Wealth and Welfare

Wealth is a stock of economic goods existing at a given time, Car, orchard, building, pen, utensil are wealth. But welfare is a state of mind which represents human satisfaction and happiness. It is a subjective concept.

Wealth is a means to economic welfare. The accumulation of goods and services will enable a person to satisfy his wants and make him feel happy. He need not have to worry about the stings of poverty.

However, accumulation of wealth is a necessary but not sufficient condition for welfare. It is not only the total quantity of goods but also its composition contributes to economic welfare. If a larger part of economic goods consists of bombs, guns and missiles, then they cannot promote welfare. Again it is not total quantity of wealth but the way of producing wealth, i.e. human cost of production, i.e., work leisure ratio, improvements in work safety etc. have much to do with human welfare. While producing wealth, if there is deterioration of environment quality then wealth cannot be a true indicator of welfare.