The economy is based on several assumptions, the first of which is
that each person’s goal is to get the most out of their life. Since the
most precious resource we have is time - which is limited - the question
of its use becomes fundamental. Therefore, in our lives, we are
constantly calculating the costs and benefits, of what we have to
sacrifice and the advantages we can obtain from doing so. The second
assumption is the idea that companies want to maximize profits, that is,
earn as much as possible. An "entrepreneur" is someone who takes a
thing (product or service) and works to increase its value. An
entrepreneur uses his business to create new value. Another important
concept we need to be clear about is the market economy, which means
that all available resources are used in the most productive way
possible. So companies, just like people, have to answer the following
question on a daily basis: how can I get the most out of what I do? One
way to think about profits is to think about prices, a company has to
decide the best price for their product or service to enable them to get
the maximum benefit. On the one hand, there are consumers who want to
obtain as much as they can, and to enjoy the highest level of well-being
available to them, and on the other there are companies who need to be
productive, and make a profit. They are simple concepts, but they can
reveal many dynamics that speak volumes about how the world works.
The
market economy is a powerful force in improving people's lives;
companies can only make profits if they offer products that really
interest people, and this assumption drives them to do better and
better. Unfortunately, however, the market is amoral, because it rewards
scarcity and not the intrinsic value of an object or service; just
think of the fact that water is free, while diamonds are very expensive
(or think of medical insurance, which is not sold to those who need it,
but only to those who can afford it).
