Money is not wealth

Money is not the same as wealth.What is wealth? Farms and food and factories and what they produce are forms of wealth. And so are people and knowledge. There are lots of other kinds of wealth, but this is not the place to do more than give examples.All these forms of wealth are valuable, but money is valuable only because you can exchange control of money for control of wealth: you can use it to buy control of farms, factories, and what they produce. You can use it to buy control of people, for a time. In other words you can buy control of wealth -- of things that actually have value -- with money; but money itself is not wealth.Let's get slightly more formal. Money (Wikipedia) is defined as anything that functions as "a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment."I'm going to accept the "medium of exchange" and "unit of account," parts of the definition, and against the "store of value" definition. Money does not store any value. It does store something, and we'll come to that later, but not value.A small thought experiment to clarify. Supposing there's a trillion dollars worth of real stuff, like farms, factories, food, knowledge and people in some imaginary world and a trillion dollars worth of money.I claim that the real stuff has value, and the money does not.Suppose I magically double the real stuff, and I disappear all the money. (I can do that, because it's a though experiment.) We now have twice as much productive capacity, and I would claim twice as much value.Suppose I double the amount of money in the world, and disappear all the real stuff. Then, in technical economic terms, you are screwed. You can't eat money. You can't wear it. You can't get it to run your farms and factories. You are screwed.If money was a store of value, then doubling either the money or real stuff would be an even exchange. But doubling the real stuff and getting rid of money roughly doubles value. And doubling the money while getting rid of the real stuff takes us to zero.Money is not entirely without value. It is useful as a medium of exchange and a unit of account. Money is certainly useful for solving the problems of resource allocation and of coordination. But I can easily, if not optimally solve those problems. Just give everyone little pieces of paper, or balances in an accounting system, and let them exchange them for labor and for existing real stuff.Instant money. I didn't have to go find some value to store in it. Because intrinsically, money has no value.But it is useful.QED, I think.So if money isn't wealth, then what is?And if I can create useful (but again, not optimal money) with a snap of my fingers, what does that mean.Those are both harder problems and I'm not going to address them in this post.I'm just going to say: whatever wealth is, and whatever money is, they're not the same thing.