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I don’t want to be a millionaire, I just want to live like one. — Walter Hagen

Wealth is an elusive concept. While everyone has an idea what it is, it often means different things to different people. When we refer to the wealth of nations, the potential for confusion is even greater.

For purposes of this book, wealth has a specific meaning. Wealth is the value of those goods and services originally created to meet the demands of others. Defined in this way, wealth is what determines the living standards of people throughout the world. Since this meaning of wealth differs from the more common meaning, it helps to clarify the difference.

People often view wealth from a personal perspective. Wealthy people—the rich—have substantially more income or assets than we have. The poor have substantially less. One problem with this view is there are various ways to become wealthy that have nothing to do with the creation of wealth. We can inherit wealth. Win it. Steal it. Even marry it. In each of these cases, the wealth was created by someone else.

While hard work and effort can produce wealth, it’s not the essential ingredient. Individuals in some of the poorest nations in the world work much harder than those in wealthier nations but have little to show for it. Those who marry into wealth may have worked very hard and sacrificed a great deal. While their efforts can enable them to become personally wealthy, their wealth represents a transfer of something created by others.

A similar distinction can be made for politicians, lawyers and accountants, whose work enables them to become wealthy. These professionals can enhance a nation’s wealth when they use their skills to help their clients keep or enhance the wealth they have created. However, politicians, lawyers and accountants can also undermine a nation’s wealth when they use their skills to shift wealth from those who created it to others.

The title of P.J. O’Rourke’s hilarious book, Eat the Rich, captures the resentment some people have for the rich. Most who resent the rich likely do so out of a suspicion their wealth came at someone else’s expense. There is seldom resentment for the wealth of famous sports heroes or other celebrities. It’s obvious their wealth is the result of their unique talents. They earned it!

It is not always obvious how those running businesses earned their wealth. Without such knowledge, it is easy to assume their financial success came at the expense of others. Resentment of the rich can be justified if wealth was at the expense of others. However, the most successful businesses are those that provide the greatest improvements in the living standards of their customers. Microsoft, Apple, Amazon and Google have made their owners fabulously wealthy by serving the needs of others. They have been among the leading businesses contributing to improving the wealth of their customers and, in turn, the wealth of nations.

Although wealth is usually associated with the accumulation of assets, it isn’t a static concept. It’s dynamic. Wealth involves an ongoing creative process, one where individuals continually work to provide others with things they value.

All material assets lose most, if not all, of their value when individuals stop producing things. A mansion might one day be worth millions of dollars. Without people constantly working to provide food, water, electricity, security, communications and other essential accompaniments, the mansion’s value would quickly plummet. The real value of every asset is tied to the ongoing work of an extensive supporting cast of hardworking people.

Wealthy nations are those whose workers produce significantly more of the things its people value than an average nation. Poor nations are those where workers produce significantly less.

Somewhere around 4,000 B.C. Egypt became the first nation to emerge from the ancient world. Blessed with the Nile’s gift of fertile land, Egyptians were the most prosperous people in the world.

Prosperity is a relative concept. In ancient Egypt it meant you had a job (forced labor), sufficient food to sustain yourself and your family, and you were relatively secure from external threats. You and your extended family also lived in the same mud-brick house.

In spite of having a head start on every other nation, Egypt is no longer a rich country. In 2015, the living standard of Egypt’s workers was 13% below the world’s average.

For over a century the United States had the largest economy in the world in terms of the creation of goods and services. In 2014, China passed the US in terms of overall output and has continued to move ahead. While China’s economy is currently the largest in the world, China isn’t wealthy. It is, at best, a middle class country.

Of all the world’s largest countries, the United States is by far the most productive in terms of providing its people with the greatest amount of goods and services. As a result, its people enjoy the world’s highest living standards. However, the United States isn’t the most productive nation. In 2015 Singapore’s workers produced $85,000 of output per person, well above the $56,000 of the United States. Moreover, while the productivity of certain other countries has recently increased, there are indications productivity in the United States is no longer increasing. From the standpoint of people, changes in a nation’s economic condition can be even more important than the level.

There has always been a dynamic ebb and flow of wealth among nations. This ebb and flow provides hope for every nation seeking to enhance the wealth of its citizens. It also provides a warning to successful nations not to take prosperity for granted.

While it takes many generations for a nation to achieve wealth, it can take less than a generation to lose it. Each nation’s destiny depends on the ability of its citizens to recognize and embrace the forces that contribute to the original creation of wealth.