The impact wealth managers at Tribe Impact Capital have looked to the past to predict the future in its new study The Evolution of Wealth. James Lawson, co-founder of Tribe Impact Capital, looks at where the “money monkey” is swinging.
The English word ‘wealth’ originally came from the Old English ‘wela’, meaning bliss or prosperity. How did the term defined by Chambers Dictionary as “the condition of being rich” come from the same source as “the state of being well”?
Tribe Impact Capital have published a study into the history of our relationship with wealth, and what this might mean for the future. As Dr Peter Collett, former Oxford Don and Big Brother psychologist, says “for other species, rank is usually ordered according to factors like physical strength, but ours is largely organised through wealth. Homo sapiens, the thinking ape, has become homo pecuniae, the money monkey.”
Looking back through time, Tribe found a number of distinctive periods where wealth was viewed very differently from today. For instance, in the Bronze Age, the possession of beautiful items was important. Broadcaster and historian Bettany Hughes says we find “precious items obtain a near religious status, as we can see from them being buried in a sacred context. And as faith was a lot less formalised, there is a sense that these beautiful items have been offered up by the earth”.
In this time before money, wealth wasn’t financial but sacred.
Skip forward a couple of millennia and the power vacuum left by the Romans means that feudalism is rife. Rich List pioneer and historian Philip Beresford found at this time in our history, wealth “was essential as a tool in the exercise of power”.
This isn’t the soft power that today’s influencers wield, but something much more physical and intimidating. From these snapshots and others, the impact wealth managers Tribe have been able to draw conclusions about the future of wealth.
One of the future trends concerns our judgement of wealth. Early concepts of wealth were centred on stability, when wealth was created and stewarded over lifetimes. Since then, evaluation of wealth has become much more rapid. In the 1600s, as they stood at London’s docks waving farewell to the East India Company ships they had financed, it would take two years for early capitalists to assess their ventures. By 1960, the average holding period of a stock was just over eight years. And by 2000, this had fallen to just over one year. Tribe believe that the pendulum will swing back, as wealth is used in more long term sustainable investments.
Other trends Tribe’s report identifies include a much greater connectivity between the wealth holder and the impact of their assets. In addition, they point to a restoration of trust within the financial system.
These trends and others allow Tribe to conclude that wealth will move away from being one dimensional. Accounting allowed us to measure wealth on a balance sheet. And when it gets measured this way, it gets managed this way: wealth can only move up or down.
But many cultures haven’t ever seen wealth this way. For example, throughout history, as the dominating cultures focused on wealth in monetary terms, the cultures they dominated were forced to take an alternative approach.
As Dame Frances Cairncross says “communities that historically have been persecuted accumulate their wealth in different ways. For these people, it became a necessity that wealth was portable; education being a key form of portable wealth”.
In fact, there are many facets to wealth. From the ecological wealth so integral to indigenous communities, to “intellectual property which has become far more important as a store of wealth” for business leaders.