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Prosperity Factors

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LandJ posted on Sat, Apr 6 2013 11:20 AM

Since I am ignorant in Economics, what are the factors that contribute to the prosperity?

Is GDP? Prices? 

What else?

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Top 25 Contributor
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Increased production. Anything that leads to increased production leads to increased prosperity.

Experience and theory show that division of labor increases production. The freer the market, including the freer the trade, the greater the prosperity. The more property is respected, the greater the production. The lower the taxes, the tarrifs, govt intervention in general, the greater the prosperity. The sounder the money, the greater the prosperity.

GDP is a clumsy attempt to measure production, very flawed, very misleading.

Prices per se tell one nothing. Comparison of prices does. When a price is lower in country A than B, then A is more prosperous than B, other things being equal.

 

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Top 50 Contributor
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Wealth and prosperity are the product of free interactions.  Production is necessary as it is the starting point that gives people something upon which to perform their interactions.  For example I can trade you an apple for $1 and then use that dollar to purchase a bottle of water.  In both of these cases I am better off as I want the dollar more than the apple, you want the apple more than the dollar.  Then I am even better off as I want the bottle of water more than the dollar.  In no case did I create something but in both cases I made myself better off.

So take a "wealthy" country like the USA.  There is a vast amount of that wealth tied up in the US Government and the Defense Dept in particular.  This is of no real value to the populace as they have no means to better themselves with this previously created wealth.  How much wealthier would the populace be had 20% of these scarce resources been given to entrepreneurs and transformed into things that could be traded?

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It depends on what you mean by factors and prosperity, and under what given conditions. For example, free markets are great, but in reality aren't that common. Prosperity could mean the total income of a nation, the wealth of the wealthiest individual, the HDI, or some decreasing function of a poverty measure - which, under ideal conditions, all correlate with one-another, but in reality usually don't. Can you clarify your question?

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