a tentative definition of wealth

This morning I posted to Twitter and to Facebook this link about the Facebook IPO, written by Dan Denning of Daily Reckoning Australia. In his post Mr. Denning makes this point:

Time is your most valuable asset. And it’s the one asset we all have equal amounts of. How we use it is what distinguishes us from one another.

This thought coincides with my own thinking over the past year or so. I thought of the common excuse we all make, “I don’t have the time”, and wondered what it really means. For we all have the same amount of time: 24 hours in a day. How we spend that time expresses our personal values. So when I say, “I don’t have time for that,” what I mean is, “I don’t value that activity highly enough to make time for it. My time is filled with other things that I value more.”

Of course, often we have already pledged our time away: made time commitments that don’t leave any spare room. But to the extent that we’re not slaves, those commitments too are a choice, and an expression of our values.

Again, in reference to Mr. Denning’s words, my specific thought in the past year has been this: that time is not just our most valuable asset; it is ultimately our only asset. We all have an unknown but finite quantity allotted to us at birth, and we continuously spend it. This is the powerful ancient image of the hourglass: the sand is our life draining away. What are we doing with it?

The other things we call wealth are really just transformations of time. Money, for instance, represents time in the sense of how long it takes us to earn a certain amount of it, and in the sense of how it can help us make use of our nonearning time. The same applies to specific assets or experiences we might buy. In this way we exchange and reshuffle the time in our lives, but our total stock of time remains finite, and is continuously slipping away.

Lately I was trying to come up with my own definition of wealth. Bearing in mind these other thoughts, one of my early stabs at it was this:

possession of the quantity of resources that allows one to maximize one’s leisure time

A new word comes in: leisure. For not all time is equally valuable to us. The premium time, the true temporal wealth, is leisure. This implies that many people usually considered wealthy are not wealthy at all. The lawyer who puts in 60-hour weeks to earn $500,000 a year has very little leisure, even as he drives a more expensive car, lives in a more expensive house, wears more expensive clothes, and goes on more expensive vacations than most of us.

The lawyer might object: what use is leisure to me if I don’t have the money to enjoy it? Fair enough. But this raises further questions. What constitutes enjoyment? And how much does it need to cost?

In the ancient world, as I’ve mentioned before, leisure was the prerogative and indeed the defining mark of the free man—the citizen. And there were only 2 proper uses for his leisure:

  • improving himself
  • improving his society

If you weren’t doing one or both of those things, then you were in the deepest sense wasting your time. At least, this was the ideal.

Leaving aside for a moment the question of improving society, what does it mean to improve oneself? Speaking generally, the ancients again might answer: “cultivating virtue.” For my part, I think they were right. But it might be argued that this idea is too limiting in our freedom-loving world. People should be able to do what they want, no?

So I resorted to Abraham Maslow’s theory of motivation. Based on his studies of animals and humans, he found that the psychological motives of behavior could be grouped into a few broad categories, which could be arranged in a hierarchy. The hierarchy just meant that the lower-order motives or needs were the ones that animals, including human animals, attend to first, leaving other needs unmet until these ones have been taken care of, at least partly. At the bottom level are the physiological needs, such as food, water, and air. Moving up from there, we come to the safety needs, belonging needs, esteem needs. These complete the needs that Maslow characterized as “deficiency needs”—those things we need for our normal healthy development and living, and which, once they are met, do not need to be over-met. Some of us eat, for example, more than we need; but that is not healthy.

At the top of the hierarchy, above all those deficiency or D-needs, are what Maslow called the “being” or B-needs: the need for human beings to actualize themselves, to fulfill their potentials. According to Maslow, once we have fulfilled our D-needs, we naturally turn toward our B-needs and actualize ourselves, for this is how we experience fulfillment in life. And, unlike the D-needs which can be satisfied with a finite amount fulfillment, the B-needs are open-ended: we never get “full” of them. If you find fulfillment in playing the piano, there is no natural endpoint; the piano and its music can fill up the life of someone who has passion for it, with plenty left undone when they die. Or you may find that your zeal for self-actualization moves on from piano to, say, gardening. Again, there is no limit to the fulfillment you can get from gardening as long as you have a passion for it. You can keep going with it: learning more, doing more, appreciating more.

All right, so where does this take me? I offer this as a tentative definition of wealth:

having resources such that one is not impeded by a lack of resources in pursuing either one’s deficiency needs or one’s being needs

I had reasons for putting it in this negative way, with the phrase “not impeded.” For this preserves the freedom aspect. No one is forcing us to look after our deficiency needs and our being needs; Maslow just observed that, left to our own devices, that’s what we do.

And how did I start wandering down this path? I was actually reflecting on the question of economic growth. But I’ll have to leave that for another time.

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