Wealth is material goods made by man. It is houses and automobiles, piles of lumber and bars of copper, steel mills and pipelines, foodstuffs and clothing. It is also land and natural resources in the ground insofar as man has made them useable and accessible. Man, of course, does not make the material stuff of land and natural resources, but he certainly does create their character as wealth.

Air, sunlight, rainfall, and wind are also material goods. But insofar as they come to us automatically, without any need for labor or effort on our part to cause their existence or our benefit from them, they are outside the province of economic activity and of economics. They are nature-given conditions that automatically benefit us; historically, they have been described as free goods. Economics deals only with those goods which are the object of economic activity, that is, which man needs to produce in some sense--goods whose existence or beneficial relationship to his well-being he needs to cause in his capacity as a thinking being, that is, on whose behalf he must expend labor or effort. Such goods are economic goods. In saying that wealth is goods, we refer only to economic goods; we exclude free goods.

Some implications of the fact that wealth consists of goods must be named. Wealth is not at all synonymous with money or monetary value. The wealth produced in an economic system and the total monetary value of that wealth is separate and distinct phenomena. The one can increase without the other. More wealth can exist totally apart from more money. More wealth produced in the form of ordinary commodities, like steel, sugar, automobiles, and so on, without any increase in the supply of money, is nonetheless more wealth; but in such circumstances it results in correspondingly lower prices, and no increase in the total monetary value of commodities. By the same token, more money and more monetary value can exist totally apart from more wealth. This happens almost every day under a system of fiat paper money, where the supply of money is determined by the wishes of the government, irrespective of the supply of goods. In such circumstances, the effect of the additional money is simply to raise prices.

A connection between the quantity of money and the amount of wealth would exist only if money consisted of gold or silver. Even then, it would be a highly imperfect connection. Under such circumstances, an increase in the supply of gold or silver would constitute both an increase in the supply of money and an increase in the supply of wealth insofar as more gold and silver in their capacity as industrial materials meant more wealth. A further connection would exist insofar as increases in the supply of money under such circumstances tended to exist as the by-product of general improvements in the ability to produce, that is, insofar as a larger supply of gold or silver was the result of improvements in machinery, transportation, and so forth, having wider application than merely to the mining of the precious metals.

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