Project Topic Research

What is wealth?

Wealth is the abundance of valuable resources or material possessions. An individual, community, region or country that possesses an abundance of such possessions or resources to the benefit of the common good is known as wealthy.

The modern concept of wealth is of significance in all areas of economics, and clearly so for growth economics and development economics yet the meaning of wealth is context-dependent. At the most general level, economists may define wealth as "anything of value" that captures both the subjective nature of the idea and the idea that it is not a fixed or static concept. Various definitions and concepts of wealth have been asserted by various individuals and in different contexts.(Dennis Pirages1996)

Defining wealth can be a normative process with various ethical implications, since often wealth maximization is seen as a goal or is thought to be a normative principle of its own. (Kronman, Anthony T, March 1980) (Robert L. Heilbroner, 1987)

^{The United Nations definition of inclusive wealth is a monetary measure which includes the sum of natural, human and physical assets. Natural capital includes land, forests, fossil fuels, and minerals. Human capital is the population's education and skills. Physical (or "manufactured") capital includes such things as machinery, buildings, and infrastructure.}

^{In popular usage, wealth can be described as an abundance of items of economic value, or the state of controlling or possessing such items, usually in the form of money, real estate and personal property.}

An individual who is considered wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group. Wealth can be categorized into three principal categories: personal property, including homes or automobiles; monetary savings, such as the accumulation of past income; and the capital wealth of income producing assets, including real estate, stocks, bonds, and businesses.

'Wealth' refers to some accumulation of resources (net asset value), whether abundant or not. 'Richness' refers to an abundance of such resources (income or flow). A wealthy individual, community, or nation thus has more accumulated resources (capital) than a poor one. The opposite of wealth is destitution. The opposite of richness is poverty.

Concept of Wealth

Concepts of wealth also vary across time. Modern labor-saving inventions and the development of the sciences have vastly improved the standard of living in modern societies for even the poorest of people. This comparative wealth across time is also applicable to the future; given this trend of human advancement, it is possible that the standard of living that the wealthiest enjoy today will be considered impoverished by future generations.

The invention of coined money and banking was particularly important. Aristotle describes the basic function of money as a universal instrument of quantitative measurement – “for it measures all things […]”– making things alike and comparable due to a social “agreement” of acceptance.(Nicomachean Ethics) In that way, money also enables a new type of economic society and the definition of wealth in measurable quantities. In the Roman Empire, just as in modern colonialism, the main force behind the conquest of countries was the exploitation and accumulation of wealth in quantitative values like gold and money. Modern philosophers like Nietzsche criticized the fixation on measurable wealth: “Unsere ‘Reichen’ – das sind die Ärmsten! Der eigentliche Zweck alles Reichtums ist vergessen!” (“Our ‘rich people’ – those are the poorest! The real purpose of all wealth has been forgotten!”) (Nietzsche. Werke in drei Bänden)

^{Wealth is a restrictive agent for people of different classes because some hobbies can only be participated in by the affluent, such as world travel.}

^{Partly as a result of different economic conditions of life, members of different social classes often have different value systems and view the world in different ways. As such, there exist different "conceptions of social reality, different aspirations and hopes and fears, different conceptions of the desirable."} 

Wealth Effect

The wealth effect is the change in spending that accompanies a change in perceived wealth.Darby, Michael R. (1987)

People typically spend more overall when one of two things is true: when people actually are richer, objectively, or when people perceive themselves to be richer—for example, the assessed value of their home increases, or a stock they own goes up in price.

Demand for some goods (called inferior goods) decreases with increasing wealth. For example, consider consumption of cheap fast food versus steak. As someone becomes wealthier, their demand for cheap fast food is likely to decrease, and their demand for more expensive steak may increase.

What is Poverty?

Poverty is general scarcity or dearth, or the state of one who lacks a certain amount of material possessions or money. Absolute poverty or destitution refers to the deprivation of basic human needs, which commonly includes food,water, sanitation, clothing, shelter, health care and education. Relative poverty is defined contextually as economic inequality in the location or society in which people live. (The World Bank. 2011) (Instituto Nacional de Estadistica. 2009)

United Nations defines Poverty: Fundamentally, poverty is the inability of getting choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation. 

