An Inquiry into the Nature and Causes of the Wealth of the People

1. Preface

Part I · The Problem

1. 1A Household BudgetStarting from one two-earner household's monthly bill, this chapter poses the book's question: incomes rise and the city grows richer, so why do the money and time left over each month not grow? It separates wealth from prosperity and shows that a productivity gain can become lower prices, higher pay, profit or shorter hours.
2. 2Three Events in 1776The chapter opens with three events of 1776: Smith's Wealth of Nations, Watt's engine and the Declaration of Independence. It shows that productivity gains reach people's lives only through prices, pay, hours and rights, and leads to the question of shorter hours in the age of AI.
3. 3Wealth and ProsperityThis chapter defines the book's two key terms: wealth is what a society produces; prosperity is the money, time and security left once the essentials are paid. It explains why GDP and composite indices cannot measure prosperity, and how to record welfare and its cost separately, reading only the direction of change.

Part II · Measurement and Price

1. 4Why Printing Money Cannot Make the Poor ProsperousWhere inflation comes from, what rate of money growth is reasonable, and why excess money works like a tax no one voted for. The chapter shows why printing money does not help low-income households and can hurt them, since new money reaches them only after prices have already risen; lasting improvement comes from more real output and lower basic costs.
2. 5The Generalized Engel CoefficientThis chapter extends Engel's food share to housing, care, medicine, transport and communications, and builds a generalized Engel coefficient. It adds the hours of work needed to cover the essentials, so that the burden on time is measured as well as the burden on money.
3. 6The Pure ProducerThis chapter defines the pure producer: a person squeezed at once in spending, exit, control of time and share of the surplus, whatever their income. It shows how employers who each hold down their own workers' spending end up shrinking one another's markets.
4. 7The Hours Inside a PriceEvery price is the working time of many people, and every price has a floor and a ceiling. Below the floor the shortfall moves into quality, safety and hours; above the ceiling the buyer's room is used up. A price within the range both sides can sustain is what mutual recognition of labor means.

Part III · The Making of Prosperity

1. 8One Person's Spending, Another's IncomeHow prosperity forms between people: one person's discretionary spending becomes another's income, and then a third person's spending. The circuit needs both money and time; transfers can restart it but cannot replace production and paid exchange.
2. 9Education and the Art of LivingThis chapter treats education as infrastructure on the demand side: it forms people who ask for safety and health, keep accounts, judge quality and use their time well. Schooling that trains only producers yields more labor, not necessarily more prosperity.
3. 10Prosperity from WithinTrade can amplify opportunity but cannot replace the internal circuit in which ordinary people buy from and earn from one another; large economies and small open ones face this differently. The chapter also introduces development debt: growth not backed by productive capacity and paid for by the future.
4. 11Self-Repairing and Brittle EconomiesThis chapter tells a self-repairing economy from a brittle one by a single test: can it fix its own problems, with prices that tell the truth and failing firms that exit in an orderly way? It explains why decay is easier than recovery and which rules preserve the capacity to repair.
5. 12Two EquilibriaA city can settle in a high or a low state, each of which sustains itself; resources only set the range. In the low state everyone chooses rationally and everyone is waiting for everyone else, so the way out is to change the rules so that many can act at once.

Part IV · Power

1. 13Rights, Power, and Starting OverThis chapter brings politics into the frame: whether a person can do something depends both on whether it is permitted and on whether it is affordable. It covers how rights and public power convert into one another, how to judge each extension of power, and why parties who depend on each other are adversaries, not enemies.
2. 14The Metabolism of PowerPower, like a firm, makes mistakes and needs an orderly exit: officials who can be replaced, rules that can be reviewed and repealed. Small turnovers that are suppressed build into ruptures; the chapter also explains why politics needs a plurality of ideas.
3. 15Taxes, Public Finance, and the Wealth of the PeopleWhere government's money comes from and where it goes, and why taxing, borrowing and printing money all draw on the same output. The chapter offers a test of whether a spending item is worth it, and argues that budgets serve ordinary households better when those who pay can see the costs.

Part V · Applications

1. 16Who Gets the AI DividendWhere the AI dividend goes: lower prices, higher pay, more profit or shorter hours. The chapter works out the productivity a shorter week requires, explains why no single firm can deliver time on its own, and shows how a four-day week at unchanged pay could be put into practice.
2. 17Why Conquest Cannot Make a People ProsperousWhy war and conquest rarely pay, and do not make ordinary people's lives better: they can move land, resources and wealth, but cannot build the demand, credit and division of labor among ordinary people that prosperity needs. The chapter also traces how war enters the household bill, and who can refuse it.

Part VI · Interface and Synthesis

1. 18Where Politics Meets EconomicsPolitics decides what a person is forbidden to do, economics what a person can afford; the two constraints meet but cannot be merged into a single number. The chapter also discusses designed versus grown institutions and the boundary between science and political bargaining.
2. 19A Market Built on MoralityMarket morality is what people do voluntarily above the line of the law: respecting the other side's labor, not gaining by squeezing others, keeping their word. The more of it there is, the lower the cost of transacting and the less power is needed to keep order.
3. 20What Would Make Ordinary People ProsperousThe final chapter gathers the argument: prosperity can only arise from within a society, in exchange based on mutual recognition, and nothing that bypasses that circuit can replace it. It sets out the conditions a society can create, and where individuals and societies can begin.

Appendices

1. Glossary
2. Notes on the Argument
3. References