I’m intrigued by the term “Wealth Plus”, which was introduced by Tyler Cowen in his book Stubborn Attachments.
In short, the book is an advocate for economic growth, arguing that sustainable economic growth is the best way to increase global human well-being. It’s an interesting and quick read, particularly as it thinks about exponential growth and its effects on the distant future. For example, a 1% difference in growth rates compounded over 100 years is actually a very big difference!
Wealth Plus points out that GDP fails to fully capture the benefits that human progress is able to create. GDP measures new money created, but it is oblivious to any other factor such as health or free time. Measured as GDP, $100 created from back-breaking factory labor is the same as $100 created from tech consulting. Wealth Plus assigns more values to the latter. Flexible hours and greater emotional fulfillment increase the value of the consulting job.
I like this concept for three reasons.
First, it fights against the traditional thought that wealth equals dollars. Dollars is a prevalent metric because it is easy to measure. In reality, wealth is so much more and we experience its benefits every day. As an example, one non-monetary measurement is the longevity of life.
Second, Wealth Plus makes a great framework for life decisions. I don’t think this is new, but it’s a nice term to summarize a more complex thought process. For example, most people wouldn’t take a job with a $1000 annual increase in pay if it increased their commute by an hour. When measured under Wealth Plus, the new job is valued lower due to time and the stress of driving.
Third, it’s a reminder that there can be multiple ways to measure something as successful. An exponential increase in GDP paired with an exponential decrease in happiness sounds like a recipe for a dystopian future. For any topic, the criteria for success are important to get right - but it’s important to not be blind to a single metric once it is established.
As a final takeaway, here is a question I try to ask myself when making decisions:
“Is this the best way to maximize my Wealth Plus?”