How an economy grows

A free market economy grows because of efficiency of capital. Capital can be anything that benefits an enterprise. It can be an improved printing press that can produce more, credit that can be easily acquired or specific labor skills that benefits others.

It all starts when people find ways to improve production that gives them more free time to do something else. We start off with a basic need in food, if people used to hunt for the entire day, this wastes an opportunity for a specific activity that can benefit the group such as finding ways to design a more efficient tool to catch food. If one of them forgoes 2 days of hunting to design a bow and arrow, this can shorten the time it takes to hunt for food. Once the bow and arrow is produced this new capital brings in an efficient way to catch food. If this capital reduces their hunting time in half this will give the hunters time to do something else which can be beneficial to their economy.

From an entire day of hunting to only half a day, the new capital doubled their production and if they so choose they can spend an entire day and catch 2 instead of just one. This clearly shows a growing economy. This is true when humans first left hunting and gathering food for farming where this efficient mass production system frees even more time.

In modern times, efficiency can be seen in cheap massed produced cars compared to hand made exotic cars whose prices can reach an unattainable level for a majority of people. When it comes to monetary capital, credit allows businesses to produce revenues now rather than wait for a later date. Efficiency allows markets to keep up with an economy with unlimited demand.

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