Notes (Retirement)

The creation of wealth takes place when an individual or corporation employs the potential labour and capital resources available and uses these to produce something (production is taken in the most general sense of the term) which has greater value than the resources used. In this sense wealth creation is the value added in the production process. […]
In everyday language, wealth refers to the net assets or net worth of an individual, a family or a business. In this sense the meaning of wealth is close to that of capital. It is the stock of useful things owned by an individual, a family or corporation which yields a stream of income, either in cash or in kind. For an economy as a whole, wealth is more than the total capital stock, because it also includes that part of current income which has no capital source. […]
…the economic growth of the West is not due primarily to capital growth, but to improvements in the quality of the labour force, better education, economies of scale and all those other factors which raise residual productivity. […]
A former colleague of mine, Professor Peter Bauer, has written eloquently on this issue, and I cannot resist quoting from his provocative article on “The investment fetish”. Writing of the situation in Third World countries today, he states that “Emergence from poverty…does not require large scale capital formation. It requires changes in attitudes and mores adverse to material improvement, readiness to produce for the market instead of subsistence and the pursuit of appropriate government economic policies. Much of capital formation is not a pre-condition of material advance but its concomitant.”

From chapter 2 of The Creation of Wealth by Brian Griffiths, 1984. The quotation from Professor Bauer appears on page 248 of Equality, the Third World and Economic Delusion, 1981.