Let us introduce a third vocabulary word: Asset. An Asset is something that is consumed to provide Value, like cash in a mattress, food in a refrigerator, or the portion of a house or car that is depreciating as it is used.
One of the miracles of the modern age is the ability of banks to turn Assets into Wealth many times over. It’s a bit of technology built on societal trust.
In the stock market example, it isn’t double-counting, just different perspectives. Stock shares are a claim on the company, so the Google code is included in the Wealth of Google, and stock ownership is counted in the Wealth of the individual owners, but it’s like saying “there are 20 legs in my dining room, and there are 4 legs on the table”—it’s an error of logic to add the 20 to the 4.
Let us introduce a third vocabulary word: Asset. An Asset is something that is consumed to provide Value, like cash in a mattress, food in a refrigerator, or the portion of a house or car that is depreciating as it is used. One of the miracles of the modern age is the ability of banks to turn Assets into Wealth many times over. It’s a bit of technology built on societal trust. In the stock market example, it isn’t double-counting, just different perspectives. Stock shares are a claim on the company, so the Google code is included in the Wealth of Google, and stock ownership is counted in the Wealth of the individual owners, but it’s like saying “there are 20 legs in my dining room, and there are 4 legs on the table”—it’s an error of logic to add the 20 to the 4.