# Economic Growth An increase in productivity, the ability to do more with less. It’s in principle, separable from the ideas of the money, trade , the division of labour and even the economy. You are alone on an island. You get by fishing. Every day, you are able to catch and eat ten fish. One day a thought comes to mind. > “You know what, I don’t really need to eat ten fish” This marks the dawn of economic growth. Now each day you catch ten fish, and eat nine. This is called saving: and it is where all economic growth begins. For the next nine days, you continue like this, catching ten and eating nine. The tenth day rolls around. You don’t need to catch any fish today. You already have nine ready to go. You have earned a precious resource, that you have never had before - free time. The second part of the equation of economic growth is _investment_. What will you do with this free time? What if you could use it in a way that would benefit you until the end of your days? When you have a resource, you have to use it somehow. Naturally, there will be better and worse ways of putting it to use. We have to make a guess in this realm of possibilities. With your first free day, in what feels like forever, you build yourself a net. Your life is changed forever. You are able to catch twice the amount of fish in a given time. You decide to continue catch nine fish a day. You now have half a day free, _every single day_. You have achieved so much with a single free day, what will you be able to achieve now? Maybe you’ll make more nets, so that if and when yours breaks, you’ll still be good. Or you could search around the island to scout for better fishing spots? Maybe, you venture into the island’s mainland and learn a new skill altogether - berry picking perhaps? Might you be best served by a long term project? You could try to build a boat, in the short term you could gain access to better fishing spots and in the long term you could relocate from the island altogether. No matter what you do, it will be an investment - a guess as to what will bring the you the most. The sky really is the limit. 1. You do work. 2. You save up resources. 3. You invest what you have saved. This is the feedback loop that underpins all economic growth. Who knows? Perhaps if we let the island scenario play out for long enough, what we will have is fully fledged modernity complete with cars, planes, computers and fleshed out theories as to what constitutes economic growth. --- Links Tags: Created: [[2021-09-06]] | Related: | | ----------- | | References: | | - | | Map: |