This excerpt originally appeared in Pittsburgh Tribune Review on June 13, 2012.

If wealth is money and money is wealth, then it's easy to overlook questions of how to produce the actual goods and services that people use money to buy. The typical American knows that if someone gave him an extra $10 million, he would indeed be much richer. He'd imagine himself going to a Mercedes dealership and driving away in a new sedan to the toniest neighborhood in town to buy a luxurious mansion that he would then fill with state-of-the-art appliances and consumer electronics.

Indeed, money plays a vital economic role. But wealth is not money (it's what money can buy) and wealth is not generated by money (it's generated by sound institutions and culture).