[ The Economist ] The real wealth of nations [ Summary ] Economists usually settle instead for GDP to measure the flow of goods and services , not wealth . It values a flow of goods and services , not a stock of assets . Gauging an economy by its GDP is like judging a company by its quarterly profits , without ever peeking at its balance - sheet . There is no widely recognized , monetary measure that sums up this stock of natural , human and physical assets . The balance sheet of wealth released by the United Nations , included three kinds of asset : physical capital , human capital and natural capital . ( see charts ) Most of countries only have focused on increasing human capital to offset the erosion of their natural patrimony . The idea that natural asset are substitutable makes environmentalists nervous . They insist that the undoubted value of these natural treasures should be reflected in their price . The price should include not only the products value but also commodity ’ s true value like bee ’ s pollinating . Economists have shown that such wealth can be measured . This kind of wealth is called as a “ comprehensive wealth ” or “ inclusive wealth ” . If the notion catches on , neither name may be needed . Free exchangeThe real wealth of nationsA new report comes up with a better way to size up wealth “ WEALTH is not without its advantages , ” John Kenneth Galbraith once wrote , “ and the case to the contrary , although it has often been made , has never proved widely persuasive . ” Despite the obvious advantages of wealth , nations do a poor job of keeping count of their own . They may boast about their abundant natural resources , their skilled workforce and their world - class infrastructure . But there is no widely recognised , monetary measure that sums up this stock of natural , human and physical assets . Economists usually settle instead for GDP . But that is a measure of income , not wealth . It values a flow of goods and services , not a stock of assets . Gauging an economy by its GDP is like judging a company by its quarterly profits , without ever peeking at its balance - sheet . Happily , the United Nations this month published balance - sheets for 20 nations in a report overseen by Sir Partha Dasgupta of Cambridge University . They included three kinds of asset : “ manufactured ” , or physical , capital ( machinery , buildings , infrastructure and so on ) ; human capital ( the population ’ s education and skills ) ; and natural capital ( including land , forests , fossil fuels and minerals ) . By this gauge , America ’ s wealth amounted to almost $ 118 trillion in 2008 , over ten times its GDP that year . ( These amounts are calculated at the prices prevailing in 2000 . ) Its wealth per person was , however , lower than Japan ’ s , which tops the league on this measure . Judged by GDP , Japan ’ s economy is now smaller than China ’ s . But according to the UN , Japan was almost 2 . 8 times wealthier than China in 2008 ( see charts ) . Officials often say that their country ’ s biggest asset is their people . For all of the countries in the report except Nigeria , Russia and Saudi Arabia , this turns out to be true . The UN calculates a population ’ s human capital based on its average years of schooling , the wage its workers can command and the number of years they can expect to work before they retire ( or die ) . Human capital represents 88 % of Britain ’ s wealth and 75 % of America ’ s . The average Japanese has more human capital than anyone else . Japan is also one of only three countries in the report that did not deplete their natural capital between 1990 and 2008 . All of the countries except Russia nonetheless increased their wealth , accumulating enough other assets to offset the erosion of their natural patrimony . In 14 of the 20 countries studied , these increases in wealth outpaced the growth of their population , leaving per - person wealth higher in 2008 than in 1990 . Germany , for example , increased its human capital by over 50 %. China expanded its “ manufactured ” capital by an extraordinary 540 %. By putting a dollar value on everything from bauxite to brainpower , the UN ’ s exercise makes all three kinds of capital comparable and commensurable . It also implies that they are substitutable . A country can lose $ 100 billion - worth of pastureland , gain $ 100 billion - worth of skills and be no worse off than before . The framework turns economic policymaking into an “ asset - management problem ” , says Sir Partha . A country like Saudi Arabia , for example , depleted its stock of fossil fuels by $ 37 billion between 1990 and 2008 , while adding to its stock of school - leavers and university graduates ( its human capital grew by almost $ 1 trillion ) . In some richer countries , however , investments in human capital appear to have hit diminishing returns , the report argues . Perhaps governments should redirect their investment into natural capital instead , restocking their forests rather than their libraries . The idea that natural assets are substitutable makes some environmentalists ( including some contributors to the report ) nervous . Many of the services the environment provides , like clean water and air , are irreplaceable necessities , they point out . In theory , however , the undoubted value of these natural treasures should be reflected in their price , which should rise steeply as they become more scarce . A good asset manager will then husband them carefully , knowing that it will take an ever - increasing amount of human or physical capital to make up for further losses of the natural kind . In practice , however , natural assets are often hard to price well or at all . As a consequence , the UN report has to steer clear of assets like clean air that cannot be directly owned , bought or sold . It confines itself to resources like gas , nickel and timber , for which market prices exist . But even these market prices may not reflect a commodity ’ s true social value . Beekeeping is one example beloved by economic theorists . Bees create honey , which can be sold on the market . But they also pollinate nearby apple trees , a useful service that is not purchased or priced . Bee countersNo one is more aware of these limitations than the report ’ s authors . Their estimates are illustrative , not definitive , says Sir Partha . The calculations are inevitably crude , just as the first guesstimates of GDP were crude over 70 years ago . He hopes more economists will do the hard but valuable work of pricing the seemingly priceless . The profession does not really reward this work , says Sir Partha . But some economists do it anyway . Taylor Ricketts of the University of Vermont and his co - authors have even calculated the value of pollination , showing that one Costa Rican coffee - grower benefited by $ 62 , 000 a year from the feral honey bees in two nearby patches of forest . Now that economists have shown that such wealth can be measured , they must decide what it should be called . In his earlier academic work Sir Partha calls it “ comprehensive wealth ” . The UN report dubs it “ inclusive wealth ” . If the notion catches on , neither name may be needed . “ Pretty soon , ” says Sir Partha , “ we ought to drop both adjectives and just call it wealth ’.”