Wealth Includes Natural, Economic, Human and Social Capital

The wealth of a society is defined as the total amount of economically relevant private and public assets including natural, economic, human and social capital. In line with the OECD well-being framework, these four types of capital are necessary for the sustainability of well-being over time. Natural capital comprises nonrenewable and conditionally renewable natural assets and natural liabilities, land and ecosystems. Two sets of questions are briefly discussed: how natural capital can be valued in monetary terms and to whom the property rights of natural assets and liabilities should be allocated. Economic capital, consisting of physical and financial capital, is far less complicated to evaluate than natural capital. According to UNECE, OECD and Eurostat, “the observed market prices for produced and financial capital are fair reflections of their well-being effects.” The concept of human capital adopted in this book goes beyond the stock of economically productive human capabilities (G. Becker) and means healthy and educated people, while social capital – in Robert Putnam’s sense – refers to “connections among individuals – social networks and the norm of reciprocity and trust worthiness that arise from them.”