How is wealth created? Didn't mankind start out with no money in the beginning?

Answer 1

Wealth is created by the four factors of production: Land, Labor, Capital, and Entrepreneurship

Answer 2

Money (as opposed to barter) is an invention that has only been around for less than about 3000 years. But there was wealth before there was money. Money itself is not wealth -- it's a means of storing and stacking and counting and exchanging wealth. It's like a peanut butter jar (money), to peanut butter (wealth or value).

Wealth is magically created whenever one party exchanges something of theirs to someone else, and receives in exchange something of greater value to them that can also be exchanged.

Answer 3

Mankind started with no money, but when humans began to covet what other humans had they had to form a system to obtain it... originally that was the strong simply taking it, then barter, now money (or more correctly, what stands in for it in the digital age).

Answer 4

Yes, money is a way of measuring wealth and it is created every time the market pays more for something that was created with less.

Answer 5

No money yes, but precious metals were used as currency. I would have to say that brains probably determined wealth in earlier years. Same as today; drive, determination, and know-how drove people to becoming higher class or to provide better for themselves.

Answer 6

There was always some form of money...in the beginning cave men traded sticks for rocks... and so it began.

Answer 7

No, in the beginning (whichever way you want to think about "the beginning") there was no money.

Basically humans operated initially in groups. As far as we know, everyone in the group had a function, and got a share of the rewards - the main activity being hunting animals and finding edible plants.

Next came bartering. This could only occur when humans stopped functioning as groups and started to operate as individuals. At this point a person could produce more of something than they actually needed, and barter whatever was left over for things they didn't have but wanted. So, if I breed chickens and you harvest a field of wheat, I can offer to exchange one of my chickens for a measure of grain, for example.

Sometime later we come to "money", which wasn't necessarily made of gold or silver (copper coins were quite common for lower denomiations).
Money is essentially a symbolic form of bartering. It became necessary in situations where instant bartering wasn't appropriate/possible.

For example, if you've got something I want, but I can't give you what you want in return for, say, three months, then I've got to give you something we both agree is equivalent to what I want. Either I can use goods or services to go around making exchanges until I get enough of what you want to complete the barter - or I can give you and agreed amount of money. Giving you money is a whole lot easier.

But where did "money" itself come from?
The simple answer is we just don't know. There is no historical record which describes the process of moving from barter to the use of money.

One theory was that some unknown kind and/or his advisors dreamed it up and forced the citizens of that country to go along with the idea. And that the idea spread from country to country over time.

Another theory is that it emerged almost by accident.
Imagine Fred wants a whole sack of grain from Bert. Bert asks for five chickens, but Fred only has four. Fred could settle for 4/5ths of a sack of grain - but for some reason he wants a whole sack. So Fred says to Bert, "You give me the whole sack now, and I'll give you the four chickens I've got, plus this sign scratched on a piece of metal or rock. That sign means 'I owe you 1 chicken'. So in a few weeks time, when I've raised some more chickens, you bring me that piece of stone/metal, and I'll recognise the scratches, and I'll give you another chicken."
And Bert trusts Fred enough to go along with this plan.
This would make bartering a whole lot easier, because you wouldn't always have to either exchange things of equal value OR hope to remember who owed what to whom.

After a while these "tokens" would stop being variable in value (depending on a specific barter) and different "coins" would acquire standardised symbolic values to give us money as we know it today.

But both of these ideas, along with several other theories, are still, for the time being at least, only guesswork.

How did "wealth" come into it? Just the way it does today - the more I charge you for something over and above what it cost me, the more profit I make and the richer I get. If there's a shortage of chickens and I've anticipated this and raised a few extra on the patch of ground behind my hut then I can charge my neighbours more than chickens would normally cost - and that's the beginning of wealth.
A;ternatively, lending money has always been a potentially effective way of making extra money without producing extra goods/food/etc. at all.

People who leant money to tribal chiefs, kings, etc. (to pay men to join their armies, for example) were particularly likely to benefit. As long as the person who borrowed the money played fair. Those who were successful were likely to get extra benefits from the people they loaned money to, such as lands, titles, etc..

Those who flunked out - because the borrower's army was defeated, or because the army won but did find enough treasure to loot, or simply because the borrower sent round a couple of large lads with swords to make the moneylender an offer he couldn't refuse - didn't have any real way of enforcing the repayment. Even if they still had their head they had to pretty much grin and bear it.

Answer 8

Every time you ad value to something.

Take a million old chairs and clean and repair them.Then sale them for a dollar more than you paid and you are a millionaire.

Answer 9

By having things of valu:

Like having your own cave, a fire and three dead deer made you pretty weathy and sought after in cave-man days.