Products and services we all rely on aren’t simply sitting there waiting to be made; rather, they must be created in order to meet our needs.
Good health, a safe place to live, the ability to learn and interact with others through social networks, respect for human rights, peace, and a healthy environment are all essential components of a happy life. These are only a few of the many things that matter to us.
In order to achieve many of these aims, we need specific commodities and services, such as health care from nurses and physicians or the house in which we reside, or the instructors who educate us.
People’s income is the most popular unit of measurement used to compare wealth, poverty, and growth. There are advantages and disadvantages to using monetary metrics; nonetheless, abstractness is one of the most significant drawbacks. Money measurements, such as GDP per capita, can be so abstract that we lose sight of what they really measure: people’s ability to get basic necessities.
Because economic progress is vital, this article aims to demonstrate how abstract monetary indicators tell us about people’s tangible living situations in other countries and throughout history.
First, I’ll explain what economic growth is and why it’s so hard to assess. •
Second, I’ll describe the pros and cons of several growth indicators, and you’ll see the most recent statistics on several of these measures to observe how people’s material living situations have evolved. •
The items and services I’m referring to are:
Right now, take a glance about you. The clothes you’re wearing, the device you’re using to read this, the electricity that powers it, the furniture around you, the nearby toilet, the sewage system to which it’s connected, the bus, car, or bicycle you used to get here, the food you ate today, the medications you’ll receive if you get sick, and every window in your house are all examples of products that were made for your use.
Many of these goods were unavailable at some point in the past. The vast majority of people were unable to get the most basic necessities of life. Just two centuries ago, almost three-quarters of the world’s population “could not afford a little room to dwell, food that would not promote malnutrition, and some basic heating capacity,” says a new research on global poverty. 1
Finally, let’s take a look at books, the final item on that list.
The only method to print a book was to have a scribe transcribe it by hand word-for-for-word hundreds of years ago. A single copy of the Bible was produced over the course of eight months by a scribe who worked daily.
Because it was so time consuming, only a small number of books were published. Historians’ best guesses are depicted in the graph. 3
It wasn’t until the mid-15th century that the goldsmith Johannes Gutenberg coupled his knowledge of wine presses in his hometown with the notion of moving letters. The printing press was invented by him. Gutenberg revolutionised printing with a new printing method he devised. A worker was now able to generate many books a day instead of spending months on a single book.
When the printing press expanded over the continent, the number of books produced increased dramatically. More and more individuals were able to get their hands on books that had previously only been available to a small number of people.
Economic growth may be characterised as a rise in the amount of commodities and services produced by individuals for the benefit of their fellow citizens.
Before delving deeper into the concept of economic growth, it’s useful to take a look at the staggering variety of commodities and services that people create. This is beneficial, in my opinion, because it is easy for economic production metrics to become esoteric. We might easily lose sight of the actual commodities and services that these measurements refer to as a result of their abstraction.
However, this list of commodities and services is not a comprehensive one; it just served as a springboard for my thoughts on poverty and economic growth:
In your own place: Lighting at night; the sewage system; a shower; vacuum cleaner; fridge; heating; cooling; electricity; windows; a toilet – even a flush toilet; soap; an outdoor balcony or garden; running water; warm water; cutlery and dishes; an oven; sewing machine; stove (that doesn’t poison you); carpet; toilet paper; trash bags; music recordings or even online streaming of world music and film; g
The most essential necessity is to have sufficient nourishment. Throughout much of human history, and to this day, millions of people suffer from hunger.
Millions of people are still suffering from micronutrient insufficiency, which is why we must eat a more diverse and rich diet to ensure we obtain all of the nutrients we need.
Think of food that is safe to eat (pasteurised milk, for example), spices, tea, and coffee, as well as kitchen utensils and ingredients (ranging from a bag of flour to canned soups or yoghurt), sweets, fruits, and vegetables, as well as bread, as well as ways to keep your food from spoiling (ranging from the coleman can opener to a zip-top bag).
A person’s ability to comprehend the world around them is enhanced by a variety of sources, including formal education from pre-kindergarten through university, as well as books and facts gleaned through the internet and other publicly available sources.
Financial services (including bank accounts, ATMs, and credit cards) are also part of the infrastructure. Cities have a network of competent workers who can help fix problems, as do postal services (that deliver quickly). National parks have street cleaning crews and public swimming pools (including private pools). Firefighters have parks. Online shopping has weather forecasts. And a waste management system is part of the infrastructure.
Lawnmowers, cars, car mechanics, bikes, power drills (even battery-powered ones), watches, laptops and computers, smartphones (with GPS and a good camera), the ability to stay in touch with distant friends or family members (or even visiting them), and the internet right here. Tools and technologies: GPS; batteries; telephones and mobile phones; video calls; WiFi; and the internet right here. We have all of these things.
People who are disabled, sick, or elderly; protection from crime; non-profit organisations financed by the public, by donations or philanthropy; insurances (against many different risks); and a legal system with judges and lawyers that implement the rule of law are among the many social services provided by the government.
