4 ms·
> No extra raw materials were required to get from the planks of wood to the chair but value was created anyway. The labor required to build the chair is one a
by legutierr 4y ago
> No extra raw materials were required to get from the planks of wood to the chair but value was created anyway.
The labor required to build the chair is one additional ingredient. The transformation of wood and nails to chair does not happen spontaneously.
- friedman23 4y agoThe labor is a small fixed cost. Depending on what is done with the labor the leverage is potentially infinite (eg. many internet business that earn a million or more per year for every employee they have hired). Growth can happen by getting the same labor to do something more valuable (maybe building houses instead of chairs?)
- sdflhasjd 4y agoLabour is people, which need food and water.
- friedman23 4y agoI don't see the point of your statement. Economic growth can happen even if the population remains constant (or even shrinks but that would be a headwind to overall economic growth and at that point it might be more instructive to look at gdp per capita).
- deleted 4y ago[deleted]