Sources of income

FOUR SOURCES OF GROWTH INCOME:
  more skilled labor
  accumulation of capital
  technical progress
  improvement of the economic organization of societyGoods and services that create our well-being, do not fall from the sky. Theirproduction requires labor and intellectual potential,equipment and investments, the organization of the labor process and the cooperationfirms. There are four main sources of growth in production and income.First, the training of employees.Education, training and experience are the main means ofachieve higher qualifications. By improving their skills, peoplemultiply the main asset - their own abilities.Second, investment.The workers produce more output using more sophisticatedhardware. Sawyer, for example, cut down more trees, if applicablemodern chainsaw instead of a primitive hacksaw and an ax. Drivertruck can carry more cargo than the driver. But the equipment andmachines - are not free. The resources used to produce them, couldto find a different use: in the manufacture of food, clothing,vehicles and other items of daily consumption.Economics teaches that he who saves and invests more, moreproduces in the future.Third, technological progress.The use of human intelligence, invent new products ormore affective technology - a key source ofEconomic rosta.Za the last 250 years, the development of technology literally transformed our lives.First steam engine, then - the internal combustion engine,electricity, and nuclear reactor replaced the muscles of humans and animals in theas the main source of energy. Cars, buses, trains andaircraft replaced the horse and cart as the main means of transportation.Technological advances continue to change our lives today. Laserplayers, microcomputers, word processors, microwave ovens,video cameras, tape recorders, car air conditioners have substantially changedthe nature of our work and leisure over the last twenty years.Fourth, the improvement of the economic organization of society.Historically, changes in the law have always been an important source ofeconomic progress. In the XVIII century. The patent system has providedinvestors the right to private property in ideas. Around the same timerecognition of the corporation as a legal entity facilitating the creation oflarge firms, required for mass production of industrialproducts. These progressive changes in the economic organization of societycontributed to the growth of production in Europe and North America.Effective economic organization of society contributes to the economiccooperation of people and directs resources to produce their desiredproducts. Its main characteristics in more detail in the nextparts.