<p>As currently written, the question asks whether the value of all assets equals the wealth of individuals. This is trivially not the case, since assets can be liabilities of another entity.</p>

<p>As an example, imagine an economy in which one individual owns both an industrial firm and a bank. The bank can make a loan to the firm, and both entities’ balance sheets grow - the bank gets a loan asset, the firm gets a new deposit at the bank. This means that the total value of all assets increases by double the amount of the loan. However, the act of taking out a loan and not spending it does not increase the value of a corporation, and so individual owning the two banks has no increase in wealth.</p>

CC BY-SA 4.0
2020-06-06T16:37:46.507Z
2020-06-06T16:37:46.507Z
Brian Romanchuk
<p>Say we estimated the value of all assets (money, stocks, bonds, property, etc.) in the world.</p>

<p>Next we estimate the wealth of all the individuals in the world.</p>

<p>Would the two resulting values be similar or substantially different? If they would be substantially different, then why?</p>

<p>I am happy for people answering the question to use the definition of wealth they feel is most appropriate.</p>

CC BY-SA 4.0
2020-06-06T13:44:54.287Z
Well they will be the same as that is trivially true - wealth is in literature most often measured  as a the present value of net assets. So if you look for some empirical measurement of wealth in literature then they will be calculated just as a net present value of net assets. If you then measure net assets again then it should match. If you have some different measurement of wealth in mind then you should make it part of your question
1muflon1
CC BY-SA 4.0
2020-06-06T13:56:56.647Z
@1muflon1 I think the question could be interesting precisely because in theory assets and wealth are the same thing. However, the way we typically measure wealth (or assets) need not be the same. It is far from my field, so I cannot provide any insights. But I think the question could be interesting.
brunosalcedo
CC BY-SA 4.0
2020-06-06T14:00:29.510Z
@brunosalcedo I agree but I also think that it lacks some clarity about it. Also it would be too broad for an answer here to go over all different historic ways how wealth was ever estimated. It would help a lot if OP would just make explicitly clear what other measure of wealth this should be contrasted to.
1muflon1
CC BY-SA 4.0
2020-06-06T14:16:43.043Z
@1muflon1 I don't believe it is trivially true due the ownership of some assets by companies, governments and other organisations.
Barnaby Golden
CC BY-SA 4.0
2020-06-06T14:18:09.113Z
@brunosalcedo I could pick a measure of wealth, but I am no expert in this field and my decision would be arbitrary. I'm happy for somebody answering to state the measure of wealth they use and why. If that makes the question too broad, I would be happy for it to be closed.
Barnaby Golden
CC BY-SA 4.0
2020-06-06T14:22:19.073Z
@BarnabyGolden right but all companies and other organizations belong to the people - a piece of building or machinery cannot own anything - if you are asking if there would be difference when comparing wealth of private individuals excluding holding of wealth by any organizations then the answer would be again trivial but this time no. Same answer if you want to compare wealth hold by private individuals and their owned organizations to total wealth that would include governments. I think you should make it bit clear exactly what you want to know here
1muflon1
CC BY-SA 4.0
2020-06-06T15:05:51.873Z
@1muflon1 I specifically said 'individuals' in my question, not 'the people'. As an example, Oxford University is a major land-owner in the UK. Are those assets associated with individuals? I don't know the answer to that, hence asking this question.
Barnaby Golden
CC BY-SA 4.0
2020-06-06T15:23:12.540Z
@BarnabyGolden but while legally there is distinction between an individual and organization owning something thats a legal distinction not economic one. From an economic perspective everything is owned by individuals. If all people in the world would disappear no assets would be owned by anyone. But based on your clarifications in the comments now I get that what you meant is the difference between assets hold by *private* individuals as compared to assets hold by both private and public but in your original post that wasn't clear.
1muflon1
<wealth>
If we estimated the value of all the assets in the world and compared it with the estimated total wealth of individuals, would the results be similar?
Barnaby Golden
# If we estimated the value of all the assets in the world and compared it with the estimated total wealth of individuals, would the results be similar?

(Asked by: username_0 on 2020-06-06)

Say we estimated the value of all assets (money, stocks, bonds, property, etc.) in the world.

Next we estimate the wealth of all the individuals in the world.

Would the two resulting values be similar or substantially different? If they would be substantially different, then why?

I am happy for people answering the question to use the definition of wealth they feel is most appropriate.

**Tags:** wealth

> **Comments:**
> **username_1**: Well they will be the same as that is trivially true - wealth is in literature most often measured  as a the present value of net assets. So if you look for some empirical measurement of wealth in literature then they will be calculated just as a net present value of net assets. If you then measure net assets again then it should match. If you have some different measurement of wealth in mind then you should make it part of your question  
> **username_2**: @username_1 I think the question could be interesting precisely because in theory assets and wealth are the same thing. However, the way we typically measure wealth (or assets) need not be the same. It is far from my field, so I cannot provide any insights. But I think the question could be interesting.  
> **username_1**: @username_2 I agree but I also think that it lacks some clarity about it. Also it would be too broad for an answer here to go over all different historic ways how wealth was ever estimated. It would help a lot if OP would just make explicitly clear what other measure of wealth this should be contrasted to.  
> **username_0**: @username_1 I don't believe it is trivially true due the ownership of some assets by companies, governments and other organisations.  
> **username_0**: @username_2 I could pick a measure of wealth, but I am no expert in this field and my decision would be arbitrary. I'm happy for somebody answering to state the measure of wealth they use and why. If that makes the question too broad, I would be happy for it to be closed.  
> **username_1**: @BarnabyGolden right but all companies and other organizations belong to the people - a piece of building or machinery cannot own anything - if you are asking if there would be difference when comparing wealth of private individuals excluding holding of wealth by any organizations then the answer would be again trivial but this time no. Same answer if you want to compare wealth hold by private individuals and their owned organizations to total wealth that would include governments. I think you should make it bit clear exactly what you want to know here  
> **username_0**: @username_1 I specifically said 'individuals' in my question, not 'the people'. As an example, Oxford University is a major land-owner in the UK. Are those assets associated with individuals? I don't know the answer to that, hence asking this question.  
> **username_1**: @BarnabyGolden but while legally there is distinction between an individual and organization owning something thats a legal distinction not economic one. From an economic perspective everything is owned by individuals. If all people in the world would disappear no assets would be owned by anyone. But based on your clarifications in the comments now I get that what you meant is the difference between assets hold by *private* individuals as compared to assets hold by both private and public but in your original post that wasn't clear.  

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## 1 answers

### Answer by username_3 on 2020-06-06. Score: 2

As currently written, the question asks whether the value of all assets equals the wealth of individuals. This is trivially not the case, since assets can be liabilities of another entity.

As an example, imagine an economy in which one individual owns both an industrial firm and a bank. The bank can make a loan to the firm, and both entities’ balance sheets grow - the bank gets a loan asset, the firm gets a new deposit at the bank. This means that the total value of all assets increases by double the amount of the loan. However, the act of taking out a loan and not spending it does not increase the value of a corporation, and so individual owning the two banks has no increase in wealth.


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