I’ve been thinking about the differences between old wealth and new wealth lately.
According to Wikipedia, “wealth is an abundance of valuable material possessions or resources. ‘Wealth’ refers to some accumulation of resources, whether abundant or not. ‘Richness’ refers to an abundance of such resources. A wealthy (or rich) individual, community, or nation thus has more resources than a poor one. Richness can also refer to at least basic needs being met with abundance widely shared.”
So, in the old economy, wealth was determined by how much money you have, your family name, your school, etc. Most of the things you’ve seen in high society or the upper class. The problem with this definition of wealth is that it’s purely destructive. When a person is motivated by the pursuit of profit, he or she will start making decisions outside the normal realm of morals and ethics.
If you’ve seen the film, The Corporation, they reveal that “a disturbing diagnosis is delivered: the institutional embodiment of laissez-faire capitalism fully meets the diagnostic criteria of a psychopath.” Symptoms include the “callous disregard for the feelings of other people, the incapacity to maintain human relationships, reckless disregard for the safety of others, deceitfulness (continual lying to deceive for profit), the incapacity to experience guilt, and the failure to conform to social norms and respect for the law.” Pretty scary huh? Enron, Worldcom, sweatshops, and Madoff are great examples of this psychopath behavior and the consequences that result from it.
What I’ve noticed is this notion and concept of “new wealth.” Within our generation, it doesn’t matter how much money you make or how “wealthy” you are through monetary means. With the collapse of the financial system (from psychopathic investment bankers) to the numerous corporations filing for bankruptcy, we’ve seen what “business and wealth” will cause individuals to do.
The currency around “new wealth” revolves around your creativity, innovation, cross-displinary networks, and what you’ve actually done to make this world a better place. These are the people that are “rich” in my books. Not the investment bankers on wall street leveraging more buyouts with inflated money that doesn’t actually exist to make an extra buck.
As we move into this conceptual age, the new currency should revolve around creativity, innovation, and entrepreneurship, and not on making billions at the expense of others. I’m just glad that the majority of investment bankers have finally moved out of Manhattan because the “wealthy” creative folks are finally moving back in.
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Michael is the Co-Founder of All Day Buffet. You can follow his updates by following him on Twitter.
7 responses so far ↓
1 David Locke // May 14, 2009 at 11:50 am
Innovation creates new wealth, then it captures the cash involved. Old money uses cash to create cash, or mostly to keep cash.
Weath is not capital. It turns out that the 3rd world poor have lots of cash, but no capital. Capital is the ability to use cash to create cash. You capitalize a lake by building a dam and selling off the electricity generated by the dam. Of course, the law has to be in place, so you continue to own the dam and the income stream from the dam. The law also provides you with the provisions to transfer ownership of the dam, and to obtain fair pricing for distribution.
In the U.S., we use the term capital to mean cash, but in most countries there is a distance, a dielectic, between capital and cash. A cleptocracy makes it very expensive to spend cash, to hold property, or to do business. Cash and capital a different things.
2 Chris Lindstrom // May 29, 2009 at 11:26 am
“The currency around “new wealth” revolves around your creativity, innovation, cross-displinary networks, and what you’ve actually done to make this world a better place.”
You nailed this one. I would emphasize, in particular, our innovation around how you actually use your cross-disciplinary networks. Networks are a powerful tool, and everybody can tap into them. How effective you are is based on your ability to successfully aggregate and enroll your networks together around a specific goal, vision, or task.
3 James Gibson // May 29, 2009 at 1:03 pm
I would agree that creatives are bringing in the “New Wealth”, I also look at it in a lifestyle frame of reference. Tim Ferris argues (agree with him or not, he’s a bit of a capitalist himself) that the true currency of the New Rich is in fact time. The main motivation behind a lot of people’s pursuits isn’t the cash money in hand per-se, but the freedom that said money provides, by eliminating things that consume time. Most people willingly exchange their personal time in exchange for cash. It’s the basis of the modern workforce. And as you discussed, Manhattan Investment bankers lived in that moment. Stock traders have no problem exchanging personal time, vacations and family life for the money they are paid. It’s the drive and thirst for cash and status, which is shown by acquiring more / valuable stuff.
I think responsible entrepreneurs of future creative companies, or “New Wealth” companies will adapt their workspaces to create environments of time. No longer will silly standards of 9-5 structure, or unnecessary, bureaucratic hierarchies be the iron fist of the workplace. The new wealthy workforce will have a flexible time schedule, be able to work from anywhere and work on a more collaborative, problem solving basis. Workers will be able to enjoy life, and perform better, especially when they are surrounded with a well skilled colleges, and are highly encouraged to innovate.
It will be interesting to see companies take this new approach. I think the only major company to do it truly sucessfully is Google. Imagine if your current employer gave you a percentage of your workweek to do whatever you want, without bureaucratic interruptions? That’s when things like Twitter get invented.
4 hermes handbags // Jul 8, 2010 at 12:14 am
“The currency around “new wealth” revolves around your creativity, innovation, cross-displinary networks, and what you’ve actually done to make this world a better place.”
You nailed this one. I would emphasize, in particular, our innovation around how you actually use your cross-disciplinary networks. Networks are a powerful tool, and everybody can tap into them. How effective you are is based on your ability to successfully aggregate and enroll your networks together around a specific goal, vision, or task.
5 hermes handbags // Jul 8, 2010 at 12:15 am
Innovation creates new wealth, then it captures the cash involved. Old money uses cash to create cash, or mostly to keep cash.
Weath is not capital. It turns out that the 3rd world poor have lots of cash, but no capital. Capital is the ability to use cash to create cash. You capitalize a lake by building a dam and selling off the electricity generated by the dam. Of course, the law has to be in place, so you continue to own the dam and the income stream from the dam. The law also provides you with the provisions to transfer ownership of the dam, and to obtain fair pricing for distribution.
In the U.S., we use the term capital to mean cash, but in most countries there is a distance, a dielectic, between capital and cash. A cleptocracy makes it very expensive to spend cash, to hold property, or to do business. Cash and capital a different things.
6 Stanley McKinley // Aug 9, 2010 at 9:26 am
A nation’s NEW wealth is the value awarded the producers for bringing forth resources from the earth. The trade turn of this value multiplied by seven equals the total earned income of the nation.
http://normbook.homestead.com/
7 Stanley McKinley // Aug 9, 2010 at 9:29 am
A nation’s NEW wealth is the value awarded the producers for bringing forth resources from the earth. The trade turn of this value multiplied by seven equals the total earned income of the nation.
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