v.1). Not bullion — **burgers**: the goods, comforts and pleasures that production makes possible. One feature of this conception is that the total is not fixed: if wealth is what a society can produce, then production — and so wealth — can rise or fall over time, rather than only being redistributed from one place to another. This is the conception that underpins modern economics, and since the 1940s it is approximately what **GDP** measures. On this conception, the factors usually identified as *causes* of wealth — what produces the goods — include: - **Division of labour** — split work into specialised steps and you produce far more (his famous pin factory). - **Trade** — a bigger market means more specialising, and gains on both sides. - **Investment** — tools and machines multiply what each worker can make. Today we'd add **technology and innovation**, **skills and education**, and **institutions** like property and contracts. And Smith thought government had real jobs in all this: provide **justice** so deals are fair and property is safe, supply **public goods** that markets won't (roads, schools, defence), and step in where one failure can "burn down the whole street." > [!example] By the numbers > Real GDP per head was roughly flat for most of history and then rose sharply after about 1800. Over the same long period, global life expectancy rose from around 28 to 74, and the share of people in extreme poverty fell from about 80% to under 10%. > [!note] What it captures, and what it misses > **Captures:** the goods and services a population can produce and consume, and changes in that quantity over time. **Misses:** GDP counts market activity, so it leaves out unpaid work, says nothing in itself about how output is shared, and treats the using-up of natural resources as ordinary income. ## Wealth №3: wellbeing and the environment GDP measures market output, but there are aspects of how a society is doing that it does not directly reflect. It says little about: - **Non-market activity** — care work, household labour, volunteering. - **Inequality** — averages can rise while parts of a population struggle. - **Sustainability** — using up natural resources can show up as income rather than as a reduction in a country's assets. So a third idea of wealth has grown up, one that aims to include **fairness, unpaid work, and the state of the environment** — the "clean air" column. A number of frameworks try to capture it: the UN's wider wellbeing and Human Development measures, and closer to home **Scotland's National Performance Framework**, which sets out national goals well beyond GDP. > [!note] What it captures, and what it misses > **Captures:** dimensions of how people are doing that market output leaves out — health, education, the distribution of income, and environmental quality. **Misses:** there is no single agreed measure, and different frameworks include different things, so "wellbeing" is harder to summarise in one number than money or GDP. ## The three side by side | Conception | Wealth is… | Associated with | Often measured by | | --- | --- | --- | --- | | **Gold** | money and precious metals | mercantilism (c. 16th–18th centuries) | stocks of gold and silver | | **Burgers** | the goods and services people can produce and enjoy | Adam Smith; modern economics | GDP (since the 1940s) | | **Clean air** | wellbeing, fairness and the environment, alongside output | recent "beyond-GDP" thinking | wellbeing frameworks, e.g. Scotland's NPF, UN HDI | ## Study guide questions 1. What did **mercantilists** think made a country rich, and what was Smith's main objection? 2. Smith said wealth is "what money purchases," not money itself. Why does this conception allow a country's wealth to *grow* rather than simply move from one country to another? 3. Name two things **GDP** captures well, and two things it leaves out. 4. What does the "**clean air**" conception of wealth try to include that GDP does not? 5. For each of the three conceptions — gold, burgers, clean air — name one way it has been (or could be) measured. ## Further reading - Diane Coyle — [*GDP: A Brief but Affectionate History*](https://press.princeton.edu/books/paperback/9780691169859/gdp) (Princeton University Press) - Hans Rosling — [*Factfulness*](https://www.hachette.co.uk/titles/hans-rosling/factfulness/9781473637467/) (Sceptre / Hachette) - Hannah Ritchie — [*Not the End of the World*](https://www.hachettebookgroup.com/titles/hannah-ritchie/not-the-end-of-the-world/9780316536752/) (Little, Brown Spark) - Oded Galor — [*The Journey of Humanity*](https://www.penguinrandomhouse.com/books/679024/the-journey-of-humanity-by-oded-galor/) (Penguin Random House) - Daron Acemoglu & James Robinson — [*Why Nations Fail*](https://www.penguinrandomhouse.com/books/205014/why-nations-fail-by-daron-acemoglu-and-james-a-robinson/) (Crown / Penguin Random House) - Adam Smith — [*The Wealth of Nations*](https://www.gutenberg.org/ebooks/3300) and [*The Theory of Moral Sentiments*](https://www.gutenberg.org/ebooks/58559) (free full texts at Project Gutenberg; for *Wealth of Nations*, try just the first chapter of each of the five books) --- ← Back to [[Introduction to SES Resources]] · see also [[Adam Smith]] · [[Wealth of Nations at 250]]