Page:Walter Renton Ingalls - Wealth and Income of the American People (1924).pdf/177



Wealth is defined in various ways. The older school of economists regarded as wealth only the material things—land, mines, railways, etc. Later it was learned that the definition should be broader. As good a definition as any is this: Wealth is that which has value in exchange. There are some things that have value but not in exchange and therefore are not wealth. Thus the air we breathe has value, for no one could live without it, but it is not wealth, for anyone can get it for nothing.

Wealth that has value in exchange is of two kinds, physical, i.e., that which we can see or touch, and is tangible. Included with physical wealth are bonds, bills and other promises to pay, as between nations. They may, or may not, represent physical things. They are mortgages on work to be performed in the future and as such they have value in exchange.

In considering the wealth of nations it is important to make a distinction in the physical wealth, as between present and potential, or developed and undeveloped. Thus at the present time an inventory of the wealth of Germany would be large while that of Russia would be small. Yet in the same breath Germany might be described as a poor country, and Russia as a rich one; the meaning being, correctly, that Germany has but little in mines, forests and other natural resources,