World Bank defines Poverty: is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life. (worldbank.org. 27 May 2011)

Copenhagen Declaration: Absolute poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to social services. (Un.org. Retrieved 26 July 2013)

Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished "capability" of people to live the kinds of lives they value. The social aspects of poverty may include lack of access to information, education, health care, or political power. (World Health Organization. March 2002)(Journal of Poverty)

^{Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society. (H Silver, 1994)} 

Poverty Characteristics

^{David Moore, in his book The World Bank, argues that some analysis of poverty reflect pejorative, sometimes racial, stereotypes of impoverished people as powerless victims and passive recipients of aid programs.}

 ^{Every year nearly 11 million children living in poverty die before their fifth birthday. 1.02 billion people go to bed hungry every night.}

^{Poverty often drastically affects children's success in school. A child's "home activities, preferences, mannerisms" must align with the world and in the cases that they do not these students are at a disadvantage in the school and most importantly the classroom. Therefore, it is safe to state that children who live at or below the poverty level will have far less success educationally than children who live above the poverty line. Poor children have a great deal less healthcare and this ultimately results in many absences from the academic year. Additionally, poor children are much more likely to suffer from hunger, fatigue, irritability, headaches, ear infections, flu, and colds. These illnesses could potentially restrict a child or student's focus and concentration}

^{According to experts, many women become victims of trafficking, the most common form of which is prostitution, as a means of survival and economic desperation.} 

Deterioration of living conditions can often compel children to abandon school to contribute to the family income, putting them at risk of being exploited. For example, in Zimbabwe, a number of girls are turning to sex in return for food to survive because of the increasing poverty.

^{In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide.}

^{Government revenue can be diverted away from basic services by corruption. Funds from aid and natural resources are often sent by government individuals for money laundering to overseas banks which insist on bank secrecy, instead of spending on the poor.} 

^{What is Corruption?}

^{In philosophical, theological, or moral discussions, corruption is spiritual or moral impurity or deviation from an ideal. Corruption may include many activities including bribery and embezzlement. Government, or 'political', corruption occurs when an office-holder or other governmental employee acts in an official capacity for personal gain.} 

^{Specific acts of corruption include "bribery, extortion, and embezzlement" in a system where "corruption becomes the rule rather than the exception."}

^{The word corrupt when used as an adjective literally means "utterly broken". The word corrupt also have a lot of other meanings as an adjective: 1.guilty of dishonest practices, as bribery, lacking integrity, crooked; 2.debased in character, depraved, perverted, wicked, evil; 3.made inferior by errors or alterations, as a text; 4.infected and tainted; 5.decayed, putrid; when the word corrupt is used as a verb with objects it also has a definition that is to mar and spoil.} 

^{Corruption can occur on different scales. There is corruption that occurs as small favours between a small number of people (petty corruption), corruption that affects the government on a large scale (grand corruption), and corruption that is so prevalent that it is part of the every day structure of society, including corruption as one of the symptoms of organized crime (systemic corruption).}

^{Petty corruption occurs at a smaller scale and within established social frameworks and governing norms. Examples include the exchange of small improper gifts or use of personal connections to obtain favours. This form of corruption is particularly common in developing countries and where public servants are significantly underpaid.}

^{Grand corruption is defined as corruption occurring at the highest levels of government in a way that requires significant subversion of the political, legal and economic systems. Such corruption is commonly found in countries with authoritarian or dictatorial governments but also in those without adequate policing of corruption.}

^{Political corruption is the abuse of public power, office, or resources by elected government officials for personal gain, e.g. by extortion, soliciting or offering bribes}

^{Police corruption is a specific form of police misconduct designed to obtain financial benefits, other personal gain, and/or career advancement for a police officer or officers in exchange for not pursuing, or selectively pursuing, an investigation or arrest. One common form of police corruption is soliciting and/or accepting bribes in exchange for not reporting organized drug or prostitution rings or other illegal activities. Another example is police officers flouting the police code of conduct in order to secure convictions of suspects — for example, through the use of falsified evidence. More rarely, police officers may deliberately and systematically participate in organized crime themselves. In most major cities, there are internal affairs sections to investigate suspected police corruption or misconduct.}

^{Judicial corruption refers to corruption related misconduct of judges, through receiving or giving bribes, improper sentencing of convicted criminals, bias in the hearing and judgement of arguments and other such misconduct.}

^{Bribery and Embazzlement}

Bribery is the improper use of gifts and favours in exchange for personal gain. This is also known as kickbacks or, in the Middle East, baksheesh. It is the most common form of corruption. The types of favours given are diverse and include money, gifts, sexual favours, company shares, entertainment, employment and political benefits. The personal gain that is given can be anything from actively giving preferential treatment to having an indiscretion or crime overlooked.

^{While bribery is the use of positive inducements for corrupt aims, extortion and blackmail centre around the use of threats. This can be the threat of violence or false imprisonment as well as exposure of an individual's secrets or prior crimes.}

Embezzlement and theft involve someone with access to funds or assets illegally taking control of them. Fraud involves using deception to convince the owner of funds or assets to give them up to an unauthorized party.