Additionally, a growing number of benefits, which are not services in and of themselves (they are transfers), become more affordable as a society progresses economically, such as health insurance, unemployment insurance, and the ability to donate a portion of one’s earnings to a worthwhile charity on a regular basis.
In our free time, we enjoy: camping; travelling; sporting events; board games; hotels; playgrounds; children’s toys; classes to learn new skills (from painting to music to courses on the environment around us); football; pets; going to the movies, theatre, or a music concert; clothing (even comfortable and fashionable clothes that keep you warm and protect against rain); shoes (even different types of footwear); shoe repair; contraception.
there should be 7 ways to celebrate life: a camera, a musical instrument, and a celebration party.
There are a variety of services available to help people maintain good health: dentists, antibiotics, surgeries and anaesthesia, mental health care from psychologists and psychiatrists, vaccines and public sewage. There are also a variety of services available to help people maintain good health: dental floss (some floss), disinfectants, glasses and sunglasses, contact lenses and hearing aids.
Specific desires and needs: Generally speaking, most of the things on this list are beneficial to the general public. However, the products and services that are most valuable to a single person might be quite narrowly tailored.
My broken left leg has a large cast on as I type these words. A few weeks ago, these goods were completely unnecessary to me. I require two long crutches to get about and a daily injection of a blood thinner to prevent thrombosis. After I fractured my leg, I required the help of nurses and physicians to go back to health. Equipment like X-ray machines have to be used in order for them to get the job done. I may need the help of physiotherapists in order to get back on my feet.
Specific items and services are sought for by all of us on a daily basis because of our personal preferences. An injury, for example, may bring up a requirement. Others are a result of a new stage of life, such as when you have a newborn or care for an older family member. Others, like a fisherman, a musician, or a painter, need specialised equipment.
There is no such thing as a one-stop shop for all of these products and services. They must be made. For a while there were no more than a few left, and even those that were crucial were limited. What does this mean for your life? Look at the list above and see for yourself.
What does it mean to say that the economy is growing?
So, what exactly do we mean when we talk about “economic growth”?
According to a variety of sources, “economic growth” is defined as “an rise in the amount of goods and services produced per capita during a certain time period.”
Oxford Dictionary: “Economic growth is the increase in the output of goods and services per head of population over a defined period of time”. The Cambridge Dictionary has a similar meaning. An rise in the economy of a country or a region, notably in the value of products and services produced by the country or area.
More definitions can be found in the following footnote. As a result of this analysis, I propose the following definition of “economic literature” as a whole:
A society’s ability to generate more and better economic products and services is a key indicator of economic growth.
Somewhat lengthier than the majority of other definitions are more to my taste. ‘Products,’ rather than ‘goods and services,’ and ‘value,’ rather than addressing both quantity and quality individually, might be used to condense the term.
When a new product enters the market, the quantity changes from 0 to 1. Antibiotics, vaccinations, computers, and the telephone are just a few examples of how new products and services have facilitated major historical shifts.
This notion of growth is further explored in the footnotes.
Economic products and services are what exactly?
In many conceptions of economic growth, “goods and services” are simply defined. This avoids a major stumbling block in its measurement and description. A subset of economic goods and services is the focus of economic growth rather than the whole range of commodities and services.
Even in the most routine of tasks, we are always ‘producing’ things and services. We’ve already provided one service and one good by the time we get out of bed and clean our teeth. Is cleaning one’s teeth and toasting one’s contribution to the country’s economic output? How to draw the line isn’t a simple question to answer. However, a line must be drawn somewhere. A definition of production that is so wide that it loses all meaning would result if we didn’t; we’d be producing services with every breath and scratch of our nose.
The term “production border” refers to the line that must be drawn to delineate economic commodities and services. The concept is depicted in the drawing. The products and services that we take into account while talking about economic growth are defined by the production boundary.
No doubt about it, the vast majority of goods and services fall into this category. But for some, it might be difficult to determine where they belong on the manufacturing line. Another example is the topic of whether or not the creation of illicit items should be included in the definition. Furthermore, there is the question of whether domestic production should be included in the definition of “economic output.” These questions have been answered by a variety of writers and measuring systems. 9
A product’s qualities can assist determine whether it falls on one side or the other of the line.
10 Products and services that can be made and that are in short supply are economic goods and services. They contrast with plentiful, free things like sunshine and the many crucial components of our existence that cannot be created, such as friendships. They are the antithesis of both. 11 Everyday speech does this correctly; for example, we don’t talk about the sun or our friendships as a good or service we create.
People supply each other with economic goods and services as a method of solving a problem, and this signifies that the person requesting them finds them valuable.
Finally, ‘delegability’ can assist you determine if you’re looking at an economic product. If an activity can be outsourced to someone else, it is regarded to be a form of production in an economic sense. There are a lot of things on the big list we discussed before that would be included here, but not your breathing.