Surplus wealth[45] is the wealth created by human beings over and above that which is needed to enable the race to survive. It will be seen to be a vitally important concept, and exists because humans have both the capacity and the willingness to produce it - wealth out is greater than wealth in. It derives ultimately from the earth's ability in conjunction with the sun to produce a continuing supply of food and other natural resources, and from the earth itself containing useful recoverable materials. These are greatly amplified by our insatiable curiosity, ability to reason, willingness to work, love of experimentation and ability to communicate our discoveries to others. Taken together these factors have given us ever-expanding spheres of science and technology, and allowed us to invent and innovate across the whole spectrum of human activity. Surplus wealth consists of all the excess that people are producing now, and all the excess that still exists from that which people produced in the past.
Human beings have the capacity and willingness to produce more than they need in order to survive - the excess is surplus wealth.
Many animals also have this capacity, but they don't have the willingness - they usually spend their excess time sleeping, fighting or impressing the opposite sex, whereas humans spend it producing more and more.
Before I retired I used to wonder who really is the more intelligent, especially on a cold wet Monday morning in January when I had to go to work and came down to find our black and white cat curled up in her favourite armchair. She would open her eyes dozily, give me a little 'prrp' in greeting as I stroked her, yawn, stretch and turn over, then go straight back to sleep again.
In the days when our ancestors were hunter gatherers, before about 10,000 years ago, they worked and consumed what they produced. This was known as a subsistence economy. There was no surplus, at least no lasting surplus, until agriculture was developed. Agriculture enabled much more productive use of time and effort and populations expanded rapidly (Harari 2011 p110). Initially, surplus produce was stored in case of bad harvests or natural disasters, but as time went on and surpluses built up, fewer people were needed to produce enough for the needs of the community so others began to specialise in other activities such as clothes and shoe making, hut building, soldiering etc. This was specialisation, or the division of labour, which enabled people to become very skilled in their own employment areas, resulting in a very efficient use of time. Trade developed at the same time to allow people to exchange with each other the different forms of surplus that they produced.
These three elements, surplus wealth, specialisation and trade, are the basis of all our material possessions that aren't part of the natural world. They account for everything that we have ever produced and are still producing, over and above that which keeps us and the race alive - every paper clip, every road, every haircut, every ship, every building; and also every nuclear missile, every illegal drug, every weapon and every instrument of torture. They have created the life that we have, for better or for worse.
Surplus wealth, specialisation and trade are the basis of civilisation, and consist simply of people working in co-operation to do and make things for others.
It is worth keeping this very simple basis in mind as we explore the vast intricacies of a modern economy.
If you think that is amazing then consider this: these three elements have also created you, me and practically everyone else alive today! Of the current world population of about 7 billion it is estimated[46] that at least 6.9 billion of us owe our very existence to surplus wealth, specialisation and trade. What happens is that the initial surplus enables more children to be raised while they remain dependent, who then go on to produce surplus wealth in their turn so that they can raise more children and so on.
The vast majority of us would not even exist but for surplus wealth, specialisation and trade!
Specialisation fosters innovation, because a person who devotes time to a specialised task also devotes time to finding ways of doing it faster, more easily, or with fewer or more readily available materials. The desire to innovate leads to the development of tools and machines - technology - and to the study of general principles that underlie the physical world and ourselves - science. It is innovation, science and technology that accounts for the bulk of population growth. Sanitation, nutrition and medicines have reduced infant death rates dramatically and given us increased life expectancies, and machinery and the power to drive it have given us the means to feed, clothe and house ourselves for our longer lives. From 1800 to today world population grew from 1 billion to over 7 billion - the fastest growth rate in human history - triggered by the industrial revolution. That's something to consider when we hear arguments that try to convince us that we'd be better off without technology. It's debatable whether or not the survivors would be better off, but the rest of us - the overwhelming majority - would be dead!
In future, if we have enough good sense - and that's not at all guaranteed - we can use our surplus wealth to generate power without carbon dioxide, produce ample food and clean water for everyone, clean up all forms of pollution, retain and expand biodiversity, and create a sustainable and secure world that is a joy for everyone to live in and to share.
All that is needed to create a better world is the will to do so and the recognition that we are not constrained in what we choose to do, least of all by that which is only symbolic - money.
Clearly the more people who are creating surplus wealth the more wealth there is in the world.[47] Not only that, the range of wealth is wider and innovation is greater because more people are engaged in seeking it out. The best investment we can make is to bring as many people as possible into purposeful employment, and trade our wealth for theirs on fair terms so that we all share the benefits.