Economics is the name which people have come to give to the study of Wealth. It is the study by which we learn how Wealth is produced, how it is consumed, how it is distributed among people, and so on. It is a very important kind of study, because it often depends upon our being right or wrong in Economics whether we make the whole State poorer or richer, and whether we make the people living in the State happier or not. Now as Economics is the study of Wealth, the first thing we have to make certain of is, _What Wealth is_. I WHAT IS WEALTH? The Economic definition of Wealth is subtle and difficult to appreciate, but it is absolutely essential to our study to get it clear at the outset and keep it firmly in mind. It is through some muddlement in this original definition of wealth that nearly all mistakes in Economics are made. First, we must be clear as to what Wealth is _not_. Wealth is never properly defined, for the purposes of economic study, by any one of the answers a person would naturally give off-hand. For instance, most people would say that a man’s wealth was the money he was worth. But that, of course, is nonsense; for even if there were no money used his possessions would still be there, and if he had a house and cattle and horses the mere fact that money was not being used where he lived would not make him any worse off. Another and better, but still a wrong, answer is: “Wealth is what a man possesses.” For instance, in the case of this farmer, his house and his stock and his furniture and implements are what we call his “wealth.” In ordinary talk that answer will do well enough. But it will not do for the strict science of Economics, for it is not accurate. For consider a particular case. Part of this man’s wealth is, you say, a certain grey horse. But if you look closely at your definition and make it rigidly accurate, you will find that _it is not the horse itself which constitutes his wealth, but something attaching to the horse_, some quality or circumstance which affects the horse and gives the horse what is called its _value_. It is this _Value_ which is wealth, not the horse. To see how true this is consider how the value changes while the horse remains the same.