What is needed for Economic Progress?

When England discovered the American colonies there were only a few natives and no capital structure, and by the time the colonies formed a new nation they had the population and resources to sustain a successful country.    The American colonies did eventually increase the standard of living for the people who lived there.   This rise in the standard of living is called Economic Progress.  Economic progress happens when the standards of living and material wellbeing of a society increases over time i.e. each generation is better off than the one before it.  It means that individuals and society as a whole are able to consume more goods or the same quantity but they are at a high quality.  There are several reasons that economic progress can come about.  The first one is the improvement of resources.  This allows the quality of the goods being produced to be better since the raw materials were originally better.  An example of this would be the making of a chair.  If someone was making a chair and only had a soft wood, he would make the chair, but it would be weak and not last as long.  If he had an extremely hard wood to make the chair with he would then be able to make a sturdier and longer lasting chair.  He was able to make a better product due to the improvement in his resources.

Another way that economic progress can come about is through technology improving.  This is when machines or tools we use to create goods improve and allow us to make them better or faster.  An example of this was during the industrial revolution when textile mills became feasible.  It made the process faster than making it by hand.  It revolutionized the clothing industry which allowed more clothes to be produced then had ever been done before.  This lowered the price of clothes which allowed more people to be able to afford more clothes than they were originally able to buy.  So the improvement in the technology that was used to produce clothes resulted in a higher standard of living or economic progress.  Once a capital structure has been developed it needs to be maintained.  Due to the law of atrophy things will always go towards a state of decay instead of order.  What this means for economics is that when a factory that has been built to produce goods it will instantly start to decay.  An entrepreneur needs to be investing in the maintenance and improvement of the capital structure.  In order to build the initial capital structure the entrepreneur must have first restricted his consumption to save for the eventual improvement of his capital structure.  This will lead to an improvement in capital structure that improves technology that as discussed above leads to economic progress.  So in order for economic progress to occur there also must be saving by the individual or the society so that the capital structure can be maintained and improved.

Finally, once you have all the facts mentioned above it will take an intelligent entrepreneur to properly invest the resources into an economically successful venture.  If there is a good capital structure, excellent resources, and plenty of money, but it is used in a way that no one in society wants, it will fail to make a profit that will result in losses and the economic progress will actually decrease.  Businesses start up all the time that do not succeed, when these companies go out of business all off the resources that were invested are either destroyed or lessened in value.  It is important, therefore, that the society entrepreneurs function in be one where they well have the best chance of seeing what will be successful in that economy.  The society need to be one that is free and uninfringed market were people are able to spend their income on what will bring them the most value.  If this is not so then the entrepreneur will not know what he should produce that will benefit the most amount of people in the society.  If industries are successful merely determined by government policies they will be impossible to determine what will be successful.  The entrepreneur will make a guess about what will be successful that could or could not be right.  So it is important to have entrepreneurs who are willing to take risks and have a market structure that would best allow them to see what would be the most profitable for them to invest in, so that the most people benefit from it.  The better people become at doing something the more they can profit from it and less they do other things.  This is called specialization.  If entrepreneurs have successfully invested in areas that are profitable they will want to get better and better at these industries.  It will make sense for a mechanic to spend the majority of his time fixing cars and use the extra money he made to buy food then to spend his time growing food. He will be more productive fixing just cars and the farmer will be more productive just growing food.  So another factor for economic progress is that the labor markets become specialized in activities that they are suited for.  These are all essential skills that are need to bring about economic progress in a society.

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