Great IdeasLiving together
Wealth, money and markets
How wealth is made, traded and shared.
The question
What is wealth, and how is it made and shared? Is the love of money good, bad or neither?
How the books answer
Oldest first. Each stop is our own short summary of what the author argued; follow the link to the rung for the whole lesson.
c. 340–322 BC
Aristotle, Politics and The Athenian Constitution
Aristotle separates managing a household, which gathers what a family needs, from money-making for its own sake, which has no natural limit. Money was invented to make trade easier. He criticized lending money at interest, since money then breeds money.
1265–1274
Thomas Aquinas, Summa Theologica, First Part of the Second Part
Aquinas argues that wealth can't be what happiness is, because it is only a means to other things. Riches are for use: to support life and to help others. Like Aristotle, he warns against a desire for money that knows no limit.
“It is impossible for man's happiness to consist in wealth.”
1689
John Locke, A Letter Concerning Toleration and the Second Treatise of Civil Government
Locke argues that property comes from work. When a person picks apples or plows a field, they mix their labor with nature and make it theirs. He thought labor gives things most of their value, and that money let people keep wealth without it spoiling.
“The "labour" of his body and the "work" of his hands, we may say, are properly his.”
1776
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
Adam Smith says a nation's wealth is what its people produce, not the gold in its treasury. Dividing work into special tasks makes each worker far more productive, and trade lets each person benefit from others' skills. People serving their own interest in a free market, he argues, are often led to serve the common good, though he also warned against businesses joining to fix prices.
“It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
1848
Karl Marx and Friedrich Engels, Manifesto of the Communist Party
Marx and Engels argue that history is driven by struggles between classes. They praise modern industry for producing more than any earlier age, but claim it divides society into owners and workers who have nothing to sell but their labor. They call for workers to unite and overthrow this order, a call that later movements and their critics have argued over ever since.
“The history of all hitherto existing society is the history of class struggles.”
1867
Karl Marx, Capital, Volume 1
In Capital, Marx studies how money is turned into more money. He contrasts selling in order to buy with buying in order to sell at a profit. He argues that profit comes from workers' unpaid labor, a claim many economists accept in part and many reject.
“M—C—M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell.”
1899
Thorstein Veblen, The Theory of the Leisure Class
Veblen notices that rich people often spend to show off, not because they need things. He calls it conspicuous consumption. Wealth wins respect, he says, only when others can see it.
“Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure.”
1920
R. H. Tawney, The Acquisitive Society
Tawney criticizes a society that treats getting rich as the main goal of life. He argues that property and industry should be judged by the service they do for others. Owning things is fine, he says, but owning without working is what corrupts.
“For it is not private ownership, but private ownership divorced from work, which is corrupting to the principle of industry.”
1936
John Maynard Keynes, The General Theory of Employment, Interest and Money
Writing during the Great Depression, Keynes argues that a market economy can get stuck with many people out of work if total spending falls. He thought governments could help by spending and by managing interest rates. Economists still debate how far his ideas hold.
For young readers
Wealth is having the things people need and want: food, homes, tools and money to trade for them. Money itself is just a handy way to trade, so you don't have to swap a chicken for a pair of shoes.
Adam Smith noticed that a baker bakes bread to earn a living, and that helps everyone get bread. Other writers worried that some people end up with far too much while others have too little. People still argue about the best way for wealth to be made and shared.
Talk about it
- Why is money useful? What would life be like without it?
- Smith says the baker works for his own good and helps us too. Can you think of other examples?
- Aristotle says there is such a thing as wanting too much money. What do you think?
- Veblen says people buy things to show off. Have you seen that? Why do people do it?
- If you earned ten dollars, how would you choose to spend, save or share it?
Where else on the site
- Economic Systems
- Specialization and the Terms of Trade
- Absolute and Comparative Advantage
- Market Equilibrium
- Schools of Macroeconomic Thought
- Spenders and Savers
Every rung tagged with this idea:
These pages are our own short synthesis, written for families. They were inspired by Mortimer J. Adler's Syntopicon, the index of great ideas in volumes 1 and 2 of Great Books of the Western World, but the questions, summaries and groupings are ours, not the Syntopicon's. Short excerpts come from public-domain translations, credited where they appear.