M1, M2, M3 — increasingly broad measures of the money supply in a country. Start off with currency, add to that checking accounts and other cash-like deposits, then include longer-term savings instruments, etc. Beyond M3 there's L, a still-broader measure of total "liquidity" in an economy.

But even more interesting to get a handle on is national wealth. What's a country worth? Tough to estimate. One economist a few years ago [1] suggested a total US value in 1996 of ~114 trillion dollars. Of that amount only ~2% is consumer durable goods. Real estate (land and buildings) contributes another ~8%, and financial assets (bank accounts, stocks, bonds, etc.) ~16%.

What's the rest, almost 75% of the total? Amazing, if you haven't thought about it, or maybe obvious if you have. It's the people, aka "human capital". Consider the future earnings stream of all labor income. Now calculate its net present value. That's how much you would have to invest in order to generate enough interest to pay everybody their wages. More than 80 trillion dollars — almost half a million dollars per person. There's where the real wealth of nations is stored. Maybe it makes economic sense to spend a bit on education, on libraries, on public health, ...

(see also MusicalValues (3 Nov 2001), ... )

TopicScience - TopicSociety - TopicLibraries - 2004-01-17

(correlates: BeatingExpectations, IambicHonesty3, DraftAsTaxation, ...)