Alfred Marshall about the Nature of Material and Immaterial Wealth

"All wealth consists of desirable things; that is, things which satisfy human wants directly or indirectly... Desirable things or goods are Material, or Immaterial... Material goods consist of useful material things, and of all rights to hold, or use, or derive benefits from material things, or to receive them at a future time. Non-material goods fall into two classes. One consists of man's own qualities and faculties for action and for enjoyment; such for instance as business ability, professional skill, or the faculty of deriving recreation from reading or music. All these lie within himself and are called internal. The second class are called external because they consist of relations beneficial to him with other people."

Principles of Economics

Alfred Marshall thinks that non-material goods are not to be counted as wealth:

"Not all desirable things are reckoned as wealth. The affection of friends, for instance, is an important element of wellbeing, but it is not reckoned as wealth, except by a poetic licence."

I see why he makes such a decision, he wants to make economics into science by limiting the subject matter to things that can be measured, or at least measured easily, but I am of a different opinion, or at least and I find it useful to talk about material and non-material wealth, and not simply to ignore the non-material side so early in the analysis, and at all. Indeed I want to concentrate on how material wealth can be used so as to produce as much of the immaterial as possible.

The wish of Mr. Marshall is to develop unselfishness in men. He thinks that this can be done simply collecting facts about material wealth and analysing them. I think that keeping the considerations and impacts on immaterial wealth ought to be carried out at the same time and not separated, otherwise the conclusions will be misleading notwithstanding the good intentions.

John Ruskin had made a similar criticism earlier, but it seems that Alfred Marhall did not pay heed, although he did seem to respect Ruskin's opinions:

"Modern political economy stands on a precisely similar basis. Assuming, not that the human being has no skeleton, but that it is all skeleton, it founds an ossifiant theory of progress on this negation of a soul; and having shown the utmost that may be made of bones, and constructed a number of interesting geometrical figures with death's-head and humeri, successfully proves the inconvenience of the reappearance of a soul among these corpuscular structures. I do not deny the truth of this theory: I simply deny its applicability to the present phase of the world."

John Ruskin, Unto This Last: Four Essays on the First Principles of Political Economy