Why Productivity Matters Above All Else
Tl;dr: productivity matters more than anything else. Rich societies are rich because their inhabitants are productive. Poor societies are poor because their inhabitants are not productive.
When I was a kid, I use to think that if I wanted to make my country richer, I would have to sell a product to other countries, not in mine.
The balance of account of my country was all I had in mind because I thought that was the only way to pay off debt: by selling to others, not to ourselves.
That was wrong.
Let’s take an example.
Productivity Within the Village
Let’s imagine a village inside which you have a baker selling bread, a butcher selling steaks, and a tailor selling suits.
If the baker makes one bread per day, the tailor one suit per day, and the butcher one steak per day, he’ll have 1/3 of bread and will have to sell 1/3 to the butcher and 1/3 to the tailor to buy 1/3 of a suit and 1/3 of steak.
Everyone is poor because no one is productive.
However, if each inhabitant makes three pieces of their goods, that is that the baker bakes three pieces of bread, the tailor sews three suits and the butcher makes three steaks, they each will be able to get one bread, one steak, and one suit, exchanging that what they produce against what was produced by the others.
Plainly, this principle outlines the nature of capitalism and free enterprise: the pleasure to do what you’re good at and to exchange the fruits of your labor against the fruits of the labor of someone else.
Its equation is the following:
Those that produce a lot, receive a lot in exchange.
Productivity is all that matters and should be prioritized above all else.
The Bottom Line
What matters the most is not the amount of money in the economy, but what is produced in the economy.
He who produced a lot for others has others producing a lot for him.
Money only simplifies the exchange of produced goods.
As such, if you want to have a positive impact on the world, your job is to produce.
What you do doesn’t matter as when you produce, you’re making the world better and richer because you’re making something.
If no one did anything, everyone would be poor. If the entire planet was super productive, everyone would be “rich”!
Rich countries are those where people are highly productive.
Poor countries are those where people don’t produce much (because of reasons outside the scope of this article).
It doesn’t matter what you make, it doesn’t matter who you sell to.
Remember that anything produced is better than nothing produced.
If you want to help yourself and if you want to help the world, produce, produce, produce.
Photo credits: Photo by Erik Odiin on Unsplash