Something that's bothered me for a while is: how is wealth created and value added to society? If I start a software company which marginally makes some people's lives better, does this actually contribute to society? How zero sum are our efforts?
I know the answer to this is somewhere in economics but I'm not really sure where and the 1 course I took on macro wasn't really enough to answer this for me.
Any recommendations/people willing to talk me through this?
Well, in real terms, if the nation has N people, working M hours on average each.
Either you employ more people (economic crises cause employment to shrink and the inverse happens in booms), making M bigger and economic output larger, or you get more done per hour, making productivity higher.
Any sort of machine you invent that helps people get more done per hour increases real GDP if the machine is adopted and use many places.
For example, if you had invented the tractor, the consequences would temporarily have been mass unemployment, but later the pe... (read more)