R. Klitgaard postulates that corruption will occur if the corrupt gain is greater than the penalty multiplied by the likelihood of being caught and prosecuted:

Corrupt gain > Penalty × Likelihood of being caught and prosecuted

References

1.  Denis "Authentic Development: Is it Sustainable?", pp. 189-205 in Building Sustainable Societies, Dennis Pirages, ed., M. E. Sharpe, ISBN 1-56324-738-0,ISBN 978-1-56324-738-5. (1996)

1. Kronman, Anthony T. (March 1980). Wealth Maximization as a Normative Principle 9. The Journal of Legal Studies. doi:10.1086/467637.

1.  Robert L. Heilbroner, 1987 [2008. The New Palgrave: A Dictionary of Economics, v. 4, pp. 880-83. Brief preview link

1. Aristotle. Nicomachean Ethics 1133a.

1. Nietzsche. Werke in drei Bänden. III, p. 419.

1.  Aspects of Poverty. Ed. Ben B Seligman. New York: Thomas Y. Crowell Co., 1968.

1.  Darby, Michael R. (1987). "wealth effect," The New Palgrave: A Dictionary of Economics, v. 4, pp. 883–4.

1.  Poverty. merriam-webster. Retrieved 18 November 2013

1.  "Measuring Inequality". The World Bank. 2011.

1.  Instituto Nacional de Estadistica (2009). "Poverty and its measurement - The presentation of a range of methods to obtain measures of poverty". pp. 2–3.

1.  "Indicators of Poverty & Hunger". United Nations. Retrieved 27 May 2011.

1. "Poverty and Inequality Analysis". worldbank.org. Retrieved 27 May 2011.

1. "World Summit for Social Development 1995 (see Annex II, Section 19)". Un.org. Retrieved 26 July 2013.

1.  "A Glossary for Social Epidemiology". World Health Organization. March 2002. Retrieved 21 June 2011.

1.  "Journal of Poverty". Journal of Poverty. Retrieved 24 October 2010.

1. H Silver, 1994, social exclusion and social solidarity, in International Labour Review, 133 5–6

1.  G Simmel, The poor, Social Problems 1965 13

1.  P Townsend, 1979, Poverty in the UK, Penguin

1. Chapter on Voices of the Poor in David Moore's edited book The World Bank: Development, Poverty, Hegemony (University of KwaZulu-Natal Press, 2007)

1. "1.02 billion people hungry". fao.org. 19 June 2009. Retrieved 21 June 2011.

1. Solley, Bobbie A. (2005). When Poverty's Children Write: Celebrating Strengths, Transforming Lives. Portsmouth, NH: Heinemann, Inc.

1.  "Experts encourage action against sex trafficking". .voanews.com. 15 May 2009. Retrieved 24 October 2010.

1. Thomson, Mike (12 June 2009). "Zimbabwean girls trade sex for food". BBC News. Retrieved 24 October 2010.

1. Atkins, M. S., McKay, M., Talbott, E., & Arvantis, P. (1996). "DSM-IV diagnosis of conduct disorder and oppositional defiant disorder: Implications and guidelines for school mental health teams," School Psychology Review, 25, 274–283. Citing: Bell, C. C., & Jenkins, E. J. (1991). "Traumatic stress and children," Journal of Health Care for the Poor and Underserved, 2, 175–185.

1. "Anti-Corruption Climate Change: it started in Nigeria". United Nations Office on Drugs and Crime. 13 November 2007. Retrieved 21 June 2011.

1.  "Nigeria: the Hidden Cost of Corruption". Public Broadcasting Service (PBS). 14 April 2009. Retrieved 21 June 2011.

1.  "Banks, graft and development". The Economist. 12 March 2009. Retrieved 21 June 2011.

1. Znoj, Heinzpeter (2009). "Deep Corruption in Indonesia: Discourses, Practices, Histories". In Monique Nuijten, Gerhard Anders. Corruption and the secret of law: a legal anthropological perspective. Ashgate. pp. 53–54.ISBN 978-0-7546-7682-9.

1.  "Corrupt | Define Corrupt at Dictionary.com". Dictionary.reference.com. Retrieved 2010-12-06.

1.  Institutional working definition of corruption. Anti-Corruption Trust of Southern Africa. 2007

1. Wang, Peng (2013). "The rise of the Red Mafia in China: a case study of organised crime and corruption in Chongqing". Trends in Organized Crime16 (1): 49–73. doi:10.1007/s12117-012-9179-8.

1. Klitgaard, Robert (1998), Controlling Corruption, University of California Press, Berkely, CA

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